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Guest anorthosite

If anyone has a copy of Obelix and Co. from the childhood, I suggest you go back and read it.

To cut a long story short, the Romans use money to try and corrupt the village by creating an artificial market for menhirs (which Obelix makes). The economic battle plans of the Romans will amuse any HPCer as every civilisation of the ancient world tries to get a piece of the menhir bubble.

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That is a really interesting read Isakndar. What was the source of your information?

I'm finding myself more and more fascinated by the history of fiat money. Two statements that are commonly bandied around on this site are:

1) Every fiat currency in the last 2000 years has failed

2) It does so within approximately 30 years of being taken up

I would love to see some more references / stats to back this up. Although as previously stated, the educated elites of the time probably didn't understand economics that well or document their failures.

It really amazes me that this phenomenon has been repeated throughout history and always has the same outcome.

I found some similar information here:

Why does fiat money seemly work?

I am studying history for a second degree - I have read 20 or 30 books and many more academic journals on Roman history - these are my sources.

That quotation is rather odd and wrong - While is is true there was a huge boom under Nero as he emptied out the Treasury, there was a recession under Vespasian while the public finances were put in order. But from the mid 90s AD to the end of the 2nd century, the Economy prospered under the emperors Trajan, Hadrian, Antonius Pius and Marcus Aurelius with a stable currency. The currency was not debased significantly until the 3rd century. And while Diocletian's prices Edict was a bad idea, he can be credited with presiding over a stablising of the currency.

It is also worth mentioning that the debasement of the silver coinage probably did not amount to more than a couple of percent per year during the 3rd century - so not really different from a modern rate of inflation.

Edited by Isakndar
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  • 2 weeks later...

I finished this most difficult of essays. And hit the end paragraph with this...

It is difficult from a modern perspective to appreciate the achievements from the ancient world; there is a discontinuity with the past that is particularly hard to bridge. European economic histories have a tendency to start around the year 1000 and are predicated on a theme of continuous economic and technological development. Thus the achievements of the prior millennia are ignored because the realty does not fit the required narrative. These historians, thus by their omissions, unconsciously bring into stark relief the extent and scale of the economic decline from the end of antiquity.

Though my essay was to discuss the economic productivity of the high empire which lasted a long time, I had to consider the effects of our understanding of the past coloured by medieval historians who tend to understate the achievements of the past. I think this is quite punchy?

PS - the economic recession which started in the later empire (not the period I was discussing) lasted about 500 - 1000 years. Ecomomics are a branch of chaos mathematics - such things can happen.

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I finished this most difficult of essays. And hit the end paragraph with this...

It is difficult from a modern perspective to appreciate the achievements from the ancient world; there is a discontinuity with the past that is particularly hard to bridge. European economic histories have a tendency to start around the year 1000 and are predicated on a theme of continuous economic and technological development. Thus the achievements of the prior millennia are ignored because the realty does not fit the required narrative. These historians, thus by their omissions, unconsciously bring into stark relief the extent and scale of the economic decline from the end of antiquity.

Though my essay was to discuss the economic productivity of the high empire which lasted a long time, I had to consider the effects of our understanding of the past coloured by medieval historians who tend to understate the achievements of the past. I think this is quite punchy?

PS - the economic recession which started in the later empire (not the period I was discussing) lasted about 500 - 1000 years. Ecomomics are a branch of chaos mathematics - such things can happen.

I cant think of any examples right now, but watching some TV documentaries about past peoples, the archeologists usually seem to assume the people of the past were STUPID.

The same is applied to any tribes discovered in modern times.

These people were NOT stupid. They were more or less the SAME as we are.

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: Rome 27 BC

Rome’s history of inflation and money debasement actually began with Cesar’s successor Augustus, whereby his method was at least not a prima facie fraud. He simply ordered the mines to overproduce silver in an attempt to finance the empire that had grown greatly under Cesar and himself.

When this overproduction began to have inflationary effects, Augustus wisely decided to cut back on the issuance of coins. This was the last time that a Roman emperor attempted to honestly correct a monetary policy blunder, aside from a brief flashing up of monetary rectitude under Aurelius some 280 years later.

