Featured Debasement, Inflation and Fallout

Discussion in 'Ancient Coins' started by kevin McGonigal, Feb 13, 2020.

  1. kevin McGonigal

    kevin McGonigal Well-Known Member

    For those who collect and study the numismatic or financial history of the Roman Empire in its Third Century crisis, it can sometimes be bewildering to us just what was going on. Well, it might have been just as mystifying to the Roman man in the street then as it is to us today. Originally the Roman state was put in good order by Augustus with a good gold and silver coinage of consistent weight and fineness. Even the token Aes coinage was of good weight and inspiring image. Nero's fiddling with the weight and purity of the aureus and denarius did not cause undue alarm and prices remained fairly constant. Through most of the Second century AD, even though the Good emperors gradually reduced the fineness of the silver denarius, prices remained fairly constant or rose slowly enough that few seemed alarmed. By the Severan Era of the early Third Century the debasement of the silver in coins was sufficient for us to notice it and the increase in the salary given to Roman troops may have been necessary because they noticed it, too.

    The Roman Government was pretty good at doctoring the silver coinage (gold coinage seemed immune to these changes) in such a way that the full extent of the debasement was not apparent to the average consumer or housewife. The average Roman would have had some difficulty assaying the fineness of his coinage but he was probably cognizant of weight which he could more easily determine, and the Roman state was careful to keep up the weight of the denarius of the Third century. The denarius of Severus Alexander, though only of about .500 fine silver, usually weighed a bit over 3 grams which and compared favorably to the denarii of Antoninus Pius and Marcus Aurelius, at least in weight. Looking at the circulating coinage of Severus Alexander, circa 230 AD (first line of coins pictured below) shows an As of some 10 grams, a Denarius (.500 fine) and 3.1 grams and a comforting sestertius of almost 21 grams. The gold aureus (not shown) might be of variable weight but remained of the highest fineness but was not often handled by average Romans in the marketplace. The system seemed to be working fine. There was a cryptic criticism of the circulating medium by the historian Herodian at this time but it is so obscure that few could have seen it as meaningful in their lives.

    Moving forward to the reign of Gordian III about a decade later the system still seemed to be working smoothly though an observant shopper might have noticed that the Gordian III denarius of about three grams appeared to be somewhat less frequently encountered and was being replaced by the supposedly double denarius (second line below) which was tariffed at two denarii but at about 4.4 grams clearly contained less silver than two denarii. Also the As (or its double,the dupondius) was also less commonly encountered, though the Sesterius still seemed, at close to twenty grams, a substantial coin.

    Over the next fifteen years the changes were so dramatic in appearance of the coinage (these same changes can be seen in the provincial coinage of the East as well) that even the most obtuse of Romans could see that their coinage was being so altered in weight, fineness of metal and even appearance that something very wrong was going on (third line below). How could they protect themselves? In some cases they tried to obtain and then hoard some of those earlier coins which helps explain why there are a number of double denarii from the 240's available to collectors today, as many of these coins were pulled from circulation for hoarding before they were much worn.

    But also one of the strangest, to us, anyway, was the pulling from circulation and hoarding of the token brass coinage from the 230's, the 240's and 250's. At the old ratio of copper to silver (41 grams of copper to one gram of silver in the Augustan system) the copper or bronze in a sestertius, like that of Gallienus pictured below, was worth far more as metal than the heavily debased light weight double denarius of Valerian, Gallienus and the myriad of emperors right after them. The sestertius was supposed to be eight to the double denarius when actually just one sestertius was worth more in metal than the fast becoming worthless double denarius.The sestertii of Valerian and Gallienus were being treated as bullion and were quickly pulled from circulation (Gresham's Law) and the emperors of the 270's produced few of them, even when they tried to pass off light weight sestertii as Double Sestetrii. Who would have thought in the early Third century AD that token coinage copper, bronze and brass would become bullion coins?

