Featured Debasement, Inflation and Fallout

Further to my last - I just stuck "Leo" into Vcoins and even his grotty coppers seem to be 30 quid or so. Grotty 3rd and 4th coppers would be 30 pence I hope. So things still seem to be as I recollect them

 

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Kevin: Thank you for this well-written and thought-provoking post. I have a special interest in Rome's "Third Century Crisis."

I think one needs to put the financial crisis during this time in context with the societal collapse that was also occurring throughout the Empire.

Pat Southern, in her excellent The Roman Empire: From Severus to Constantine, seems to feel that the disruption of the Empire during this period was not as nearly fatal as I do. She wrote, "Military disasters, folk migrations, hit-and-run raids across the frontiers, external and internal rebellions, civil wars, bankruptcy, famines and plagues were recurrent and familiar events in the history of Rome."

I think, however, she underestimated the precarious state of the Empire at this point of its history. The severe devastation of disease, the Plague of Cyprian from about AD 249 to 262, for example, cannot be exaggerated. (Our most recent panic from the relatively mild Coronavirus epidemic should give us some insight what role a devastating epidemic could play in a scientifically unsophisticated ancient society.)

https://en.wikipedia.org/wiki/Plague_of_Cyprian

It must be noted that it was the earlier Antonine plague of AD 165 to 180 that led to the events (including co-regent Lucius Verus' death) that created the instability that led to the crises of the next (third) century.

https://en.wikipedia.org/wiki/Antonine_Plague

Michael Grant in his enjoyable The Climax of Rome also emphasized the cultural and military achievements of this period.

The erosion of trust in coinage erodes trust in a central authority. The confidence in a fiat currency (money whose value is derived from government order, not the underlying metal) is only as good as the confidence in the government that has issued it.

I'm only surprised that the Roman Empire didn't collapse sooner, perhaps even in the third century.

I agree. Great book.



I thank you and others for this great thread.


g.

 

Coincided with? Yes.

Led to? Maybe

Yes - but for me that points to questions about gvt ideology, which I think is probably the correct way to go. And in so far as that is the correct way to go, then matters to do with succession, plagues, metal supplies etc etc are to that extent regrettable diversions

Rob T

 

Considering the pandemonium and panic in the marketplace right now with the Corona virus, more of a potential than actual catastrophe, I can well image the same thing and worse, when a very deadly plague of unknown origin, actually started carrying away large segments of the population from servile workers in the fields to co-emperors in the purple. In addition to the material losses, I can well imagine the critical doubts sapping the morale of the people, causing them to question the value of everything from the coins in their purses to the efficacy of appealing to the gods. These plagues, as we know from the better documented bubonic of Fourteenth Century Europe, did not exist in a vacuum and did not just kill many people. They were initiators of considerable change, often unseen or understood until much later with retrospection. That we may have difficulty comprehending how these plagues affected their lives in ways not understood by them or us does not mean that they did not bring about seminal changes, and not always for the better, changes that we can see only dimly through a darkened mirror. That they were simply coincidental to a loss of confidence leading to a crisis of confidence and an unwillingness to resist forces that seemed beyond their control ought not to be established as more than a "great perhaps". I find that economist and author Peter Temin does an excellent job in his "The Roman Market Economy", of establishing cause and effect between periodic plagues, and barbarian assaults and economic changes, including rising wages from declining populations. He would be the last to establish this as more than a high degree of probability, but his data and conclusions seem to be more than simply persuasive.

 

Thanks. This seems to me strong on passion and imagination, but short on detail. You cite a Peter Temin book, and Temin seems mostly interested in prices. Concerning plague and prices, I make three points:

1) Fundamentally, there are less hands to work the field, but also, fewer mouths to feed, pointing towards a null effect.

2) As you say there might be psychological effects, also dislocations. But set against that, there would no longer be a need to cultivate infertile marginal lands. Again these contrary consequences tend to cancel out

3) rather wild fluctuations of grain prices were entirely normal in the pre-modern world, certainly due to effects of weather on the harvest, and probably exacerbated by speculation in many cases. So its not clear why a short term variation, adjusting to a new normal, would necessarily have long term monetary effects.