Under Augustus’ successors, things began to deteriorate fast. Claudius , Caligula and Nero embarked on enormous spending sprees that depleted Rome’s treasury. It was Nero who first came up with the idea to actually debase coins by reducing their silver content in AD 64 , and it all went downhill from there.

It should be mentioned that Mark Anthony of Hollywood fame financed the army he used in his fight against Octavian – then later Augustus – also with debased coinage. These coins remained in circulation for a long time, obeying Gresham’s Law – "bad money drives good money from circulation".

In AD 274 Aurelius entered the scene with a well-intentioned monetary reform, which fixed the silver-copper content of the then most widely used coin (the Antonianus)at 1:20 – however, just as soon as this reform was instituted, the silver content resumed its inexorable decline.

n AD 301 Emperor Diocletian tried his hand at reform, this time by instituting price controls, an idiocy repeated numerous times thereafter, in spite of the incontrovertible evidence that it never works (Richard Nixon’s ill-fated experiment being the most recent example) .

Naturally, those price controls accelerated Rome’s downfall as goods simply began to disappear from the market place. Merchants began to hide their goods rather than accept the edict to sell them at a loss. This is of course why price controls are always doomed to failure.

One recurring feature of Rome’s long history of debasing its money was a perennial trade deficit due to overconsumption. Does this sound vaguely familiar?

Must say the book I am currently reading "A history of money from ancient times to the present day" by Glyn Davies strongly disagrees with most of that.

Nero indeed started debasing the coinage (the aureus reduced in weight and the denarius became only 90% pure), but this was not a problem for 200 years while the empire was still expanding. Inflation during this time was very low. By Ad250 (the beginning of the high inflationary period) the silver content was 40 percent. By the time of Gallienius 20 years later, the silver content was down to 4% and inflation was rampant. Then came Aurelian who changed the nominal values of the coinage which in fact caused inflation to increase at a much higher rate.

Interesting quote here for the gold currency crowd "Modern believers in the disinflationary magic of a gold currency.....should note that Aurelian proved conclusively that a "reformed" currency is perfectly compatible with an increase rather than a decrease in inflation"

Diocletian in fact returned the coinage to a 100% purity, but he was still not able to control inflation (possibly because of the existing coinage already circulating)

Edited by jazza
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During the time of the Emperor Tiberius, 33AD - from Tacitus' Annals

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.

Hence followed a scarcity of money, a great shock being given to all

credit, the current coin too, in consequence of the conviction of so

many persons and the sale of their property, being locked up in the

imperial treasury or the public exchequer. To meet this, the Senate

had directed that every creditor should have two-thirds his capital

secured on estates in Italy. Creditors however were suing for

payment in full, and it was not respectable for persons when sued to

break faith. So, at first, there were clamorous meetings and

importunate entreaties; then noisy applications to the praetor's

court. And the very device intended as a remedy, the sale and purchase

of estates, proved the contrary, as the usurers had hoarded up all

their money for buying land. The facilities for selling were

followed by a fall of prices, and the deeper a man was in debt, the

more reluctantly did he part with his property, and many were

utterly ruined. The destruction of private wealth precipitated the

fall of rank and reputation, till at last the emperor interposed his

aid by distributing throughout the banks a hundred million

sesterces, and allowing freedom to borrow without interest for three

years, provided the borrower gave security to the State in land to

double the amount. Credit was thus restored, and gradually private

lenders were found. The purchase too of estates was not carried out

according to the letter of the Senate's decree, rigour at the

outset, as usual with such matters, becoming negligence in the end.

-------------------------------------------------------------------------------

From what I have been reading I gather this was caused by the end of a long building boom under Augustus, the Banks loaning had been investing their gains in land and property, but the huge building program work had dried up under Tiberius reducing the velocity and supply of money. Then and there was a sudden event, the enforcement of an existing law that required "cash backing for real estate loans" - I think the senate enforced the banks to hold more cash on deposit for their outstanding loans, it is not entirely clear. Anyway how ever it happened there was a sudden credit crisis and many banks and private investors were forced to liquidate assets in order to comply with the requirements at first and then to pay off loans to other institutions as they were called in - the property market crashed. Tiberius was forced to provide liquidity to the credit markets - 100 million sestercies is about £1.5 billion if such comparisons are possible.

