This is a quick overview of the Ancient Roman Currency and Economy from the early days of the city-state in the 7-6th century BC through to the decline and fall of the western part of the Empire in the 5th century. Ie over 1000 years of Roman currency and economy.
The economy of ancient RomeThis is a quick overview of the Ancient Roman Currency and Economy from the early days of the city-state in the 7-6th century BC through to the decline and fall of the western part of the Empire in the 5th century. Ie over 1000 years of Roman currency and economy.
A state’s economy is a direct reflection of many factors, such as its social conditions, particularly those of the plebeians, population trends (including immigration and emigration), technology and innovation, military activity (including the “pax romana” for example), productivity (Roman job specialization for example) and access to resources both financial and material (including energy). Even the geography of ancient Rome played its part. Perhaps the aspect which most greatly attracts attention when looking at Roman civilisation is the economics of war and conquest, but it doesn’t take long to understand that this is merely one element: just think about the aspects of Rome’s decline and fall and you’ll see there’s much more to it.
Tracking all of these aspects of the ancient Roman economy and their interdependence throughout the 1000 year period of ancient Rome is no easy thing. To this we should add that the information is extremely patchy and contains a good dose of one-sided selectivity: Historical accounts and literature were written by members of the richer equestrian and senatorial classes who were often at odds with Emperors and legislators who might have a desire to redress the social balance of the Romans in any way towards the plebeian masses. The subject of “correct” wealth redistribution within society continues to be an unresolved theme even today, the only clear indications being that the extremes are extremely negative: be it through forceful flattening of society killing all individual enterprise or permitting excessive wealth concentration in the hands of an excessively small elite. It can therefore be deduced how understanding the ancient Roman economy is not only about understanding the economics of war and conquest but also about understanding the shifting definition of “Roman society“.
Some highlights and examples of ancient Rome’s economy are given below. Some further detail and view points are reserved for a separate page dedicated to observing various aspects of the Roman economy.
Currency and economy in early Rome
Archaeological research has found early settlements on the Palatine hill as early as the 10th century BC. These populations of indoeuropean origin lived in huts made by driving posts into the ground, with straw thatched roves with a hole in them to allow fire smoke out. Their livelihood was likely based on a mixture of agriculture and livestock. Their social structure is thought to have been federal – ie many small settlements in relatively close contact with each other.
The most ancient Roman currency and economy was pastoral and based on bartering: the early Romans were Shepherds and sheep farmers and currency was based on exchange of goods such as cattle and perhaps salt.
The barter of goods was followed by barter of metal by weight in the form of lumps of misshapen bronze known as “aes rude” which had the inconvenience of having to be weighed in order to be exchanged, these were followed by small regularly shaped ingots called “aes signatum”, which still lacked standard weight. “Real” regularly shaped and weighed Roman coins weren’t in use until well into the Republican period around 335BC, at the time when the Romans began to be involved with trade over sea which they had to a degree learned from their neighbouring Etruscans who had already evolved a florid mercantile economy which traded with Gaul, Greece and North Africa.
The first Roman silver coins were coined around 312BC as the Romans came into contact with the Greek colonies in southern Italy where the existing bronze coinage was of insufficient value to trade with the silver coinage of the Greeks. In 268BC the silver denarius was coined which acted as a reference right through to the 3rd century AD in spite of the quantity of silver in the coins being progressively reduced in line with the heavy inflation which characterized much of the Republican and Imperial age.
Roman economy and territorial expansion
As Rome grew it took over the land and commerce of its neighbours. The first instance of this can be seen in the often told “story” dating to the early Roman kingdom. The Romans are said to have needed women to populate the new city and the neighbouring Sabines were an obvious target. The women were taken, a fight ensued and the two sides eventually came to an amicable agreement. It is suggested that in fact this story is a parallel to the Roman theft of the Sabine salt trade along the via Salaria road (“sale” meaning salt, was a commodity equivalent to wealth hence modern words such as “salary”). The Salaria road exists to this day.
