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EARLY ECONOMIC POLICY OF THE ROMAN REPUBLIC
Aes signatum, produced by the Roman Republic after 450 BC, one of the oldest Roman coins
Bruce Bartlett wrote in the Cato Institute Journal: “Beginning with the third century B.C. Roman economic policy started to contrast more and more sharply with that in the Hellenistic world, especially Egypt. In Greece and Egypt economic policy had gradually become highly regimented, depriving individuals of the freedom to pursue personal profit in production or trade, crushing them under a heavy burden of oppressive taxation, and forcing workers into vast collectives where they were little better than bees in a great hive. The later Hellenistic period was also one of almost constant warfare, which, together with rampant piracy, closed the seas to trade. The result, predictably, was stagnation. [Source: Bruce Bartlett, “How Excessive Government Killed Ancient Rome,” Cato Institute Journal 14: 2, Fall 1994, Cato.org /=]
“Stagnation bred weakness in the states ofthe Mediterranean, which partially explains the ease with which Rome was able to steadily expand its reach beginning in the 3rd century B.C. By the first century B.C., Rome was the undisputed master of the Mediterranean. However, peace did not follow Rome’s victory, for civil wars sapped its strength.” /=\
Categories with related articles in this website: Early Ancient Roman History (34 articles) factsanddetails.com; Later Ancient Roman History (33 articles) factsanddetails.com; Ancient Roman Life (39 articles) factsanddetails.com; Ancient Greek and Roman Religion and Myths (35 articles) factsanddetails.com; Ancient Roman Art and Culture (33 articles) factsanddetails.com; Ancient Roman Government, Military, Infrastructure and Economics (42 articles) factsanddetails.com; Ancient Greek and Roman Philosophy and Science (33 articles) factsanddetails.com; Ancient Persian, Arabian, Phoenician and Near East Cultures (26 articles) factsanddetails.com
Websites on Ancient Rome: Internet Ancient History Sourcebook: Rome sourcebooks.fordham.edu ; Internet Ancient History Sourcebook: Late Antiquity sourcebooks.fordham.edu ; Forum Romanum forumromanum.org ; “Outlines of Roman History” forumromanum.org; “The Private Life of the Romans” forumromanum.org|; BBC Ancient Rome bbc.co.uk/history; Perseus Project - Tufts University; perseus.tufts.edu ; Lacus Curtius penelope.uchicago.edu; Gutenberg.org gutenberg.org The Roman Empire in the 1st Century pbs.org/empires/romans; The Internet Classics Archive classics.mit.edu ; Bryn Mawr Classical Review bmcr.brynmawr.edu; De Imperatoribus Romanis: An Online Encyclopedia of Roman Emperors roman-emperors.org; British Museum ancientgreece.co.uk; Oxford Classical Art Research Center: The Beazley Archive beazley.ox.ac.uk ; Metropolitan Museum of Art metmuseum.org/about-the-met/curatorial-departments/greek-and-roman-art; The Internet Classics Archive kchanson.com ; Cambridge Classics External Gateway to Humanities Resources web.archive.org/web; Internet Encyclopedia of Philosophy iep.utm.edu; Stanford Encyclopedia of Philosophy plato.stanford.edu; Ancient Rome resources for students from the Courtenay Middle School Library web.archive.org ; History of ancient Rome OpenCourseWare from the University of Notre Dame /web.archive.org ; United Nations of Roma Victrix (UNRV) History unrv.com
Caesar’s Economic Reforms
The next great need of Rome was the improvement of the condition of the lower classes. Caesar well knew that the condition of the people could not be changed in a day; but he believed that the government ought not to encourage pauperism by helping those who ought to help themselves. There were three hundred and twenty thousand persons at Rome to whom grain was distributed. He reduced this number to one hundred and fifty thousand, or more than one half. He provided means of employment for the idle, by constructing new buildings in the city, and other public works; and also by enforcing the law that one third of the labor employed on landed estates should be free labor. As the land of Italy was so completely occupied, he encouraged the establishment, in the provinces, of agricultural colonies which would not only tend to relieve the farmer class, but to Romanize the empire. He relieved the debtor class by a bankrupt law which permitted the insolvent debtor to escape imprisonment by turning over his property to his creditors. In such ways as these, while not pretending to abolish poverty, he afforded better means for the poorer classes to obtain a living. [Source: “Outlines of Roman History” by William C. Morey, Ph.D., D.C.L. New York, American Book Company (1901), forumromanum.org \~]
