Ephraim Lytle
Recent discussion of the ancient economy has focused on the phenomena of vertical integration and disintegration. The first is the process whereby complex social organizations or ‘firms’ control every step in not only a product’s supply chain and production but also in its distribution and sale. Integration is typically followed by a process of disintegration whereby vertical integration is replaced by specialization, because at various points in the production and marketing of any product specialized producers can provide goods and services more efficiently than can vertically integrated firms: the visible hand of the integrated firm is replaced by the invisible hand of the market. While the nature and extent of integration/disintegration in the Roman economy is the subject of ongoing debate (Silver 2009; Broekaert 2012; Silver 2013), scholars interested in the Greek economy have paid little attention to these phenomena, for good reasons: although in Classical poleis such as Athens there existed abundant horizontal specialization (a diversity of trades to match the diversity of needs), chains of production were short and the need for vertical specialization limited (Harris 2002). At the same time, social and political institutions gave limited scope to firms (Frier and Kehoe 2007: 126-134), while the rate of innovation itself is generally thought to have been low. Finally, for the Greek economy, where data is decidedly scarcer than for Rome, it would be difficult to detect short-lived vertical integration even if we had reason to search for it.
Nevertheless, in this paper I argue that there are exceptions to this general portrait and that a likely example can be found in the curious case of Chaerephilus and his sons, attested at Athens in the fourth century as having achieved citizenship and considerable social status through wealth somehow derived from the saltfish trade (PA 15187; Davies APF: 566-568). This evidence has presented a lasting conundrum to scholars of Athenian social and economic history, who frequently note that the wealth and status enjoyed by Chaerephilus and his sons find no parallels in our evidence either for retailers, importers or merchants more generally (e.g., Davies APF; Erxleben 1974; Reed 2003; Engen 2010).
But careful attention to the literary and epigraphic evidence suggests that Chaerephilus and his sons were neither retailers nor importers, as conventionally defined, but ran a vertically integrated firm—Chaerephilus & Sons—that owned interests both at Athens and abroad and controlled every step in the production, marketing and trade of a branded product. This argument relies on a reappraisal of the literary and epigraphic evidence for the family, which includes a number of overlooked details concerning their origins. Take, for example, a fragment of Timocles (fr. 15 K-A) which includes a peculiar description that suggests that the sons Pheidippus and Pamphilus were of barbarian, and perhaps specifically ‘Scythian’ origin, and that as “two saperdai”—a fish name closely associated with a variety of saltfish from the Black Sea and especially the Sea of Azov—they originated from a region that seems to have been the primary source of Athenian saltfish during the fourth century BC.
Additional fragments and epigraphic evidence offer similarly unexploited details about the structure of the firm and the nature of its trade. Finally, it is argued that this evidence is compatible with a range of comparative evidence suggesting that the unique risks, barriers to entry and transaction costs associated with saltfish production frequently encouraged vertical integration. The curious case of Chaerephilus & Sons thus seems to be the earliest attested instance of a surprisingly well-attested historical phenomenon, while also offering an interesting parallel to what recent scholarship has identified as one of the clearest examples of vertical integration and disintegration at Rome: the case of Umbricius Scaurus, a producer and merchant of garum and saltfish at Pompeii (Ellis 2011; Silver 2013).