    Perhaps readers interested in this period have their own coins showing the change in weight, fineness and appearance which illustrate this what must have proved a traumatic experience to the Roman people. The coins below are (first line) a Denarius an As and a sestertius of Severus Alexander, (second line) a double denarius and sestertius of Gordian III and lastly a double denarius and sestertius of Gallienus, whose profile we rarely see as large in the most common examples of his coins. IMG_1305[4023]Debasement and Inflation.jpg

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    Last edited: Feb 13, 2020
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  3. The Eidolon

    The Eidolon Well-Known Member

    Thanks for the enjoyable write-up! It's Greek, and from an earlier era, but there's a passage in Aristophanes' Frogs that suggests classical people were well aware of the chronic debasements of their coinage:

    "I have often noticed that there are good and honest citizens in Athens, who are as old gold is to new money. The ancient coins are excellent in point of standard; they are assuredly the best of all moneys; they alone are well struck and give a pure ring; everywhere they obtain currency, both in Greece and in strange lands; yet we make no use of them and prefer those bad copper pieces quite recently issued and so wretchedly struck. Exactly in the same way do we deal with our citizens. If we know them to be well-born, sober, brave, honest, adepts in the exercises of the gymnasium and in the liberal arts, they are the butts of our contumely and we have only a use for the petty rubbish, consisting of strangers, slaves and low-born folk not worth a whit more, mushrooms of yesterday, whom formerly Athens would not have even wanted as scapegoats. Madmen, do change your ways at last; employ the honest men afresh; if you are fortunate through doing this, 'twill be but right, and if Fate betrays you, the wise will at least praise you for having fallen honourably."
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  4. EWC3

    EWC3 (mood: stubborn)

    Hello Kevin

    Many thanks for this. I have spent a good deal of my life looking at the economic forces behind the coinages of early India, Islam, China and medieval Europe. There is a lot of expertise on Roman affairs on this group, and I have been hoping to learn more regarding Roman events – this looks like a good opportunity. Here are a bunch of comments which immediately spring to mind. Criticism welcome

    In very general terms, I think the apparently massive hyper-inflation of the fourth century is the really bewildering thing. Problem is - its hard to get a grip on it via coins.

    I feel writers are a bit unfair on Nero concerning his weight standard reform. Striking the denarius at 8 to the ounce was a rational move. The weird thing was really why the Republic generally struck at 7 to the ounce. A question I have found it hard to answer is how mixed the denarii hoards were in the period Nero to Trajan. If as I suspect all the coins were nominally valued at 6 to the ounce, then there would be no call for anyone (but the mint and counterfeiters) to prefer the old over the new. But that’s theory, I am curious to know what actually happened.

    True as far as Roman purity goes I think – but this is a special aspect of Roman politics. Most people who went onto a gold standard did end up debasing (Kushans, Medieval North India post 1000 AD, Byzantium......). So the question is – what was special about Rome?

    Interesting – can you expand?

    I never heard about this before – are such hoards common? My rule of thumb is 100:1 Copper to Silver as metal – but that is a very rough guide. Due to a change of policy in late 11th century China, billions of base metal cash were pushed into “bullion” status and exported. It became normal internally for coppersmiths to buy coin just for the metal

    Again, I would be more concerned about the 4th century. Levels of inflation in the 3rd century were comparable with what has happened over my own lifetime. Shocking to my grandparents maybe, but not really so today. My impression was there was a change of mind set – from accidental inflation driven by chaos in the 3rd century to deliberate inflation as state policy in the 4th. This catches my attention because it seems highly relevant to what we see going on in our own times…..

    Rob T
  5. kevin McGonigal

    kevin McGonigal Well-Known Member

    Ah, Aristophanes, Breka Koax, koax, koax. Though he is writing in "the Frogs" here, his ideas on coinage, and society in general, sound more like he is in Cloud Cuckoo Land.
  6. dougsmit

    dougsmit Member Supporter

    Please, honor the meter and don't leave out parts.
    "Brekekekéx-koáx-koáx" (Greek: Βρεκεκεκέξ κοάξ κοάξ)
    Some musicians still use a chorus but we seem to have left that concept behind on stage and screen.