His Reform of the Provincial System: The despotism of the Roman republic was nowhere more severe and unjust than in the provinces. This was due to two things—the arbitrary authority of the governor, and the wretched system of farming the taxes. The governor ruled the province, not for the benefit of the provincials, but for the benefit of himself. It is said that the proconsul hoped to make three fortunes out of his province—one to pay his debts, one to bribe the jury if he were brought to trial, and one to keep himself. The tax collector also looked upon the property of the province as a harvest to be divided between the Roman treasury and himself. Caesar put a check upon this system of robbery. The governor was now made a responsible agent of the emperor; and the collection of taxes was placed under a more rigid supervision. The provincials found in Caesar a protector; because his policy involved the welfare of all his subjects. \~\
His Other Reforms and Projects: The most noted of Caesar’s other changes was the reform of the calendar, which has remained as he left it, with slight change, down to the present day. He also intended to codify the Roman law; to provide for the founding of public libraries; to improve the architecture of the city; to drain the Pontine Marshes for the improvement of the public health; to cut a channel through the Isthmus of Corinth; and to extend the empire to its natural limits, the Euphrates, the Danube, and the Rhine. These projects show the comprehensive mind of Caesar. That they would have been carried out in great part, if he had lived, we can scarcely doubt, when we consider his wonderful executive genius and the works he actually accomplished in the short time in which he held his power. \~\
Economic Policies of Augustus
Augustus coin with his nymphomaniac daughter Julia
Suetonius wrote: “He often showed generosity to all classes when occasion offered. For example, by bringing the royal treasures to Rome in his Alexandrian triumph he made ready money so abundant, that the rate of interest fell, and the value of real estate rose greatly; and after that, whenever there was an excess of funds from the property of those who had been condemned, he loaned it without interest for fixed periods to any who could give security for double the amount. He increased the property qualification for Senators, requiring one million two hundred thousand sesterces, instead of eight hundred thousand, and making up the amount for those who did not possess it. [Source: Suetonius (c.69-after 122 A.D.): “De Vita Caesarum — Divus Augustus” (“The Lives of the Caesars — The Deified Augustus”), written A.D. c. 110, “Suetonius, De Vita Caesarum,” 2 Vols., trans. J. C. Rolfe (Cambridge, Mass.: Harvard University Press, 1920), pp. 123-287]
“He often gave largess [congiarium, strictly a distribution of oil, came to be used of any largess] to the people, but usually of different sums: now four hundred, now three hundred, now two hundred and fifty sesterces a man; and he did not even exclude young boys, though it had been usually for them to receive a share only after the age of eleven. In times of scarcity too he often distributed grain to each man at a very low figure, sometimes for nothing, and he doubled the money tickets [the tesserae nummulariae were small tablets or round hollow balls of wood, marked with numbers; they were distributed to the people instead of money and entitled the holder to receive the sum inscribed upon them — grain, oil, and various commodities were distributed by similar tesserae].
“But to show that he was a prince who desired the public welfare rather than popularity, when the people complained of the scarcity and high price of wine, he sharply rebuked them by saying: "My son-in-law Agrippa has taken good care, by building several aqueducts, that men shall not go thirsty." Again, when the people demanded largess which he had in fact promised, he replied: "I am a man of my word"; but when they called for one which had not been promised, he rebuked them in a proclamation for their shameless impudence, and declared that he would not give it, even though he was intending to do so. With equal dignity and firmness, when he had announced a distribution of money and found that many had been manumitted and added to the list of citizens, he declared that those to whom no promise had been made should receive nothing, and gave the rest less than he had promised, to make the appointed sum suffice. Once indeed in a time of great scarcity when it was difficult to find a remedy, he expelled from the city the slaves that were for sale, as well as the schools of gladiators, all foreigners with the exception of physicians and teachers, and a part of the household slaves; and when grain at last became more plentiful, he writes: "I was strongly inclined to do away forever with distributions of grain, because through dependence on them agriculture was neglected; but I did not carry out my purpose, feeling sure that they would one day be renewed through desire for popular favor." But from that time on he regulated the practice with no less regard for the interests of the farmers and grain-dealers than for those of the populace.