It must have been a major event. Tactius and Suetonius both record it over 50 years after it took place, and Cassius Dio nearly 200 years. It all seems rather familiar.

And there was I trying to write an essay on the Roman Economy for my History BA. :blink:

I love Roman history. History does indeed repeat and the man of wisdom was right when he observed cynically, that there is nothing new under the sun. Trying to recall the section in the Bible where, just before the Babylonian exile-600 BC, the prophets were warning against greed manifesting itself in the purchase of second homes at a time when many people were struggling financially.

I was reading about the UK "South Sea Bubble" last night and noted how everyone at all levels of society got caught up in the credit expansion that led to a very long period of bust.

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Happened on this while I was going around the British Museum last week.

History of Money

A bit light on economic theory, but good on the history of money as a medium of exchange, including cowrie shells used in China - many of the current chinese characters for financial terms such as 'loan', 'buy', etc include the cowrie character to this day. Also some strange forms of currency such as Chinese 'knife' and Indian 'sword' money - essentially partially forged bronze or iron billets, used as a medium for trade.

The key thing with most early currencies was that the value of the currency had a direct correlation with the value of the metal used. The Romans actually brought in a currency based on the silver denarius, and the the other coins such as the gold aureus was worth 25 times as much, in commodity, as well as monetary value. Had an interesting chat with one of the curators who was explaining about the Roman monetary system, inflation, and crises of confidence in the various Roman coinages. Also got to hold a worn old silver denarius that was used to pay the Roman troops with - this was one of the few coins that was universally accepted, even in economic downturns, merely because people had confidence in this particular type of currency

It's also pretty awe-inspiring seeing the Swedish 10 daler coin - a slab of copper measuring two feet by one foot on a side!

Well worth a visit if you're in London, IMHO.

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Regarding the original topic, seems that here is an address for an 1887 article on the collapse of monetary system in Rome in 33 A.D.:

http://links.jstor.org/sici?sici=0271-4442...STOR-reducePage

Need to be a student at a right uni to get this as a freebie or otherwise we need to pay it seems.

While on this note, I found another curious work - just screened it, read a few pages here and there, seems fascinating enough: http://911.lege.net/The_Decline_and_Fall_o...ican_Empire.pdf

"Dedicated to the Americans who toil, who pay their taxes, who trust their government, and take for granted that America is a great world power."

Seems like "Americans" can easily be substituted with "Brits" :P ... OK, so when do we finally have the Collapse of the current monetary system - tomorrow, 2008, 2009 or 2050?

Edited by Meerkat
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Iskandar - truly excellent stuff mate, this is an area that genuinely fascinates me.

I presume you have read Peter Heather?

I'd be interested in any of your book recommendations concerning the financial history of the Roman Empire (if indeed such things exist, I've not located anything that interesting myself yet)

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Guest anorthosite
Iskandar - truly excellent stuff mate, this is an area that genuinely fascinates me.

I presume you have read Peter Heather?

I'd be interested in any of your book recommendations concerning the financial history of the Roman Empire (if indeed such things exist, I've not located anything that interesting myself yet)

On a slight aside, any good book about the Punic Wars (The Fall of Carthage by Adrian Goldsworthy is a good one) will show show what happens when a capitalist empire (Carthage) comes up against a more militaristic empire, in this case the early Roman empire.

There are some similarities between the UK & USA and Carthage that are well worth learning about.

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Summa cum laude, Isakndar!!

Sed hac occasione dissimile est (but it's different this time) :lol:

During the time of the Emperor Tiberius, 33AD - from Tacitus' Annals

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.

