He may have gained world-wide fame as a victorious army commander, but Alexander the Great was also a very competent expert in finances.

The student of Aristotle has shown outstanding management capabilities, although military budgets contained more or less what budgets of states comprised (and were directly related to the latter): rates of salaries, health and welfare, building projects, supplies, transports, reforms of the tax system, indirect taxes and donations, even financial scandals.

How were soldiers and equipment of Alexander the Great paid? How many short-term loans did he get in order to finance his military expeditions and why did he forbid the women of Ephesus to wear jewelry? What kind of gifts did he offer the guests who attended his wedding and what became of the huge storehouse of the Gaza perfumes?

Answers to these and many more questions were given by the judge of administrative law Dimitrios Kostopoulos in a lecture he gave, entitled “The economics of Alexander the Great”.

Multi-speed military pay rates

Until 331 BC, the main expenses of Alexander were related to the wages paid to the army, the maintenance of military equipment-siege engines, the fleet, the food supplies, transports and health care. However, the most significant direct cost of war were the wages, which were determined by a military pay rate. Although sources do not agree about the salary, one can estimate that at the beginning of an expedition, the average salary of a common soldier reached 1-2 drachmas per day.

“Decadarch or corporals received 40 drachmas per month. The salary of a platoon leader was double and that of the horsemen was double than the salary of the foot soldiers. According to Diodorus, horsemen received 300 drachmas per month and Macedonian phalangites 100 drachmas, whereas professional mercenaries were given additional financial motivation,” as Mr. Kostopoulos mentioned.

The numbers were large: in 334 BC, for instance, a military force of 35,000 men passed the Dardanelles strait, and another 10,000 men under Parmenion had passed it in 336 BC, while there were yet another 12,000 men, the army that Alexander had maintained in Macedonia. The annual cost for salaries is estimated at 4,000-5,000 talents in the first year of the expedition, and 7,000 talents in the next years (fleet wages not included), because Alexander reinforced his army with mercenaries from the Greek cities of Asia Minor, and placed guards in all regions he conquered.

After the occupation of Susa and Persepolis and the acquisition of the Darius’ Treasure, the cost of army wages skyrocketed: for the expedition to India, Alexander gathered an army of 140,000 men. The fleet he used for the same expedition had 150 ships with 3,000-5,000 men.

Cost of maintaining and replenishing military equipment

Equally high were expenses for maintaining and replenishing military equipment. Alexander’s army was the most technologically advanced military machine of its time. Engineers, the staff for the siege engine and other technicians, like bridge builders and men who built tents and beds, followed the army. Also quite expensive were the provisioning, food supplies and the transportation not only of the army but also of women and children who were related to the soldiers; for their attendance there was a special supply and transport corps.

The health service of Alexander was also well organized. This group included doctors, herbalists, pharmacists and nurses. Diodorus mentions that Alexander spent 100 talents for medicines during the India expedition. He also spent high amounts of money as compensation to parents and families of men who fell in battle. Justin mentions that orphans received their father’s salary.

“Appeasers” or “mattress-guards”

According to the point of view of Alexander, the war also required feasts and fairs to boost up the army’s morale – and these cost a lot of money. In addition, the military budget covered costs for cooks, waiters etc., even for professions unknown today, like that of… “mattress guards” or “appeasers”, who guarded Alexander and the generals while they were sleeping. Royal meals were also very expensive; Plutarch mentions that Alexander spent 600 talents per year for them.

Alexander was utterly generous regarding the rewards of men who distinguished themselves in battles and sieges. According to Diodorus, after the victories at Issus and Gaugamela donations of 3,000 talents were made, while for the conquest of Ecbatana jewels and 13,000 talents were distributed. According to Arrian, Greek allies who wished to repatriate were given 2,000 talents, while those who decided to stay after all received 3 talents each. Alexander was also generous towards veterans. According to Arrian, Macedonians who couldn’t fight anymore due to old age or illness, received their salary and one extra talent, as well as the costs of the journey back home.

How were expenses of war covered

The money to cover all these expenses came mainly from the royal treasure of Philip, while a very important source of income were the Macedonian mines, producing gold and silver for the minting of coins. Incomes also came from customs and taxes of the royal land. The most important source of income, however, were loans. According to Plutarch, Alexander took short-term loans of 1,460 talents.

The costs for professional mercenaries were covered from the royal treasure, that of the Macedonian army partly from aristocracy grants and partly from the royal treasure. The costs for the navy were covered from the trierarchy.

Alexander did not impose taxes to the Greek cities of Asia Minor. Cities who did not resist the conqueror had to pay a certain amount of money, in order to contribute to the “common cause”, which was the punishment of Darius.

Taxes were imposed to cities who showed a hostile attitude towards Alexander, and the people of Ephesus who put up a sturdy resistance to the conqueror. That is why women in Ephesus were not allowed to wear jewelry. Other incomes came from plundering. This was the case of Gaza’s storehouse of perfumes.

According to Mr. Kostopoulos, Alexander faced financial difficulties until 333 BC. Later, and above all after the Battle of Gaugamela, fabulous riches of the treasuries of Darius in Susa and Persepolis were turned over to Alexander.

After conquering the Persian Empire, Alexander proceeded to tax and administration reforms, in order to control the vast empire. However, financial scandals did occur, like that of Harpalus, who absconded large amounts of money.