Free-Market Policies under Augustus
Roman market
Bruce Bartlett wrote in the Cato Institute Journal: “Following the murder of Caesar in 44 B.C., his adopted son Octavian finally brought an end to internal strife with his defeat of Mark Antony in the battle of Actium in 31 B.C. Octavian’s victory was due in no small part to his championing of Roman economic freedom against the Oriental despotism of Egypt represented by Antony, who had fled to Egypt and married Cleopatra in 36 B.C. As Oertel (1934: 386) put it, “The victory of Augustus and of the West meant... a repulse of the tendencies towards State capitalism and State socialism which might have come to fruition ... had Antony and Cleopatra been victorious. [Source: Bruce Bartlett, “How Excessive Government Killed Ancient Rome,” Cato Institute Journal 14: 2, Fall 1994, Cato.org /=]
“The long years of war had taken a heavy toll on the Roman economy. Steep taxes and requisitions of supplies by the army, as well as rampant inflation and the closing of trade routes, severely depressed economic growth. Above all, businessmen and traders craved peace and stability inorder to rebuild their wealth. Increasingly, they came to believe that peace and stability could only be maintained if political power were centralized in one man. This man was Octavian, who took the name Augustus and became the first emperor of Rome in 27 B.C., serving until 14 AD. /=\
“Although the establishment of the Roman principate represented a diminution of political freedom, it led to an expansion of economic freedom. In practice, the average Roman had little real political freedom anyway. His power lay not in the ballot box, but in participating in mob activities, although these were often manipulated by unscrupulous leaders for their own benefit. Especially during the Republic, the mob could often make or break Rome’s leaders (Brunt 1966). Of course, economic freedom was not universal. Egypt, which was the personal property of the Roman emperor, largely retained its socialist economic system (Rostovtzeff 1929, Mime 1927). /=\
“Augustus clearly favored private enterprise, private property, and free trade. The burden of taxation was significantly lifted by the abolition of tax farming and the regularization of taxation.Peace brought a revival of trade and commerce, further encouraged by Roman investments in good roads and harbors. Except for modest customs duties (estimated at 5 percent), free trade ruled throughout the Empire. It was, in Michael Rostovtzeff’s words, a period of “almost complete freedom for trade and of splendid opportunities for private initiative”. /=\
“Tiberius, Rome’s second emperor (14—37 AD.), extended the policies of Augustus well into the first century A.D. It was his strong desire to encourage growth and establish a solid middle class (bourgeoisie), which he saw as the backbone of the Empire. Oertel (1939: 232) describes the situation: ‘The first century of our era witnessed a definitely high level of economic prosperity, made possible by exceptionally favorable conditions. Within the framework of the Empire, embracing vast territories in which peace was established and communications were secure, it was possible for a bourgeoisie to come into being whose chief interests were economic, which maintained a form of economy resting on the old city culture and characterized by individualism and private enterprise, and which reaped all the benefits inherent in such a system. The State deliberately encouraged this activity of the bourgeoisie, both directly through government protection and its liberal economic policy, which guaranteed freedom of action and an organic growth on the lines of “laissez faire, laissez aller,” and directly through measures encouraging economic activity.’ /=\
“Of course, economic freedom was not universal. Egypt, which was the personal property of the Roman emperor, largely retained its socialist economic system However, even here some liberalization did occur. Banking was deregulated, leading to the creation of many private banks. Some land was privatized and the state monopolies were weakened, thus giving encouragement to private enterprise even though the economy remained largely nationalized.” /=\
Crackdowns and Austerity Measures of Tiberius
Tiberius coin
Suetonius wrote: “He reduced the cost of the games and shows by cutting down the pay of the actors and limiting the pairs of gladiators to a fixed number. Complaining bitterly that the prices of Corinthian bronzes had risen to an immense figure and that three mullets had been sold for thirty thousand sesterces, he proposed that a limit be set to household furniture and that the prices in the market should be regulated each year at the discretion of the Senate, while the aediles were instructed to put such restrictions on cook-shops and eating-houses as not to allow even pastry to be exposed for sale. Furthermore, to encourage general frugality by his personal example, he often served at formal dinners meats left over from the day before and partly consumed, or the half of a boar, declaring that it had all the qualities of a whole one. He issued an edict forbidding general kissing, as well as the exchange of New Year's gifts after the Kalends of January. It was his custom to return a gift of four-fold value, and in person; but annoyed at being interrupted all through the month by those who did not have access to him on the holiday, he did not continue it. [Source: Suetonius (c.69-after 122 A.D.) Tiberius, “De Vita Caesarum,” written A.D. 110, 2 Vols., translated by J. C. Rolfe (Cambridge, Mass.: Harvard University Press, 1920), pp. 291-401]
“He revived the custom of our forefathers, that in the absence of a public prosecutor matrons of ill-repute be punished according to the decision of a council of their relatives. He absolved a Roman knight from his oath and allowed him to put away his wife, who was taken in adultery with her son-in-law, even though he had previously sworn that he would never divorce her. Notorious women had begun to make an open profession of prostitution, to avoid the punishment of the laws by giving up the privileges and rank of matrons, while the most profligate young men of both orders voluntarily incurred degradation from their rank, so as not to be prevented by the decree of the Senate from appearing on the stage and in the arena. All such men and women he punished with exile, to prevent anyone from shielding himself by such a device. He deprived a Senator of his broad stripe on learning that he had moved to his gardens just before the Kalends of July [the first of July was the date for renting and hiring houses and rooms — hence "moving day"], with the design of renting a house in the city at a lower figure after that date. He deposed another from his quaestorship, because he had taken a wife the day before casting lots [to determine his province or sphere of duty] and divorced her the day after.
