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Source link: http://archive.mises.org/10611/inflation-and-the-fall-of-the-roman-empire/

Inflation and the Fall of the Roman Empire

September 7, 2009 by

Monetary policy therefore always serves, even if it serves badly, the perceived needs of the rulers of the state. If it also happens to enhance the prosperity and progress of the masses of the people, that is a secondary benefit; but its first aim is to serve the needs of the rulers, not the ruled. This point is central, I believe, to an understanding of the course of monetary policy in the late Roman Empire.

We may begin by looking at the mentality of the rulers of the Roman Empire, beginning at the end of the 2nd century AD and looking through to the end of the 3rd century AD. Roman historians refer to this period as the “Crisis of the 3rd Century.” And the reason is that the problems of the Roman society in that period were so profound, so enormous, that Roman society emerged from the 3rd century very different in almost all ways from what it had been in the 1st and 2nd centuries. Full Article by Joseph Peden.


Hal (gold_tracker) September 7, 2009 at 9:01 am

Wow. Thanks for the link to this article. That was a very interesting historical look a Rome. Intriguing. When ever I’ve thought about Roman history the monetary policies were not things that came to mind.

Sean Williams September 7, 2009 at 12:30 pm

It’s funny how so many people think economic issues are a modern phenomenon. Just recently archaeologists found a stone tablet in Turkey, in which the Roman Emperor assuaged rioting by reducing taxes: http://heritage-key.com/blogs/sean-williams/ancient-credit-crunch

David Hayes September 7, 2009 at 12:40 pm

This is an awesome article. It really shows the fundamentals never change.

HM September 7, 2009 at 1:31 pm

I haven’t read Decline and Fall in over 20 years, but if I remember correctly Gibbon chalked up the decline and fall to the introduction of Christianity and the Empire’s failure to stop expanding. I recall something about boundaries of Hadrian’s wall, the Rhine river, etc.
Dr. Peden starts his article by the time it was all over for the Empire anyway. The whole culture had changed, and inflation, etc. were just the outcome of a decaying society.

And just for fun for the folks at Mises, if Prof Joseph Peden teaches at the Baruch College in NYC, then the College gets 39% of its funding from the State. If Dr. Peden teaches there, I’m sure the good Professor sends 39% of his paycheck back to the College…

Jonathan Finegold Catalán September 7, 2009 at 2:36 pm

Before choosing economics as one of my majors, I considered myself a historian. My interest in history began in the 6th Grade, and it began with the Roman Empire. Gibbon’s volume were given to be as a gift, I believe, sometime in middle school. Roman economic history has always been an interest to me, although I focused mostly on their military history. This is a great article. Thank you for sharing it on this website!

If anybody is interested, I wrote a blog post on another event during the Classical Era. Specifically, it deals with an event which occurred during the First Punic War. If anybody is interested: http://www.economicthought.net/2009/09/when-charity-saved-rome/

Matt September 7, 2009 at 5:03 pm

Great Article !

Historians of the future will call our age
‘The Second Roman Empire’ The only difference will be that the new Rome will be called ‘Washington’.
Notice how we are now in a seemingly endless war and no Washington bureaucrats are being fired in this recession/depression, rather there is an expansion.
Gradually people give-up their freedoms in the hope of security but in the end they get neither.
As the saying goes, those who are ignorant of the mistakes in history are doomed to repeat them.

Ohhh Henry September 7, 2009 at 7:49 pm

Great article. A couple of things in it made me think of my own situation in the Great White Northern empire.

“live in harmony; enrich the troops; ignore everyone else.”

This is essentially the same policy as the current Premier of Ontario (equivalent of state governor). A deceitful non-entity who has nevertheless enjoyed tremendous electoral success with the following policy – do everything the unions want, and to hell with the rest. Once the economic engine of Canada but now in terminal decline, the final collapse of Ontario’s economy is not scheduled until well after the premier has retired into hog heaven. (Think of Ontario as Canada’s California, Massachusetts, New York and Michigan rolled into one entity)

“the government, in order to try to protect its civil servants and its soldiers from the effects of inflation, began to demand payment of taxes in kind and in services rather than in coin. They wound up, in effect, repudiating their own issued coins, not accepting them for tax collection purposes.”

The government of Canada also stopped accepting cash in payment of taxes, even though it still laughably refers to its bureaucratic drones as “cashiers”. Their motivation was somewhat different. Evidently they no longer trust their employees to handle negotiable assets, and probably it was also keeping them up late at night worrying that there were still a few hundred million dollars circulating in the country which were not being handled by their friends in the banks and which were not being fully taxed.

“When this was not sufficient to meet his needs, he admitted almost every inhabitant of the empire to Roman citizenship.”

This explains the Canadian citizenship and refugee policies quite well. Unfortunately they’ve found that while it’s one thing to give everyone a Canadian passport who asks for it, it’s quite another thing to get them to actually stay in the country and work as their tax slaves.

HL September 8, 2009 at 1:49 am

Pity the I-talians. Once they were Romans. Now they are just Italians.

JA September 8, 2009 at 9:08 am

I thought that all Empires are “bad”…

- So the Fall of the Roman EMPIRE was a GOOD thing, right?

Vanmind September 8, 2009 at 3:15 pm

Right, JA. It was such public malfeasance (socialism) that caused Rome to become an empire that quickly started tearing itself apart from the inside.

Arto Bendiken September 14, 2009 at 10:01 am

A small correction: the article footer currently states that the transcript first ran at LewRockwell.com. This is not correct; I am in fact the person who commissioned the transcript from the original audio recording at Mises.org, and the primary source for the transcript is on my site at:


This fact is also reflected in the footer of the reposting at LewRockwell.com:


I would appreciate it if the Mises.org article’s attribution could be corrected accordingly. In any case, I’m very glad to see that so many others have found this lecture as interesting as I did.

I also have a transcript of the Q&A session that follows the lecture itself, and would be glad to send that to anyone who wants it. (I didn’t post that in the original, as some parts of it were inaudible.)

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