An Interesting Review of Inflation in the Roman Empire

Miscellaneous History
1

I just want to share with you some interesting facts about inflation and monetary policy during Roman times.

We all know the basic Roman currency was the silver denarius. It was pure silver under Caesar Augustus, 95-90% silver under Nero, 85% silver under Trajanus, 75% silver under Marcus Aurelius, 50% silver under Septimius Severus. Finally under the unfortunate Gallienus it was replaced by the antonianus coin, just 5% silver. Gold coins were less much used: minting was considerably slowed down by Marcus Aurelius and by the time of Caracalla gold coins were so small and irregular they were only accepted in trasactions and as tax payments by weight.

The pay rate of a legionary under Gaius Marius and Sulla was 75 denarii a year plus subsistence (frumentum). Julius Caesar increased pay to 150 denarii a year; Caesar Augustus increased it 225 denarii; Domitian increased it to 300; Commodus to 375; Septimius Severus finally increased it to 500. In short we may see that pay of a legionary was inexorably linked to debasement of the denarius. Subsistence was always supplied by the State.

Military expenses in the Roman Empire were, contrary to popular opinion, quite modest: Hans Delbruck estimated the number of men under arms at the end of Caesar Augustus’ reign at 225,000, including support troops and foreign mercenaries. Considering the Empire had a population of 60-65 millions that means about one third of one percent. By comparison at the end of the Second Punic War Rome had more than 7% of her population under arms, including allies and mercenaries. Domitian even thought about reducing the size of the army to save money but never went about it.

So how did contemporary Romans see inflation? Unsurprisingly not unlike modern public opinion. Emperor Tiberius complained bitterly to the Senate that Romans were giving away their gold and silver to foreign peoples for luxury items. Under Vespasianus imports from the East amounted to about 25 million denarii a year. Very few saw the perverted clientes system, an inheritance of the Republican period, as the main drain on finances, just like modern popular opinion fails to see the “welfare” system is the main drain on finances. Emperors, legates, senators and other worthies literally bought the unruly mobs in the main cities of the Empire with magnificent shows and gifts of oil, wine and bread.

As money became debased the fiscal apparatus became more and more oppressive. According to a few historians many of the earliest coin hoards found in Europe were hidden by ordinary Roman subjects not to avoid marauding bands of Germans but to save themselves from the taxman. Roman rulers, ever the practical lot, quickly acknowledged this situation and soon started accepting “nature” payment. Large land owners paid their taxes in wine and grains while small freemen simply paid their taxes with labor: they may serve a few days each year to repair the local roads or send a slave with a wagon and a couple of oxen to serve in the army baggage train (impedimenta) for a Summer campaign. Alexander Severus even tried a desperate device: he cut taxes by two thirds to get them paid in hard cash instead in nature. In the end he failed miserably.

When Diocletian finally managed to bring a semblance of order after decades of civil war “half the provinces laid in ruins and the other half had been stripped bare to pay the armies” (Charles Oman). Instead of working on rebuilding a prosperous Empire like Caesar Augustus did, Diocletian simply put in place a system of grinding taxation, price fixing and fearful punishments which managed to sap the last blood out of the system. We are told many people simply fled to the mountains to avoid Diocletian’s merciless taxmen and many of the most fertile lands of the Empire were simply abandoned: tilled fields and lush vineyards gave way to swamps and woods. Diocletian finally threw in the towel and retired to his country palace, leaving his sons to sort out the mess he created.

2

I recall reading how, eventually, a dual-money system evolved with the ruling class and the bureaucrats being paid in, and using, gold while everybody else was relegated to transacting with worthless and unwanted copper coins.

Reminds me of the Fed and their electronic printing press of today…

3

Thanks for posting. This is very interesting. I’ll have to dig into it in depth.

4

This is part of a slide I use when teaching my student’s about Rome’s decline.

žDuring Nero’s time it dropped to 94% silver (AD 54)

žBy 100 AD it was down to 85% silver.

ž218 AD – 43% silver

ž244 AD – 0.05% silver

ž476 AD – less than 0.02% silver

5

Yes, the big debasement happened in the third century after the death of Septimius Severus (211 AD).