“He abolished foreign cults, especially the Egyptian and the Jewish rites, compelling all who were addicted to such superstitions to burn their religious vestments and all their paraphernalia. Those of the Jews who were of military age he assigned to provinees of less healthy climate, ostensibly to serve in the army; the others of that same race or of similar beliefs he banished from the city, on pain of slavery for life if they did not obey. He banished the astrologers as well, but pardoned such as begged for indulgence and promised to give up their art.
“He gave special attention to securing safety from prowling brigands and lawless outbreaks, He stationed garrisons of soldiers nearer together than before throughout Italy, while at Rome he established a camp for the barracks of the praetorian cohorts, which before that time had been quartered in isolated groups in divers lodging houses. He took great pains to prevent outbreaks of the populace and punished such as occurred with the utmost severity. When a quarrel in the theatre ended in bloodshed, he banished the leaders of the factions, as well as the actors who were the cause of the dissension; and no entreaties of the people could ever induce him to recall them.
Caligula Pillages and Imposes Huge Taxes to Pay off His Extravagances
coin with Caligula and the three sisters he ravished
Suetonius wrote: “Having thus impoverished himself, from very need he turned his attention to pillage through a complicated and cunningly devised system of false accusations, auction sales, and imposts. He ruled that Roman citizenship could not lawfully be enjoyed by those whose forefathers had obtained it for themselves and their descendants, except in the case of sons, since "descendants" ought not to be understood as going beyond that degree; and when certificates of the deified Julius and Augustus were presented to him, he waved them aside as old and out of date. He also charged that those estates had been falsely returned, to which any addition had later been made from any cause whatever. If any chief centurions since the beginning of Tiberius' reign had not named that emperor or himself among their heirs, he set aside their wills on the ground of ingratitude; also the testaments of all others, as null and void, if anyone said that they had intended to make Caesar their heir when they died. [Source: Suetonius (c.69-after 122 A.D.) “De Vita Caesarum: Caius Caligula” (“The Lives of the Caesars: Caius Caligula”) written in A.D. 110, 2 Vols., translated by J. C. Rolfe, (Cambridge, Mass.: Harvard University Press, and London: William Henemann, 1920), Vol. I, pp. 405-497, modernized by J. S. Arkenberg, Dept. of History, Cal. State Fullerton]
“When he had roused such fear in this way that he came to be named openly as heir by strangers among their intimates and by parents among their children, he accused them of making game of him by continuing to live after such a declaration, and to many of them he sent poisoned dainties. He used further to conduct the trial of such cases in person, naming in advance the sum which he proposed to raise at each sitting, and not rising until it was made up. Impatient of the slightest delay, he once condemned in a single sentence more than forty who were accused on different counts, boasting to Caesonia, when she woke after a nap, of the great amount of business he had done while she was taking her afternoon sleep. Appointing an auction, he put up and sold what was left from all the shows, personally soliciting bids and running them up so high, that some who were forced to buy articles at an enormous price and were thus stripped of their possessions, opened their veins. A well-known incident is that of Aponius Saturninus; he fell asleep on one of the benches, and as the auctioneer was warned by Gaius not to overlook the praetorian gentleman who kept nodding to him, the bidding was not stopped until thirteen gladiators were knocked down to the unconscious sleeper at nine million sesterces.
“When he was in Gaul and had sold at immense figures the jewels, furniture, slaves, and even the freedmen of his sisters who had been condemned to death, finding the business so profitable, he sent to the city for all the paraphernalia of the old palace, seizing for its transportation even public carriages and animals from the bakeries; with the result that bread was often scarce at Rome and many who had cases in court lost them from inability to appear and meet their bail. To get rid of this furniture, he resorted to every kind of trickery and wheedling, now railing at the bidders for avarice and because they were not ashamed to be richer than he, and now feigning regret for allowing common men to acquire the property of princes. Having learned that a rich provincial had paid those who issued the emperor's invitations two hundred thousand sesterces, to be smuggled in among the guests at one of his dinner-parties, he was not in the least displeased that the honor of dining with him was rated so high; but when next day the man appeared at his auction, he sent a messenger to hand him some trifle or other at the price of two hundred thousand sesterces and say that he should dine with Caesar on his personal invitation.