The wealth of the Etruscans to the north was also due to mercantile trade, primarily mining of metals to be used for the manufacture of weapons as well as agricultural produce. The absorption of the Etruscan lands by Rome meant these sources of natural wealth fell into Roman control. In order to develop these resources the Roman state would give mining licences, for example there was sulphur in Sicily, coal in the north and iron in central Italy. Not to mention the marble in Tuscany.
Was the Roman economy and territorial expansion Parasitic or Saprophytic?
This question is the crux to understanding the development of the ancient Roman culture and economy. The traditional view is that Rome expanded with violence and took what transportable wealth was to be found leaving the peoples they invaded in abject poverty – ie a Parasitic approach which resulted in ultimate death of the prey. Reality is rather greyer and coloured by period, the particular war and the objectives sought. A glance at the Roman treatment of cities and the result such as the Society of Pompeii suggests that the Romans also knew a degree of wisdom: imperialism tends to destroy the markets taken over and as such is negative to your own economy. So very often a mixture of approach was adopted which might allow the local culture to “Romanise” and benefit from the patronage of Rome whilst in return paying a tribute in taxes and legions (socii and foederati). ie Romanisation was closer to a Saprophytic approach, at least conceptually.
That this was so can be perceived from the case o “Verres”, governor of Sicily which at the time was the major supplier of wheat into Rome. Verres was was at first in General Marius‘ camp with the “populares” party and then moved over to that o Sulla with the Optimates. He made ample use of his position as Praetor in favour of his party for which he was repaid with a position as governor. True to character Verres misused his powerful position to his own personal advantage, inflicting grave injustice. On his return to Rome in 70BC the sicilians sued for justice and Cicero won the case for them in spite of ample support for Verres amongst the Patricians. However this is but one case, there were plenty more which pointed in the opposite direction of abject despotism and illegality.
Throughout the period of growth of the empire the conquest of territories provided the Romans with riches which in turn allowed the removal of direct taxation and to finance their own civil wars. Thus while the dominions grew Rome could finance itself, the growth of learning and of organisation and thus lead to further success. All was thus well, or so it seemed. Continued success has its price, as was soon to become evident during the social wars (around 200BC until the murder of Caesar a century and a half later).
Expansion of Roman dominions throughout Italy, across the entire Mediterranean and to the East had put Rome in direct contact with the great centres of thought and art such as Greece. As well as attracting the artists and intellectuals to Rome itself it also meant a concentration of treasures, slave labour and wealth into the city. This lead to the Roman high culture of the Augustan age (just after Caesar, around the year 0). By this period the once austere Romans of Romulus and Remus had become well-to-do citizens: Well off, used to comforts, luxuries and foreign schooling.
The Impact of Grain on the Roman Economy
Not long before this time the siege of Hannibal and the Carthaginians had been resisted also thanks to the ability for internal agricultural production but expansion across the Mediterranean basin brought some significant shifts in the Roman economy in a relatively short period of time. For example:
- Contact with the orient during the Roman Republican period was accompanied with the arrival of soft grain wheat which replaced the hard wheat such as spelt which had been traditional in Rome. The significance of this was great because it required far less processing, allowed greater production volumes, the formation of larger production centres which could transport the excess product and hence allowed the bread and cake industry to evolve. This evolved Roman diet and drink in general such as the Roman wine market which also developed in parallel.
- With the taking of Egypt and North Africa Rome had also taken the main grain stores of the then known world.
Cheap grain and cereal imports from Africa and Sicily provided an incentive for a shift of home agriculture to sheep and cattle rearing. This meant a reduction in the number of paid plebeian jobs available to run the large farm estates.
Military conquest meant that the economy of Rome depended less and less on internal production and industry but rather on politics and trade. Clearly this revolution could not occur without a significant hit to social stability in the short term. For example the sudden influx into the city of transportable wealth such as gold and slaves would have been reflected on the Roman economy with strong inflation at the same time as job losses amongst the poorer classes.
