Posted on 04/28/2023 4:04:21 AM PDT by george76
At its peak, the Roman Empire held up to 130 million people over a span of 1.5 million square miles.
Rome had conquered much of the known world. The Empire built 50,000 miles of roads, as well as many aqueducts, amphitheatres, and other works that are still in use today.
Our alphabet, calendar, languages, literature, and architecture borrow much from the Romans. Even concepts of Roman justice still stand tall, such as being “innocent until proven guilty”.
How could such a powerful empire collapse?
The Roman Economy.
Trade was vital to Rome. It was trade that allowed a wide variety of goods to be imported into its borders: beef, grains, glassware, iron, lead, leather, marble, olive oil, perfumes, purple dye, silk, silver, spices, timber, tin and wine.
Trade generated vast wealth for the citizens of Rome. However, the city of Rome itself had only 1 million people, and costs kept rising as the empire became larger.
Administrative, logistical, and military costs kept adding up, and the Empire found creative new ways to pay for things.
Along with other factors, this led to hyperinflation, a fractured economy, localization of trade, heavy taxes, and a financial crisis that crippled Rome.
Roman Debasement.
The major silver coin used during the first 220 years of the empire was the denarius.
This coin, between the size of a modern nickel and dime, was worth approximately a day’s wages for a skilled laborer or craftsman. During the first days of the Empire, these coins were of high purity, holding about 4.5 grams of pure silver.
However, with a finite supply of silver and gold entering the empire, Roman spending was limited by the amount of denarii that could be minted.
This made financing the pet-projects of emperors challenging. How was the newest war, thermae, palace, or circus to be paid for?
Roman officials found a way to work around this. By decreasing the purity of their coinage, they were able to make more “silver” coins with the same face value. With more coins in circulation, the government could spend more. And so, the content of silver dropped over the years.
By the time of Marcus Aurelius, the denarius was only about 75% silver. Caracalla tried a different method of debasement. He introduced the “double denarius”, which was worth 2x the denarius in face value. However, it had only the weight of 1.5 denarii. By the time of Gallienus, the coins had barely 5% silver. Each coin was a bronze core with a thin coating of silver. The shine quickly wore off to reveal the poor quality underneath.
The Consequences.
The real effects of debasement took time to materialize.
Adding more coins of poorer quality into circulation did not help increase prosperity – it just transferred wealth away from the people, and it meant that more coins were needed to pay for goods and services.
At times, there was runaway inflation in the empire. For example, soldiers demanded far higher wages as the quality of coins diminished.
“Nobody should have any money but I, so that I may bestow it upon the soldiers.” – Caracalla, who raised soldiers pay by 50% near 210 AD.
By 265 AD, when there was only 0.5% silver left in a denarius, prices skyrocketed 1,000% across the Roman Empire. Only barbarian mercenaries were to be paid in gold.
The Effects.
With soaring logistical and admin costs and no precious metals left to plunder from enemies, the Romans levied more and more taxes against the people to sustain the Empire.
Hyperinflation, soaring taxes, and worthless money created a trifecta that dissolved much of Rome’s trade. The economy was paralyzed.
By the end of the 3rd century, any trade that was left was mostly local, using inefficient barter methods instead of any meaningful medium of exchange.
The Collapse.
During the crisis of the 3rd century (235-284 A.D), there may have been more than 50 emperors. Most of these were murdered, assassinated, or killed in battle.
The empire was in a free-for-all, and it split into three separate states.
Constant civil wars meant the Empire’s borders were vulnerable. Trade networks were disintegrated and such activities became too dangerous.
Barbarian invasions came in from every direction. Plague was rampant.
And so the Western Roman Empire would cease to exist by 476 A.D.
Currency debasement, yes.
Also: unchecked immigration by people who did not share Roman cultural values. Cultural debasement was a big problem too.
BTTT
On the other hand, the Eastern Roman Empire lived on with varying degrees of success under Emperors such as Justinian and Basil. It lost its African and Middle Eastern provinces to Islam, but it maintained its strength in Asia Minor until it was further weakened by the Crusades and eventually fell to the Turks, 1000 years after the fall of the Western Empire.
Also: unchecked immigration by people who did not share Roman cultural values. Cultural debasement was a big problem too.
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It was actually an even bigger problem than the currency debasement.
” How was the newest war, thermae, palace, or circus to be paid for?”
Boy Howdy, that sorta sounds a little like Washington DC.
But we can all be assured that ‘our’ government would never debase our dollar like them old Romans did their denarius. Would they?
From: usinflationcalculator.com
If in 1913 I purchased an item for $1.00
then in 2023 that same item would cost: $30.49
Cumulative rate of inflation: 2948.8%
As the old song goes, We are Headin for the Last Roundup and fast.
Bureaucracy Kills: A Lesson from Rome
We can't say we weren't warned.
As I have read before, we are going through the exact same thing. Time to jettison everything and go live in another country. Better to be poor in Mexico than live with what his going to happen here.
p
"That which has been is what will be, That which is done is what will be done, And there is nothing new under the sun." - Ecclesiastes 1:9
Reading Edward Gibbon's “Decline and Fall of the Roman Empire”, he is clear about what happened to the economy.
To paraphrase, he said that there was not enough gold and silver (etc.) for the valuation of commodities. So, slaves became currency.
A person's wealth could be calculated based on the number of slaves he held.
The use of a mercenary army that had no loyalty to Rome didn’t help. And the corruption of the souls of the people with hedonism being rampant further destroyed the empire.
ping
Sadly, there are other excellent examples since Rome....
-Spain
-British Empire
-Germany
All controlled the world -- until they didn't!
NEXT?
The tax rate in the Eastern Empire was 3%, which most of the populous willingly paid for protection from invasion from the east.
The tax rate in the Roman Empire was 10%. In the 3rd Century, with the cost of administering and securing the empire rising, the government took to collecting the tax every other year instead of annually, then every third year, and finally every fourth year before it completely collapsed.
No matter how powerful your army, you cannot go into remote regions and attempt to suddenly take 40% of the populations Gross Domestic Product. Particularly when the population perceives little benefit from the empire. And your army is composed of fewer and fewer Romans and increasing numbers of subjugated people. None of this factors in the every present theft, extortion, and corruption of the tax collectors themselves. Revolt is inevitable.
On the other hand, the Eastern Empire survived until 1453 AD.
A similar phenomena occurred in Great Britain and the US causing the “Long Depression” from 1873 to 1896.
The rapid expansion of their economies was not supported by increased supply of gold, exacerbated by the US going on the gold standard and demonetizing silver.
It was alleviated after the discovery of gold in South Africa in 1886 and the later Yukon gold finds.
I recall the expression, "I'll bet you a dollar to a doughnut..." With doughnuts now costing about $1.50 each, that expression is no longer heard.
LOL.
Just adding, not pinging, because NTSA.
Yep. Among the things enemies within across history love and cherish the most.
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