Bitcoin Forum

Before long, readers will wonder where this thread is going.
Here's the proposed route for "Learning from Imperial Rome":

1. Background and Definitions
2. Augustus
3. Tiberius
4. Claudius
5. Trajan
6. Marcus Aurelius and Lucius Versus
7. Caracalla
8. Aurelian
9. Diocletian
10. Lessons from Imperial Rome

The Executive Summary:
Would a cryptocurrency that resets in 49 years do
a better job than currencies presently in circulation?
Who would believe such an idea?

(BTW I believe there is sufficent prior art to invalidate any
patent application. And I have no plans to introduce a new
cryptocurrency ;-)

What?

Background and Definitions.

Language is a subject of interest to those studying Complexity.
Language, eg French, defines the Nation, and is distinct from
the Nation State. Arguments can be made that without words
to describe concepts, ideas cannot advance. (If you want the
science see the Sapir-Whorf hypothesis -
http://www.youtube.com/watch?v=GRMNrEo7CRw )

Arguably, money is also a language, but all those things that
arise from that thought will have to wait. There are some other
things about Complexity that need to be said.

If you have seen starlings in flight, you will know that they
behave differently to robins. Complexity suggests that without
prior knowledge, it is impossible to predict how each species
will behave collectively, given only the behaviour of the
individual. Hayek said something similar in his Nobel Prize
speech in regard to economics. We still persist in making
forecasts.

There are other unintended examples,- see "Father Ted - On Holiday"
http://s.ytimg.com/yts/swfbin/player-vflqv4MLv/watch_as3.swf
Three things come to mind:
* When modelling, never confuse the output of a computer with the
real world. (Revisit this later).
* Exponential change is unfamiliar to human thought.
* When looking at economic thought - "I just don't get it."
(In economics, everyone's a newbie).

Modern Monetary Theory - Banks, Minsky and Ponzi financing:
http://www.youtube.com/watch?v=0SPqMDMbRlo
In this video Dr Grasselli says "it's dead simple"
and I still don't get it.
http://www.youtube.com/watch?v=OgGritTEDB
His paper is here :
http://keenomics.s3.amazonaws.com/debtdeflation_media/2012/08/UWSPresentation.pdf

When a mathematician puts "bad" and "equilibrium" in one sentence, the words
can take on a meaning far beyond the reader's experience - somewhat like the
Ghostbusters' "that would be bad"
http://www.youtube.com/watch?&v=jyaLZHiJJnE

Still too demanding? Here Dr Michael Hudson talks about the earliest attempts at
money:
http://www.debtdeflation.com/blogs/2012/09/16/fields-institute-mmt-mct-seminar/
http://www.youtube.com/watch?&v=yQZGv2xL-fw
Ancient Sumer and Babylon - money was created to allow ale to be drunk and
paid for later. What went wrong?

Please - just focus on the facts for now. It's surprising how often people
can look at the same facts and reach diametrically opposed positions.
And I have to question some of the facts presented by Dr Hudson - the part
about the 'S' curves. The history may be correct, but the math is suspect.
Fortunately, this economy actually is dead simple.

Recognise that bronze age and later culture is under discussion. A standard
measure of barley was the cubic foot - the artaba. You pour barley into
a standard container, draw a straight edge across the top to remove the excess,
and you now have an Artaba of barley. By a magic similar to that of the
bitcoin mining rig, the Artaba becomes money. A similar magic was applied to
silver to produce the Shekel - a "guaranteed" quantity and quality of silver.
To make it really simple make 1 Shekel = 1 Artaba (of barley) through Royal
edict, and everybody understands how the system works.

In those times, as today, the quantities of barley and silver are finite.
The exponential growth in money identified by Dr Hudson could not continue for
more than a few decades - as indeed he suggests. Modelling the process
allows potentially infinite resources, but suggests that, left to itself,
the system will eventually move into catastrophic collapse. (Welcome to
world of fiat currencies.) Note also, that given the right initial
conditions, this happens with a silver-based currency.

These communities knew that their economy faced, potentially,
once-in-a-lifetime catastrophic failures. Their answer, it seems, was
to turn their economy into a sort of 2000BC real-world game of Monopoly,
where at some fixed points in time, the board was swept clean and
everyone re-started from "GO". You may be curious as to what happens
when somebody decides "this time it's different". Cue Greeks ...

Historically, the Code of Hammurabi and the Jubilee of Leviticus
predated the Greek economy and it's collapse. It seems the Babylonians
and the Hebrews managed to learn from their harsh lessons and adapt,
while the Greeks got no second chance. Rome, perhaps, thought that
the Greeks were just unlucky, or that Rome was different, or ...

Prior to the rise of Rome, interest rates were quite high.
Thus modelling those economies with an interest rate of 25 percent the economy
collapses after thirty years, and with an interest rate of 15 percent the
economy collapses after sixty years. Leviticus defines the Jubilee - Debt and
savings cancellation - as happening at 49 year intervals.

So, what interest rate will give a 300 year exponential rise in GDP followed
by a catastrophic collapse? Depending on other factors, a 2.43 percent
interest rate approximates to the rise and fall of Imperial Rome.

The initial conditions:

Firms loan =100
Firms deposit in banks account = 100
Money in Bank Vault = 12
Bank Capital = 5
Wages deposited in a Bank account = 9.1
Wages pa = 0.8088
Capital = 900
Labour productivity conversion factor 1.0
Population (workforce) = 1
Prices = 1
Employment ratio = 0.95

Four hundred and thirtyone years later - after zenith and collapse:

Firms Loan:  87.7689
Firms Deposit: 100.1007
Bank Vault: 595232962498.4783
Bank Capital:   1.7689
Workers Deposit:   0.0000
wage :   0.0000
Capital = : 606.1012
Alpha = : 409271.8157
Beta =:   8.6185
Price Level (inflation):   0.0000
Employment ratio :   0.0401

A quick calculation should confirm productivity increases of three
percent per year, and a population growth of 0.5 percent per year.
That is greater than the interest rate and the system still collapses!

So, away from the model, and back in the rela world, what really
happened in Imperial Rome?

I think you drank too much coffee today bro.

keep trollin, trollin, trollin
what

good post.. i was thinking something similar a few days ago when listening to my vespasian audiobooks

@OP Imperial rome certainly however these were not the catastrophic collapses you are referring to.

Augustus

Any figure quoted here should be treated with the caution usually reserved for
the output of any computer.

Solid data on most periods of Imperial Rome is somewhat sparse,
hence modelling the economy is more detective story than math.
Fortunately, thanks to ongoing interest in the history of Rome,
there is enough data available to make sensible guesses. This
paper was particularly useful:
http://www.kepe.gr/EN_Pages/disc_papers_en.htm Prodromidis - Discussion paper Nr 85 - Another View on an Old Inflation - P-I Prodromidis

Although this economic history properly begins in 27BC when Octavian accepts,
as head of state, the name Augustus and rights and responsibilities that were
previously held separately to that office, his actions two years earlier are telling:
In the year 29 BC, Octavius paid 400 sesterces each to 250,000 citizens,
1,000 sesterces each to 120,000 veterans in the colonies, and spent 700 million
sesterces in purchasing land for his soldiers to settle upon. He also used a census
to determine the population and to use this as a base for taxation. Largesse such
as that above had the benefit of encouraging people to be recorded in the census.

Thus after defeating Antony through military skill and might, in 27BC Augustus retained
certain rights to Egypt and other important military provinces. In his acceptance
speech, Augustus declared that he had restored the Republic. Financially,
principally through Egypt, Augustus had an income of perhaps five percent of Roman GDP,
and he spent almost all of that on donatives and public works. The Senate raised taxes,
via a one percent tax on wealth, sufficent to pay the costs of the Army and related
services, perhaps as much as five percent of GDP. The Army comprised 28 legions,
each legionaire was paid 150 denarii pa and the military budget was some 15.652 M Denarii,
suggesting a GDP in excess of 300M Denarii. To pay for this, taxes were levied only
on Roman citizens, hence only applicable to what is now modern Italy. This was
supplemented by tribute from conquered lands, today France, Spain, Greece, part
of Germany, and others.

This Settlement marked the end of a struggle between the propertied classes and the
champions of the common people that continued through most of the first century BC.
Civil wars have a way of extinguishing debt, hence in 27BC, Rome's debt to GDP may
have been as low as ten percent. The Roman coinage was sound: the gold aureus 7.9g;
the silver denarius 3.8g; the Sestertius in orichalum 8.0g, and the bronze As.
Peace brought improvements in tax collection, and less corruption. The population
grew 0.48 percent pa, and productivity increased by 1 percent pa. Prices were quite
stable, though variations year-to-year in crop yields caused wheat prices to fluctuate
around 4.5 drachmae per artaba.

The reign marked a change from military prowess to political and economic skills,
from conquest to consolidation and improvement, from expansion to a fixing of borders
and alliances. Augustus was in sole control over most of the Army, and established
the Praetorian Guard to provide close protection wherever he went. Over time, Augustus
replaced many officials with his own men, giving him tighter control over the
administration. With interest rates of some three percent, and above the rate of growth,
the economy suffered mild inflation during the 44 year reign. Legionaire pay rose
to 224 denarii, suggesting a 50 percent inflation over the 44 years.

Aside from those who opposed him directly on the battlefield, the biggest losers
to Imperial Patronage and public generosity were the Senators who espoused the old
republican order, and the corrupt civil servants who were replaced under the new order.

When Augustus died in 14AD he left a document in his own hand, advising Tiberius to
keep the Empire within the present frontiers. Some five years earlier, in Germany,
three legions were ambushed and annihilated, reducing the number of legions to
twentyfive, and ceding territory between the Rhine and the Elbe.

Hmmm, Catastrophe?  - I'd view any situation where slavery is a preferred lifestyle choice,
as quite serious, but maybe I'm just a 21st century socialist.
I chose "catastrophe" to mean both a serious decline in the quality of life for the general
population and to describe a process that is very difficult to control and to reverse. 

Tiberius

Donatives and Congiarium:
http://en.wikipedia.org/wiki/Donativum
http://en.wikipedia.org/wiki/Congiarium

Tiberius succeeded Augustus in 14AD, and inherited twentyfive legions, the land rents
and wheat trade of all Egypt, silver mines in Spain, and some problems. There were,
unusually, few potential challengers and Tiberius's accession was bloodless.

Mutiny broke out almost immediately in the German Legions. While some suggest that an
increase in pay was promised by Augustus, it seems more likely that a substantial
donative was expected. A substantial donative would be of the order of three to five
years pay for the Army, thus perhaps 15-20 percent of GDP. That would be within the
gift of Augustus. Army pay was raised by taxation, hence any requests for increases
in pay and hence taxes would empower the landed gentry recently screwed over by Augustus.
In either case Tiberius was not disposed to handing out money, particularly under
duress, and given the past generosity of Augustus there may not have been much money
in the coffers.

Also at this time, Tiberius pressed to have the laws prohibiting usury enforced. If
money was to be borrowed, it was to be loaned at zero interest rates applicable
across the empire whether in Rome, Alexandria, Londinium, or Jerusalem. Tiberius
not only ended the Augustan practice of donatives and circuses, he discouraged
others from carrying on the practice.

To suppress the mutiny, Tiberius sent his son Drusus and his adopted son Germanicus
with their Legions into Germany. Instead of the expected conflict, Germanicus offered
the mutineers a way out: to join him, cross the Rhine and to keep the spoils of the
conquest of the Germans as their payment. Attracted by the prospect of looting, rape,
and pillage, the mutiny ended. The land between the Rhine and the Elbe was retaken,
and Germanicus returned to Rome in triumph after regaining two of the three eagles
lost in 9AD. Power slipped a little further out of the hands of the Senate and into
the reputation of the Army.

Zero interest rates degraded the ability of the monetary system to direct supply to
meet demand and also destroyed the business model of the banks. It took some time,
but the crisis peaked in 32-33AD, when the capitalisation of the Financial Sector
rapidly approached zero. The exact terms are unknown, but Tiberius rescued the
banks with several large loans at zero percent interest rates. It is likely that
Tiberius screwed over the banksters in much the same way that Augustus dealt with
the Senate.

In 31AD Tiberius, with the help of the Senate, suppresses the usurper Sejanus,
bribing the remainder of the Praetorian Guard with a substantial donative. Anyone
remotely connected to Sejanus was executed in a ruthless and brutal purge and their
property was forfeited.

Tiberius died in 37AD, some hours after Caligula publicly announced his death
and while the resulting celebrations were underway.

##############################################################################

Caligula

According to Suetonius, in the first year of Caligula's reign he squandered
the 2,700,000,000 sesterces that Tiberius had amassed.

In any event, Caligula's political payments for support, generosity and
extravagance quickly exhausted the state's treasury and a financial crisis emerged
in AD 39. Caligula began falsely accusing, fining and even killing individuals
for the purpose of seizing their estates. A number of other desperate measures by
Caligula are described by historians. In order to gain funds, Caligula asked the
public to lend the state money. Caligula levied taxes on lawsuits, marriage and
prostitution. Caligula began auctioning the lives of the gladiators at shows.
Wills that left items to Tiberius were reinterpreted to leave the items instead to
Caligula. Centurions who had acquired property via plundering were forced to
turn over spoils to the state. The current and past highway commissioners were
accused of incompetence and embezzlement and forced to repay money.

His nephew Nero Caesar both envied and admired the fact that Gaius had run through
the vast wealth Tiberius had left him in so short a time. The Vatican Obelisk
was first brought from Egypt to Rome by Caligula. It was the centerpiece of a large
racetrack he built. A brief famine of an unknown size occurred, perhaps caused by
this financial crisis, but according to Suetonius a result of Caligula's seizure
of public carriages, according to Seneca because grain imports were disturbed by
Caligula using boats for a pontoon bridge.

There is simply no way that the economy could withstand the instantaneous expenditure
of 700M Denarii. The GDP was a little over 500 million denarii, leaving considerable
doubt over the exact course of events. Interest rates fall because money is easy to
obtain, and to restrain the economy taxes are raised to a level where the economy
would collapse if the pressure were maintained there for more than a couple of years.
Almost all the Treasury's wealth was transferred to the private sector.

Of note is the effect of raising government spending. It seems impossible to raise
government spending sufficiently to justify the taxes raised without pushing
inflation into a steep rising trend. Perhaps a reasonable assumption is that
towards the end of his reign, spending was limited to Army costs, and hence taxation
would fall as soon as the projects were completed and revenues increased.

Perhaps Caligula caused someting similar to a Jubilee to occur as assets were seized
from the wealthy and spent or given to the poor in the form of higher wages.
The heavy taxation, seizures, and tax on food would have caused both unemployment
and price increases. Money would be withdrawn from bank deposts of the private sector,
and either concealed or exported. From about this time until around 70AD-80AD
Egyptian wheat prices rose 53 percent. That is over one percent pa, but legionary
pay and Army costs seem to have been static, perhaps because those related prices
were controlled by the Emperor. In all this, more silver was needed to increase
the quantitiy of denarii in circulation.

Meanwhile, back in the Senate, while Caligula was keeping the mob entertained, the
Senators were increasing their wealth and influence, thus when Caligula mentioned
that he might make his horse a Senator, something had to be done. In 41AD Caligula
was assassinated.

Taxation was some seven percent of GDP, while interest rates were two percent.