Caligula taxed prostitutes
“He levied new and unheard of taxes, at first through the publicans and then, because their profit was so great, through the centurions and tribunes of the praetorian guard; and there was no class of commodities or men on which he did not impose some form of tariff. On all eatables sold in any part of the city he levied a fixed and definite charge; on lawsuits and legal processes begun anywhere, a fortieth part of the sum involved, providing a penalty in case anyone was found guilty of compromising or abandoning a suit; on the daily wages of porters, an eighth; on the earnings of prostitutes, as much as each received for one embrace; and a clause was added to this chapter of the law, providing that those who had ever been prostitutes or acted as panders should be liable to this public tax, and that even matrimony should not be exempt.
“When taxes of this kind had been proclaimed, but not published in writing, inasmuch as many offences were committed through ignorance of the letter of the law, he at last, on the urgent demand of the people, had the law posted up, but in a very narrow place and in excessively small letters, to prevent the making of a copy. To leave no kind of plunder untried, he opened a brothel in his palace, setting apart a number of rooms and furnishing them to suit the grandeur of the place, where matrons and freeborn youths should stand exposed. Then he sent his pages about the fora and basilicas, to invite young men and old to enjoy themselves, lending money on interest to those who came and having clerks openly take down their names, as contributors to Caesar's revenues. He did not even disdain to make money from play, and to increase his gains by falsehood and even by perjury. Having on one occasion given up his place to the player next him and gone into the courtyard, he spied two wealthy Roman knights passing by; he ordered them to be seized at once and their property confiscated and came back exultant, boasting that he had never played in better luck.
“But when his daughter was born, complaining of his narrow means, and no longer merely of the burdens of a ruler but of those of a father as well, he took up contributions for the girl's maintenance and dowry. He also made proclamation that he would receive New Year's gifts, and on the Kalends of January took his place in the entrance to the Palace, to clutch the coins which a throng of people of all classes showered on him by handfuls and lapfuls. Finally, seized with a mania for feeling the touch of money, he would often pour out huge piles of gold pieces in some open place, walk over them barefooted, and wallow in them for a long time with his whole body.
Vespasian, Money and Control of the Roman Treasury
Suetonius wrote: “The only thing for which he can fairly be censured was his love of money. For not content with reviving the imposts which had been repealed under Galba, he added new and heavy burdens, increasing the amount of tribute paid by the provinces, in some cases actually doubling it, and quite openly carrying on traffic which would be shameful even for a man in private life; for he would buy up certain commodities merely in order to distribute them at a profit. He made no bones of selling offices to candidates and acquittals to men under prosecution, whether innocent or guilty. [Source: Suetonius (c.69-after 122 A.D.): “De Vita Caesarum: Vespasian” (“Life of Vespasian”), written c. A.D. 110, translated by J. C. Rolfe, Suetonius, 2 Vols., The Loeb Classical Library (London: William Heinemann, and New York: The MacMillan Co., 1914), II.281-321]
Vespasian taxed toilets like these in Pompeii
He is even believed to have had the habit of designedly advancing the most rapacious of his procurators to higher posts, that they might he the richer when he later condemned them; in fact, it was common talk that he used these men as sponges, because he, so to speak, soaked them when they were dry and squeezed them when they were wet. Some say that he was naturally covetous and was taunted with it by an old herdsman of his, who on being forced to pay for the freedom for which he earnestly begged Vespasian when he became emperor cried: "The fox changes his fur, but not his nature." Others, on the contrary, believe that he was driven by necessity to raise money by spoliation and robbery because of the desperate state of the treasury and the privy purse; to which he bore witness at the very beginning of his reign by declaring that forty thousand millions were needed to set the State upright. This latter view seems the more probable, since he made the best use of his gains, ill gotten though they were.
“He was most generous to all classes, making up the requisite estate for senators [This had been increased to 1,200,000 sesterces by Augustus], giving needy ex-consuls an annual stipend of five hundred thousand sesterces, restoring to a better condition many cities throughout the empire which had suffered from earthquakes or fires, and in particular encouraging men of talent and the arts.
“He was the first to establish a regular salary of a hundred thousand sesterces for Latin and Greek teachers of rhetoric, paid from the privy purse. He also presented eminent poets with princely largess and great rewards, and artists, too, such as the restorer of the Venus of Cos [Doubtless referring to the statue of Venus consecrated by Vespasian in his Temple of Peace, the sculptor of which, according to Pliny, was unknown. The Venus of Cos was the work of Praxiteles], and of the Colossus [The colossal statue of Nero; see Nero, xxxi.1]. To a mechanical engineer, who promised to transport some heavy columns to the capitol at small expense, he gave no mean reward for his invention, but refused to make use of it, saying: "You must let me feed my poor commons."