    I believe the best evidence we have of the importance of bullion value in coins is the long period (nearly a century) the Roman coins continued having silver content after that content stopped being enough to see with the eye. If no one cared, there would have been no need for silver wash or XXI. Certainly the mint would have gone directly to nothing but copper.
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  7. kevin McGonigal

    kevin McGonigal Well-Known Member

    On the reference to the Roman historian Herodian and tampering with the coinage. His reference in Herodian, History 7.3.3, is cryptic because he is assigning responsibility for monetary problems to emperors using nefarious means to supply military needs at the expense of the business community. You will have a hard time trying to pull this info up by conducting an internet search because once you write "Herodian and coinage" you will be swamped with references to the Jewish coinage of the Herods. However I have an on line article for you that cites Herodian the Historian (who wrote in Greek, by the way, not Latin). The author is Colin P. Elliott, "The Acceptance and Value of Roman Silver Coinage in the Second and Third Centuries A.D. I found it on line from JSTOR and you can download it from there. It originally appeared in the Numismatic Chronicle, 1966, Vol. 174 pp. 129-152. For the once token brass being pulled out of circulation and hoarded you might want to try "The Imperial Roman Economy, Hoarding, Gresham's law and All That" put up on Historia.

    The one best publication I have found on this is, "Coinage in the Roman Economy", 300 BC to AD 700 by Kenneth W. Harl. It is an excellent source, especially for the metrology of the coinage. For the hoarding of the token bronze go to p. 135 but if you can , get and read the whole book. It is a real page turner, not at all dry or abstract. For anyone interested in this topic I think Harl's book the absolute bet out there.
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  8. kevin McGonigal

    kevin McGonigal Well-Known Member

    Jeeze, give me a break on the meter (Dactylic hexameter?). It's been 55 years or so since I studied Greek at the University. Besides, the frogs croaking for Aristophanes were croaking in Attic Greek. My frogs use the Doric Greek dialect..
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  9. ancient coin hunter

    ancient coin hunter I dig ancient coins...

    Excellent write-up - thank you. I've been fascinated with the machinations of the Roman economy in the third century as the emperors tried to pay their erstwhile masters (the soldiery), going back to Septimius Severus' famous quote on his deathbed at York. "Enrich the soldiers, ignore all others."

    What Gibbon ascribed to the "licentiousness of the soldiers" became de riguer. The average Roman in the street had to put up with the declining quality of the coins in his purse while inflationary pressures spiraled and the bad money drove out the good. Ostensibly a couple of loaves of bread and lentils, which might have cost an As in more favorable times required a handful of nearly worthless radiates. As the city fathers of the Eastern Mediterranean were squeezed by civic fiduciary obligations that they no longer could afford, the provincial currency disappeared.

    Diocletian's Edict of Maximum prices attempted to curb inflation on pain of death, but apparently these restrictions could not be enforced. One of the drivers of the process may have been the decline in the availability of silver from mines in Spain and Dacia, as well as reductions in the spoils of war by the end of the second century. Also, the economy - built as it was upon slavery and agrarianism lacked dynamism and the ability to expand.
  10. kevin McGonigal

    kevin McGonigal Well-Known Member

    And Diocletian discovered, that among all the laws of the Empire, the law of supply and demand trumps all the others (except perhaps for gravity).
  11. Terence Cheesman

    Terence Cheesman Supporter! Supporter

    EWC 3 does ask a question about the gold coinage of the Roman Empire. While it is true the Romans maintained the purity of the gold coinage they did not maintain the weight. Thus
    Augustus to Nero 7.9 grms
    Nero Reform 7.39 grms
    Domitian briefly raised the standard back to 7.9 but later dropped it to 7.55 grms
    Trajan to Commodus 7.25 grms
    Didius Julianus 6.82 grms
    Septimius Severus 7.39 grms
    Caracalla (215 A.D) 6.54 grms
    Gordian III 4.86 grms
    Trajan Decius 4.00 grms
    Gallus 3.60 grms
    Gallienus 2.50 grms down to 1.10 grms
    Data collected from RAG Carson "Coins of the Roman Empire " pp 229 to 233. In the same book Carson postulates that there were two reductions of the value of the silver coinage one during the reign of Severus Alexander where the denarius was reduced by half and one under Trajan Decius where the antoninianus was reduced by half. This would make the antoninianus the equivalent of a silver quinarius and the denarius the same as a sestertius. I have not heard much commentary on this theory but the chaos in the silver coinage especially would make the more stable aes coinage a more attractive means of storing wealth. A recent article in NC 2014 by Colin Elliot suggests that the crises came very quickly. This is more or less the norm and may have had something to do with the collapse of both gold and silver coinages during the sole reign of Gallienius.
    Reduced Aureus of Gallienus 266-267 A.D. Rome Rv Securitas standing left RIC 118 Gobl 670b This coin 1.43 grms 18 mm very thin. 529995.jpg
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  12. EWC3