########################################################

Season's compliments to all :-)

That's almost there moreover "donatives" and "congirum" are pretty interesting for example

Nero

After tax collectors were accused of being too harsh to the poor, Nero transferred
collection authority to lower commissioners. Nero banned any magistrate or
procurator from exhibiting public entertainment for fear that the venue was being
used as a method to sway the populace. Additionally, there were many impeachments
and removals of government officials along with arrests for extortion and
corruption. When further complaints arose that the poor were being overly taxed,
Nero attempted to repeal all indirect taxes. The Senate convinced him this action
would bankrupt the public treasury. As a compromise, taxes were cut from
4.5 percent to 2.5 percent. Additionally, secret government tax records were
ordered to become public. To lower  the cost of food imports, merchant ships were
declared tax-exempt.

The economic policy of Nero is a point of debate among scholars. According to
ancient historians, Nero's construction projects were overly extravagant and the
large number of expenditures under Nero left Italy "thoroughly exhausted by
contributions of money" with "the provinces ruined." Modern historians, though,
note that the period was riddled with deflation and that it is likely that Nero's
spending came in the form of public works projects and charity intended to ease
economic troubles.

In 64, Rome burned. Nero enacted a public relief effort as well as significant
reconstruction. A number of other major construction projects occurred in Nero's
late reign. Nero had the marshes of Ostia filled with rubble from the fire.
He erected the large Domus Aurea. In 67, Nero attempted to have a canal dug at
the Isthmus of Corinth. Ancient historians state that these projects and others
exacerbated the drain on the State's budget. The cost to rebuild Rome was immense,
requiring funds the state treasury did not have. Nero devalued the Roman currency
for the first time in the Empire's history. He reduced the weight of the denarius
from 84 per Roman pound to 96 (3.85 grams to 3.35 grams). He also reduced the
silver purity from 99.5% to 93.5% - the silver weight dropping from 3.83 grams to
3.4 grams. Furthermore, Nero reduced the weight of the aureus from 40 per Roman
pound to 45 (8 grams to 7.2 grams). He himself, he said, made the state an annual
present of sixty million sesterces.

Rome, at this time 64AD, is divided into fourteen districts, four of which
remained uninjured, three were levelled to the ground, while in the other seven
were left only a few shattered, half-burnt relics of houses.

The cost of reconstruction is immense, far higher than the economy could easily
absorb without price increases, and there were significant price fluctuations
still ongoing when Nero died in 68AD.

Nero's debasement of the Roman denarius after the great fire of 64AD was mirrored
in the Alexandrian coinage: His last four years witnessed an intense outpouring
of tetradrachms, actually a recoining of the existing currency supply (including
some high-quality Ptolemaic tetradrachms still in circulation) to the new denarius
standard, viz. 2.19 grams of silver per tetradrachm. In this process a considerable
quantity of silver was recovered and exported to Rome, where it enlarged the flood
of denarii minted to finance Nero's building program.

##################################################################################

Nero's death precipitated a period of financial and political turmoil. 69AD became
known as the year of the four Emperors, with further damage to the Treasury, and
ceding further political power to the benefit of the Army and the Praetorian Guard.

Fires, floods, plagues, eruptions provided a background that echoed the distress,
and in these succeeding years brought a series of crises and Emperors greater or
indifferent incompetence.  It is really not possible to easily model this scale of
anarchic behaviour. A pattern emerged: the Senate proposed a new Emperor, the Army
accepted him, on accession the Emperor gifted the contents of the Treasury and most
of his personal fortune to the Army: each variant, depending on the integrity of
the new Emperor and the corruption of the old, would begin to rebuild their
finances, either by foul means, or by confiscating the wealth stolen by the previous
incumbents.

((Vespasian(70AD - 79AD) Titus(79AD - 81AD))

Domitian (81AD) attempted to restore the currency, bringing the denarius back to
98 percent silver. A financial crisis soon followed in 85AD and the denarius was
again debased. It is reported that Domitian increased the pay of the army by one
third, and absent a record of donatives on accession, it is assumed that the pay
increase was in lieu of a donativum.

Nerva - All properties which had been confiscated by Domitian were returned to their
respective families. As was custom by this time, a change of emperor was expected to
bring with it a generous payment of gifts and money to the people and the army.
Accordingly, a congiarium of 75 denarii per head was bestowed upon the citizens,
while the soldiers of the Praetorian Guard received a donativum which may have
amounted to as much as 5000 denarii per person. This was followed by a string of
economic reforms intended to alleviate the burden of taxation from the most needy
Romans.

When Nerva died in 98AD, the government was in another crisis, the banks and
treasury were bankrupt, even after desperate measures including the auctioning of
Domitian's property, including ships, estates, and even furniture.

The records suggest that wheat prices rose from a low of 2.2 drachmae to 16 drachmae
between 65AD and 99AD.

Trajan

He freed many people who had been unjustly imprisoned by Domitian and returned a
great deal of  private property that Domitian had confiscated (a process that
had been begun by Nerva).

Trajan's Dacian campaigns began in 101AD and continued until successfully completed
in 106AD. Thanks to the treason of a confidant of the Dacian king, Bicilis, the
Romans found Decebalus's treasure in the river of Sargesia/Sargetia - a fortune
estimated by Jerome Carcopino at 165,500 kg of gold and 331,000 kg of silver.
In 107 he devalued the Roman currency. He decreased the silver purity of the denarius
from 93.5% to 89% - the actual silver weight dropping from 3.04 grams to 2.88 grams.
This devaluation, coupled with the  massive amount of gold and silver from Dacia
allowed the Emperor to mint a larger quantity of denarii than his predecessors.
Trajan was also in a position to reduce the amount of wheat necessary to be shipped to
the capital.
The conclusion of the Dacian Wars marked a triumph for Rome and its armies. Trajan
announced 123 days of celebrations throughout the Empire. Dacia's gold mines were
secured and it is estimated that Dacia then contributed 700 million Denarii annually
to the Roman economy, providing finance for Rome's future campaigns and assisting
with the rapid expansion of Roman towns throughout Europe. Under the spell of the
Dacian windfall the government proceeded in the grand manner. The money was not
needed to rebuild Rome. So it was used to establish a great philanthropic fund.
Under this FCA, farmers were allowed to borrow from the government on mortgage
security at 5 percent, which was less than half the rural commercial rate.
The result is a substantial injection of money into the economy, and interest rates
have to rise to keep prices in check, with near zero increase during Trajan's reign.
High tax rates will limit prices and also bring interest rates down quickly, but why
did Trajan debase the currency? He got gold, but not enough silver to keep the
trimetallic currency in balance. Wheat prices suggest modest deflation with
prices in the range  7-9 drachmae except for 112AD, 12 drachmae.

When Trajan began his reign, bank debt - money in the bank available for loan by the
bank - had increased a hundredfold from debt in the reign of Augustus. When Trajan
died in 117AD debt had fallen by two-thirds.

##################################################################################

Hadrian

War in the east - Hadrian's U-turn was more than a short-term response to immediate
crisis;  it reflected a slow but irreversible shift in the balance of geopolitical
power at the expense of Rome. The dynamic that had built the empire had exhausted
itself. War was profitable where there were towns, villages and farms; where there
was a large productive peasantry the fruits of whose labour could be plundered in
war and taxed in peace.

Hadrian wrote off uncollectable debt ~ 900M Sesterces, say 250M Denarii. He
determined to remove these from the accounts and begin his reign with a clean slate.
Consequently the records of these debts were publicly burned, an event which,
obviously, gained him public favour. On ascension, there would be money paid to the
army, some 2500 Denarii per soldier is mentioned as a donative. Interest rates were
high, hence taxes raised excess revenue, though at this time mild deflation seemed
to be ongoing. Spending at this time was wasteful, and while there is no mention of
famine or plague, it may not have been far away. The wars in the east and with the
Jews may have reduced the population growth. The taxes boosted the treasury,
allowing later donatives to increase.

Antoninus (138AD -161AD)

Instead of plundering to support his prodigality, he emptied his private treasury
to assist distressed provinces and cities, and everywhere exercised rigid economy.
One highlight during his reign occurred in 148AD, with the nine-hundredth anniversary
of the foundation of Rome being celebrated by the hosting of magnificent games in Rome.
While this increased Antoninus's popularity, the frugal emperor had to debase the
Roman currency. He decreased the silver purity of the denarius from 89% to 83.5%
- the actual silver weight dropping from 2.88 grams to 2.68 grams.

Marcus Aurelius and Lucius Verus

Marcus Aurelius ruled with Lucius Verus as co-emperor from 161AD until Verus' death
in 169AD. Upon accession, he and Lucius paid a double donative, and he also devalued
the Roman currency. The donative is huge - likely enough to empty the treasury, and to
cause problems with the costs of rebuilding Rome the following year. He decreased the
silver purity of the denarius from 83.5% to 79% the silver weight dropping from
2.68 grams to 2.57 grams. However, Marcus would later revisit the issue of currency
reform. The decision to double the donative implies that there was an expectation,
what was a gift, had become an obligation, to be paid to the Army.

In the spring of 162, the Tiber flooded over its banks, destroying much of Rome.
It drowned many animals, leaving the city in famine. Marcus and Lucius gave the
crisis their personal attention. In other times of famine, the emperors are said
to have provided for the  Italian communities out of the Roman granaries.
That would effectively reduce the Emperor's income.
They were at war with Parthia, 161AD - 166AD. The returning army carried with them
a plague, afterwards known as the Antonine Plague, or the Plague of Galen, which
spread through the Roman Empire between 165AD and 180AD. The disease was a pandemic
believed to be either of smallpox or measles, and would ultimately claim the lives
of two Roman emperors - Lucius Verus, who died in 169AD,  and Marcus Aurelius,
whose family name, Antoninus, was given to the epidemic. The disease broke out again
nine years later, according to the Roman historian Dio Cassius, and caused up to
2,000 deaths a day at Rome, one-quarter of those infected. Total deaths have been
estimated at five million. In 168AD they revalued the denarius, increasing the silver
purity from 79% to 82% - the actual silver weight increasing from 2.57 grams to
2.67 grams. However, two years later Marcus reverted to the previous values because
of the military crises facing the empire. Far more dangerous was the invasion of
166AD, when the Marcomanni of Bohemia, clients of the Roman Empire since 19, crossed
the Danube together with the Lombards and other German tribes. At the same time, the
Iranian Sarmatians attacked between the Danube and the Theiss rivers. The Romans
suffered at least two serious defeats by the Quadi and Marcomanni, who could cross
the Alps, ravage Opitergium (Oderzo) and besiege Aquileia, the main Roman city of
north-east Italy.

At this time the Roman economy is in a critial state: small changes to the
population or to productivity will make disproportionate change to the outcome
of events - the butterfly effect.

################################################################################


Commodus (177AD - 192AD)

Arbitrary, vicious, insane ...

Despite his notoriety, and considering the importance of his reign, Commodus'
years in power are not well chronicled. Commodus was simply uninterested in his
responsibilities and found a new chamberlain and favourite in Cleander. Upon his
accession Commodus devalued the Roman currency. He reduced the weight of the
denarius from 96 per Roman pound to 105 (3.85 grams to 3.35 grams). He also
reduced the silver purity from 79 percent to 76 percent - the silver weight
dropping from 2.57 grams to 2.34 grams. In 186 he further reduced the  purity and
silver weight to 74 percent and 2.22 grams respectively, being 108 to the Roman
pound.  His reduction of the denarius during his rule was the largest since the
empire's first devaluation during Nero's reign. Cleander proceeded to concentrate
power in his own hands and to enrich himself by becoming responsible for all public
offices: he sold and bestowed entry to the Senate, army commands, governorships
and, increasingly, even the suffect consulships to the highest bidder. Unrest
around the empire increased, with large numbers of army deserters causing trouble
in Gaul and Germany. Finally Papirius Dionysius, the grain commissioner, caused
a famine in 190AD so that hungry Romans would destroy Cleandar.

His arrogance knew few bounds as he renamed Rome Commodiana as his colony and
changed the names of the months. He tried to remain popular by giving 140 denarii
to each person, while ordering senators in other cities to contribute five denarii
each and every year on his birthday. For each appearance in the arena as a
gladiator, he charged the city of Rome a million sesterces, straining the Roman
economy.

The avaiable data suggests that vast quantities of money were skimmed from the
emperor and the Imperial revenues and caused distortions to the economy.

His personal trainer strangled Commodus in his bath after other conspiracies failed.

###############################################################################
Five Emperors (193AD)

After Commodus was assassinated, Laetus and Eclectus took Helvius Pertinax, 66,
to the praetorian camp, where he promised the guards a donative of 12,000 sesterces
each.
During the plot against Commodus, the assassins seem to have settled on the popular
66 year old Senator Pertinax in advance. He was immediately raised as Emperor, and
ressurected the title 'Princeps Senatus' or First of the Senate, in deference to
Republican ideals. He was likely seen as a new Nerva - a respected Senator restoring
the Empire after the murder of a tyrant. Due to insufficient funds in the Imperial
treasury to pay the now expected donative to the army on his succession, his gift
was considerably smaller than they expected. As a result, while he oversaw corn
supplies in Ostia the Praetorian Guard plotted a coup. As Pertinax rushed back to
Rome to defuse the coup, he met with the conspirators face-to-face on the Palatine
and was dispatched there after a reign of less than 3 months.
On  accession the Imperial treasury was reduced to less than a million sesterces.
Pertinax had sold imperial luxuries such as statues, arms, horses, furniture, and
slaves while cutting palace expenditures in half. Oppressive taxes and restrictions
on commerce were canceled. Those improving uncultivated Italian lands were exempted
from tribute for ten years. The praetorians got what they were promised, and the
people received 100 denarii each.
Not getting what he wanted, Laetus incited soldiers, who were no longer allowed to
plunder; after only 86 days on the throne they murdered Emperor Pertinax and his
loyal Eclectus.
City prefect Sulpicianus, father-in-law of Pertinax, aimed to take the throne; but
he was outbid by the wealthy Didius Julianus, who promised the praetorian guards
25,000 sesterces and gave them 30,000 each, saying he would restore the honor of
Commodus. The Senate and people loathed Julianus, because they believed Pertinax
was reforming the abuses of the Commodus era, and many believed the soldiers killed
Pertinax for money.
Pescennius Niger, the Roman governor in Syria, was urged by those in Asia to assume
the throne, and Julianus ordered him killed. Septimius Severus, commanding in Pannonia,
shrewdly sent a letter to Britain governor Clodius Albinus, declaring him Caesar,
and marched for Rome. Julianus got the Senate to declare Severus a public enemy and
fortified the palace, putting to death Laetus and Marcia. Meanwhile Severus not only
won over most of Europe, he even persuaded those sent by Julianus to kill him.
The desperate Julianus tried to share the throne with Severus; but the Senate sentenced
Julianus to death, declared Severus Emperor, and bestowed divine honors on Pertinax.
Julianus was executed in the palace after reigning 66 days.