“When Titus found fault with him for contriving a tax upon public toilets, he held a piece of money from the first payment to his son's nose, asking whether its odor was offensive to him. When Titus said "No," he replied, "Yet it comes from urine." On the report of a deputation that a colossal statue of great cost had been voted him at public expense, he demanded to have it set up at once, and holding out his open hand, said that the base was ready. He did not cease his jokes even then in apprehension of death and in extreme danger; for when among other portents the Mausoleum [Of Augustus] opened on a sudden and a comet appeared in the heavens, he declared that the former applied to Junia Calvina of the family of Augustus, and the latter to the king of the Parthians, who wore his hair long; and as death drew near, he said: "Woe's me. Methinks I'm turning into a god."”
Diocletian's Efforts to Improve the Economy
Ralph W. Mathisen of the University of South Carolina wrote: “Another problem was the economy, which was in an especially sorry state. The coinage had become so debased as to be virtually worthless. Diocletian's attempt to reissue good gold and silver coins failed because there simply was not enough gold and silver available to restore confidence in the currency. A "Maximum Price Edict" issued in 301, intended to curb inflation, served only to drive goods onto the black market. Diocletian finally accepted the ruin of the money economy and revised the tax system so that it was based on payments in kind . The soldiers too came to be paid in kind. [Source: Ralph W. Mathisen, University of South Carolina ^|^]
“In order to assure the long term survival of the empire, Diocletian identified certain occupations which he felt would have to be performed. These were known as the "compulsory services." They included such occupations as soldiers, bakers, members of town councils, and tenant farmers. These functions became hereditary, and those engaging in them were inhibited from changing their careers. The repetitious nature of these laws, however, suggests that they were not widely obeyed. Diocletian also expanded the policy of third-century emperors of restricting the entry of senators into high-ranking governmental posts, especially military ones. ^|^
Diocletian's Price Controls
Diocletian coin
Bruce Bartlett wrote in the Cato Institute Journal: “By the end of the third century, Rome had clearly reached a crisis. The state could no longer obtain sufficient resources even through compulsion and was forced to rely ever more heavily on debasement of the currency to raise revenue. By the reign of Claudius II Gothicus (268—270 A.D.) the silver content of the denarius was down to just .02 percent. As a consequence, prices skyrocketed. A measure of Egyptian wheat, for example, which sold for seven to eight drachmaes in the second century now cost 120,000 drachmaes. This suggests an inflation of 15,000 percent during the third century. [Source: Bruce Bartlett, “How Excessive Government Killed Ancient Rome,” Cato Institute Journal 14: 2, Fall 1994, Cato.org /=]
“Finally, the very survival of the state was at stake. At this point, the Emperor Diocletian (284—305 A.D.) took action. He attempted to stop the inflation with a far-reaching system of price controls on all services and commodities.’° These controls were justified by Diodetian’s belief that the inflation was due mainly to speculation and hoarding, rather than debasement of the currency. As he stated in the preamble to his edict of 301 A.D.: ‘For who is so hard and so devoid of human feeling that he cannot, or rather has not perceived, that in the commerce carried on in the markets or involved in the daily life of cities immoderate prices are so widespread that the unbridled passion for gain is lessened neither by abundant supplies nor by fruitful years; so that without a doubt men who are busied in these affairs constantly plan to control the very winds and weather from the movements of the stars, and, evil that they are, they cannot endure the watering of the fertile fields by the rains from above which bring the hope of future harvests, since they reckon it their own loss if abundance comes through the moderation of the weather.’ /=\
“Despite the fact that the death penalty applied to violations of the price controls, they were a total failure. Lactantius (1984: 11), a contemporary of Diocletian’s, tells us that much blood was shed over “small and cheap items” and that goods disappeared from sale. Yet, “the rise in price got much worse.” Finally, “after many had met their deaths, sheer necessity led to the repeal of the law.” /=\
Diocletian: Prices Edict, 301, Preamble: “For who is so hard and so devoid of human feeling that he cannot, or rather has not perceived, that in the commerce carried on in the markets or involved in the daily life of cities immoderate prices are so widespread that the unbridled passion for gain is lessened neither by abundant supplies nor by fruitful years; so that without a doubt men who are busied in these affairs constantly plan to control the very winds and weather from the movements of the stars, and, evil that they are, they cannot endure the watering of the fertile fields by the rains from above which bring the hope of future harvests, since they reckon it their own loss if abundance comes through the moderation of the weather.”
