Futures Contracts in Ancient Greece
with olive oil
Aristotle wrote about a man named Thales in Ancient Greece, who he says was the first philosopher and the father of math and science. Thales even invented futures contracts with olive oil. How?
Thales spent a lot of time studying the stars and started noticing patterns to predict the weather. One year the people around him thought the following season would bring a poor olive oil harvest but based on his study of the stars, he knew it would be a good harvest. So he pre-purchased the supply of olive oil from the farmers with the promise that if the season was a bad harvest like they expected, they could keep his money. But if it was good, he owned all the olive oil.
The harvest was good, and he got to sell oil to the citizens of the land for profit. Some say he gave most back because he didn't have time to get into the oil business. Either way, he monopolized olive oil and invented futures contracts.
Thales of Miletus was born in 626 BC and died at 78. rip