How Did the Athenians Fund Their Military during the Peloponnesian War?
The Peloponnesian War (431-404 BC) was one of the greatest events in the Hellenic world, as it decided the fate of Greek culture. The war pitted Greece’s two most powerful city-states against each other – Athens and Sparta – in a struggle for control over the entire Greek-speaking world that would last for nearly three decades, leaving both sides decimated and vulnerable to other enemies. The Athenians had the initial economic and naval advantage, but the Spartans held the edge on land and possessed the intangible of living in austerity, which meant that they could handle the deprivations of war much better than the Athenians.
The Spartans and Athenians enticed and sometimes bullied their smaller and militarily weaker neighbors into joining their alliances – the Athenians led the Delian League while the Spartans head the Peloponnesian League – making the conflict one in which no Greek-speaking peoples, an event the Macedonians, could escape. When it became apparent that the civilization-wide war was going to take place, the Athenians, led by Pericles, quickly began planning how they would fund their military. Thanks to some extant decrees and the writings of the Athenian general and historian, Thucydides, the details of Athens’ wartime economic planning are known. The primary sources show that the Athenians funded their war effort primarily through the Athena Temple, which acted as an ancient national bank. The economic policies that the Athenians used during the war were quite sound, even by modern methods, but unfortunately for them, they only planned for a short war, which ultimately led to their careful economic planning coming undone.
The Background of the Peloponnesian War
The Peloponnesian War, like all wars, had its origins several decades before the first spear was thrown. After the Hellenic League expelled the Persians from Greece in 479 BC, the Athenians lead the effort to form a new and lasting anti-Persian alliance, which resulted in the Delian League forming in 478 BC. Although Athens was always the most powerful state in the Delian League, it was named for the island state of Delos where the treasury was kept. 
The smaller member city-states enjoyed an equal vote with Athens and were more than willing to go to war against the Corinthian led Peloponnesian League in what historians call the First Peloponnesian War (460-446 BC). The First Peloponnesian War ended in somewhat of a stalemate and left many unresolved issues in Greece: the peace settlement recognized the existence of the Athenian navy, but in turn, the Athenians had to relinquish land they conquered on the mainland. 
Feeling empowered due to their naval success against Corinth and the Peloponnesians, the Athenians began to treat the Delian League as their empire gradually. Athens all but took over the council, member states were suppressed, and the final and perhaps most important move was when the Athenians moved the treasury to Athens in 454 BC and incorporated it into the Athena Temple. 
The decision to move the treasure helped to build Athens into one of the premier cities of the ancient world and also bolstered the career of the Athenian general and statesman, Pericles (ca. 495-429 BC). It is believed that Pericles became the leader of Athens sometime after the death of Kimon in 451 BC,  which meant that he was able to take full advantage of the resources available in the Athena Temple.
Thanks to the infusion of 9,700 silver talents from Delos (a “talent” was a measurement of silver used by the Greeks), the Athenians were able to build the Parthenon and to modernize the harbor of Petraeus, as well as fund the initial stage of the war against the Peloponnesian League.  The strong-arm moves Athens employed against its allies did not go unnoticed by Sparta and its allies. They too prepared for another conflict with the growing Greek empire, which began once more between Athens and Corinth. 
What Type of Finances Did the Athenians Need?
War is certainly a very costly endeavor and often ends up being a zero-sum game. Pericles and the Athenians knew that to successfully pursue a war against the Peloponnesian League they had to carefully plan everything down to the last talent, which is why there is a fair amount of documentation on the subject. In 431 BC, the first year of the war, the Athenians used 200 ships. It is estimated that it cost about one talent to keep a ship at sea for a month and ships were usually kept at sea for eight months at a time, so the annual cost to support the navy was around 1,600 talents. 
For the Athenians, most of their military resources were spent on their navy. They conceded the land war to the Spartans, opting for a strategy of defense behind city walls. Still, they needed men to guard the walls and to conduct counter-attacks and sorties when necessary. The optimal number of men needed to defend the Athenian polis was 3,500, who were paid one drachma a day and for a retainer each day, which amounted to 7,000 drachmas or one talent and one-sixth.
The yearly total for funding the land army was around 420 talents. It is believed that based on these numbers, Pericles expected to spend 6,000 talents total for a three-year war. There is debate over why he thought the war would only last three years, but it probably stemmed from the fact that the Spartans and their allies could only afford to launch campaigns of a month at a time.  Pericles simply thought that Athens’ large navy and considerable funds would be enough to bring Sparta and her allies to the bargaining table within three years instead of the twenty-seven years the war lasted.
