Business

The first monopoly in the world was about Olive Oil

Olive oil was used for trade purposes all around the Mediterranean 3000 years ago, and it is not just a basic component of what we use to call today as “the mediterranean diet”. One unknown story about olive oil trade in the ancient world is the case of Thales, one of the 7 sages (or the Seven Wise men of Greece), who predicted olive oil demand at the right moment and became rich. 

Very few people know that Thales turned into something more than a businessman, by creating the first monopoly in history. Thales before the time he decided to practice astronomy observations in trade, was a famous mathematician and astronomer, but also relatively poor. As most of philosophers was teaching that he was poor because he wanted to live as a poor but his citizens in Miletus did not believe him. So, in order to prove to his fellow citizens that wisdom can be used in order to reach wealth, he invented what we today describe in financial with the terms  “futureys” and “options”. 

 

But why olive oil?

Olive oil supply was during Thales times probably like the oil of our time. Thales decided that it could be the best product he could “invest” in, because of its high potential demand. So he decided to rent all the olive oil presses in his area, some say not only in Miletus, but also in Chios, the Aegean island famous about its mastich. 

How did he do it?

Thales, using his astronomy observation skills and knowledge, predicted that olive presses (used for taking oil out of olives)  would be needed at a specific period of time, so he foresaw a good year for olives. So he agreed with the presses owners that he would rent them at a specific time in the future, with a discount for him, something that constitutes also the first creation and use of the futures. And this is what followed next. The following year, after a very good harvest, Thales became immediately rich after controlling the olive presses price and proved to his citizens that he could easily be a good businessman if he would like to be so. 

So, there was a monopoly made because Thales was the owner of the Olive oil presses at a time, so he secondly applied what we today use to call as options. Maybe a bad use when knowledge is being used for profit. 

For the record, Aristotle mentions that the method Thales practised, could be globally applied and also that his objective was not to become rich, but to prove his fellow citizens that philosophy if applied could be really useful. 

We don't know if Thales after this success became a trader, but Plutarch says that he was involved in trade activities. Some also mention that Hippocrates and Plato were traders as well.  

 

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