Seems to me, like almost all the economists I read, Temin is whistling in the dark. We just do not have the facts on Ancient/Roman events to write with such confidence

Rob T

PS Peter Temin wrote criticising Moses Finley in December 2012. By chance, I did the same in 2013. Our approaches were very different. My own point was that Finley was clearly a propagandist for a particular 20th century ideology (see p. 13 ff in the below). This argument between Temin and Finley seems to me really a conflict in 20th century ideology. Historical fact was its victim.

https://www.academia.edu/356701/Gyges_Magic_Ring_The_Origin_of_Coinages_and_Open_Societies

 

You are right. I did get carried away with that post and allowed indignation to replace reasoned logic.

 

Actually I did not "enjoy" the book on the Roman market economy. I thought Temin did a pretty good job in establishing that Rome, for a while, had a market economy and that most Romans except for rural slaves, enjoyed a decent standard of living. As for the gyrations in the price of grain I think that self evident and did not need much amplification. I must admit I was somewhat disappointed that he spent very little time on monetary policy and the coinage, which brings me to ask of you and other readers a question about something I wrote above about the debasement of the silver coinage.

In the First Century BC and through much of the First Century AD the denarius contained a bit under four grams of silver, slightly reduced by Nero. Prices in the market place seemed adjusted to that value. As we know the denarius was more debased by the latter part of the Second Century but levelled off for a while under the Severans at close to the fifty % fine level until mid century. The assumption is that this created a noticeable inflation with rapidly rising prices. The debasement part is easily ascertained from metallurgy but I am not certain about the inflationary increase in the price of goods in the market at that time. Later on, yes, but early Third Century not as much as some authors have concluded. I have wondered if prices might have remained relatively stable ( I don't know for sure that they did from say 150 to 250 AD) in that the coinage of AD 200-245 may have retained its buying value, despite the reduction of silver, because the price, the value of silver had increased from a diminishing supply. I have read that the mines were producing less and less silver as the Third Century went on and that this scarcity might have increased the value of silver to the point that a four gram double denarius of Gordian III of close to 50 % fineness may have had the purchasing power of a four gram 95% fine single denarius of Tiberius in his day. A doubling of prices over a period of two hundred years is not rampant inflation.

If so, while Roman debasement of coinage occurred, the hyper inflation which we assume happened circa 200 AD onward was not as noticeable as we believe and assume. I get the impression from the Temin book, and some more recent writings, that the Antonine plague of circa 160-170 AD and its economic and social dislocation had pretty much healed itself and there was a partial recovery of prosperity by the early Third Century. If so, that may be partially explained by the rising value of silver enabling the Roman state to issue silver of less fineness without wrecking the stability of the marketplace.

I ask readers here if they have any information on price inflation from the first half of the Third Century and if it was not rampant, was it because the Roman silver currency, though debased, had not lost as much purchasing power as is commonly assumed.

 

My copy of Harl arrived. Full marks to Ergodebooks for an impecable service.

I turn rapidly to page 168 - and discover that the “coinage trash” you reference above was at the same time valued as 6,000 denarius pieces.

I hope this explains why I am rather underwhelmed by any moans about the coinage policy of Nero or Gallienus. Was it not Constantine who set that ball rolling?

Rob T

 

If I am reading Harl correctly, those 6,000 denarii existed as only 240 nummi or one solidus in 323, and much less a few years on. Hoards of hordes of denarii communes may not have been worth the effort to dig them up, or even bury them in the first place. For all we know those coins could have been swept from the floor and wound up, not in a coin hoards, but rather trash middens.

 

Sorry, let me clarify

By 440 AD, according to Harl, a solidus was worth 42,000,000 denarii. But it equated to 7,000 nummi

42,000,000/7,000 = 6,000 denarii – the value of every little nummus by 440.

You are looking at something different - the value of the nummus in 323 – which was 6,000/240 thus 25 denarii

If I have it right 6,000/25 represents an inflation of 24,000% over that c. 120 year period - mostly occurring in the 4th century

Again looking at the evidence that Harl offers - that huge inflation is in part driven by perhaps seven (?) different revaluations of the nummus.

Now, it seems to me that at least some of these revaluations would be signalled by a change of type in the nummus, so am puzzled that Harl does not seem to comment on that.

Regarding this throwing away of the nummi. I suspect Syrians and Bulgarians hunt even for strays with metal detectors, and if there were loads of late ones being thrown away I think they would be much more common on the market than we actually observe. Large hoards of course still held their value in copper, whatever happened to the notional value.

Rob T

 

You may be entirely right about this but speaking of somethings being common on the market, I can think of few things as common and as cheap as Third Century Roman AE 4's from the Balkans or the Middle east, even further west . The market seems to be awash with them at bargain basement prices.