The Athena Temple as a Wartime Bank
During the Peloponnesian War, the Athena Temple functioned in much the same way as a modern bank to fund the Athenian cause. Although considerable material wealth was kept in the physical temple, it is important to think of it more as an institution that had vast power over Athens’ economy. The Athena Temple’s reserve funds that were used to fund the war effort were drawn from a number of sources, including: tribute from Delian League members due every year in time for the campaigning season, funds still left from the treasury of Delos, the reserve fund held in the physical temple, and private donations of uncoined gold and silver. Thucydides related the details as follows:
“Saying that their strength came from the financial income they paid and that, for the most part, success in war was a matter of judgment and abundant revenues. He told them they could take confidence, since six hundred talents in tribute usually came in every year form the allies apart from other revenue, and on the Acropolis, there was still six thousand talents in coined silver remaining at that time . . . And, apart from that, uncoined silver in private and public dedications, and there was all the sacred equipment for processions and contests and booty from the Mede and everything else of that sort, not less than five hundred talents; going further, he added the considerable amount from the other sanctuaries. They would use these and if they were compelled, even the gold plating of the goddess herself; he pointed out that the statue had forty talents’ worth of refined gold, and it was all removable.” 
The extreme measures of turning the statues into bullion and then coins would have only been used after they had exhausted all coins Athena owned. The bullion from the temple would have been used first before any sacred statues were turned into bullion and then coins.
How funds were taken from the Athena Temple was also very much like how similar financial transactions are conducted today with banks. It was typical for the Athena Temple to give loans for building projects as well as military expeditions with a sliding scale interest rate. For instance, the city would take out a loan in a specific amount of talents to fund an expedition and would be charged one drachma per day for each talent loaned until the end of the financial year and one drachma a day for five talents after, which amounted to a reduction from 6% to 1.2% interest.  The system was of course quite ahead of its time and very efficient and profitable, as long as there was a constant injection of silver into the reserve.
By 428-427 BC, the fourth year of the war, the temple reserve had fallen to less than 1,000 talents. To compensate for the dwindling fund, the Athenian government introduced a direct tax on the people, which proved to be very unpopular.  The desperate financial situation was eased a bit with the Peace of Nikias in 421 BC. Although the peace only lasted two years, it allowed the Athenians to rebuild the reserve of Athena back to 4,000 talents by 415 BC.  But once more the Athenians were plagued by their myopia; after depleting the resources of their allies they were forced to rely on their silver deposits, which were largely depleted by 413 BC. 
The Peloponnesian War represented one of the true turning points in the history of the Hellenic world. Athens sought to put the entire Greek-speaking world under its rule with its large and formidable navy, but the true strength behind Athens’ power was its wealth and financial system. Pericles and the Athenians planned well for the Peloponnesian War economically speaking, but their efforts were too short-sighted. The Spartans eventually outlasted the Athenians to “win” the Peloponnesian War, but the Macedonians were the true winners because they became the major power in the Greek-speaking world.
- How Did the Seleucid Empire Collapse?
- What was the legend of the Minotaur?
- How Did the Term “Pyrrhic Victory” Originate?
- How did Zeus become king of the gods in Greek mythology?
- How did the Phoenicians contribute to civilization?
- What has been the influence of the historian Thucydides?
- Was Atlantis based on a real place?
- How Did Historiography Evolve in the Hellenic World?
- Did the Ancient Minoans Play Organized Sports?
- How Did Pergamon Become a Great City?
- Morkot, Robert. The Penguin Historical Atlas of Ancient Greece. (London: Penguin), p. 86
- Hornblower, Simon. “Greece: The History of the Classical Period.” In The Oxford History of Greece and the Hellenistic World. Edited by John Boardman, Jasper Griffin, and Oswyn Murray. (Oxford: Oxford University Press, 2001), p. 318
- Morkot, p. 94
- Morkot, p. 86
- Blamire, Alec. “Athenian Finance, 454-404 BC.” Hesperia: the Journal of the American School of Classical Studies at Athens 70 (2001) p. 99
- Morkot, p. 95
- Kagan, Donald. The Peloponnesian War. (New York: Penguin, 2003), p. 62
- Kagan, pgs. 61-62
- Thucydides. The Peloponnesian War. Translated by Steven Lattimore. (Indianapolis: Hackett Publishing, 1998), II, 13
- Samons II, Loren J. “Athenian Finance and the Treasury of Athena.” Historia: Zeitschrift für Alte Geschicte 42 (1993) pgs. 132-3
- Blamire, p. 108
- Kagan, p. 104
- Kagan, p. 247
- Blamire, p. 115