Ancient Roman Currency and Economy

This is a quick overview of the Ancient Roman Currency and Economy from the early days
of the city-state in the 7-6 th 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 states 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 theaspects of Rome's decline and fall and you'll
see there's much more to it.
Tracking all of these aspects of the 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 richerequestrian 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 Romes economy are given below. Some further
detail and view points are reserved for a separate page dedicated to observingvarious
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 werent 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 3 rd 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 Cicerowon 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 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 Trajans market.
o
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 Neros 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 youve seen the film "Spartacus".
From the point of view of the Roman economy this all looks very negative, but we
shouldnt forget about ancient roman military success such as Pompeys 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:

Military success

"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 Neros 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"

Neros 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
o
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".
o
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)
o

Neros tour of Greece

Cutting the isthmus of Corinth

Building his "golden house"

The "golden day" reception of the Parthian king in Rome

o
Rebuilding Rome after the great fire of 64AD (rebuilding was continued by
Vespasian after Neros death)
o
Diverse "eccentricities", for example, his personal retinue of "Augustinians" or
demanding that Senators anoint themselves (the oil being at state expenses)
All of these aspects, whether willed by Nero or driven by circumstances
coupled with the great spend incurred concurred to bring about a state of
economic depression and revolt which eventually brought Neros suicide.
The provinces which had traditionally supported Nero could no longer stand
the extreme taxation imposed on them, nor were the Senatorial class
prepared to accept taxation of their own wealth.

Neros reform of coinage (devaluation):

In terms of the state finances the response was to devalue some of the
coinage in 64AD (year of the great fire of Rome). Gold and to a degree silver
coinage were made lighter as a means of using less state reserves but
implicitly an indirect means of taxing the upper/rich class which traditionally
hoarded gold versus the middle class (the merchants) which tended to trade
in silver and lower class which dealt in bronze.
o

The gold Aureus was reduced in weight by 0.5 grams to 7.3gr in total whilst

o
the silver Denarius was both reduced in weight (down 0,5grams to 3.4 grams)
and in silver purity (5-10% copper alloy)
This tactical move would clearly have been accompanied by inflation and
general impoverishment, particularly of the poorer classes: a general trend
which continued through to the fall of the Roman empire.

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
Vespasians 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 kickstart 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
Caesars 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.

Romes 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 mansiones even 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 19 thCentury "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 doesnt 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 200300 AD witnessed a period of progressive decadence (and blaming it on Jews and
Christians).

The Roman Empires 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 Empires Dying throws. End of Romes

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 4 th 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 wasnt 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.