Thursday 8th September, 2005AD
LESSONS FROM LAODICEA

It was one of those economic miracles that comes along once and a while. What made this city in ancient Asia Minor so different? Laodicea had flourished on a combination of strategic location and a monopoly over the supply of some vital commodities; 

Firstly, it was built on a busy east-west trade route, which guaranteed a passing population of merchants and travellers, the perfect ingredients for a brisk, lively market. 

Secondly, Laodicea had cornered some important markets, "Gold, Raiment, Eye-salve" read the billboards. It was sheep-raising and sheep-shearing country, after which it manufactured its excellent wool into a unique thick, glossy cloth. Wool contains unsurpassed natural qualities including properties of insulation. The many travelers heading east would soon face the harsh extremes of desert, where Laodicea's famous garments and blankets would provide them with warmth during the bitterly cold desert nights, yet readily breathing and providing shade from the blistering daytime sun and heat. Importantly, the supply of its woolen fabrics could not keep pace with demand, commanding a healthy premium. 

Ophthalmia is a potentially blinding, inflammation of the eye, a condition that was epidemic in the blinding deserts to the east, for which Laodicea had developed its renowned Eye-salve. East-ward bound caravans would stock up on Eye-salve before leaving the great City, after which every halting place they would be met by eager buyers. 

The City's marketplace was a frenzy of trade and activity as goods from the west met traders from the east, and equally, western buyers sought out exotic products from the far-east and beyond. 

So successful was the Laodicean marketplace that it had finally minted its own coinage. We have observed numerous examples in history where money freely issued in the marketplace wins acceptance based on its integrity (1). The red-gold coin of Laodicea had become widely recognized and accepted in Asia Minor and beyond due to its fixed and constant gold content. 

So important was the lucrative market of Laodicea that Rome declared its a "Free City", meaning that it could operate its markets and economy freely, using its own minted coinage, and with minimal taxation, regulation or intervention from Rome. 

But why would Rome allow this economy to operate "outside the rules" of the empire? Just as China has allowed Hong Kong, Britain the Channel Islands, as the EU allows Austria and Luxemburg and as Imperial Spain allowed Panama in the 1600-1700's, so all high-taxing, imperialistic nations and empires allow tax havens to exist and operate. Why? Because they know it is good for business and good for the empire. 

Likewise, Rome understood that Laodicea attracted riches, trade and travel into its empire from the far-east and all over the then known world. 

Over 200 - 300 years Laodicea amassed riches, fame and fortune and was the icon of success and wealth to the entire outside world. But in the year 60 AD there came a dramatic change in events as an earthquake hit quickly and harshly, shaking the city to its foundations. Swiftly Rome voted a subsidy in gold to rebuild the ruined city. Did Imperial Rome's offer of welfare come from genuine compassion or was it motivated by another more dangerous agenda? The history of handouts shows that welfare gifts usually come at a very high price(2). 

Laodicea wisely declined Rome's offer and rebuilt its city and marketplace from its own wealth and resources. Laodicea had built in savings and reserves sufficient to recover and re-build from a sizable setback. 

Thirty years later St. John would write of Laodicea, "because you say, "I am rich and have enriched myself and I have need of nothing . . ." Was John referring to Laodicea's reply to Rome's offer of help, or was it something else to which he referred ? 

What was to become of this great beacon of free markets and trade? Laodicea had been made great by it strategic location, supply monopolies, busy market and sound money. It had shown wise fiscal management with built in savings and the ability to resist the temptation of accepting welfare handouts.

But eventually even Laodicea would follow the same cycle we have observed so many times in other economies, markets and empires; the same cycle which would lead it to its decline and eventual disappearance from the world stage, . . . the very same cycle that we can see at work in our world economies today. 

Was it that Laodicea debased and destroyed its money (the gold content of its famous coin), or did it shift its manufacturing/industrial and supply base "offshore" to a cheaper region? Could it be that it indebted its people (and their children and grandchildren) with crippling debt, or did Laodicea run off to fight external wars in foreign lands? Maybe it took welfare handouts from an imperial neighbor, thereby becoming its slave"? Or did it simply forget the absolute rule of "savings", replacing it instead with the false economics of debt-based "consumption"? Maybe its people became greedy for fast, easy profits and speculated in an investment orgy of property and shares, and were unable to survive when the speculative bubble ultimately collapsed?

Whether it was one of these reasons, or a combination of several that led to its ultimate decline, history doesn't make it clear. Despite its riches at the time of writing, was St. John alluding to what was coming in the future for Laodicea when he went on to say, "you know not that you are wretched, poor, blind and naked". (3) 

Best Regards - Philip Judge 
pjudge@anglofareast.com

(1) http://www.anglofareast.com/0101.html
(2) A cursory examination of the IMF (International Monetary Fund) quickly shows that IMF relief packages (and associated World Bank loans) made to devastated third-world nations, have ended up prolonging their agony through crippling debt and foreign control of sovereign assets. 
(3) Book of Revelation, 3:17

Sources for Article : "The Mighty Famine and other Sermons" Roderick MacLeod, "A History of Asian Minor"