#################################################################################

Severus (193AD-211AD)

Severus was blamed for making Rome turbulent with many non-Italian troops and
excessive expenditures on the army. The civil war with Albinus was won by the army
of Severus at Lugdunum (Lyons), where according to Dio 150,000 from each side
fought. Albinus committed suicide, and the city was sacked and burned in 197AD.
Severus returned to Rome and executed 29 senators who had supported Albinus.
Severus had his son Antoninus (later called Caracalla) confirmed as Caesar.
When Parthian king Vologases besieged Nisibis, Severus launched another campaign
against the Parthians, relieved Nisibis, took Seleucia and Babylon, and plundered
Ctesiphon (enslaving perhaps 100,000); but he failed to capture Hatra. In 199AD
Severus visited Egypt.
In 203AD Severus visited his native Leptis Magna in Africa, promoting municipal
and cultural activities there. Severus returned to Rome to celebrate secular games
the next year, spending a record 200,000,000 sesterces on the people. The coinage
was debased, as the denarius was now less than half silver in order to maintain
his enlarged military.
Upon his accession he decreased the silver purity of the denarius from 81.5% to 78.5%.
However, the silver weight actually increased, rising from 2.40 grams to 2.46 grams.
Nevertheless the following year he debased the denarius substantially because of
rising military expenditures. The silver purity decreased from 78.5% to 64.5% - the
silver weight dropping from 2.46 grams to 1.98 grams. In 196AD he reduced the purity
and silver weight of the denarius again, to 54% and 1.82 grams respectively.
Severus' currency debasement was the largest since the reign of Nero, compromising
the long-term strength of the economy.
He promoted the Antoninianus.  Although nominally valued at two denarii, the
antoninianus never contained more than 1.6 times the amount of silver of the denarius.
As the number of antoniniani minted increased, the number of denarii minted decreased,
until the denarius ceased to be minted in significant quantities by the middle of the
third century.
His policy of an expanded and better-rewarded army was criticized by his contemporary
Dio Cassius and Herodianus: in particular, they pointed out the increasing burden
(in the form of taxes and services) the civilian population had to bear to maintain
the new army. Severus raised army pay from 300 to 500 denarii pa.

On his deathbed, Severus instructed his son Caracalla to always mind the soldiers
and ignore everyone else.

Caracalla

During his reign as emperor, Caracalla raised the annual pay of an average
legionary to 675 denarii and lavished many benefits on the army which he both
feared and admired, as instructed by his father Septimius Severus who had told
him on his deathbed to "Be harmonious, enrich the soldiers, and scorn all other men."
With the soldiers, "He forgot even the proper dignity of his rank, encouraging their
insolent familiarity, " according to Gibbon. "The vigour of the army, instead of
being confirmed by the severe discipline of the camps, melted away in the luxury
of the cities." After the assination of Geta, Caracalla soon convinced them of the
justice of his cause, by distributing in one lavish donative the accumulated
treasures of his father's reign.
About the time of his accession he devalued the Roman currency, the silver purity
of the denarius was decreased from 56.5% to 51.5%, the actual silver weight dropping
from 1.81 grams to 1.66 grams - though the overall weight slightly increased.
In 215 he introduced the antoninianus, a "double denarius" weighing 5.1 grams and
containing 2.6 grams of silver - a purity of 52%.
The Constitutio Antoniniana (Latin: "Constitution [or Edict] of Antoninus")
(also called Edict of Caracalla) was an edict issued in 212 by Caracalla which
declared that all free men in the Roman Empire were to be given full Roman citizenship
and all free women in the Empire were given the same rights as Roman women. The Roman
Historian Cassius Dio contended that the sole motivation for the edict was a desire
to increase state revenue. At the time aliens did not have to pay most taxes that
were required of citizens, so although nominally Caracalla was elevating their legal
status, he was more importantly expanding the Roman tax base. The effect of this was
to remove the distinction that citizenship had held since the foundation of Rome and
as such the act had a profound effect upon the fabric of Roman society. He kept the
Senate and other wealthy families in check by forcing them to construct, at their own
expense, palaces, theaters, and places of entertainment throughout the periphery.
New and heavy taxes were levied against the bulk of the population, with additional
fees and confiscations targeted at the wealthiest families. Only Roman citizens paid
an inheritance and manumission tax, and this tax was doubled at this time. Dion
informs us that the extraordinary gifts of Caracalla to the army amounted annually to
seventy millions of drachmae.

#####################################################################################


Macrinus (217AD-218AD)

Macrinus was Praetorian Guard Prefect when Caracalla was assinated, and became Emperor
while on a military campaign. A working assumption is that he gained control of
33 Legions and raised their pay to 900 denarii pa.

Macrinus achieved a costly draw near the town of Nisibis and as a result was forced to
enter negotiations through which was obliged to pay the enormous indemnity of 200
million sesterces to the Parthian ruler Artabanus IV in return for peace. Macrinus
displayed some financial farsightedness when he revalued the Roman currency. He
increased the silver purity of the denarius from 51.5% to 58% - the actual silver
weight increasing from 1.66 grams to 1.82 grams.
Nevertheless, in order to prevent an uprising among the soldiers, he at once
presented a donative to both the legionaries and the praetorians, rewarding them more
liberally than was customary, and as a man would who sought to mitigate the crime of
having slain the Emperor. The language of Dio is obscure, but he seems to say that
when the name Antoninus was bestowed on Diadumenianus, Macrinus gave each soldier
a second donative of 3000 sesterces, indicating that he had presented the same sum to
them on his accession. Entirely different figures are given in the fictitious speech
in Diad.

#######################################################################################

Over the next fiftytwo years the fortunes of Rome declined, echoing the purity of the
silver coinage.

The year 238AD saw six Emperors come and go.

Between 255AD and 260AD wheat prices fell from 24 drachmae to 12 drachmae, suggesting
that a financial crisis had occurred.

Around 259AD, Valerian moved to defend Edessa and his troops lost significant numbers
to the plague. In 250 to 266, at the height of the outbreak, 5,000 people a day were
said to be dying in Rome.

From around 255AD conversion from gold to the debased coinage began to break down
progressively, leading to hoarding, confusion and panic that had gradually increased
over the years. Gold coins likely ceased to circulate at the end of the period.

In 269AD the denarius had long since ceased to circulate, and the the antoninianus was
reduced to a copper coin with a silver wash, and a content of two percent silver. These
coins were theoretically convertible to gold at a rate of 25 and 12.5:1, but whether
the moneychangers would accept such exchanges or if they charged an extortionate tariff
is unknown.

Aurelian

At the beginning of Aurelian's reign debt was perhaps x1000 times that of Augustus,
while army pay had increased x40, and wages were probably much less. Taxes were still
paid in coin, and while the silver coinage was almost worthless, gold coins seem to have
avoided debasement.

Aurelian was proclaimed emperor in September 270AD by the legions in Sirmium.
From 250AD the economical substrate of the state, agriculture and commerce, suffered from
the disruption caused by the instability. On top of this an epidemic swept through the
Empire around 250AD, greatly diminishing manpower both for the army and for agriculture.
Following several barabarian invasions, Rome itself came close to being sacked.
Aurelian commenced building the walls that became known as the Aurelian Walls around Rome.

As soon as the military situation had been stabilised, Aurelian went to Rome, forcibly
closed down the mint to end the fraud being perpetrated by the mint workers, righted the
disorder and exiled the qualified workers, in particular the engravers, to other imperial
mints. As such, at the beginning of 271AD, the main source of the devalued billon radiates
was under control.

Aurelian's reign records the only uprising of mint workers. The rationalis Felicissimus,
a senior public financial official whose responsibilities included supervision of the mint
at Rome, revolted against Aurelian. The revolt seems to have been caused by the fact that
the mint workers, and Felicissimus first, were accustomed to stealing the silver for the
coins and producing coins of inferior quality. Aurelian wanted to eliminate this, and put
Felicissimus under trial. The rationalis incited the mintworkers to revolt: the rebellion
spread in the streets, even if it seems that Felicissimus was killed immediately, presumably
executed. In the rebellion the mint of Rome was closed temporarily, and the institution of
several other mints caused the main mint of the empire to lose its hegemony.

In 272AD, Aurelian turned his attention to the lost eastern provinces of the empire, the
so-called "Palmyrene Empire" ruled by Queen Zenobia from the city of Palmyra.
Zenobia had carved out her own empire, encompassing Syria, Palestine, Egypt and large
parts of Asia Minor. In response, the Egyptian queen cut off Rome's shipments of grain,
and in a matter of weeks, the Romans started running low on bread.
Eventually Zenobia and her son were captured and made to walk on the streets of Rome
in his triumph.

With the grain stores once again shipped to Rome, Aurelian's soldiers handed out free bread
to the citizens of the city, and the Emperor was hailed a hero by his subjects. The rich
province Egypt was also recovered by Aurelian. The Brucheion (Royal Quarter) in Alexandria
was burned to the ground.

Aurelian attacked the next stage of his reform once he had restored the unity of the Empire.
Thanks to the reconquest of the Gallic empire in 274AD and the ensuing closure of the
Cologne and Trier mints, he was able to cut off the second source of devalued billon and
embark on the actual monetary reform. The western mints of Milan and Rome, which was reopened
in 273AD with this aim, served as a test bench for the reform, and in the spring of 274AD,
the reformed antoninianus, the aurelianus, was introduced in all the mints. The exergue on
the reverse carried the distinctive mark of the reform, XXI/KA
His monetary reformation included in the introduction of antoninianii containing 5\% silver.
They bore the mark XXI (or its Greek numerals form KA), which meant that twenty of such
coins would contain the same silver quantity of an old silver denarius.[26] Considering that
this was an improvement over the previous situation gives an idea of the severity of the
economic situation Aurelian faced. The Emperor struggled to introduce the new "good" coin
by recalling all the old "bad" coins prior to their introduction.
At some time, Prodromidis does not say exactly when, Aurelian abandoned the fixed rate of
converion of the old debased silver coinage to gold coins. "Throughout the long debasement
period, the authorities did not alter the long-standing peg between the new "silver" coins
and gold pieces until it was abandoned by Aurelian (A.D.270-5)".

They showed and guaranteed the fine silver content of the coin (5%): 20 aureliani at 5% of
silver were equivalent to 1 argenteus of pure silver. The mark shows that the reformer
intended to reintroduce the pure silver coin equivalent to the 20 aureliani and weighing
1/80 of the Roman pound into the monetary system. This was undoubtedly to be done as soon
as the bad billon radiates of the crisis had been recalled, which would otherwise have
condemned the new silver coin to hoarding and melting down.
Thus the diffusion of the aurelianus is linked to the recall of the debased coinage,
inevitably the antoniniani of Gallienus, Claudius and Quintillus (and in the west, their
equivalent in the name of Victorinus and Tetricus) since, as the hoards prove, they were
the only currency in circulation. The recall of the debased currency turned out to be all
the more necessary, since keeping them in circulation would have been a source of confusion
in transactions. This meant, therefore, that the face value of the antoninianus and that
of the aurelianus, both radiate coins, were different. If we admit that the value of the
aurelianus at two denarii was maintained, it must be supposed that it was the billon
antoninianus of Gallienus and his successors that was devalued by half, ending up being
worth only one denarius. Furthermore, the denarius usualis which was then introduced
had the physical characteristics, both in weight and in content, of the devalued
antoninianus. It was issued to defuse public mistrust.

Long before the antoninianus reached the final stage of its debasement, its depreciation
had resulted in the dislocation of the entire monetary system because the fractional coins
of the antoninianus had been eliminated. (antoninianus and aurelianus seem to mean the same)
The reformed currency of 274AD and its denominations remained in use until the great
recoinage of Diocletian in 293AD. Aurelian struck a radiate aurelianus of improved weight
(84 to the Roman pound) and fineness (5% fine) that was tariffed at five notational denarii
communes ("common denarii" or d.c.). The denomination carried on the reverse the numerals XXI
(or in Greek KA) to denote the coin as equal to 20 sestertii (or 5 d.c.).
The gold aureus (minted at 50 or 60 the Roman pound) was exhanged at rates of 600 to
1,000 d.c., equivalent to 120 to 200 aurelianiani. Rare fractions of billion denarii,
and of bronze sestertii and asses were also coined. Simultaneously, Aurelian reorganized
the provincial mint at Alexandria, and he minted an improved Alexandrine tetradrachma
that might have been tariffed at par with the aurelianus.

Army Pay: Roman soldiers received top pay for coveted full time employment. The legionary
from 46BC to 84AD received a daily wage of 10 asses or 225 (150?) denarii per year;
Praetorian guardsmen received 2 denarii per day or 720 denarii per year. Domitian
raised legionary annual pay by one-third to 300 denarii. Septimius Severus in 195
and Caracalla in 215AD raised the annual pay to 400 and 600 denarii respectively.
In 274AD Aurelian revised the currency: 800 denarius -> 800 antoninianus :
200 Aurelianus : 10 Argenteus? : 1 Aureus (The Argenteus was never issued)
Under Augustus 1 Aureus = 25 denarius : a debasement of the denarius x8?
Aurelian's wife, Ulpina Severina ruled as Empress for some six months after his death
and issued some coinage as Empress.

Wheat prices : 24 drachmae in 269AD; 200 drachmae in 276AD
That suggests a serious exchange rate devaluation took place as part of Aurelian's
reform. Debts were adjusted to account for the new currency.

#####################################################################################

(275AD -285AD) Several Emperors - Tacitus, Florianus, Probus, Carus, Carinus

Not much is known about finances during this time, except that price inflation was a
feature. There are some rare coins issued by Tacitus that suggest that a rebasement of
the silver coinage was in progress.

Diocletian

It is impossible to adequately cover the events of 285AD-305AD in a brief note: inevitably
the text must focus on one narrow area, however, other writers have brought their own views
and experience to an interesting period in world history. There is no shortage of comment
elsewhere.

When Diocletian became Emperor, he may have assumed that, provided he survived past the
two year half-life of his predecessors, the foundations provided by Aurelian merely
needed to be built on and reinforced to ensure the continuity of Rome's greatness.
He had the self-confidence to install himself as both god and Emperor, suggesting
perhaps that he believed this reign would be different. The economy would soon test
the limits of his power.

The economy, was in an especially sorry state. The common coinage had become so debased as
to be virtually worthless, requiring carts on occasion to move wealth from one place to
another. Diocletian's attempt to reissue good gold and silver coins failed because there
simply was not enough gold and silver available to restore confidence in the currency.

A "Maximum Price Edict" issued in 301, intended to curb inflation, served only to drive
goods onto the black market. Diocletian finally accepted the ruin of the money economy
and revised the tax system so that it was based on payments in kind. The soldiers too
came to be paid in kind. This led to rampant price inflation: for example, the price of
wheat under Diocletian was 67 times the typical Principate figure. The monetary economy
collapsed and the army was obliged to rely on unpaid food levies to obtain supplies.

Food levies were raised without regard to fairness, ruining the border provinces where
the military was mainly based. Soldiers' salaries became worthless, which reduced the
army's recruits to a subsistence-level existence. One figure suggested is that one artaba
of corn, or wheat, rose to the price of 120,000 drachmae, 20 Talents, presumably prior to
the edict on prices.

Among other things, prices were set for transportation, and that alone may have helped
collapse the economy. Aurelian's attempt to reform the currency had failed; the denarius
was dead. Diocletian restored the three-metal coinage and issued better quality pieces.
The new system consisted of five coins: the aureus/solidus, a gold coin weighing, like
its predecessors, one-sixtieth of a pound; the argenteus, a coin weighing one ninety-sixth
of a pound and containing ninety-five percent pure silver; the follis, sometimes referred
to as the laureatus A, which is a copper coin with added silver struck at the rate of
thirty-two to the pound; the radiatus, a small copper coin struck at the rate of 108 to
the pound, with no added silver; and a coin known today as the laureatus B, a smaller
copper coin struck at the rate of 192 to the pound. Since the nominal values of these
new issues were lower than their intrinsic worth as metals, the state was minting these
coins at a loss. This practice could be sustained only by requisitioning precious metals
from private citizens in exchange for state-minted coin (of a far lower value than the
price of the precious metals requisitioned).

By 301, however, the system was in trouble, strained by a new bout of inflation. Diocletian
therefore issued his Edict on Coinage, an act re-tariffing all debts so that the nummus,
the most common coin in circulation, would be worth half as much. In the edict, preserved
in an inscription from the city of Aphrodisias in Caria (near Geyre, Turkey), it was
declared that all debts contracted before 1 September 301AD must be repaid at the old
standards, while all debts contracted after that date would be repaid at the new standards.
It appears that the edict was made in an attempt to preserve the current price of gold and
to keep the Empire's coinage on silver, Rome's traditional metal currency. This edict risked
giving further momentum to inflationary trends, as had happened after Aurelian's currency
reforms. The government's response was to issue a price freeze.