There are plenty of accounts of the astronomical prices which houses and land were reaching in the city at the time.
Roman Economical Social Divide & the Grain Supply
Wars were financed by the wealthy patrician nobility who would then receive dividends and shares of booty, rather like purchasing stakes in a business venture. Ancient laws as well as custom meant that the senators and nobility invested their profits into land and agriculture rather than in industry and commerce. This made the ruling classes into extensive landowners.
Success in war also meant that the Roman slave trade was huge, for example it wouldn’t be unusual for the main slave trade centres to trade ten thousand slaves at a time. The cost of slaves came down heavily to the point where it was cheaper to purchase slaves than to pay free workers a salary. Slaves filled all forms of job in the city, from teaching through to tending shops and small industry.
Large numbers of Roman plebeian citizens were put out of a job and income, hence leaving them with few options but to:
- Sign up into the professional army so they too cold get a share of the booty and a piece of land on retirement.
- Sell themselves into slavery so as to be looked after by a hopefully dutiful owner.
- Live on the “social security” ration of foodstuffs known as the “annona” – the regular grain supply. Huge shiploads of grain regularly came from ports such as Alexandria to be unloaded in the grain stores along the River Tiber and managed by the state bureaucracy at locations in the Roman Forum such as Trajan’s market.
- An interesting anecdote of how these grain imports plaid a large part in Roman history is that historians relate that the great fire which ravaged much of Rome in 64AD under Emperor Nero’s reign started from the grain stores (it is unclear whether by arson).
The grain supply thus became a central feature of the ancient Roman economy and of the balance and evolution of Roman society:
- Coupled with the games at the circus and gladiatorial shows it formed the famous drug of the masses which Martial termed “panem et circenses”
- As of the 1st century AD this grain was handed out for free to the poor. It was a huge expense for the state coffers. Imperial rulers had to draw a fine line between hurting the state finances and populist handouts of free food to win popular support.
- The grain was at times used as part currency to pay the legionaries.
- It was at once a symbol and visible evidence of the power of the Roman state: its cessation in the 4th century was great evidence of the gradual fall of Rome.
- This dependence on the grain supply made the water mills used for milling and the trade routes along which it sailed of great strategic importance for the control of the city.
Slave revolts, increasing Social Divide, Social Struggle and end of the Republic
When Roman farms were small and slaves were few, a strong rapport could build up between slave and master. These were the idyllic times much praised by the likes of Cato in his book “de Agricultura” which interestingly is said to have been drawn from a similar book taken from Carthage written by Mago, brother of Hannibal. But with the passage of time the master was ever less present in the increasingly large estates which would be run by unscrupulous farm managers who drew every little bit of economic worth from their hoards of slaves which in some cases could be in the hundreds or exceed a thousand. The slaves were treated little better than animals and it is hardly surprising that there was more than one slave revolt. The most significant slave revolts were in 196BC, 186BC and most particularly in 139, the latter being worthy of consideration as an outright war. 70,000 slaves took control of Sicily as well as winning several pitched battles. It took some seven years to re-establish some sort of order. One can imagine what fate the vanquished slaves met, especially if you’ve seen the film “Spartacus“.
From the point of view of the Roman economy this all looks very negative, but we shouldn’t forget about ancient roman military success such as Pompey’s victories over the pirates of the mediterranean and into the orient and ancient roman innovation, both of which were extremely positive at this time (much of Roman technology was developed in the last two centuries BC).
Taken very superficially we can therefore see that this was a period of contradictory economic signals. Rather like an industrial revolution bringing a great concentration of wealth and benefits but great instability due to the redistribution of it and consequentially affecting social structure around it:
- “High” levels of innovation and new technology
- Inflow of extra wealth (for the rich classes who sponsored the military campaigns)
- Sudden access to cheap labour
- Civil strife and civil war (implies reduced business confidence and tendency to invest wealth into fixed assets like the farms and land rather than commerce)
All these factors meant that the end of the republican period was characterised by social and civil war: the rich were increasingly rich whilst the poor had few very badly paid jobs to aspire to. The only real alternative for the poor was to join the army and hence be paid a wage.