Diocletian's Economic Reforms
As part of their efforts to make the empire secure, Diocletian and Constantine I both instituted economic polices with the goal of stabilizing prices and ensuring social stability. These tasks have proved beyond the means of modern governments with millions of employees available to implement policy: it is certain that the very small corps of administrators in the Roman Empire could have had chance of imposing such rules. At all events, these regulations do not seem to have worked.
Diocletian collected taxes in the form of goods, like the Egyptian wine stored in the amphorae, rather than money
Bruce Bartlett wrote in the Cato Institute Journal: “ “Diocletian’s other reforms, however, were more successful. The cornerstone of Diocletian’s economic policy was to turn the existing A.D. hoc policy of requisitions to obtain resources for the state into a regular system.” Since money was worthless, the new system was based on collecting taxes in the form of actual goods and services, but regularized into a budget so that the state knew exactly what it needed and taxpayers knew exactly how much they had to pay. [Source: Bruce Bartlett, “How Excessive Government Killed Ancient Rome,” Cato Institute Journal 14: 2, Fall 1994, Cato.org /=]
“Careful calculations were made of precisely how much grain, cloth, oil, weapons or other goods were necessary to sustain a single Roman soldier. Thus, working backwards from the state’s military requirements, a calculation was made for the total amount of goods and services the state would need in a given year. On the other side of the coin, it was also necessary to calculate what the taxpayers were able to provide in terms of the necessary goods and services. This required a massive census, not only of people but of resources, especially cultivated land. Land was graded according to its productivity. As Lactantius (1984: 37) put it, “Fields were measured out clod by clod, vines and trees were counted, every kind of animal was registered, and note taken of every member of the population.” /=\
“Taxable capacity was measured in terms of the caput, which stood for a single man, his family, his land and what they could produce.’ The state’s needs were measured in terms of the annona, which represented the cost of maintaining a single soldier for a year. With these two measures calculated in precision, it was now possible to have a real budget and tax system based entirely on actual goods and services. Assessments were made and resources collected, transported and stored for state use. /=\
Although an army on the move might still requisition goods or services when needed, the overall result of Diocletian’s reform was generally positive. Taxpayers at least knew in advance what they were required to pay, rather than suffer from A.D. hoc confiscations. Also, the tax burden was spread more widely, instead of simply falling on the unlucky, thus lowering the burden for many Romans. At the same time, with the improved availability of resources, the state could now better plan and conduct its military operations. In order to maintain this system where people were tied to their land, home, jobs, and places of employment, Diocletian transformed the previous ad hoc practice. Workers were organized into guilds and businesses into corporations called collegia. Both became de facto organs of the state, controlling and directing their members to work and produce for the state.” /=\
Economic Reasons Behind the Fall of Rome
Bruce Bartlett wrote in the Cato Institute Journal: “Constantine (308—37 A. D.) continued Diocletian’s policies of regimenting the economy, by tying workers and their descendants even more tightly to the land or their place of employment For example, in 332 he issued the following order: ‘Any person in whose possession a tenant that belongs to another is found not only shall restore the aforesaid tenant to his place of origin but also shall assume the capitation tax for this man for the time that he was with him. Tenants also who meditate flight may be bound with chains and reduced to a servile condition, so that by virtue of a servile condemnation they shall be compelled to fulfill the duties that befit free men.’ [Source: Bruce Bartlett, “How Excessive Government Killed Ancient Rome,” Cato Institute Journal 14: 2, Fall 1994, Cato.org /=]
Despite such efforts, land continued to be abandoned and trade, for the most part, ceased. Industry moved to the provinces, basically leaving Rome as an economic empty shell; still in receipt of taxes, grain and other goods produced in the provinces, but producing nothing itself. The mobof Rome andthe palace favorites produced nothing, yet continually demanded more, leading to an intolerable tax burden on the productive classes.’ /=\
“In the fifty years after Diocletian the Roman tax burden roughly doubled, making it impossible for small farmers to live on their production. This is what led to the final breakdown of the economy. As Lactantius put it: ‘The number of recipients began to exceed the number of contributors by so much that, with farmers’ resources exhausted by the enormous size of the requisitions, fields became deserted and cultivated land was turned into forest.’ /=\
kneeling barbarian