The Edict on Maximum Prices (Edictum De Pretiis Rerum Venalium) was issued two to three
months after the coinage edict, somewhere between 20 November and 10 December 301AD. The
best-preserved Latin inscription surviving from the Greek East, the edict survives in many
versions, on materials as varied as wood, papyrus, and stone. In the edict, Diocletian
declared that the current pricing crisis resulted from the unchecked greed of merchants,
and had resulted in turmoil for the mass of common citizens. The language of the edict
calls on the people's memory of their benevolent leaders, and exhorts them to enforce the
provisions of the edict, and thereby restore perfection to the world. The edict goes on to
list in detail over one thousand goods and accompanying retail prices not to be exceeded.
Penalties are laid out for various pricing transgressions.

In the most basic terms, the edict was ignorant of the law of supply and demand: it ignored
the fact that prices might vary from region to region according to product availability, and
it ignored the impact of transportation costs in the retail price of goods. In the judgment
of the historian David Potter, the edict was "an act of economic lunacy". Inflation,
speculation, and monetary instability continued, and a black market arose to trade in goods
forced out of official markets. The edict's penalties were applied unevenly across the empire
(some scholars believe they were applied only in Diocletian's domains), widely resisted,
and eventually dropped, perhaps within a year of the edict's issue. Lactantius has written
of the perverse accompaniments to the edict; of goods withdrawn from the market, of brawls
over minute variations in price, of the deaths that came when its provisions were enforced.
His account may be true, but it seems to modern historians exaggerated and hyperbolic, and
the impact of the law is recorded in no other ancient source.

Prodromidis suggests wheat prices in the range 220-1332 drachmae for 296-301AD and that the
pay of a Legionary was in the range 7500-12400 denarii pa. Add to that a reluctance of the
public to accept the soldier's coin at face value, especially after an Edict doubled the
coin's purchasing power.

Our modern practice of never wasting a good crisis seems to have been applied equally in
Diocletian's reign. His response to instability was to apply ever greater control, and the
above text does not do justice to the extent of imposition on everyday life: religion,
occupation, trade, and travel were all subject to monitoring, scrutiny, intervention and
punishment, including torture and execution.

Given today's obsession with Debt:GDP ratios, Diocletian's methods were counterproductive.
But who will tell a god that he is wrong?

Diocletion retired to grow cabbages in 305AD. The Eastern Empire, based in Constaninople,
survived a thousand years as the the Byzantine Empire. The Western Empire, based in Rome,
crumbled into ruin.

########################################################################################

This passage points to the continuing decline:
"Large powerful landowners, able to avoid taxation by legal or illegal means, began to
organise small communities around them. Small landowners crushed into bankruptcy by the
heavy burden of taxation threw themselves at the mercy of the large landowners signing
on as tenants or even as slaves. (slaves, of course, paid no taxes). The latter
phenomenon was so widespread and so injurious to the State's revenues in fact that in
368AD the Emperor Valens declared it illegal to renounce one's liberty in order to place
oneself under the protection of a great landlord. (Bernardi 1970:49)"

Learning from Imperial Rome - 27BC to 305AD and beyond

Few people understand how much the world has changed. Not many people can speak of their
experience of the commonplace use of silver coins, let alone a non-decimal currency .
Fewer still understand that the financial world became unhinged in 1971 when the USA
repudiated the link between the world's reserve currency and gold. To understand
Bitcoin's place in the modern monetary system, first understand the difference between
systems using metallic coinage, and the current experiment in fiat currency. If the above
text seems overly long, it does, at minimum, provide an anchor point in a sea of instability.

The link below provides comment on "On the Minting of Coin" by Copernicus in 1517. It
provides a useful summary of the principles of the metallist system of money. Of note are
the recommendations for the introduction of new coinage: Except for the stricture that
coins should not be issued in large quantities, Bitcoin does not meet these criteria.
http://copernicus.torun.pl/en/science/economics/4/

Alternatively, the criteria suggests that price of Bitcoin should approximate the cost of
generating one additional coin, if Bitcoin's intrinsic valuation is calculated in the same
way that bullion metals are evaluated, ie that seniorage should be near zero.

Another view on precious metals as money is given in the link below, together with a
reference to Solon (Greece 593BC). 'Athens was saved by Solon, who "shook off" all debt.'
http://rhetoricaldevice.com/articles/BriefHistoryOfMoney1.html
"At the point at which a tyrant or revolt seemed likely, the Athenians appointed Solon to
mediate."

Under Diocletian the economy had reached a point where barter and payment-in-kind were
part of the State's finances, a clear indication that the monetary system was in a state
of collapse, and that the efficiencies obtained though trimetallic money had dissipated.
Earlier civilisations had concluded that once debts of various kinds had reached a
critical mass the only way to get the economy to recover was to shake off the debt.

Hence, when Diocletian began his reign from 295AD onward:
* GDP was falling
* all debts contracted before 1 September 301AD must be repaid athe price before the Edict
* there was not enough gold and silver available to restore confidence in the currency
* payments in kind led to rampant price inflation
* greed and speculation were blamed, leading to micromanagement of the economy and trade.

History suggests that where there is a currency, there are periodic crises, and that
three outcomes to these kind of crises are probable:
* Revolt or revolution especially if the merely rich feel threated by the elite
* A cyclic recovery led by debt cancellation and the return of property and freedom
* The Roman outcome - a slide into ruin where the power of the elite is unchallenged

A cryptocurrency might have offered Rome a fourth option: a means of automatically
cancelling debt after a set period of time. It was probably too late to implement
such a scheme by the time Diocletian came to power but if it were in place some decades
earlier, the hyperinflation that occurred from 300AD onward might have been averted.

"The price of the same measure of wheat rose in Egypt from 6 drachmai in the first
century to 200 in the third century; in A.D. 314, the price rose to 9,000 drachmai
and to 78,000 in A.D. 334; shortly after the year A.D. 344 the price shot up to more
than 2 million drachmai. As noted, other provinces went through a similar, if not
quite as spectacular, inflation."  Robert L. Scheuttinger and Eamonn Butler 1978.
https://mises.org/daily/3498

Explanations other than excessive debt have been proposed for the fall of the Roman
Empire: slavery, indolence, welfare, excessive wage and price controls, excessive
taxation, acts of economic lunacy and even lead poisioning. It would be wise to
consider all the possibilities before reaching a conclusion.

However, if excessive debt leads to another spectacular crash in the world's
interconnected economies, by the time the crisis becomes evident it may be too late
for effective action. I urge everyone interested in cryptocurrencies to carefully
consider the case for inbuilt lifespans as part of their design.

   
An essay on imperial rome

Think back to the first time you ever heard of imperial rome. At one stage or another, every man woman or child will be faced with the issue of imperial rome. While it is becoming a hot topic for debate, several of todays most brilliant minds seem incapable of recognising its increasing relevance to understanding future generations. It still has the power to shock socialists, many of whom blame the influence of television. Hold onto your hats as we begin a journey into imperial rome.

Social Factors

Interweaving social trends form a strong net in which we are all trapped. When The Tygers of Pan Tang sang 'It's lonely at the top. Everybody's trying to do you in' [1] , they was clearly refering to the impact of imperial rome on today's society. A child’s approach to imperial rome provides standards by which we may judge our selves.

Our post-literate society, more than ever before, relies upon imperial rome. Society says that every man must find their own truth. While one sees imperial rome, another may see monkeys playing tennis.

Economic Factors

Economics has been defined as 'I'll scratch your back if you scratch mine.' To my learned ear that sounds like two people with itchy backs. Of course, imperial rome fits perfectly into the Fish-Out-Of-Water model, as is standard in this case.

There is no longer a need to argue the importance of imperial rome, it is clear to see that the results speak for themselves. The question which surfaces now is, how? Even a child could work out that transport costs is in financial terms 'holding hands with imperial rome.' Many analysts fear a subsequent depression.

Political Factors

Politics was once a game featuring competitors from elite classes. Comparing current political thought with that held just ten years ago is like comparing imperial romeilisation, as it's become known, and one's own sense of morality.

One quote comes instantly to mind when examining this topic. I mean of course the words of award winning journalist Francis Bootlegger 'A man must have his cake and eat it in order to justify his actions.' [2] Considered by many to be one of the 'Founding Fathers' of imperial rome, his words cannot be over-looked. It is a well known 'secret' that what prompted many politicians to first strive for power was imperial rome.
I wait anxiously. What will the next few years bring for imperial rome?

Conclusion

In my opinion imperial rome has a special place in the heart of mankind. It collaborates successfully, 'literally' plants seeds for harvest, and is a joy to behold.

I shall give the final word to star Justin Cruise: 'You win some, you loose some, but imperial rome wins most often.' [3]

[1] Tygers of Pang Tang - The Cage - 1982 MCR Records

[2] Bootlegger - Take It! - 1961 Viva Books

[3] Get On The Bus - Issue 321 - Media Books
   

Disclosure and Errata

Aurelian - "wages were probably much less"

I would encourage others to model the Roman economy using Prof Keen's Minsky model,
and to then use that to validate any results. An early basic model is here :
http://www.debtdeflation.com/blogs/wp-content/uploads/qed/QED.zip
Sourceforge has the latest version of the "Minsky" program.

There is a gap in the figures for legionary pay in the table given by Prodromidis,
with the figure for Maximinus Thrax (235-238AD) in the range 1200-1800 denarii.
The next figures quoted are for Diocletian (284-305AD) 7500-12400 denarii.
The price of wheat, and hence subsistence wages, disconnects from army pay in this
period. The chosen path in the model is for army pay to increase at a relatively
steady pace, while wages and price inflation suffer a step change around 274AD.
Price inflation in 270AD is estimated at x6 prices in 27BC.

Thus the results you get may (or may not) show wages in the private sector rising much
less than those in the Army, eg these increases to 270AD may be x8 and x40 respectively.
Though there may be an explanation for the difference, this still bothers me - see also
this:
http://www.fee.org/the_freeman/detail/poor-relief-in-ancient-rome
"Estimates of the slave population in Rome itself range all the way from one in five
to three to one in the period between the conquest of Greece (146 B.c.) and the reign
of Alexander Severus (A.D. 222-235)."

It seems there may be some disagreement on the size of the enslaved Roman population.
That variation alters the average wage - more slaves means lower figures, but without
accurate facts and figures there is no way to determine the change.

It is possible, if unlikely, that the wage calculated by the model is indeed correct.
More work will be needed to include the effect of slavery, and perhaps a change to
the model . . . back to the virtual drawing board :-(

* A correction to the estimated increase in debt stated earlier: the correct figure
is x278 - the increase in the rate of bank lending. Debt increases lagged that
somewhat at x163 (both figures are for 270AD).

cp1 - thanks for your comment and the references - I will look.

Interesting writeup, so not even metallic coins escape devaluation, when the coffers are empty.
Some questions:
Currency devaluation was unavoidable? ie if Rome entered a phase of austerity instead would that extend or shorten the life of the empire?
Was there any kind of fractional reserve banking at some point in Rome?
Can you show some graphs with legionaire salary index with wheat and gold?

An introduction to the history of the Roman empire.

"ROME: Rise and fall of an empire - Part 1/14" on YouTube (https://www.youtube.com/watch?v=JB732wBSTvw&feature=youtube_gdata_player)

An overwhelming theme is the Romans plundered wealth and had huge military expenses, ultimately unsustainable, a 2 week saga if you watch an episode every night. Also not hard to see how the society could have been sustainable with my BTC0.02 education in economics.

lol many seeked the "End" of History, Rome, Genghis, Lui, Napoleon, Hitler, US they all had a Masterplan on how their Empire will live forever. But in nature nothing moves in a straight line, to move forward one must go up and down, up and down.

Good lesson in history.

-Bad money always chases out good.

-Although he tried, Aurelian couldn't rid the empire of the debased currency.

Greed, does it every time  :D

"if Rome entered a phase of austerity instead would that extend or shorten the life of the empire?"

Austerity??? For example, selling your wife to the highest bidder in the local
slavemarket and buying a smaller one? I'm not sure that would work ;-)

In 27BC over half the inhabitants of Rome were slaves, and by the mid 300AD's
the elite were passing laws prohibiting freemen from selling themselves, and
presumably their wives and children, into slavery. Does that sound like
austerity to you?

Can you show some graphs with legionaire salary index with wheat and gold?

http://www.kepe.gr/EN_Pages/disc_papers_en.htm Prodromidis - Discussion paper Nr 85 - Another View on an Old Inflation - P-I Prodromidis
Try p27?

Was there any kind of fractional reserve banking at some point in Rome?
It was a cash society. And I think you need paper money to make
fractional reserve lending work.

No questions on a cryptocurrency that goes to zero?

Thanks for the good read. So basically the Romans, well a certain portion of them at least, devalued their own currency until it was worth nothing? Is that the gist of it? What if they hadn't done this and kept the Denarius at a certain percentage of silver? Interesting theories to think about!

I thought you said there were records of Debts burned, doesnt that mean that there were bank-like entities?

How about restarting blockchain every 49 years, or better yet have older blocks phase out gradually as , wouldnt that create a rolling reboot of the economy.

They would have done better to enforce free trade and less tax and universal law. Power shifts were a result of insufficient funding for military staff. Debt forgiveness would only benefit the those who made promises they had no intention of honoring, the ones holding the debt the soldiers would still organize to to get there fair share.

Interesting that you suggest that an economy should reset every 49 yrs.

Ancient Israel maintained a Jubilee Year which occurred every 49/50 yrs. During the Jubilee Year, all property and debts were paid and returned to their original owners. Any slave was also set free.

http://en.wikipedia.org/wiki/Jubilee_(Biblical)

You people propably know better ;)
:P
So in order to defuse any zionist conspiracy theory hatching up lets make it 42

Sooooo....Is this thread supposed to be another one of those "America is like the Roman Empire!!!" kinda bullshit threads?

I think the Romans were pretty good at Trade and Law. Modern Law is actualy Roman Law. If you hold a debt for 49 years you may as well write it off,  I think 49 years is a sufficient period to try and extract some value out of the debt, if you fail then most propably you made a bad judgement took the Risk and lost.

I know, but you can’t argue their empire is thriving because we carry the torch, or because there empire was founded on cooperative trade, free trade was not stifled with price fixing and there economic engine extinguished because there army provided little protection at an exorbitant cost.  
The law and taxes at the time we inequitably enforced, those who were not part of Roam were subject to 100% taxation and enslavement, those who found jobs as mercenaries in the army and promised land in gratitude of service had to take it by force as they were not paid by Rome.   They couldn’t wait 49 years to forgive Rome, they needed to eat.

A believe evolution is a damn good indicator of success, So if we now chose roman law, conducts over anything else, and generaly carry the Torch of Rome, it is that we believe that they were at least in the right track. Credit to where its due man.
Little protection, Stiffled economy? Pax Romana, Roads who do you think made those possible? The Roman Army.
And according to OP soldier's salary was pretty much stable, and got what they asked or else ...

"How about restarting blocsoldiers every 49 years, or better yet have older blocks phase out gradually as , wouldnt that create a rolling reboot of the economy."

The economy would need to be in a dire state before enough people agreed to such a measure,
and, as pointed out elsewhere, property would likely have to be returned as part of the deal.
While I'm hopeful that I'm wrong and the global economy rights itself, history suggests that
some form of radical solution may be required, not immediately, but eventually. 