Social Reform and failed wealth redistribution during the Republican Period
Around 130-120BC, two brothers known as the Gracchi brothers, of noble descent, took it in turn to promote a number of social reforms in favour of the plebeians but also with the noble consideration in mind of preventing social disaster. These reforms included limits on land-owning and some redistribution of wealth by handing the poorer classes land from the public estate or from proceeds abroad (such as Pergamum). The reforms clearly went down very badly with the Patrician conservatives and ended up in violence; both brothers were eventually killed (actually one killed himself on seeing the soldiers killing his supporters).
The reforms were rendered ineffective but they did provide a basis for the popular party in contrast to that of the conservative nobles. A further 100 years and a couple of civil wars between the two factions would have to pass before the likes of Caesar and Augustus went about settling the issue to a degree. It is estimated that by the time of the great emperor Augustus as many as 50% of the citizens of Rome were taking advantage of cheap grain.
First Julius Caesar and then Augustus were great reformers and are not only remembered for their military capability but also for the extensive works they undertook in the public interest. Through great urban development projects they rendered available to the masses much of the wealth which hitherto had been reserved to a few. Augustus was particularly able in the use of “publica magnificentia” to public benefit as well as a vehicle for personal propaganda.
A side note: It is easy to gliss over the Roman plebeians as an event or series of events tied to social struggle but within an economic context we must remember that the plebeians were the mass consumers of Roman society.
Roman Economy during the Empire
In hindsight the doom of the empire was already there to be read although it would take several centuries to make itself felt. The economy of Rome depended on success at war to keep the slaves and the cheap grain coming to feed the impoverished plebeian class. While success kept coming there was little problem but clearly there were physical limitations out there waiting to make themselves felt. The land reforms of the Gracchi, Caesar and Augustus were of limited effect given that a war or year of bad harvest was sufficient to put a small farm out of business and force its sale, usually to one of the larger estates.
The Roman economy and coinage under Nero
The period of Emperor Nero’s reign was in some ways a turning point in the shape of the Roman economy. Various factors contributed to this:
- Changing Roman social structure: increasing social divide, impoverishment of the plebeian masses, growing political power of the military.
- Greater access than ever to wealth from the provinces and oriental luxuries: take Egypt and ancient Alexandria for instance which since the time of Emperor Augustus was considered a sort of personal province of the emperor.
- Growing imperial borders accompanied by the first great move in extending Romanity: Nero gave Greece a quasi-freedom which was close to full Roman citizenship.
- Enduring “pax Romana“
- Nero’s desire and policies to orientalise Roman culture towards the arts and a new social structure with an unchallenged deity-despot ruling over it rather like a Pharoah. This implied huge public spending for a diverse assortment of initiatives such as…
- Building the first “real” imperial baths and palaestra (athletics grounds) – actually Agrippa had built the first baths next to the Pantheon at the time of Augustus but they were more like a sauna rather than the imperial template with a symmetrical axis that Nero constructed and that we would recognize today as the archetypal “Roman Baths“.
- The cost of Circus games and public entertainment (including completion of the circus on the Vatican hill where St. Peter would be crucified and buried)
- Nero’s tour of Greece
- Cutting the isthmus of Corinth
- Building his “golden house”
- The “golden day” reception of the Parthian king in Rome
- Rebuilding Rome after the great fire of 64AD (rebuilding was continued by Vespasian after Nero’s death)
- Diverse “eccentricities”, for example, his personal retinue of “Augustinians” or demanding that Senators anoint themselves (the oil being at state expenses)
Nero’s reform of coinage (devaluation):
- The gold Aureus was reduced in weight by 0.5 grams to 7.3gr in total whilst
- the silver Denarius was both reduced in weight (down 0,5grams to 3.4 grams) and in silver purity (5-10% copper alloy)
Post Scriptum: Comparing the Roman economy at the time of Nero with the 21st century….
