13 votes

How inflation ruined the Roman economy

4 comments

  1. CosmicDefect
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    Here's a lovely chart which I think makes a good companion to this video. The decline of the Roman Empire is partially reflected in the degradation of minted coins over this period as a symptom of...

    Here's a lovely chart which I think makes a good companion to this video. The decline of the Roman Empire is partially reflected in the degradation of minted coins over this period as a symptom of economic inflation and instability. This is especially potent in the 3rd century where the empire was fraught with chaos and political troubles. You can literally see the debasement of silver in the Antoninianus with your eyes. The coins minted in the late 3rd century can hardly be called "silver" coins as they look nothing like their priors and are mostly bronze.

    5 votes
  2. [3]
    EgoEimi
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    The video brought up a staggering figure: in the middle of 2nd century, annual government expenditure was 1 billion sestertii; 70%, or 700 million, went to the army! In comparison, only a mere...

    The video brought up a staggering figure: in the middle of 2nd century, annual government expenditure was 1 billion sestertii; 70%, or 700 million, went to the army! In comparison, only a mere 10~12% of the US federal budget goes to the defense department.

    Another staggering figure: from the 2nd century to the 3rd, the emperors debased the currency: the soldier wages raised by 800%! — and general inflation presumably tracked alongside this. The real underlying Roman economy, however, was degrading.

    3 votes
    1. [2]
      CosmicDefect
      Link Parent
      This I think was a common feature not just in Roman history, but many ancient governments. Military expenditures were huge and have only come down in more modern history (perhaps even not until...

      The video brought up a staggering figure: in the middle of 2nd century, annual government expenditure was 1 billion sestertii; 70%, or 700 million, went to the army! In comparison, only a mere 10~12% of the US federal budget goes to the defense department.

      This I think was a common feature not just in Roman history, but many ancient governments. Military expenditures were huge and have only come down in more modern history (perhaps even not until the industrial revolution) -- though I don't have numbers to show it. A reoccurring theme in Julius Caesar's various civil wars was "how do we pay the veterans?"

      3 votes
      1. skybrian
        (edited )
        Link Parent
        In part that's because it was a civil war. In earlier Roman history it was different. Soldiers had to provide their own weapons (expensive) so they weren't poor. Also, part of the incentive was to...
        • Exemplary

        In part that's because it was a civil war. In earlier Roman history it was different. Soldiers had to provide their own weapons (expensive) so they weren't poor. Also, part of the incentive was to get in on the "spoils" of war (looting and the like).

        Bret Devereaux (who specializes in Roman military history but often writes about other things) wrote about this last week. There's quite a lot of detail about other things, but these bits are interesting:

        [T]he Senate sometimes tried to trim the sails of generals it was displeased with – and Marius reportedly had gotten elected on a campaign platform of ‘to hell with the Senate’ (Sall. Iug. 84.1) – by limiting the size of their armies or refusing to allow them to conduct a levy. And since 205 (a century before Marius), popular generals had occasionally juked this effort by the Senate by instead calling for volunteers, which the Senate could not stop.

        [...]

        [T]he Romans had been distributing spoils to the soldiers at the end of a campaign as a lump-sum payment since the beginning. [...] And the idea that Roman victories might seize land which would then be settled as Roman coloniae, creating new land for Roman settlers was also not new (Wikipedia has a convenient list of Roman coloniae). So Marius is simply promising to do a thing Roman commanders regularly did, essentially saying, “serve with me, because I’m going to win and victory will make us rich.” Which is exactly the reason volunteers rushed to serve with Scipio Africanus and Scipio Aemilianus: they anticipated a lucrative victory for such well-regarded commanders.

        That only works for successful conquests, though.

        Devereaux attributes reforms to how veterans were paid to Augustus:

        Augustus, after all, institutes regular bonuses for discharge, establishing a treasury funded by a regular tax to meet the expense rather than simply promising that he would win a lot and so soldiers would get rich off of their share of the booty (Res Gestae 17). And it’s not hard to see the problem he’s responding to – the massive military buildup of the Roman civil wars had left Octavian, as the victor, with the red-hot potato of hundreds of thousands of soldiers who were promised the spoils of victory, including large numbers of men who didn’t win but who, if not settled down somehow would disrupt the state (RG 3). Earlier in the civil wars, Octavian had used proscriptions and land confiscations to solve this problem but as emperor, he needed a permanent solution, thus the establishment of the aerarium militare and its discharge bonuses (praemia). Before that, you simply had generals promising to feast their soldiers off of the property of the vanquished; the civil wars had only changed that in that the vanquished were now Romans. It also establishes a standard length of service, creating that professional, long-service army.

        Ancient economies worked very differently so making comparisons to modern economies is difficult. One thing that has changed is that wars are pretty much never profitable now, and that has resulted in less war.

        5 votes