Although Constantine made an effort to restore the currency, subsequent emperors resumed the debasement, resulting in renewed price inflation. Apparently, Emperor Julian (360—63 AD.) also refused to believe that the inflation was due to debasement, but rather was caused by merchants hoarding their stores. To prove his point, he sent his own grain reserves into the market at Antioch. According to Gibbon: ‘The consequences might have been foreseen, and were soon felt. The Imperial wheat was purchased by the rich merchants; the proprietors of land or of corn withheld from the city the accustomed supply; and the small quantities that appeared in the market were secretly sold at an advanced and illegal price.’ /=\
“Although he had been warned that his policies would not lower prices, but rather would exacerbate the shortage, Julian nevertheless continued to believe that his policy worked, and blamed complaints of its failure on the ingratitude of the people. In other respects, however, Julian was more enlightened. In the areaof tax policy, he showed sensitivity and perception. He understood that the main reason for the state’s fiscal problem was the excessive burden of taxation, which fell unequally on the population. The wealthy effectively were able to evade taxation through legal and illegal measures, such as bribery. By contrast, the ordinary citizen was helpless against the demands of the increasingly brutal tax collectors. /=\
“Previous measures to ease the tax burden, however, were ineffective because they only relieved the wealthy. Constantine, for example, had sought to ease the burden by reducing the number of tax units— caputs—for which a given district was responsible. In practice, this meant that only the wealthy had any reduction in their taxes. Jnlian, however, by cutting the tax rate, ensured that his tax reduction was realized by all the people. He also sought to broaden the tax base by abolishing some of the tax exemptions which many groups, especially the wealthy, had been granted by previous emperors (Bernardi 1970: 59, 66). /=\
“Nevertheless, the revenues of the state remained inadequate to maintain the national defense. This led to further tax increases, such as the increase in the sales tax from 1 percent to 4.5 percent in 444 A.D. However, state revenues continued to shrink, as taxpayers invested increasing amounts of time, effort and money in tax evasion schemes. Thns even as tax rates rose, tax revenues fell, hastening the decline of the Roman state. /=\
“In short, taxpayers evaded taxation by withdrawing from society altogether. Large, powerful landowners, able to avoid taxation through legal or illegal means, began to organize small communities around them. Small landowners, crushed into bankruptcy by the heavy burden of taxation, threw themselves at the mercy of the large landowners, signing on as tenants or even as slaves, (Slaves, of course, paid no taxes.) The latter phenomenon was so widespread and so injurious to the state’s revenues, in fact, that in 368 AD. Emperor Valens declared it illegal to renounce one’s liberty in order to place oneself under the protection of a great landlord. /=\
“In the end, there was no money left to pay the army, build forts or ships, or protect the frontier. The barbarian invasions, which were the final blow to the Roman state in the fifth century, were simply the culmination of three centuries of deterioration in the fiscal capacity of the state to defend itself. Indeed, many Romans welcomed the barbarians as saviors from the onerous tax burden.’ /=\
“Although the fall of Rome appears as a cataclysmic event in history, for the bulk of Roman citizens it had little impact on their way of life. As Henri Pirenne (1939: 33—62) has pointed out, once the invaders effectively had displaced the Roman government they settled into governing themselves. At this point, they no longer had any incentive to pillage, but rather sought to provide peace and stability in the areas they controlled. After all, the wealthier their subjects the greater their taxpaying capacity. /=\
“In conclusion, the fall of Rome was fundamentally due to economic deterioration resulting from excessive taxation, inflation, and over- regulation. Higher and higher taxes failed to raise additional revenues because wealthier taxpayers could evade such taxes while the middle class—and its taxpaying capacity—were exterminated. Although the final demise of the Roman Empire in the West (its Eastern half continued on as the Byzantine Empire) was an event of great historical importance, for most Romans it was a relief.” /=\
Image Sources: Wikimedia Commons
Text Sources: Internet Ancient History Sourcebook: Rome sourcebooks.fordham.edu ; Internet Ancient History Sourcebook: Late Antiquity sourcebooks.fordham.edu ; Forum Romanum forumromanum.org ; “Outlines of Roman History” by William C. Morey, Ph.D., D.C.L. New York, American Book Company (1901), forumromanum.org \~\; “The Private Life of the Romans” by Harold Whetstone Johnston, Revised by Mary Johnston, Scott, Foresman and Company (1903, 1932) forumromanum.org |+|; BBC Ancient Rome bbc.co.uk/history/ ; Perseus Project - Tufts University; perseus.tufts.edu ; MIT, Online Library of Liberty, oll.libertyfund.org ; Gutenberg.org gutenberg.org Metropolitan Museum of Art, National Geographic, Smithsonian magazine, New York Times, Washington Post, Los Angeles Times, Live Science, Discover magazine, Times of London, Natural History magazine, Archaeology magazine, The New Yorker, Encyclopædia Britannica, "The Discoverers" [∞] and "The Creators" [μ]" by Daniel Boorstin. "Greek and Roman Life" by Ian Jenkins from the British Museum.Time, Newsweek, Wikipedia, Reuters, Associated Press, The Guardian, AFP, BBC and various books and other publications.
Last updated October 2018