At the time of writing this article (August 2011) sovereign debt and excessive state spending is a recurring theme across the western world. Anyone who reads the papers will be well aware of the economic consequences this can bring. At the time of Nero government “Bonds” had not been invented but nevertheless the reaction was not so different from today: different provinces refused to circulate Roman money issued by Nero.
Several Roman provinces such as Gaul and Africa were successfully competing with Italy/Rome for commerce whilst at the same time the Roman citizens were unwilling to give up their luxuries and standard of living – unsurprisingly inducing a negative balance of trade and increased national debt which could only be recouped by invading new territory (increasingly difficult due to resources and logistics), unpopular taxation measures (such as Vespasian’s tax on the use of public lavatories) and/or further devaluation…. Some emperors extended the rights to citizenship so as to extend the right to tax. Certainly devaluation became a recurring item much as it did for post WWII Italy: a means of making your goods seem cheaper and helping your exports, at the expense of internal inflation and general impoverishment, shortage of money supply, risk aversion, reluctance to invest etc.
Given such pressures on the one hand (see essays on the fall of the roman empire) and the inability to reign in class privileges, claims to benefits and individual expectations such as the right to own huge untaxed land tenancies for the rich/emperor, free grain, free public games for the poor and pensions for the military was eventually paid for by social disintegration and poverty of later generations.
Was the long slippery path evident to the Romans? Cato, Cicero, Seneca, Martial and numerous other writers both serious and satirical were clearly aware that things were not going in the right direction, yet in spite of that not even a centralized despotic form of rule was able to halt the trend.
Some glimpses into Roman banking and money supply:
The effects of economic swings and booms were to be felt then very much as they are nowadays. A sudden depression in confidence in Rome would have almost immediate effects in the provinces as was witnessed during the reign of Emperor Tiberius:
Remember that when Augustus beat Queen Cleopatra and had taken over control of Egypt Rome had only just passed through a hundred years of civil and social war leading to a great expense and stagnating economy. His own troops in Italy were threatening revolt which he managed to avoid thanks to the wealth gained from the victory over Cleopatra and Mark Anthony. He took the province’s immense treasures to Rome and used them to kick-start what was then a stagnating economy through an intensive urban reform programme – turning a “city of bricks into one of marble”.
The historian Tacitus gives us an interesting account of the year 33BC during the reign of Emperor Tiberius by which time the economic effects of the preceding 50 years were making themselves felt: Inflation had pushed prices up high, particularly those of real estate and now capital was flowing out of Rome and threatening deflation. Partly for this reason and partly to contain growing usury the emperor reinstated some old laws of Caesar’s intended for the public good and generally against the interests of single individuals, forcing lenders to invest a large proportion of their capital in local real estate and posed a severe upper limit on interest rates.
“The curse of usury was indeed of old standing in Rome and a most frequent cause of sedition and discord, and it was therefore repressed even in the early days of a less corrupt morality. First, the Twelve Tables prohibited any one from exacting more than 10 per cent., when, previously, the rate had depended on the caprice of the wealthy. Subsequently, by a bill brought in by the tribunes, interest was reduced to half that amount, and finally compound interest was wholly forbidden.”
The passage then follows:
” …. In their dismay the senators, not one of whom was free from similar guilt, threw themselves on the emperor’s indulgence. He yielded, and a year and six months were granted, within which every one was to settle his private accounts conformably to the requirements of the law.”
Banks by this time were doing flourishing business and had many of the simpler banking tools one might expect today. In order to comply the rich lenders and banks recalled their loans with a direct impact on the smaller landowners who depended on them hence exacerbating the social divide.
Then banks themselves were also failing and were forced into insolvency. Many couldn’t pay their debts off and so bankruptcies followed with the consequence of their property being put on the market to reclaim the debt – hence putting further downward pressure on prices.
A veritable financial crisis and economic downturn with a huge destruction of wealth.
