Inflation and Unpaid Wages destroyed the Roman Empire

Historians still debate the decline and end of the Roman Empire, a subject which inspired Edward Gibbon’s masterpiece, perhaps the most widely read history books ever. This blog will just add my personal views on a topic that has been covered many times by other authors. Many hypothesis have been proposed for the Roman decline. Some point to Christianity as a source of imperial Rome's weakness. However, the Eastern Empire was also Christian and remained a strong power until the 12th century at least. Others point out that too much lead in the water supplies was slowly poisoning the Roman population. However, it feels to me that the barbarians that penetrated the Roman empire, such as the Vandals and Visigoths, were also getting water from the same sources as the Romans, therefore I feel this to be a weak explanation.

The Roman Empire started a slow decline after the Antonine plague, which some estimate killed five million people or more than 10% of the empire’s population. The plague ended the period of greatest economic prosperity of the Roman Empire. It happened just at the climax of the greatest political and military influence of the Empire, since their major rivals, the Parthians, had been repeatedly defeated by the Romans. However, a plague does not always imply the decline of a civilization. In the late middle ages the Black Plague killed a substantial part of the European population and some economic historians say that this disease increased the wages of workers (since now there were fewer people than land) and this increase in wages may have given impulse to new industries and the long term development of Europe.

The reason why the Roman Empire may have declined and eventually disintegrated is therefore probably not due to a plague nor due to military defeats. Urban populations after a plague can employ new workers at higher wages and find new arts and industries in order to recover their wealth and splendor. Also, the Roman Empire had suffered defeats far worse than the famous disaster of Adrianopole in the late 4^th century. In particular, it is easy to argue that the military defeats against Hannibal during the Punic wars, the disasters against the Teutons around 105 BC, or the rebellion of the Italian provinces during the Social War of 88 BC, were far bigger than the battle of Adrianopole. The long lasting nature of the Romans was not that their armies were always invincible, but their ability to persuade their citizens to form a new army even after suffering major defeats. Presumably, persuading your citizens to join the military effort was easier in an oligarchy or autocracy that had some respect for citizen rights. However, after the 2^nd century the Romans became a military regime in which only the generals and their troops counted for something, a bit like the Soviet Union which had the largest army in the world and yet was unable to produce decent products such as toilet paper or bread. In such a military regime probably the citizens were afraid of their Roman oppressors as much as of their barbarian invaders. After a military defeat in the 4^th or 5^th century few Romans would cooperate with their generals and authorities, because Roman generals feared that their fellow citizens could be rivals in the competition for power and therefore even if the new generals were successful these could be murdered afterward when they were no longer convenient. This meant that the late Roman authorities would find few allies and would lose power easily after military defeats.

In my view perhaps a decisive moment in Roman history were the budget and monetary policies adopted by a very successful emperor Septimius Severus. Severus is one of the few generals in history who won large battles in three continents: Europe, Asia and Africa. Some historians believe that the battle of Lugdunum in which Severus confirmed his power was the bloodiest battle in all of roman history. Severus then enlarged the army in order to make further wars in Asia, Africa and Britain. He also increased the wage of each soldier by 30% in order to guarantee their loyalty. Above I show a picture of me and my twin brother – I am the one with longer hair – on top of the Roman wall in the city of York, England, which was where Severus died in sickness while planning to conquer Scotland. Below I show a picture of the roman theater in the African home town of Severus, Leptis Magna.

In order to pay for this large army expenses, Severus debased the coins and started an inflationary period from which Rome never recovered. As economists know, debasing the currency and creating rampant inflation is the worst possible way for a government to make revenues. It is much better to raise taxes, since the more inflation you make to pay something then you need even more inflation in the future to pay for the same things. The inflation process can go out of control and the government is unable to use money anymore. Also, ordinary business men and people stop using money and lose their confidence in the government. Inflation was already understood as a bad decision even in ancient times. Severus only adopted this bad measure because he came to power as a military dictator and only valued his soldiers. In fact Severus famous last words to his sons in York were: "Be harmonious, enrich the soldiers, and scorn all other men". Being unable to persuade the Senate to cooperate, Severus was limited to the worst policy option to finance his wars, which was inflation.

During the  3^rd and 4^th centuries it was clear that inflation was damaging the roman economy and their government system. Laws were passed authorizing generals to directly seize products and valuables for use of the army, therefore ordinary taxes paid in money fell out of use. Also, since workers and business men did not want to work in industries that were more easily “taxable” or “seized”, the Roman authorities ended up passing laws obliging people to stay in the area where they had been born and to work in the same occupation as their parents. Feudalism had started. The free and vibrant economy had been replaced by a planned and rigid system.

The Roman army was never actually defeated by the barbarian invaders. Even after losses such as Adrianopole the Roman leaders were able to persuade the “winners” to become cheap mercenaries for them. Therefore the barbarians could be described as a form of cheap labor in the official Roman army. Some historians, such as Peter Heather, even argue that these cheap Barbarian soldiers were actually what kept the Roman Empire running well and efficiently during the 5^th century. However, the Western Roman Empire was dependent on revenues from the large olive oil fields and other agricultural farms in modern day Tunisia. When a corrupt province governor and a group of barbarians, the Vandals, managed to occupy Tunisia, then Roman emperors lost a major source of revenue. After a few decades and an exhaustive war with the Huns, the Western Roman Empire was out of revenue and the Barbarian soldiers employed by the Emperor decided to rebel and simply run Italy as a kingdom for themselves. Therefore one could say that mismanagement in the form of inflation to pay for a military dictatorship and a lack of money to pay the wages of soldiers was the end of the Roman Empire. The Eastern Roman Empire was much more urbanized, had a stronger economy, and was therefore able to resist invasions from the Balkans, the Middle East and from Central Asia for several centuries more.