The Severii have passed down in history books for being mostly preoccupied with keeping the soldiers happy and allowing the rest of the Empire to disintegrate. Each one of them either increased yearly pay, gave large gifts in cash or made some other concession (for example the aforementioned Septimius Severus allowed all soldiers to live with their families: until his time only legionaries serving in the East had this privilege). What changed the most for ordinary people was fiscal pressure: one of the reasons the Roman Empire prospered under rulers like Caesar Augustus and Trajanus was the moderate tax burden. As I said before Roman rulers of the first two centuries were on the average a capable and, more to the point, practical lot and most of them understood perfectly well the relationship between low levels of government intervention and prosperity.There are of course exception to this rule: Domitian tried to fix wheat and wine prices by decreeing that half the vineyards of the Empire should be eliminated and replaced with cereals. But on the average most rulers stuck to Caesar Augustus’ relatively benevolent economical policy.

As expenses increased, provinces became ravaged by civil war and/or plagues ad the coin became more and more debased taxation became of course more grinding. Septimius Severus was reckoned to be quite bad, but if we are to trust chronicles he was small fries compared to Diocletian. Truth to be told probably Diocletian’s fame suffered from his campaigns against the Christian clergy (partly to confiscate their property and partly because they obviously refused to venerate him as a living god) but it cannot be denied the Empire suffered a fatal hemorrhage under his rule: archeological finds support this view.

6

Very impressive! Which resources are you quoting (and are any of them online)?

To complete one data set, under Caracalla went legionary pay up to 750 denarii (a tenfold from times of Gaius Marius and Sulla). (Richard Gaettens, Geschichte der Inflationen)

7

I have mostly used Theodor Mommsen and Hans Delbruck (for the military part). These texts have aged surprisingly well and can still be used without problems: their critical treatment of “rhetorical” authors like Tacitus and Cassius Dio was groundbreaking at the time and there are still people having troubles accepting it. I can only imagine the shock among contemporary scholars when Delbruck called the immense multitudes Greek and Latin authors loved so much “a complete fable”. Delbruck was also the first to link the debasement of the silver denarius with the legionary’s pay.

The Severii (Septimius, Caracalla and Alexander) are well known to have favored the army, to which they owed their uneasy thrones. Septimius Severus abolished the Praetorian Guard and had the Praetorian centurions executed: the Praetorians were loathed and feared by both Emperors and soldiers. By this time an ordinary Praetorian was paid 750 denarii a year, was given better rations and, much resented by the army, stood a much better chance of becoming a centurion than the ordinary legionary fighting on the borders.

Another thing should be considered: apart from the legions, the Empire fielded an immense number of auxilia, a catch all definition including both hardened mercenary bands and inexperienced farmers serving part time as a sort of home guard. The auxiliaries were expected to supply their own weapons and were only paid 75 denarii a year plus subsistence. It is renown that Germans serving in the Roman army wanted to be paid in “old coins”, meaning coins with an high silver content: the hoards from the first two centuries AD found in Germany seem to confirm this. As mercenaries, particularly Germanic heavy cavalry, became a more important part of the host and as “old coins” became scarcer this system was dropped: Emperors now struck a deal with individual warlords. The chief swore a oath of service to the Emperor himself to serve him for a given number of months (or years) and supply him a certain number of troops of a certain quality (mailed horsemen, ax throwers, bowmen etc). In return for this the Emperor gave directly to the chief the so-called Annona Foederatica, defined in the aforementioned oath of service. This was usually in silver coins or pounds of gold. Of course the Emperors, faced with continuous bankruptcy, couldn’t be expected to keep their word, so the Annona Foederatica was often renegotiated in nature: cattle, sheep, wheat, wine, slaves, even land. It could be said that while Germanic warbands fought the Late Empire’s wars, Roman soldiers were busy extorting money to pay from them…

8

Here is another source you may find relevant to your topic: The New Deal in Old Rome.

9

An accurate assessment. Perhaps a bit harsh on Diocletian (though still accurate). I mean if the goal was keeping the empire together and stable when it was on the verge of falling apart, he did accomplish that feat. I mean his twenty year reign coupled with Constantine’s reforms essentially kept Rome intact for over a hundred years.

10

DBratton: thanks. I’ve read the first fifty pages yesterday evening. Extremely interesting: it gives me an overview of the American/British historic overview I am not overtly familiar with.

I see you are supporting the British/American view, which is quite forgiving to Diocletian. I tend to follow the German view which is much less forgiving.