The effect made itself felt in all banks throughout the empire in an incredibly short time. This was a veritable market crash as those who had access to cash postponed investments in view of better prospects with the falling market (ie a deflationary market)
Having seen the horrifying effects of recession and deflation Tiberius opted for a return to inflation. He distributed liquidity back to the banks (100 million sesterces) with 3 year interest free loans to bring back business confidence. Capitalism is not so modern huh?
Change in the Roman Agricultural Industry
An interesting swing around in agriculture occurred between the reigns of emperor Claudius and Emperor Domitian. Protracted periods of peace together with extension of Roman citizenship to other Italic peoples meant that the slave supply began to diminish and the cost of labour therefore increased. By this time animal breeds had been improved to the point that there was a situation of overproduction while feed was difficult to come by therefore pushing the costs of rearing cattle up and their value on the market down. Many landowners found it of greater benefit to move back to agriculture and to subdivide their farms to smaller tenancies.
The land tenants were a hardened bunch who knew their job and were eager to maximise the land’s yield. Very quickly fertilizers, crop rotation and seed selection made their way in to everyday agriculture. Fruit growers imported and experimented with different varieties of grapes and other fruits such as peaches and figs. The increase in wine production was so great that a law had to be passed to prevent new vineyards from being planted in order to prevent overproduction.
This growth in agriculture brought a growth in small local industry to support it although it wasn’t specialised industry as we might expect nowadays but rather provided an access to many different needs on a local scale. Unfortunately the more or less free access to cheap slave labour meant that the Romans never put their genius for engineering to bear on industrial machinery and therefore never managed the leap required for a capitalist styled industrial revolution. Not only were slaves very cheap but machinery would have implied an important loss of jobs and the Romans had already learned that joblessness could create great social stress. In this sense one could say the Roman state was liberal rather than capitalistic or socialist.
Rome’s extensive Road Network – a revolution similar to that of modern telcos.
At its best the empire could boast many thousands of miles of Roman roads right across Europe which allowed hundreds of miles to be covered in a day or two. This had an effect on communications similar to that of mobile phones nowadays. The roads were patrolled and supplied with regular break points for horses, drink, food and in which the night could be spent. The more important mansioneseven provided brothels and other amusement for the Roman travellers who stopped there.
Dominion of the seas also meant that the longer routes such as between Egypt and India which might once have taken up to six months to navigate could now be navigated in about a single month. As a consequence of this, travel itself became very popular and even the less rich could afford to travel across the seas to places such as Alexandria or Athens very much as tourists did in the 19th Century “Grand Tour”. I suppose that nowadays one might compare this to the Inter-Rail tours of Europe which many students undertake after their university studies.
Emperor Vespasian is remembered as being particularly pragmatic and careful with money: the coffers of the Roman state were not exactly overflowing but a steady income was provided by taxes. Amongst his important initiatives we particularly remember construction of the Colosseum and the introduction of public lavatories which required a basic fee for use. He is remembered for his quote “pecunia non olet” (money doesn’t smell!). It is curious to notice how the word for money is “pecunia” – derived from the word “pecus” meaning sheep. Perhaps the last vestige of the Romans’ early form of income why by the time of Vespasian was nigh to being forgotten.
Later emperors managed to increase state funds but the end was by now on the horizon. Bar a few exceptions the Roman emperors and relative military juntas from the years 200-300 AD witnessed a period of progressive decadence (and blaming it on Jews and Christians).
The Roman Empire’s economic and currency decline
Emperor Diocletian began a series of much needed reforms to cope with the unmanageable size and situation of the Roman empire. Unfortunately his new system of rule which amongst other things was aimed at stability of government, was expensive to run: It duplicated bureaucracy and centres of power. This contributed to higher taxation being levied across the Empire with little care for the local levels of wealth. As a result vast agricultural areas, particularly those close to the threatened borders became uneconomical and were progressively abandoned as their owners moved into the cities. Whilst this would have once drawn Patrician buyers eager to build ever larger estates, this time round the risks involved were too great, slave supply short and financial wealth was weakening.