While Bitcoin may bring a new paradigm to banking, and make dishonesty more difficult, it will
not alter debt. At best, Gresham's law will apply, bitcoins will be hoarded, driven out by fiat
currencies.

The simplest proposal is for the new cryptocurrency to wipe out its entire blockchain and restart.

It’s more like we kept the bits that worked and called it common law. In Roman law it was OK to have a Coup d'état, so long as you could manage the military.

As for this idea I believe inflation of fiat is more a sustainable idea.  Ultimately Joseph Proudhon nailed it with "property is despotism"

Whatever the reset if it doesn’t reset to the original condition pre-man it is a form of Despotism.

I do not believe that fiat will exist as we know it in 10 years.  Specifically, debt money inevitably collapses.  The can will only kick so far before catastrophe wipes out hubris.  There may not be any bad money to drive the good money out of circulation.

I don't believe human beings will exists in 10 years. Instead we will undergo a massive extinction and dinosaurs will start walking the earth again. Also the ocean will turn into chocolate and all the sea animals will get diabetes

we (west) kept more than bits, take a look at sharia and you will see how bad a law system can go.
:) it still is, only problem now you now have more heads to coup.

WTF im reading  ???
Srsly? :o

Sneering is a good way to protect yourself from facts and logic, for a while.  They do tend to come crashing through eventually, however.

So does an asteroid, just wait for the dinosaurs when they come back to life and start using the human remains as gasoline to power their dino-cars

When in Rome...

   First off, thanks to the OP for this excellent and informative post. As this forum grows it's good to see that quality posters are still around.


  I haven't noticed the ecological collapse hypothesis in the discussion here.

http://en.wikipedia.org/wiki/Deforestation_during_the_Roman_period


  Just one more factor to add to the consideration of everything else discussed here.

  As for the comment about sharia law-

   First off, I'm guessing you haven't made any effort to look beyond a smear campaign unprecedented in human history to discredit the ideological foundations of the Islamic civil and judicial system (we're talking a propaganda campaign in the tens if not hundreds of billions of $$$)- the same ideology that just happens to underlie the only group that presents a credible threat to the hegemony of the Egyptian-Greco-Roman intellectual tradition that is today manifest in US dominance and the institution of the nation-state and the structure of the UN.

    Secondly, the justice of the Roman system, or the "freedom" of America looks a lot different if you broaden your perspective to the planetary rather than national level. While it is possible to point out the criminal basis for American empire on a national level, it is much easier to point out that the pathetic masquerade of justice in the Roman legal system used in the US right now is entirely dependent on supporting vassal states around the world where simply speaking against injustice means immediate persecution and torture for the one speaking up, and their whole family/tribe. That is to say, if you look at the hundreds of thousands of corpses in the middle east whose deaths can be directly linked to US policies in parallel to the economic boom of the 90's, maybe the political order of the Roman legal system of the US would not seem like "the lesser evil."

     The crime rate, including drug addiction and child abuse, continues to grow in the US, as does the prison population, with an average cost of about 30,000 dollars a year per inmate. The prison population in the US is higher than the combined population of all Soviet gulags at any point in the Soviet Union, and at a much higher cost- taken at gunpoint directly from the working people who pay a disproportionate share of income to support the system.

  Maybe the reason the media, owned entirely by a few of the elite who pay such a tiny fraction of their income in tax compared to the working people, is so hostile to sharia isn't because it goes contrary to human rights- maybe it's because THERE IS NO INCOME TAX in sharia... oh, but how is it that that was never mentioned on the news? There is, however, a WEALTH tax... so who would the implementation of this system really hurt? No wonder the people who control your mind are afraid of this "fundamentalist" ideology that through free movement of people, goods, and ideas provided the basis for the European renaissance and thereby the technology we enjoy today. Just to recap- the media is owned by a few people who are extremely rich, and sharia would tax this wealth, leading to the extreme rich waging war (both christians and nominal muslims) against the people seeking to institute the application of this law. Ever seen the treasury at the vatican?

  Do you honestly think that the hundreds of millions of people who want to apply this law in their homelands and are violently put down by regimes supported by US tax dollars are just totally bereft of all sense? Why is it that some Arab "barbarians" defeated the numerically and technologically superior Roman and Persian empires in such a short span and instituted a golden age that outshone the brightest days of Athens? Why is it that you have never, ever heard even one, not even ONE report on TV that even mentioned offhand a single positive aspect of sharia? And why are you still swallowing what they feed you?

  As Spengler puts it, democracy is the rule of money, and the mechanism of that rule is the media. Whoever is interested in the truth, can find it. Whoever denies the truth because accepting it would mean having to change their lifestyle, will probably continue to do so.

  Again, awesome thread, keep up the good work.

No shit. OP,


(tagged so you see a reply to you specifically)

I'm going to run through your work, and I'm very pleased to have the opportunity. 12 posts, activity = 12. God, we need more of you and less of... well, mostly everyone else new. Quality over quantity, and original thought. (I assume. This is all original work? In that, the summarization and inference are yours?)

Concerning democracy and roman law
You cannot attribute the post-2000+ years degeneration of an Idea as Flaw in the Idea, rather as society's failure to properly implement the idea.
Not arguing that *any* Idea can be ever properly implemented mind you, see Capitalism, Communism, Democracy.

And not claiming that sharia is a barbaric law, The west simply prefered roman law, It could be simply that the strong decoupling of Law from Religion was preferable, and IMHO better. The East never managed to do that decoupling.

Concerning the Fatmids Glory I wouldn't root it to sharia, Maybe the Muslim states should revisit that Era.

    Quite simply put, the West never managed it either. The separation of Church and state are an illusion- the enlightenment was a power grab by merchants and guilds on the Church and aristocracies monopoly on manufacture/interpretation of "truth", and thereby political and economic power. The values of humanism, like human rights, that form the basis for the law in the "secular" democracies, are based firmly in Christian theology. If you try to take them to their logical extreme by applying reason to them, they collapse into a sociopathic utilitarianism where the combined potential of society is directed towards hedonism with a pyramidal hierarchy as the socio-economic structure and impetus for all progress, much like the one we live in today. In other words, democracy is a religion where the god that is worshipped is the human intellect, or the human worships its self- and the possibility of humanity to supplant the divine is provided for beautifully by the interpretation of Jesus, a human, as the manifestation of God, laying the humanist foundation for communism and democracy. This worship manifests itself in an endless cycle of trying vainly to fulfill desires that only grow the more you feed them, as noted by Buddha.

     We now get to watch as this mode of existence proliferates in China.

    I don't think even the most Islamophobic historian would try to limit the Islamic golden age to the Fatimid dynasty. Do an image search for Samarkand.

Can somebody here give us a brief summary as to what the OP is trying to tell us? I fear there is some sort of language barrier.

No clue man, apparently he wants to compare Ancient Rome to modern digital currency, or at least I think he is??? I have no idea man

He is saying to prevent wealth accumulation debt needs to be forgiven approximately every 42-49 years. This is historically how civilization has managed to get this far. He is making an argument that we can do this with a new altcoin.

Check out An introduction to the history of the Roman empire.

"ROME: Rise and fall of an empire - Part 1/14" on YouTube (https://www.youtube.com/watch?v=JB732wBSTvw&feature=youtube_gdata_player)

It will take you 2 weeks - try and spot mistakes we are repeating.

I thought a debt that could not be repaid or had no possibility of being repaid meant ending up in debtors prison or you had to undergo some sort of debt bondage?

Working a minimum wage job is effectively a debt bondage.

Debtors prison idea goes hand in hand with modern banking it was short lived in the history of civilization, economists realized there was untapped economic potential there*. Re-read the tread to see how it was resolved in feudal times. Debt as you know it is a relatively new idea.

Today we resolve the problem of income inequality with inflation and bankruptcies.**

Check out  David Graeber,  DEBT: The First 5,000 Years (https://www.youtube.com/watch?v=CZIINXhGDcs&feature=youtube_gdata_player)

Edit
* keeping someone in debtors prison is a liability. Forgiving them by allowing bankruptcy puts them back in the economy as an asset.

** the solution is ineffective the 1% avoid inflation and as the wealth of the 99% moves to up the pyramid it impoverished the poor and is now eroding the middle class.

:) But is there any other god but the Human Intellect? If we listen to Buddha we may as well spend our lives in mental masturbation oops sorry "meditation". Epicurus slaps Buddha everytime, and Chryssipus tells him to get over it.
I would also add North Korea too...
Barbarians, with silk road money. nothing exceptional about them.

Wow! would take me atleast a week to read it all and absrorb. too much info. And yes like history. :)

The easy question first: The summary and opinion are mine, as are any mistakes in
calculation or transcription. I've tried to provide links to source material
where possible, so if something is not clearly linked, wikipedia is the likely source.
I'd add that I am approaching this as a not particlularly bright Engineer, who happens
to have an interest in economics and history.

I'd add this to earlier comments:
a) All systems fail eventually, good design provides for graceful failure.
b) Ancient civilisations placed limitations on interest rates, including prohibition of usury
to make their civilisation more robust.
c) To get over the problem of unpayable debt, debt forgiveness was written into Law, and
sometimes applied by edict. Slaves were set free. (Graeber defines freedom as freedom from debt)
d) Arguably, Imperial Rome failed to follow ancient practice, thus their trimetallic system
became debased because of too much debt, leading to hyperinflation and collapse.

Note that prohibition of usury was commonplace prior to the late middle ages:
See Tiberius for an instance during the Imperial Roman period, and Christian Rulers
adopted the practice for many years - currently sharia law has a similar prohibition.

I've gained the impression that some have placed their faith in gold and bitcoin
to remain viable if or when the system collapses. I have to admit I have some of these
myself, but if the System goes down, putting sticking plasters (band-aids) on a torn
artery is not a solution. I have suggested designing a suitable alt-coin as a way
forward, but for various reasons, I doubt it will work.

One point in bitcoin's favour is that this population is somewhat familiar with
exponential change.

Thanks for the topic. I believe that at some point cultures and communities will use bitcoins programmed to their needs, may the best protocols thrive, and that those bitcoins will be bound through Bitcoin. It will be exciting to live in a world where the rulebook is plain for all to see. Earned and proven wisdoms enduring while short sighted corruption fails. Let the psychopaths of finance go find more exciting things to do with their lives, go rustle a comet or something. Heck, I'll help fund it with Bitcoin!

I wrote this a few years ago: http://ponziunit.blogspot.com/2010/01/jubilee.html?q=jubilee

While a single celled organism living communally may counter the attack of a parasite by dying off (preventing the spread to other communities) humanity simply can't afford the die off, or at least hopefully the more social minded individuals would prefer not to devolve into all out warfare against their neighbors so over time, humanity has developed simple mechanisms: codes, laws, standards that remain effective even after thousands of years.

To me, the concepts of Jubilee are fair valuation, debt limitation, governance by a third party held to high standards, the rights of ownership and the protection of freedom. It simply doesn't get any more basic than that.

We simply need to purge the unethical. We can't let them continue to twist the rules. They must be expelled and it will be very bad for the community if the unethical are expelled in an 'at all costs' scenario.

Here's an article from a blogger about Jubilee and the Long Cycle, specifically Kondratieff - a demonstration that nipping the debt cycle in the bud before it has a chance to spread bad debt over generations is possible.  I believe that Bitcoin is the enabler to many ages old algorithms that for one catastrophic reason or another, never really got to see the light of day.

http://www.biblicalresearchjournal.org/brj-pages_html/001bp_2010-03-08.html#.T9vgTdDDLeg.blogger

( he's currently anti-bitcoin :-> I always listen to both sides of a story )

BitDreams - thanks for the links - I was unaware that someone had made the connection between
interest rates and the Kondratiev long wave. There may also be a causal relationship
between Debt and generational change, the "Fourth Turning" etc, but there is enough
basic math to work on here without invoking either metaphysics or religion ;-)

Found on that link:
"Obviously, with a date for universal debt forgiveness written in stone, no lender would ever set terms for repayment PAST the Jubilee year."
But see this :
http://www.infosources.org/what_is/Code_of_Hammurabi.html
"The laws (numbered from 1 to 282 but numbers 13, 66-99, 110 and 111 are missing) are on an 8 foot tall stela of black diorite"
Not as easy as wiping a hard disc, but stone yields to a hammer and chisel eventually ;-)
It does make you curious about laws 66-99, No?

Seriously though, attempts to subvert and evade a Debt Jubilee are a certainty in any Age.

Elsewhere on that link a graphs show "interest" at 10 percent and seven percent "growth",
suggested that such an economic system could not continue indefinitely.
Stated that way, I'd suggest the proposition is misleading, though not incorrect, and if I may,
I will direct my reply as best I can toward the economy of Imperial Rome.
The census figures suggest that the Roman population grew by a little over 0.5 percent per year,
and based on best guesses, productivity grew similarly, giving growth in the economy of a little
over one percent per year in most periods.
I had a look at the effect of increasing productivity in an economy with 0.5 percent population
growth and fixed rates of interest of 10 and seven percent - all figure approximate,
using a variant of Keen's Minsky model. The results were unexpected and intriguing, - I don't know
how long it will take to get my head around these dynamics. [ Some of the results are pure
vanilla - see Dr Grasselli's and Prof Keen's papers and video, the other results, ...  too early to tell. ]

:) But is there any other god but the Human Intellect? If we listen to Buddha we may as well spend our lives in mental masturbation oops sorry "meditation". Epicurus slaps Buddha everytime, and Chryssipus tells him to get over it.
[/quote]

Barbarians, with silk road money. nothing exceptional about them.
[/quote]

      Epicurus is an aesthetic hedonist- much more pallatable than the more materialistic strain, but nonetheless, his philosophy is only accessible to a leisure class supported by a slave underclass.

       The silk road was generating huge amounts of income for centuries before the arrival of Islam, and yet the "barbarians" ruling over it never achieved the level of advancement in architecture, mathematics, astronomy, poetry, or a number of other disciplines that were achieved in the Islamic golden age. Also, remember that the civilized/barbarian dialectic used by the Greeks has still been used in our lifetimes in Bush's "with us or against us" rhetoric.

        The math behind neo-liberal economic theory that points to the wealth generating effects of free trade is sound. The reason that it attracts the ire of the left is because of a problem that is more difficult to calculate- the wealth generated by this free trade is unevenly distributed and intensifies class divides. The decline in influence of the Sassanid and Byzantine empires and the rise of Islam opened up a huge area where goods were able to move more freely due to improved security and decreased taxation- Islamic law taxes wealth, rather than income or trade. Zakat, one of the pillars of Islam, acts as a wealth tax, a sort of negative interest rate and a redistributive mechanism as well as an investment incentive, which increases productivity and helps allay the social tensions that the militaristic structures and intensive taxing of other empires usually quell with sheer force or spectacles.

       The military is provided for by voluntary donations by citizens due to the spiritual rewards that are associated with participating in the military ventures of the Islamic state, which relieves a huge amount of the tension that plagued Rome and still affects those following the Roman tradition, like the US and Western Europe. The failures of the various Caliphates can be attributed more to their failure to adhere to the shari'a than the principle itself. In the same vein, the negative image of Islam in Western media, while serving specific economic interests- in particular the interest hungry financiers of the global economic order- is bolstered by the actions of individuals who stray from clear edicts in shari'a- such as the prohibition on dying by one's own hand- and are picked up as poster children for the Christian PR campaign that has not rested since the crusades... these individuals have been supported both ideologically and technically by both the KGB and CIA (via Saudis by CIA, and in Soviet incitement of aggression toward Israel by KGB see http://en.wikipedia.org/wiki/Active_measures), and have proved useful not only as pawns in geopolitical maneuvering, but also to demonize the one ideology that has the potential to provide a credible alternative to both communism and capitalism-an ideology whose spread would erode the dynamic tension that sustains both the bipolar world of the cold war and the two party system, and would render the skill set of the current elite obsolete. The elite are fighting for their survival using any means possible, and our minds are their battlefields, and the media the weapons.