    EWC3 (mood: stubborn)

    Looks right to me. As I hinted before, I think the BM went on a 600K wild goose chase over ritual burial at Frome. I think Mattingley got it right in 1928 – the huge hoarding of later 3rd base radiates in the UK is to do with a silver content vs valuation matter. Two possibilities occur to me, either Aurelian made a really big devaluation of the old coin, or, a lot of the population were deceived/over optimistic about the silver content of their Victorinus, Tetricus etc stuff.

    Many thanks indeed! A generation or so back Toynbee thought the political and economic problems of Rome in the 3rd and 4th centuries had their roots in the Stoicism of the 2nd century. Herodian gives at least slight support for that.

    I have a lot of problems with this presentation – will make a comment in another post

    OK – thanks - I ordered a copy. Interesting that there are plenty of copies on sale in the US, and none in the UK. 50 quid for air mail seems steep to me – I will see if the seller I picked can actually get it here in 3 weeks for 4 quid.

    Surely correct. But I am unclear about how important that was to the macro-economy. Seems to me I noticed loads of late Roman gold but not much from the 3rd century. Did I get that wrong?

    Rob T
  13. EWC3

    EWC3 (mood: stubborn)

    Forgive me if I go right back to square one to criticise this. Of all the thousands of pages I read on pre-modern economics just one sentence really sticks with me – from Aristotle. I paraphrase him here, this is the gist of what I read him saying:

    There are two sorts of people, those who think money is an idea, and those who think it is a thing.

    I take him to be saying there are almost two species of people, that the roots of the difference reach down in some profound way into the genetic make up of individuals. If that is the case, there cannot really be a unique satisfactory solution to macro-economic problems that suit everybody – short of some sort of massive eugenic programme.

    So – there are no laws of supply and demand of the sort you seem to suggest – economics is not physics. The claim that there are such laws is a kind of dogma, or propaganda. I suppose a lot of people might misunderstand me when I write this. Like recently when I said Keynes was not a moron. Actually Keynes certainly was a proponent of the doctrine that money is an idea, and I disagree with him in important ways over that. But its false to say he was a moron, just as it was disappointing to see the Brexit discussion on CoinTalk end up in people throwing milk shakes.

    Anyhow, getting to the facts – probably few people here have heard of Ala-ud-Din Muhammed Khalji – he never got a western nickname etc. He never defeated gravity, but he fixed prices, contradicting the point you make. He was certainly a lucky, ruthless, genius. In that he differed maybe from Diocletian (in one, two or three ways?). But the facts stand and the position you point to is not a “law” in the sense you suggest. Actually, it is modern economic dogma, and there is plenty more where it came from .

    All the Best

    Rob T
  14. kevin McGonigal

    kevin McGonigal Well-Known Member

    I think the majority of research into the debasement of the silver during the reign of Severus Alexander indicates the exact opposite of what RAG Carson states. The silver of Severus first shows that he maintained the silver at what it was at the start of his rule and then in the last three years, before his murder, that he actually increased the fineness of his coinage. For that I cite the Kenneth Harl book. I have seen that elsewhere as well.
  15. kevin McGonigal

    kevin McGonigal Well-Known Member

    I am afraid you are correct about the West nothing of the ruler, Muhammed Khalji and I would never imply that any economic principle has the certainty of the physical laws of the universe. It may be possible that your ruler was able, perhaps by brute force, terrorizing the population into submitting to his price controls, and that his state was more compact and his equivalent of the Frumentarii (imperial secret police) more effective at infiltrating the market place, and his decrees may not have been far removed by from practical supply and demand conditions in his realm, but I think the general experience of most states that have tried price and wage controls is that all they do is empty the store shelves and reopen the black market bazaars. Bears can be made to dance but that does not mean that most bears in the forest do much dancing.
  16. Sulla80