Hence followed a scarcity of money, a great shock being given to all

credit, the current coin too, in consequence of the conviction of so

many persons and the sale of their property, being locked up in the

imperial treasury or the public exchequer. To meet this, the Senate

had directed that every creditor should have two-thirds his capital

secured on estates in Italy. Creditors however were suing for

payment in full, and it was not respectable for persons when sued to

break faith. So, at first, there were clamorous meetings and

importunate entreaties; then noisy applications to the praetor's

court. And the very device intended as a remedy, the sale and purchase

of estates, proved the contrary, as the usurers had hoarded up all

their money for buying land. The facilities for selling were

followed by a fall of prices, and the deeper a man was in debt, the

more reluctantly did he part with his property, and many were

utterly ruined. The destruction of private wealth precipitated the

fall of rank and reputation, till at last the emperor interposed his

aid by distributing throughout the banks a hundred million

sesterces, and allowing freedom to borrow without interest for three

years, provided the borrower gave security to the State in land to

double the amount. Credit was thus restored, and gradually private

lenders were found. The purchase too of estates was not carried out

according to the letter of the Senate's decree, rigour at the

outset, as usual with such matters, becoming negligence in the end.

-------------------------------------------------------------------------------

From what I have been reading I gather this was caused by the end of a long building boom under Augustus, the Banks loaning had been investing their gains in land and property, but the huge building program work had dried up under Tiberius reducing the velocity and supply of money. Then and there was a sudden event, the enforcement of an existing law that required "cash backing for real estate loans" - I think the senate enforced the banks to hold more cash on deposit for their outstanding loans, it is not entirely clear. Anyway how ever it happened there was a sudden credit crisis and many banks and private investors were forced to liquidate assets in order to comply with the requirements at first and then to pay off loans to other institutions as they were called in - the property market crashed. Tiberius was forced to provide liquidity to the credit markets - 100 million sestercies is about £1.5 billion if such comparisons are possible.

It must have been a major event. Tactius and Suetonius both record it over 50 years after it took place, and Cassius Dio nearly 200 years. It all seems rather familiar.

And there was I trying to write an essay on the Roman Economy for my History BA. :blink:

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I think the parallels between Carthage and the US/UK are pretty close. I remember thinking that Carthage did actually win the Punic Wars, it was just that the stubborn Romans wouldn't accept the fact. After all, Hannibal ransacked Italy at will and destroyed the Romans' estates and wrecked their economy. They should have just given up.

I guess the moral is that at the end of the day you get what you settle for.

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Guest anorthosite
I think the parallels between Carthage and the US/UK are pretty close. I remember thinking that Carthage did actually win the Punic Wars, it was just that the stubborn Romans wouldn't accept the fact. After all, Hannibal ransacked Italy at will and destroyed the Romans' estates and wrecked their economy. They should have just given up.

I guess the moral is that at the end of the day you get what you settle for.

Another failing of Hannibal's campaign was that he was expecting the outlying regions of the Roman territory to join him. Carthaginian territory had defected to other sides in the past, and so he was expecting the same from the Romans. Quite similar to Iraq and Afghanistan today, really.

On the other hand, Hannibal was a brilliant general, possibly the best ever, the like of which our modern armies can only dream of having in command!

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Another failing of Hannibal's campaign was that he was expecting the outlying regions of the Roman territory to join him. Carthaginian territory had defected to other sides in the past, and so he was expecting the same from the Romans. Quite similar to Iraq and Afghanistan today, really.

On the other hand, Hannibal was a brilliant general, possibly the best ever, the like of which our modern armies can only dream of having in command!

A good quote about Hannibal is from his brother (?) Hastrubal. He said that Hannibal knows how to win a battle but not a war.

The Romans took a hell of a beating but refused to concede defeat and kept raising new legion after new legion. Eventually the Romans found a general arguably as good as Hannibal in Scipio Africanus who took the fight to Carthage and eventually gave the Romans victory.

The funny thing is that many Romans thought that the end of Carthage meant they would face moral decline as they no longer had an enemy that could match them.

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On the other hand, Hannibal was a brilliant general, possibly the best ever, the like of which our modern armies can only dream of having in command!

Reported by Livy and found via Adrian Goldsworthy ('In the Name of Rome'):

Africanus asked who, in Hannibal's opinion, was the greatest general of all time. Hannibal replied, 'Alexander...because with a small force he routed armies of countless numbers, and because he traversed the remotest lands....' Asked whom he placed second, Hannibal said: 'Pyrrhus. He was the first to teach the art of laying out a camp. Beside that, no one has ever shown nicer judgement in choosing his ground, or in disposing his forces. He also had the art of winning men to his side....' When Africanus followed up by asking whom he ranked third, Hannibal unhesitatingly chose himself. Scipio burst out laughing at this, and said: 'What would you be saying if you had defeated me?'