    Anyway, it was not my intention to thread-jack- apologies for the rambling...

Trade also attracts "Protectors" as was the case with Timur, who profited not from trade itself but by gatekeeping it. I claim he was a barbarian and not worthy to include him and his empire in any islamic golden age simply for the fact that he had the honnors of massacring 5% of worlds population. And yet still not a sharia promoter either.
I still fail to see how sharia, or any other religious law for that matter, is objectively  better that Roman Law.
And yes Law is decoupled from Religion in the west, in your arguments you are simply confusing Law with Power.

May bitcoin be a thread that binds humanity in time of need.

A lesson in history.

Thanks!

Today's financial world requires an entirely different train of thought to
that of ancient economic systems. I will therfore begin at the very beginning, - because
I do not want as yet, to see how deep the rabbit hole goes - with this from p55 of
the  translation by Robert Francis Harper of the Code of Hammaurabi dated 2250BC.

CoH#111 "If a wine-seller give 60KA of drink on credit, ... at the time of harvest
she shall receive 50KA of grain"

Note four things: that debt and credit were created; that for all intents and purposes
measures of grain were money; that the transaction was regulated by law; and that
hard currency is significantly absent from the law.

(To help you collect this train of thought, try telling the barman at your local watering
hole that your right to drink on credit is enshrined in law ;-))

A further observation: if grain is money, the supply of money will vary from year
to year, but the supply, with some qualifications, will be a fixed amount.

Before moving on, ... the footnote from CoH p50 reas as follows (see earlier post)
"five columns #66-99 have been cut off the stone"

I'd suppose that the relevance of that depends on your view of the probability
and predictability of a financial crash in ancient Babylon. If crises were frequent
enough to be anticipated, they would have written provisions into their law.

What would happen to an economy with no ability to grow its money supply if it had
fixed rates of interest and no real-world limits to growth?

Suppose their population grows at 0.5 percent each year; productivity increases by
2.5 percent each year; money is lent at ten percent interest and seven percent
interest is paid on deposits.

More and more goods are produced, money is restricted, hence the price of goods and
wages falls. Debt does not fall, because the additional goods produced merely makes up
the difference between borrowing and lending interest payments. After 50 years, the
economy weakens, and after sixty years it collapses. At that time, each interest payment
on the debt would be near equivalent to the original purchasing power of the loan.

I cannot pretend that this is a real example, or that it is even approximates the
modern financial system. It is however, close enough to suggest that an economy based
on bitcoin would not provide a long term solution to financial instability without
additional measures being taken. I will attempt to put this another way: If Imperial
Rome had bitcoin, a collapse was still unavoidable. Growth would have been lower,
interest rates would be lower, increasing debt and hyperinflation would be a more
probable route for collapse, and it may have taken longer, but the outcome would be
similar.

In all this, recall that the sun still shines, crops still grow, and life goes on.
And ask, is it really necessary that civilisations of a certain age suffer something
that seems equivalent to a heart attack in people at the top of their profession?

The thing with grain as money, Is that in hard times you propably can eat your stash, no other currency had this utility since. (sustain life)
Plus an expiration date. Debt can be covered by labour, People don't save more than neccessary so propably low interest rates
Most goods where peged on grain anyway, Ale, Bread, livestock food
And if there is an economic collapse it will be only after a food crisis which will rebalance demand, if there is a bubble burst you still have something to eat even unemployed.
I assume land was not an issue for them.

But on your question, money is trust, and humans are prone to mood swings, not to claim psychos. Law can protect propably from small disturbances but people when in tune all hell breaks loose.

Stop what you are doing and play some Dwarf Fortress

lol wtf

Thaaanos - thanks for the advice.

I knew that the things I was proposing would be difficult to sell,
hence if the readers show little interest in the content, there would be no
point in setting out the implications for say, NewYork, or, for example
Scotland.

 By all means continue, I keep open mind but occasionally my brain spits out rants :P

You could make an alt that will generate a new genesis block at random after each block. The longer the chain the higher the probability of a restart. Put the 50/50 chance at year 50. 50k blocks per year, probability that 1 of those blocks resets the chain is .5, next year it is .51, would anyone use such a doomsday coin?

Yes, continue. :) I enjoyed reading this thread, just didn't reply because I had nothing sensible to say yet.
Doesn't mean I agree with all things, but I like comparing ancient times with the present and trying to learn from that.

  Yeah, okay Timur was kind of lame... but it can be said that he did institute and maintain many practices of Islamic law, and the caliphate of Cordoba and Berber rule in spain also has a huge legacy in the intellectual history of the west... especially considering that that is where the knowledge of astronomy and wealth came that allowed the portuguese and spanish to effectively launch their colonial expeditions, which eventually led to the rise of Europe as a world power.

       I think it's quite plain to see how a negative interest rate of 2.5% is better for consistently driving economic growth and investment. Any time there is an excess of labor available, the system is inefficient. A negative interest rate is the best way to get to full employment possible, because it means that their is a constant incentive to invest and employ the labor force by building things like irrigation projects, schools, universities, factories, foundries, mines, workshops, vehicles, farms, and anything else that generates revenue and has resale value. Islamic law also prohibits the use of derivatives and abstract financial devices that ultimately generate buying power out of nothing, effectively devaluing the labor of those whose labor is denominated in fiat currency. This also limits the rampant growth of the financial sector. But why is growth in the financial sector a problem? They're productive, right? See the graph here http://en.wikipedia.org/wiki/Financialization

    Islamic law effectively makes deficit spending impossible... which might explain part of why the US is so keen on making sure Islamic law is not implemented on earth.

    The basis of the law is that it is from God and its implementation is for the best interest of the people who follow it. Twisting it or trying to make it favor a certain class or monarch only leads to disaster. It is so clearly codified in established source material that cannot be revised or edited- even in translation it is hard to interpret your way out of 80 lashes or the total prohibition of interest. It also results in much lower taxation, which is one of the ways that the Islamic empires were able to spread so quickly- where do you live that you wouldn't consider a change in administration in exchange for a 20-40% tax cut?

  So Islamic law increases efficiency in investment, trade, and taxation, increasing the stability and legitimacy of the government. The failures of Islamic dynasties can be attributed to their lack of adherence to the law, and their success comes from the momentum established by the first generations who more faithfully applied this law. The revival happening right now is heating up as the next phase of the information wars begins, and people realize that the crusades are ongoing and it becomes increasingly clear that the "freedom" the west is fighting for is a purely economic freedom that is being concentrated into fewer and fewer hands.

  I say it is an economic freedom, because the freedom of expression and social liberation that characterizes the Western European liberal tradition is only possible with an insulating buffer of vassal states where dissidents are imprisoned, tortured, and killed. As wealth becomes more concentrated, it becomes more difficult to secure the consent of the subjects of the state with bribery- like all you can eat buffets and xbox 360's, and it becomes increasingly necessary to limit public gatherings, illegally wire tap, imprison, and so on and so forth. The modern banking system traces its roots back to the Knights Templar, and the crusades continue...

  So the internet is making an understanding of Islamic law possible, which, as it penetrates Islamic population is leading to a rise in what the Western intelligence agencies have instructed the media to call "extremism." This is setting the stage for a civil war across the entire middle east flaring up between recipients of western "aid" and those left out of these payments. I'm guessing eventually China and Russia will challenge U.S. hegemony in a series of proxy wars, and exhaust each other among ecological fallout (Islamic culture being well adapted to rising desertification and scarcity of water), setting the stage for yet another phase of Islamic expansion as a new caliphate expands into areas inherited from declining Russian, Chinese, European, and US influence, in the same way the East-West Byzantine-Sassanid wars laid the way for the expansion of the early Islamic empires. Anyway, sorry for the digression, but this is still with the theme of correlating historical events to present circumstances at least.

  More concretely, it is difficult to generalize and say Islamic law is better than Roman law as a whole, but I would challenge that it cannot be objectively that any single aspect of Roman law is better than Islamic law.

Wisdom passed down over the ages will get to see the light of day through the blockchain.

I had to bring this quote over from r/bitcoin: http://www.reddit.com/r/Bitcoin/comments/1x0n0w/i_just_wanted_to_say_that_i_love_you_all/

My main argument against religious laws is the appeal to God to determine the human relations, my problem is that it is: Dishonest, Absolute, Hard
1.Dishonest because god never said anything about laws, else he could very well contact me directly and tell me what he wants me to do, without needing some deluded "chosen" proxy
2.Absolute, because any transgression immediately falls to "Blasphemy" and raises asymmetric punishment
3.Hard because it cannot evolve along with society, why? because God said so!
While appealing to society itself to produce the Law, has none of the above problems, and imho more "mature" as citizens get to be responsible for the mess they are in.

But that doesn't in essence make state laws better as it can fall under the "Design by Committee" problems, still you can't trust some arbitrarily genius Lawgiver to get you out of a tough spot every time.

Now concerning the philosophy on the financial matters in Islamic law

I still don't have an opinion on whether Financialization is good, or bad, there have to be some non apparent trade-offs, but I guess the delphic maxim (appealing to Apollo now :P) "Nothing to excess" applies here.

Negative interest rates will certainly kill banks, but people maybe will find something that inflates and build a market on top of it, Maybe there are examples in the Islamic world? has something like that occurred? something called "Favour"?

Sadly I will disagree with your assessment of the events in middle-east, The US "Divide and Conquer" game will leave the Islamic world in the ashes of civil war, and probably in Debt. I don't think that any power can rise out of it using Islam as vehicle, It will be in the cross-hairs of Imperial US, Orthodox Russia and Atheist Chinese commies.

I would claim that religion is now dead to be a power-vehicle, but then I look at Bitcoin and this forum and shut up. :)

I will clarify a couple of things, that seem to have been misunderstood in the earlier posts.

I have come to view the Roman Tirmetallic currency as a primitive form of the internet, acting
to quickly transmit information, both political, price and financial across wide geographical
areas and beyond. The currency had a value separate from that of the metal in the coin,
a value that ultimately arose from the credibility of the State.

I try to avoid taking a position on interest charges on loans. While the interest rate itself is
valuable information if manipulation is absent, high interest rates on debt accelerate the
collapse of an economy in the models of Imperial Rome - I would add the caution that arguing
from the specific to the general is asking for trouble. 

I still struggle to get the next point across: as Debt in an economic system increases, the
possibility of achieving as "good" equilibrium becomes more and more remote. Furthermore,
Debt and interest might best be described as orthogonal, though some seem to see these
as interchangable. Graeber makes the point that during the Colonial expansion, the conquered
were expected to pay for the cost of conquest. Their struggle to remain free became a debt,
to be repaid in the conquerer's coin. Similarly, in Imperial Rome, on accession the new Emperor
was expected to pay a donative to the troops - and if it was not forthcoming the troops were
likely to press for a payment to be made - a Debt in all but name.

One difficulty in describing the performance of these models is that stability is difficult to measure.
Traditional measures such as margins have little meaning if the entire system is unstable, hence
any view on stability is somewhat subjective. Clearly, a system that has within it relatively large
quantities of debt will be subject to larger and more rapid changes in response to changes in
interest rates when compared to a system with little debt. You might want to consider the role
of Central Banks, and their supposed role in stabilising their economy when comparing ancient
and modern systems.

Some further points worth mentioning: population growth and productivity growth are incredibly
important in determining economic outcomes when looking at timespans of ten years and upwards,
to the extent that even tenths of a percent can be clearly seen by their effects. It is also difficult
to convey how fragile the Empire was at many times of crisis, and how costly the effort to keep
the show on the road could become.

I'll again mention that during the reign of Tiberius, laws prohibiting usury were progressively
enforced, pushing the banks into insolvency, and obliging Tiberius to bail them out with large
low or zero interest loans. Hence it seems that usury, in itself is not a solution to instability.

Setting up an alt-coin with a lifespan of less than thirty years would cause problems with long lived
loans such as mortgates. Shorter lifespans might in some circumstances be desirable - there are
some worrying predictions around suggesting that financial problems may precipitate societal
collapse. If we have a clearer view of the capabilities and limitations of bitcoin it can only help. 

I think measuring economic stability solely based on debt expansion or not, may be wrong...
Political advancements and technological advancements are IMHO more important to preserve stability, and continuing growth.
I think that Rome after the initial political breakthroughs in Law and Governance(Senate), as well as in  warfare(ie Pilum) and construction technology (arch) technology , that allowed Rome to become from a village to empire, regressed in political field back to monarchy, and hit a technology wall as well as an energy wall. Europe had to wait the Renaissance to   

Rome's failure was that it fell in love with the genius Julius Ceasar, and sought to replace him ever since, forfeiting the power of the Commons.
No amount of fiscal prudence can offset political regressions or technology and energy constrains,

Why for example West and not China dominated the modern age? was it Debt that held China back?
Han China was much wealthier than the contemporary Roman Empire, so what happened?

An amazing thread.. I actually spent most of the day looking for a 'history of money' before giving up and browsing the forums.

It's my understanding that while the salary for the legionnaires was important, most were in it for the promise of land.  Equity in the Republic Empire.

At the other end of the spectrum, there were slaves.  Not to gloss over the plight of a slave, but the form of slavery was different that has been practiced in recent centuries.  Slaves were not only the poor and uneducated, they were often very well educated and actually had more wealth than the average citizen and were often given considerable responsibility.  A person who was forced into slavery (from conquest or economic hardship) had the ability to earn not only their freedom, but an equity stake in the Republic/Empire.

The biggest problem I see with the modern economy, is that we have too much debt and too little equity.  Imperialism, Feudalism, Communism, and Socialism haven't worked.  Capitalism, save for the debt, seems to work pretty well.

I'm starting to think we need to work towards a debt-free, equity based economy backed by a global, counterfeit-proof currency.  I think this can be done in our lifetime and think it would be a worthwhile goal.

What little I know of China's history suggests a balance between the administration, the peasants,
the army, and the Temples (banks).

As a very crude analogy, China played "Old Maid" where Rome and the west played "Monopoly".
When the Temples got too powerful, too rich, issued too much debt, the others ganged up on them
and rebalanced the system. That's my understanding, I have no research to back that up.

I think the point of interest is related to the collapse from 305Ad on, and what might have been
done short of a complete reorganisation to get, for example, the currency restored. The Byzantine
Emperors seemed to have managed to last 1000 years after 305Ad, and their position seemed
little different from that of Rome, though their currency was based on gold, not silver.

The theory seems to point to "confidence," and the extension of trust to the currency to enable
investment - the expectation of reward in the future to take place. I'm reluctant to use the word
confidence because that implies certain things that may not be present in this context.
 

I just got bored of the Wall Observer thread and thought I would look around.

And found this.

Too much to read tonight, but I will have a good in depth look on Sunday - as a history nut who studied a little economics - it looks right up my street.

I hope it stacks up when I look closely and read through, I could do with a good read.

Wow this is going to be interesting read hahaha, how many stims did you take?

China's problem it is said that was twofold
1. Administratrion sucked up all talent
2. they hit an energy wall

My take is simply that they lacked what Europe had, a criss cross of river ways, and Mediteranean
The energy efficiency of sea transportation allowed europe superior trade and communication.

Same pattern with the revitaliation of byzantine at the 9nth century, Seems that the eastern part had more access to markets and trade that the western part, and the opening of the Russian market around the 9th century gave them a breath of life. No wonder the the west recovered when they found trade opportunities like the italian cities at first, and the formation of the english empire later.

