We’ve been sold a myth that free markets are a modern invention, a fragile flower of the Enlightenment, which blossomed in the 19^th century but were not sufficient to manage the economic complexity that sprang from them. During the industrial revolution, politicians convinced their constituents that this new type of economy produced all sorts of new problems from which only their wise management could protect them. Thus was born the progressive era, we’ve been told, where guardrails were put in place to ensure “unrestricted capitalism” didn’t destroy us.

Every bit of that story is false. Free markets were nothing new in the 18^th or 19^th centuries. They didn’t spring from the pens of Adam Smith or Jean Baptiste Say. They had, in fact, been the cause of progress for all of human history. And those calling themselves “progressives” were actually reactionaries, seeking to return us to the mercantilist economies of 17^th century colonial America.

From the cradle of civilization to the USSR’s smoking ruins, relatively freer markets have ignited prosperity, innovation, and human flourishing. And every time, without exception, the siren song of centralization has lured societies into government overreach, taxation, and control, dragging those once prosperous societies into poverty and collapse.

This story doesn’t start with 18^th century Scottish philosophers or even 15^th century Schoolmen, but at the birth of human civilization.

Sumer (4500–2000 BCE)
The world’s first cities ran on private merchants (dam-gar) using silver, credit tablets, and floating prices in open bazaars. This resulted in the first urban explosion in history, the development of writing, the wheel, irrigation canals, and long-distance trade from the Indus to Anatolia.

Then came the world’s first empire—Sargon of Akkad—imposing tribute, royal monopolies, and forced labor. Within two centuries the economy was hollowed out, fields lay abandoned, and a mega-drought finished off the corpse.

Bronze Age (c. 3300–1200 BCE) – The First Full Cycle
The Early Bronze Age (3300–2100 BCE) was the original free-market boom. Independent city-states, village entrepreneurs, and caravan traders operated with almost no palace interference. Private seals on jars identified individual merchants and ensured quality control. They also identified standardized weights and specific production batches. Silver coils were used as money and there is evidence of interest-bearing loans between private parties. The archaeological record from Uruk to Arslantepe shows population tripled and cities of 50,000–80,000 appeared. Lapis lazuli flowed from Afghanistan to Egypt. Bronze itself was invented by profit-seeking smiths. This was the most decentralized economy the world had yet seen, and it was staggeringly prosperous.

Then the palaces took over. Starting with the Ur III dynasty in Mesopotamia and spreading to Old Babylonian kings, Hittite great kings, Middle and New Kingdom pharaohs, and Mycenaean wanax-lords, rulers systematically plundered that prosperity. Land became royal domain. Bronze production was monopolized. International trade was centralized under palace authority, while prices and wages were fixed by decree.

The glittering Late Bronze Age world of 1600–1200 BCE with its chariots, glass, and lavish diplomatic marriages was built on suffocation of the very markets that had created the wealth. When drought and migration hit around 1200 BCE, the centralized systems shattered in a single generation. The freer Early Bronze Age had been resilient; the palace-dominated Late Bronze Age was catastrophically brittle.

Iron Age Rebirth – Phoenicia and Early Greece (c. 1200–800 BCE)
After the Bronze Age collapse came fragmentation. No empire could tax the whole Mediterranean or even large subdivisions within it. Into that vacuum stepped the Phoenicians and the early Greek “poleis,” city-states run by merchant aristocracies who lived or died by trade. Tyre, Sidon, Byblos, and later Athens and Corinth revived the early Bronze Age marketplace: private shipowners, floating prices, alphabetic receipts, and coinage invented for commerce rather than taxation. The Mediterranean commercial boom of 1000–600 BCE was the direct descendant of the pre-palatial markets of 3000 BCE. And then the central state swept in again.
 

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Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness? 

 Tom