Emperor Constantine around the year 300 gave a final twinkle of revival. He undertook some important reforms amongst which was the definitive split of the empire into two. Rome therefore lost much of its former importance to the new capital of the East, Constantinople (later known as Byzantium). His other reform may at first have seemed less significant though in time it proved to have huge impact: Recognition of the Christians and assumption of their banner in the battle at the Milvian Bridge (where he took absolute power for himself).
An entire se
The Empire’s Dying throws. End of Rome’s economy.
There were numerous economic aspects involved in the fall of the Roman empire; a halt of growth in dominions, a gradual fall of population, loss of learning and cultural degradation. In short: economic downfall. Adverse climatic conditions and plagues had pushed the Huns and the famous Attila further and further westward into the lands inhabited by the then “barbarians”, leading the latter to seek haven within the Roman controlled lands. The lack of new conquests meant that economic well-fare would depend on internal production which by this time had returned to primarily sheep and cattle farming and wool production.
Furthermore the Roman citizens of the empire had developed a love for the finer things in life such as spices and exotic produce, most if not all of which came from the East. The writer Ammianus Marcelinus gives a great account of how in the 4th century Rome was still stunning. However, this meant a continuous outflow of wealth towards the East in order to pay for such imports. Unfortunately the produce of the West was of little interest to the East and so led to a growing trade imbalance and gradual impoverishment. This effect did not go unnoticed at the time. As a small example we note that emperor Vespasian, as far back as 70AD, imported and paid state wages to the best tutors which he imported from cities such as Athens, Rhodes and Alexandria in an attempt to stem the outflow of Roman students and their money.
Another factor was that of labour: the Empire had always depended on slave labour as a cheap source of labour to produce wealth. As already mentioned, the final years of the Empire were characterised by a sharp reduction in population, including slaves and this meant that the work force was physically insufficient to run and maintain the social fabric and structure of the state and Rome itself. The cost of labour increased whilst social fabric degraded. It is estimated that whilst at its greatest the population of Rome was in the region of 1.5million by the time of the early middle ages, around 400-600AD the population had reduced to less than a few hundred thousand: still huge by western standards but lest than a quarter of what it had been in its heyday.
Perhaps the greatest economic impact was to be had from the long drawn out Gothic war: Rome was sieged and taken on ore than one occasions, often by the very same men who were supposed to be allies. The impact of these disasters wasn’t so much the destruction which some days or weeks of looting could bring but rather the combined effect of business risk and the removal of silver and gold which to that time had been the standard on which coinage and lending was based. Severe deflation followed.
The decline and fall of Roman Coinage
An interesting parallel of economic development may be seen in Roman coinage and its changing value through the ages. The size and weight as well as the value of the alloy used to make Roman coins gives us an impression of inflation. Clearly coins can tell us many interesting things from the archeological point of view, for example the look of diverse temples and buildings which are no longer around, but their physical size, weight and material value can tell us much about the available resources in state coffers.
Coins were first minted around the fourth century BC. The smallest of these being the Aes. Through the ages the size, weight and alloy of the Aes progressively worsened. The first true minting of gold coins was about the time of Julius Caesar using the gold he had brought back from Gaul. In fact these coins were minted by Caesar’s successor and nephew Octavian, also known as Augustus.
By the fall of the Roman Empire the size and alloy of all types of coins, particularly the silver and gold was so poor that the peoples of various parts of the empire began to refuse to use them as valid currency. Interestingly enough the last series of roman coinage were minted by the barbarian-Gothic invaders.
Written testimony dating back to around the first century tells us of the price of various everyday consumables. When compared to similar documents written some 150 years later we can see that the increase (inflation) in the cost of common goods such as grain over that period accumulated to somewhere in the region of 500%, or 3% per annum. Not bad all told but one should consider the fact that that the period considered covers a period of growth as well as of decline. There were certainly periods of boom and bust even during the “best” years of the empire as for example in the reign of Tiberius described above.