So for me it's not the "confidence" that drives an economy that is just the effect, but the "prospect" of trade as a cause.

Some more thoughts on the precursors to the crash beginning in 305AD, beginning with some
links on how others view the history. I've added links to more recent markets and related
comments. The comments below are my own - and I make this stuff up as I go along, obviously ;-)

http://thetraderandhisshadow.files.wordpress.com/2014/01/long-term-charts.pdf

http://www.zerohedge.com/news/2014-02-08/long-term-charts-1-american-markets-independence
“Sometimes, perhaps all too often; investors, traders, economists, and mainstream media anchors
miss the forest and see only the trees (growing to the sky or crashing to the floor).
To provide some context on the markets, we present the first of three posts of long-term chart series
(and by long-term we mean more than a few decades of well-chosen trends) - stock, bond, gold, commodity,
and US Dollar prices for the last 240 years...”

http://www.zerohedge.com/news/2014-02-09/long-term-charts-2-western-markets-middle-ages
“We previously examined 240 years of US market history for a sense of 'trend' or sustainability but
some were not satisfied. In order to get a truly long-term perspective, we reach back 1000 years to
The Middle Ages and look at how stock prices, interest rates, commodity prices, and gold have changed
in a millennia (and most notably how the key historical events have shaped those price changes).”

http://www.zerohedge.com/news/2014-02-10/long-term-charts-3-markets-dawn-civilization
“We have looked at US markets since Independence and Western Markets since The Middle Ages;
but to really comprehend how far we have come, we need to press back to the dawn of civilization.
5000 years of interest-rates and commodity history and a trend is very clear as epochal events drive volatility.”

http://www.gold-eagle.com/article/ancient-prices
“Ancient price and wage data was collected to satisfy my own curiosity, and is presented for those readers
with a similar interest in the past. For the modern investor, this article contains two facts of relevance.”
“According to the Babylonian system of weights, 1 talent (30 kg) = 60 minas, one mina (504 grams) = 60 shekels,
and one shekel (8.4 grams) = 20 gerahs. True monetary systems did not exist until the development of
coinage c.700BC, however, and prices before 700BC refer to specific weights of metal.
Nb. One troy ounce = 31.1 grams. Prices in silver are as follows:”

In the 50 years prior to Aurelian, it is doubtful that interest rates offered price discovery.
Over those years barter became the normal method of trade, suggesting that the intermediation
of banks and money-changers was progressively reduced. It is hard to imagine how banking worked:
If Julius carried a satchel of silver plated copper coins into his local financial services
outlet, and asked for gold, I'd suppose he would expect a steep premium. Hmmm . . . maybe not
so difficult . . .  try today to buy a $50 gold coin or a £1 gold coin with anything less than
a large handful of fiat money and see what happens. But back to Aurelian.

I'd suggest that the dynamics of the situation were driven by trade with "barbarians". These
people would be disinclined to accept anything other than 99 percent gold in coinage, and
would give the debased roman silver coinange (2 percent silver) short shrift.

It seems likely that the roman economy would begin to disintegrate under this pressure with
maritime and international trade priced in gold, and local roman communities using either
barter or debased coinage. Whether banks and moneychangers would survive or thrive is an
interesting question. Hence I'm suggesting that from around 250AD onwards, markets in the
roman world were broken, and that interest rates quoted for that period should be viewed
with suspicion.

Note also that at the beginning of Imperial Rome, legionaries were paid in gold and with the
expectation of land when they retired. At some point, payment began to be made in silver.
Payment in debased silver coin would have caused problems for Legions on the move, but
for those guarding the frontier, not so much. See also Diocletian's edict doubling the
value of his "silver" coinage.

Perhaps it was not just the overhang of debt that brought down Imperial Rome, there
certainly was a collapse of confidence in the currency. The lesson here may be that once
financial services are removed, it may be very difficult to relace them.

It is interesting that China led the way on paper currency, crashed, and recovered. It may be that
the unity that China's geograpy brought also inhibited the competition that western Europe found
arising from their geography and the distribution of resources.

There is the issue of expansion also, as long as roman empire expanded all was good, but at some point they reached physical/political/energy/communication/technological barriers that constrained this expansion, and that was the tiping point.

It is propably very difficult to transform an expansive imperialistic culture to a self-contained sustainable culture, especially with all the inertia from the growth phase. US also follows the same path from the pioneering days, to the imperialistic days. The search of new markets, and new frontiers, Heck remember the dream of Space conquest? The final frontier? it is no accident.
Expansion is in the US DNA.
Internet gave enough room for expansion and stave off a crisis, when Space failed. I guess the new paradigm now will be "to create new scapes to expand into", a lot will depend on the ability of the west to play that trick.
This is why Innovation is so imperative to it's survival. Where would Rome be if they had figured out the steam engine? It was not out of reach: http://en.wikipedia.org/wiki/Hero_of_Alexandria ... it was only shortsightedness  (http://en.wikipedia.org/wiki/Library_of_Alexandria)on the value of innovation.

Here is a gold bugs summary of the history of money quite concise.
http://www.youtube.com/watch?v=DyV0OfU3-FU (5 episodes)

Lots of different coins and reasons for them -

http://armstrongeconomics.com/research/monetary-history-of-the-world/roman-empire/the-monetary-history-of-the-roman-republic/

Thanks bitdreams, adrian-x, thaanos.

"There is the issue of expansion also, as long as roman empire expanded all was good,"

That was precisely the issue Augustus warned about, though it has as much to do with
financial gain as conquest. Clearly if the empire ended up poorer after the expansion,
that process could not continue indefinitely. And a larger empire could spend relatively
less defending its borders. Debasement began in earnest when the expansion slowed,
perhaps because debt is related to area (and therefore a a square law), and gains were
likely linear.

Well i notice you look on problem... hmy, from rather diferent point of view then most of people. Even though it is intereting to read, I haven't heared about most fo this stuf stil im rather sure we can't just take random information, place it next to subject we are interested into and force any kind of conclusions. If they are or wrong we set aside and just continue our analyses without proper look back, since after awhile we might notice we are just weasting our time. Besides when it comes to currency i think Bisantium history is much more interesting. More intervention and more dynamic situations, not to mention there were actualy few possibility when it comes to usage of different coins.

It's come up they had in effect no usury, 1:1 gold as currency 10% tax, and an anarchic market economy with sharia law, and were very successful.

I presume there empire collapsed because the market failed as fractional reserve banking in the west allowed for capital to build a better military at the onset of WW1.

A coin could have a defined purpose and life span. As an example: Five years of speculation, five years of dividend and then a retirement plan - maybe the retired blockchain seeds the next big project. The coin could support a project, a cause or a belief. This is what I dream about :) Bring all the ideas out, new and old and put them through the math grinder.

I think that was because the romans had as a main weapon to rule a conquered land is by displaying superior culture, that means roads, aqueducts, theaters, baths and everything that displayed the roman way of life. So to create infrastructure on the conquered lands and the gains were propably in par with the expenditures. In modern times it would be seen as an investment. It could be that Rome outreached, and collapsed before reaping the returns on their "Investment"
Overall though, Europe could be in better shape After, than Before Rome. And that is *not* reflected imo in the currency value.

Once the Romans had defeated and destroyed the Carthaginians, there were no
armies large enough or sufficiently well equipped and trained to challenge them.

There were invasions and raids, but Imperial Rome itself was rarely under threat
from barbarians.

An interesting angle on all this is the system of taxation, and its reported misuse
under Diocletian:

http://www.unrv.com/economy/roman-taxes.php

"In the early days of the Roman Republic, public taxes consisted of modest assessments
on owned wealth and property. The tax rate under normal circumstances was 1% and sometimes
would climb as high as 3% in situations such as war. These modest taxes were levied against
land, homes and other real estate, slaves, animals, personal items and monetary wealth."

"These Publicani were also money lenders, or the bankers of the ancient world,
and would lend cash to hard-pressed provincials at the exorbitant rates of 4% per month or more."

"Diocletion's program, in theory, should have helped ease the burden on various classes of taxpayers,
but it didn't work that way in practice. As an example, additional taxes were levied on land owners
after the land tax had been paid because this was now a separate tax, instead of taking into account
that taxes had already been collected. The burden of paying the expected amounts was shifted from
communities and individuals within them, to the local senatorial class. The Senators who would then
be subject to complete ruin in the case of economic shortfall in a particular region."

I doubt that improvements in the system of taxation would have helped, assuming of course that
the imposition of debt via the banking system inevitably del to the downfall.

For more on that see this:
 http://www.thedailybell.com/exclusive-interviews/29044/Anthony-Wile-Larry-Parks-Everything-You-Ever-Wanted-to-Know-About-Money-Metals/
“The concept of legal tender morphs from a concept called forced tender. In the middle
of the 13th century, when Marco Polo went to China, one of the things he noticed and
remarked about was that the Chinese emperors had become fabulously rich issuing paper money.
When Marco Polo returned to Europe and told the Europeans about paper money,
they were disbelieving. Why, they asked, would anyone accept a piece of paper in exchange
for his goods and services? The answer was that if one did not accept the emperor's
money he would kill you. With legal tender you don't get killed, but if you don't accept
it in payment of a debt by law you are not entitled to be paid.”

That also contains some interesting views on gold as a money, and on the current state of the
US and related economies.

This is the dawn of proof of deeds.

http://photos1.blogger.com/blogger/8020/421/1600/worldgdp.gif

    Glad to see discussion continues to be interesting and informative here...

   your comments got me looking up this graph again. Anyway, you know my perspective is biased, but in the scientific tradition, I am open to falsification as long as it is backed by some evidence.

    
     I remember reading somewhere that around 1000 CE, 90% of Germany was covered in virgin forest. While the centralized Roman empire was never able to penetrate into the German wilderness, the decentralized Roman Catholic Church had more success. The wholesale deforestation, construction of mills, and development of metallurgy began around this time. Another crucial event at this time was the Crusades (pun intended). To answer why Europe came to be the global hegemon and China didn't has to be related to these events.

     So at the time when Europe begins its rise to prominence, the urbanization of Northern Europe is taking place. Guilds are rising in influence. The first real hegemon in medieval Europe was Venice, with colonies all around the mediterranean, a powerful navy, and tightly guarded trade secrets. Venetian craftsman specialized in the production of luxury goods, like mirrors. Mirrors enabled more sophisticated forms of consciousness due to increased self-awareness on the part of the wealthy, allowing for the development of more elaborate social hierarchies. The greater the disparity in a social hierarchy, the more the impetus for the lower members of society to attempt to rise- this is also where the innovations in etiquette by the court of Louis the 14th came in, as a trendsetter for the nobility of all of Europe.

      Some point to the Venetian republic as the birthplace of capitalism because there is documentation of wealthy merchants purchasing shares, or pooling resources, for trade ventures. This technique was later adopted in the Netherlands and England with the East India Company. This technique was already widely practiced in the Islamic world under the title musharakah, before it was adopted by the Venetians- and it was from the trade through the middle east the European elites were developing their taste for spices. The Islamic expansion united lands from China to India to Spain, and I know there are some people here who know more about Austrian economics than I do, but my limited understanding is that there is considerable mathematical evidence that free trade results in greater efficiency and wealth generation than borders and tariffs- and Islamic law required the taxing of wealth, rather than the taxing of income or trade as with Roman law, and redistributing this, which perhaps allowed for a bit more cohesion and freedom of trade through peace since resources may have been more evenly distributed.
         Multilingual, mutlireligious communities were established in Southern Italy and Spain where Jewish, Christian, and Muslim thinkers collaborated, and had access to the widest range of texts in history- which led to a great number of advances- particularly in the fields of mathematics and astronomy, partly due to the need of Muslims to calculate the most accurate qible direction, or the direction to pray towards the Kaaba in Mecca.
 
      The Middle East is obviously a very strategically important location in terms of the trade routes linking Africa, Europe, China, and India, and is of huge importance to followers of Christianity, Judaism, and Islam. So the ideological as well as the economic incentive for an invasion is clear. While the Crusades were generally unsuccessful, they did  relieve some overpopulation issues, and along with the Mongol invasion diverted the attention of the Muslims enough to allow the reconquest of Spain, including the population of multilingual scholars who began to disperse the knowledge that had been gathered and advanced in the centuries of prosperity and relative tolerance under Muslim rule. I'm sure you'll remember that the year of Columbus' expedition, most certainly a key date in Europe's rise to prominence, coincides with the date that Spain became a one religion state, which was later consolidated by the Inquisition.

      The demand for spices in Europe and the failure of the Crusades to access those trade routes, combined with the increased understanding of geography, astronomy, and navigation that the spread of knowledge associated with Arabic as a trade language, enabling scholars in Spain to access texts written in Persia and Turkestan, which included much more of the scholarship of China and India than the Greek and Latin texts that were previously available to Christian scholars, gave both the means and the motivation for the expedition to the West.

   So there is a confluence- while China had already been "civilized" for centuries, northern Europe gained access to Chinese and Indian knowledge that had been accumulated over centuries, and at the same time access increased to Greek and Roman texts through translations to vernacular. So China had probably already bumped into glass ceilings of energy availability several times in their history, while northern Europe had abundant forest land to run furnaces for their new abilities in metallurgy. Most of this deforestation was probably happening around the time of the steep rise in western europe's gdp in the graph. The rise of water mills and wind mills also increased the availability of calories for fueling labor, thought, and ingenuity. Spain was already pretty well deforested, like most of the Roman empire, but they happened into the new world, whose plunder propelled them to superpower status- also, the amount of gold and silver looted from the America's inflated everyone else's stores of wealth, and set off the race between England, the Netherlands, France, and Spain- all of Westernmost Europe (that means they could block more easterly powers from trying to send expeditions to plunder the new world, but no one was there to stop them).

      Another key event in this graph is the British dominion of India. There is a clear relationship between the decline of India's position as a global power and the rise of Western Europe. It was only with the wealth being gained from the trans-Atlantic trade routes that England was poised to gain influence over India.

    I don't think it is excessive to restate the importance that European maritime technology had in all of these events- all of this hinges completely on naval superiority, which was achieved based on cartography and mapmaking advances that were absolutely a result of the contact with the Muslims, and the Jewish and Christian subjects of the Muslim empires, who had brought scholarship on earth to the highest level that it had yet reached.

  So I am not going to say that this is a comprehensive answer to the question, but I would at least venture three major contributing factors.

1- Access to Chinese, Indian, and some previously lost Greek texts through Arabic translations, not to mention original works.
2- Access to abundant energy and timber in the vast forests of northern Europe that had been spared Roman conquest.
3- Inability to gain access to the markets due to the strength of the Muslims and the failure of the Crusades resulting in westward expansion.

   In other words, it was the immaturity of Europe that really enabled them to come into their own- they had not had the guile to harvest their nature resources as China and India already had, and they were able to profit from the knowledge that China and India had developed through their own civilizational phases, but still had a pool of abundant energy to further develop the technological knowledge that they gained access to through the multilingual scholars of Spain and Italy. Their immaturity also helped their meteoric rise to power in terms of ethics and morality, because their pitiful understanding of theology allowed them to interact with the peoples of the new world in a way that makes the Nazi holocaust look mild by comparison. Now, sitting on this ill gotten wealth, the European powers can reflect on what they did and try to take the moral high ground and lecture about human rights to the people whose ancestors they robbed and abused to gain their prominent position. Anyway, what goes around comes around.

      

you forget the English coal mines used even in Roman times and Later (19 century) The German & Belgian Coal mines... europe never hit a real energy crisis as they had access to coal for metallurgy and the industrial revolution, combined with a criss-cross of riverways + mediterranean sea for almost free-energy transportation, communication and trade.
In China though coal is much deeper and only in modern times the energy gains pay off. I don't really know the efficiency of chinese trade at the time though.