'In that case,' replied Hannibal, 'I should certainly put myself before Alexander and before Pyrrhus -- in fact before all other generals!' This reply, with its elaborate Punic subtlety...affected Scipio deeply, because Hannibal had set him apart from the general run of commanders, as one whose worth was beyond calculation.

What a great story, particularly if true ;)

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Must say the book I am currently reading "A history of money from ancient times to the present day" by Glyn Davies strongly disagrees with most of that.

Nero indeed started debasing the coinage (the aureus reduced in weight and the denarius became only 90% pure), but this was not a problem for 200 years while the empire was still expanding. Inflation during this time was very low. By Ad250 (the beginning of the high inflationary period) the silver content was 40 percent. By the time of Gallienius 20 years later, the silver content was down to 4% and inflation was rampant. Then came Aurelian who changed the nominal values of the coinage which in fact caused inflation to increase at a much higher rate.

Interesting quote here for the gold currency crowd "Modern believers in the disinflationary magic of a gold currency.....should note that Aurelian proved conclusively that a "reformed" currency is perfectly compatible with an increase rather than a decrease in inflation"

Diocletian in fact returned the coinage to a 100% purity, but he was still not able to control inflation (possibly because of the existing coinage already circulating)

This a discussion based on contexts - I was considering the period from about 100BC to 200AD - a 300 year period, before the crises of the 3rd century became established. This is important when considering the Roman Empire because he 3rd century marks a complete change in how the Roman economy functiioned from that of a state directed but still largely commercial economy to one more command structured. What you point out is correct but outside of the scope of the period I was considering. The currency was debased by relatively small measures on occasion from from the first to the second centuries - but this did not upset the base relationship of value between the coinage denominations for the users. Roman soldiers were for example salaried professionals - they earned 1200 sestercies per annum this was increased to 1800 in the 90s by Domitian, which was a bit of a f*ck up as there was not enough tax revenue to cover the increase in expenditure. The fact of the matter was currency was based on silver and gold ( ]and bronze for small exchanges such as a pot of beer in the taverna and a takeaway from the popinae), and these are very inflation resistant (pay rises were very very rare indeed and rates of pay quite standardised). The Romans (in the period 200BC to 200AD) despite what you read were responsible for one of the most stable and long lasting currencies ever created.

Edited by Isakndar
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Iskandar - truly excellent stuff mate, this is an area that genuinely fascinates me.

I presume you have read Peter Heather?

I'd be interested in any of your book recommendations concerning the financial history of the Roman Empire (if indeed such things exist, I've not located anything that interesting myself yet)

I am afraid not - most of my material comes from academic journals - Jstore - as noted as a source by another poster. But this is a student resource and one would have to pay for acess otherwise.

There are very few books on the subject - there is Finley's definative "The Ancient Economy" - first published in 1974 I think - but this is much critised academically now for portraying the Roman Economy as primativist.

The problem about Roman economic history is that most historians are not economists so it is an area not much studied, the few that have, have dominated the debate and imposed their view, partly because there are no sequences of useful statistics to analyse - thus opinion can overwhelm the extremely limited statistical analysis that can be performed.

This is changing a great deal now - there are many fresh historians that are interested in economics - and that together with what archeaology that is uncovering about estates and industries. rather than grand classical buildings - this picture is changing quite dramatically.

Now I have to write an essay about feudalism and the changes around AD 1000 - the thing is I feel like a serf in my present workplace.

Edited by Isakndar
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i think i once saw a stone tablet tv pull out advertising the new series of 'Locus Locus Locus 33BC'

with petus and kiressia allophagus.

number IV on our tablets, this stunning mead temple with open views of boar stocked forrests and excellent roads to ribchester, york and london.

generous parking for two chariots and a nice little slave flat. this little gem has even got its own under heated anciom and marble lined orgy room.

and under budget too at 20,000 groats.

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