    Sulla80 one coin at a time Supporter

    Interesting thread, is there a good reference for the variability in weights of Gordian AEs?
    Gordianus Sestertius.jpg
    Gordian III, AD 238-244, Æ Sestertius, Rome mint, AD 241-243
    Size: 29.2mm, 15.64g
    Obv: IMP GORDIANVS PIVS AVG, laureate, draped, and cuirassed bust of Gordian right
    Rev: IOVI STATORI, Jupiter standing right, holding thunderbolt and scepter
    Ref: RIC IV 298a
  17. Terence Cheesman

    Terence Cheesman Supporter! Supporter

    I have read Kevins comment and did look up Harl Coinage in the Roman Economy particularly the chart 6.1 on page 127. In it he does point out that there was an increase in the fineness of the silver denarius under Severus Alexander from 45.11% to 50.56 %. (231-235 A.D).However the weight was dropped from 3.24 grms to 2.94 grms resulting in an increase of silver from 1.41 grms to 1.49 grms. However this reform did not bring the standard back to that of
    Weight Fineness Silver content
    Septimius 3.22 grms 56.28 % 1.98 grms
    Caracalla 3.23 grms 51.32 % 1.81 grms
    I am not certain that Carson is in fact correct though it is interesting that the final silver content at 1.49 grms is almost exactly half of the silver content of a Neronian denarius at 2.97 grms
    Denarius of Severus Alexander232 A.D. Rv Spes advancing left. RIC 254 3.49 grms 18 mm Photo by W. Hansen sevalexd5.jpg
  18. EWC3

    EWC3 (mood: stubborn)

    Thanks - that was my point here. BTW Muhammed Khalji was psychologically extraordinary. Apparently, like Charlemagne and Akbar, he changed the whole face of politics and economics, but never managed to learn to read.

    I should add that to me there seems something seriously lop sided in trying to understand Ancient Economics but looking only at Greece and Rome. The Greeks and Romans wrote nearly nothing on economic matters - while the Ancient Chinese wrote reams (for instance on the quantity theory of money). Hardly seems likely to me that the Greeks and Romans were more stupid than the Chinese. I judge the reality was it was ‘bad form’ in Ancient Europe to explicitly discuss economics in public – in much the way it was ‘bad form’ in Ancient China to discuss politics in public.

    Anyhow – I fear that if one couples modern economic doctrines to a narrow and impoverished source of data you can quickly end up with modern economists offering distorted and self serving results.

    No doubt opportunities will arise soon enough to press that point further

    Rob T
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  19. EWC3

    EWC3 (mood: stubborn)

    A new paper by Bland here


    seems to me to point to (at least) a couple of basic (perhaps not very controversial) observations

    1) there was relatively little gold use in the 3rd century

    2) coin use was altogether in decline in the 5th century

    The latter however relevant to a point I am about to make in the recent and ongoing Anastasius thread....................

    Rob T
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  20. kevin McGonigal

    kevin McGonigal Well-Known Member

    Or it may be that hoards declined because the coinage trash of the Fifth Century was so wretched and of little value (except for the few gold coins Roman citizens might have been in possession of, probably very few, that people no longer thought them of enough value to hide.
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  21. EWC3

    EWC3 (mood: stubborn)

    Thanks. We agree on most of this, but I take it you are suggesting that there were maybe plenty of 5th Roman coppers but nobody bothered to hoard them. Could be – but I make three points.

    1) In other contexts tiny c. 1g coppers were hoarded. I once saw 7,000 Ancient Hindu Ganapati Naga coins passing through London – I mentioned this to an Indian guy, and he replied he had seen “a barrel full” in India – sounds like a hoard of hundreds of thousands. China throws up big hoards of c. 1g copper coins too.

    2) The best way to test this specific suggestion is to look at stray finds - accidental losses – which ought to better represent actual circulation. And it does turn out that, since metal detecting started up, there are in general lots more very small coins lost in the ground and coming to market than we would have previously guessed. But has that happened on a big scale with small Roman 5th century coppers? Are there way more on sale now than there used to be? I never noticed it if so.

    3) If countries in the old Eastern Roman empire ran a reporting scheme like that in the UK we might answer this question easily. But turn on the news and you might think, like me, that that is just a pipe dream.

    Rob T
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