A moment of philosophy! Well the first post in this thread doesn't mean to me anything but I must confess the title made me to think about learning from history

So the AboveTopSecret crowd has finally made its way over ::)

I read semaforo's post a couple of times and kept thinking how to reply. Great history lesson and focused on bitcoin relevant topics.

Bitcoin appears to have the ability to duplicate all the mistakes and all the successes throughout history in a very short time: history repeating on fast-forward. Alternate coins that don't succeed can be viewed as simulations. As a modernized testbed, bitcoin could eventually put to rest a number of contentions between economic theories. The results should have many surprises. This has got to be terrifying to many people, not me though.

Debasement.

Debasement of the currency is, for all intents and purposes, a form of taxation. It is in the first
place an abrogation of the trust placed in government to maintain the qualitative and quantitative
standards published for the tokens commonly used as money by the people. It is also a form of
taxation, removing wealth from the holders of the currency and placing wealth into the hands of the
debaser. The debaser is often, but not always, the government.

To examine the how and why debasement began in Imperial Rome, some attention must be paid to events
prior to the reign of Nero.

The Empire came into existence as a relatively stable form of governance after Kingdoms and
Republics had been tried and found wanting. The Empire had suffered the extremes of Tiberius, and
Caligula, and then enjoyed the stability of Claudius before Nero became Emperor. Nero was popular,
especially with the people, and at first continued the policies of Claudius, at least until fire
consumed one third of the Empire's capital city, Rome in 64AD. There are conflicting reports of
taxation under Nero. As modelled, taxation is set at 2.5% (lower than under Claudius) throughout
his reign, with the debasement modelled as a short-term loan of 600M denarii at low interest rates
to the banks. To test an alternative to debasement, the model is altered to increase taxes to seven
percent, and government spending is increased to reduce the contents of the Treasury to that of the
earlier model, with the loan to the banks significantly reduced.

Comparative figures for the economy four years later at the end of Nero's reign in 68AD are as
follows [debasement]: Firms Debts 1843[1953] Firms Assets 1606[1715] Bank Vault 193[211]
Bank Capital 22[23] Government spending 478[329] Taxation 210[87]
Inflation (from 0.7 in 64AD) 1.88[1.87].

A narrative for all this? Suppose that the Roman Empire used a currency that was impossible to
debase - such as bitcoin. Thus when Nero found himself in crisis, he was willing to empty the Roman
Treasury and to expend his personal fortune to see Rome quickly rebuilt - perhaps expecting others
to follow his exuberant example. The Senate and the Wealthy, who weren't getting a fine new palace
sited on 125 hectares of downtown Manhattan, and who may have ceded some land to the Emperor, well,
if there were rumblings of discontent before the fire, some embers would have been fanned into
outright hostility.

Getting new taxes in quickly is guaranteed to cause trouble, even though the additional revenue is
a fraction of the overall expenditure. The disruption from the fire has already cut the economy back,
and there will be no shortage of reasons for not paying taxes on time. Before taxes are raised,
examples are made by placing prominent citizens on trial, and confiscating their estates.
Debasement and modest increases in taxation as an alternative would at least retain the affection
of the mob. As it was there were at least two plots to assassinate Nero before the third succeeded.
Preserving the purity of the silver coinage and increasing taxation to say, seven percent, would
have lost Nero all support, and hastened his assassination.

Some things to take away from this: a) this is just a fiction, feel free to disagree. b) If you are
planning to assassinate someone, character assassination is a good beginning. c) In its impact on
the economy, this debasement was little different than an alternate via increased taxation except
for its acceptibility to the Wealthy and the people. d) It is surprising that the rebuilding of a
great city could cause so much ill feeling in the Elite strata of Roman Society. e) Revenues do not
necessarily increase just because the tax rate is raised. f) "Only the little people pay taxes"
might be relevant in ancient Rome too.

################################################################

 http://www.atmos.umd.edu/~ekalnay/pubs/2014-03-18-handy1-paper-draft-safa-motesharrei-rivas-kalnay.pdf

The above paper models Elites and Commoners as an enhanced Predator-Prey system. While Imperial Rome is
mentioned as civilisation that collapsed, it is difficult to see how this model offers any additional
insight into dynamics of the collapse. The model is referenced here to show alternative points of view,
and it is perhaps more closely aligned to the scenario where the Elite (or Wealthy) are able to avoid,
evade or withold taxes thus increasing the burden on the common people. The exclusion of the Wealthy
from taxation in Imperial Rome post 167AD might, however, be more easily modelled in this Predator-Prey
system.

It seeems reading a bit of history will do the trick, it appears that the English had transformed the China into an opium junkie.
They growed opium in india to flood the Chinese market and tip the balance of  trade  in their favour. So it would seem that the rise of Western Europe and the decline of China could be simple: basic drugdealing

in other news http://www.newscientist.com/article/mg22229632.600-coal-fuelled-china-long-before-industrial-revolution.html#.Uz4JtlfETtw

I came across some interesting thoughts on another thread:
https://bitcointalk.org/index.php?topic=554616.0

while I am researching a couple of ideas, I have some notes for reference:

"The Roman Empire grew through conquest. Subsequent conquests were financed by the spoils of the previous
conquests and the increased taxes from expansion. The conquests also financed the increasing size of bureaucracy
required to maintain an expanding empire."

True, up until Egypt was seized by Augustus, after that Rome preferred a defensible frontier, or
was forced into war by circumstances.

"Once the cost of maintaining the empire exceeded the returns from expansion, the empire stopped growing. "
The history is somewhat more complicated.
in AD14 Tiberius ordered Germanicus to the Northern extent of the Empire to put down a mutiny by the
troops overy pay. Once there Germanicus took the Army and the mutineers into Germany and plundered the
area as a reward to the Legions.
By 105AD Rome needed silver and gold to expand its monetary base, and to pay the Army. Trajan built a bridge
across the Danube, and plundered Dacia, also gaining access to the rich mines of the area.
In 272AD Aurelian went to war with the Palmyrene Empire to regain control of Egypt and the grain supplies
to Rome.
Hence while the statement is evidently true, the calculation of excess returns is at best, imprecise.
Also, after 167BC the costs ot the campaign were borne by their provinces.

"For example, administering the farthest regions of the empire became more costly
than the income from those regions, and some of them were abandoned. Conquering England brought less spoils
than the cost of that conquest."
Paying the Army on the frontier was always a loss leader, but it put Roman money into the local economy,
and financed the Roman lifestyle. Roman Monopolies always made the centre appear more affluent.

"At this point the empire began debasing the currency to compensate for the decrease in spoils and new
populations to tax."
I am uncomfortable with that statement. Arguably peace, technology and infrastructure, access to capital,
and the Roman economy increased wealth and GDP and thus the tax base.

"The empire also increased taxes and became more repressive."
For example, in 167BC, "Rome no longer needed to levy a tax against its citizens in Italy", so not
the whole story, but see below.

"The currency was so debased as to be practically worthless, but the empire still paid its military
and bureaucracy with it. Eventually the empire grew so weak it was unable to resist barbarian invasions and Rome fell".
Debased is not the same as worthless. The modus operandi following the accession of an Emperor was:
debasement to pay off the Army, thus delivering a stimulus to the economy and a spike in inflation, and
thereafter gentle deflation in the Emperor's lifetime. Over time, this probably caused problems with trade,
and I seem to recall that India wanted gold for spices and China wanted silver for silks.
The gold content of Roman coins was almost always of high purity [modern coins have some copper to
reduce wear], but the Roman silver coins went from 97 percent to 2 percent silver. My back-of-an-envelope
calculation shows a further complication: between 250AD and 270AD almost 90 percent of the silver
content of the coins in circulation may have disappeared. How much was hoarded, how much was stolen,
and how much was melted down for foreign trade is anybody's guess. In 271AD Aurelian slaughtered 7000
at the mint in Rome to end the fraud and the theft of silver.
From 250AD to 270AD trust in the currency weakened, barter became more frequent, and by 300AD even
the Military were paid in kind, resulting in the imposition of a reign of terror on the countryside.

"Peasants were so overburdened that some abandoned their fields and went to Rome for the dole, some sold children
into slavery, etc. The peasants were increasingly complacent to barbarian invasions and some welcomed barbarians
as liberators."
Again, not the whole story. See: http://www.unrv.com/economy/roman-taxes.php
"Large inflation rates and debased coinage values, by the reign of Diocletion, led to one of the more drastic
changes in the system. In the late 3rd century AD, he imposed a universal price freeze, capping maximum prices,
while at the same time he reinstated the land tax on Italian landowners. Special tolls on money traders and
companies were also imposed to help increase the tax collections.
Diocletion's program, in theory, should have helped ease the burden on various classes of taxpayers, but it
didn't work that way in practice. As an example, additional taxes were levied on land owners after the land tax had been paid because this was now a separate tax, instead of taking into account that taxes had already been collected. The burden of paying the expected amounts was shifted from communities and individuals within them, to the local senatorial class. The Senators who would then be subject to complete ruin in the case of economic shortfall in a particular region. Following Diocletion, Constantine compounded these burdens by making the senatorial class hereditary. By so doing, all debts and economic ramifications were passed from one senatorial generation to the next, ruining entire families and never allowing for a recovery that could benefit an entire community"

In summary, a much more confusing picture of the collapse. My belief remains that excessive debt was the
driver for the collapse, but the link between cause and effect remains elusive.

Interestingly these days I found an article in the most gruesome aspects of the Byzantium emperors...
that make Game of Thrones is like a fairy tale, If i get some time I will translate it. :)

First chapter:

Constantine had a bastard son whom he dearly Loved, His wife Fausta, fearing that the empire will fall to the bastard instead of her sons, courts the bastard in order to expose him to Costantine. She fails and instead tells Constantine that his bastard tried to rape her. So Constantine kills him.
After some time when the plot is exposed, he drowns Fausta in boiling water. Then the brother of Fausta conspired to incite rebelion in Spain, but Constintine decaped him and sent his head to Carthagena.

A lot to read. Maybe you should write blog ;)

The Byzantine history - I would be very interested to read up on that. The economy of medieval India
was also quite sophisticated, as is any nation exposed to maritime trade.

Just FYI - I'm attempting an extension to my model of the Roman Economy, and it may take some time.
Augustus had the benefit of acquiring silvermines in what is now Spain soon after he became Emperor,
and that may have had the side effect of price inflation toward the end of his reign, thus creating a
crisis that Tiberius dealt with successfully IMHO.
Aurelian and Diocletian found themselves facing price inflation arising from debasement of the silver
coinage and failed to contain the crisis. The reference to seizing gold and silver from the taxpayers
and paying them with fiat currency (the gold content of their coins was less than the face value of
the money) is telling a story.
Modelling that will be challenging.

re: It does make you curious about laws 66-99, No? Yes! I didn't know they were missing!
Eventually someone will try to code them into the block chain perhaps? I would suggest leaving someone
such as yourself to propose a few of those laws to fill in the blanks  :)

What are you doing with the new variable Bitcoin? disaster recovery through a not uncommon fork in the block chain. Bad regulations failing faster?
Common sense with mathematical precision and the blockchain efficiently enforcing contracts. Easy audits, nothing to prevent success and everything to eliminate waste. A wealth effect never seen on earth where taxes become voluntary, charity between strangers not uncommon (karmacoin for example), commerce at the cost of a kind word, every keystroke even. Societies' most popular occupation after Bitcoin fuels robotics might only be to entertain and to care for each other. I believe Bitcoin is the fuel for many things. Are you building a launch pad?

The most dramatic fall in faith in the EU has occurred in Spain, where the banking and housing ... for the EU of the kind that is common in Britain but is much more rarely seen on the continent. .... The EU has lost the plot – it must modernise and re-engage its citizens.

Major cause in the fall of Rome was rising security costs. This was associated with the fall of the Western and Eastern Empires. The Romans in the West had to deal with the Germanic Tribes fleeing from the Huns, whom invaded and settled in Roman Territory and proceeded to sack Roman cities, in return West Rome had to pay for security. This caused security prices to rise which was curbed by recruiting "Romanized" Germans to fight for Rome. Eventually the people fighting for West Rome saw their was more to gain by sacking Western Rome than by defending. Same applies for Eastern Rome except that they were invaded and sacked by the Arabs and converts to Islam. To curb rising security costs they called on the former Western Roman lands "Christianized" Germans to help recapture lands(crusades). This went well the 1st time, tie the 2nd, failed the 3rd, and the 4th ended with said volunteers seeing that more was to gain by attackin Eastern Rome than by defending it, this culminated with sacking the capital (Constantinople). Which effectively ended the empire.

Moral of the story: DIRECTTV COMMERCIAL NARRATOR"When tribals start attacking your borders, you begin spending money on security. When you begin spending money on security, you try to cut costs. When you cut costs you hire Germans. When you hire Germans, they sack your cities. Don't let Germans sack your cities! Switch to nuclear weapons today!"

JUST JOKING!  :D
The true moral of the story is that security expense is the one of the most wasteful expenses as it creates absolute nothing, as the jobs it creates create zero capital.

"Major cause in the fall of Rome was rising security costs."

True in the sense that it's not the fall that kills you, but that impact with a hard surface.

A declining GDP and tax base meant they could not afford the needed security,
somewhat like earlier times when they had to pay off barbarians for a quiet life.

The transition to a gold-based currency in Constantinople is interesting though, and
shows that empires can last a long time if the conditions are right.

BTW, if you own bitcoin, Keen's views on the European economy should be of interest:
http://www.debtdeflation.com/blogs/2014/06/22/economic-theory-making-europes-crisis-worse-1/

I am still thinking about the implications for bitcoin, but an expanding government
deficit would seem to contradict the need for a fixed quantity of money. Hence the comment
about Constantinople.

The reworking of my model of the Roman Economy around the time of Augustus is ongoing, but it is
time to reflect. Among other things, the value of the exercise is the concentration of the mind
around things Bitcoin. There are similarities in thought processes there that are largely absent in
today's world. Few people alive today have purchased goods with silver coins. Fewer still have
worried about the falling silver content of the coins they own. But back to history ...

There were civil wars prior to the Battle of Actium (31 BC). Then, Augustus (Octavian) fought on the
same side as Anthony, but Anthony removed himself to Egypt, leaving Octavian with a massive bill of
expenses for the Army. When Anthony marries Cleopatra there is a threat to Octavian and to Rome,
war is declared, and they clash at Actium.

His victory places Octavian at the head of the known world with 60 legions and the treasury of Egypt
at his command. Over the next three years, the Rome will have an economic boom as 32 Legions are
progressively paid off, costing Octavian 150M denarii, (Roman GDP is of the order of 1000M denarii pa).
When Octavian returns to Rome, he brings with him cartloads of money from the Egyptian Treasury,
prisoners and the emblems of captured Cities and Princes. 250 denarii went to every soldier and
100 denarii to every citizen [Stobart p150]. Interest rates fell instantly from eleven percent to
four percent. (Try to imagine Mr Draghi giving every EuroZone family a year's wages in bitcoin and
all tax free!)

The surplus manpower he then put to good use: construction in Rome, earthworks and irrigation in Egypt.
The silver mines in Gaul and the Iberian peninsula came later, and all were in his domain when he took
the title of Augustus. There followed a long period (18 BC to 6 BC) of grain price deflation, with
Egyptian wheat prices falling from 9.3 to 1.9 [Prodromidis], followed by a period of stability
(4 BC to 4 AD).

Try to view the world through the eyes of a citizen in Sicily in this time of Augustus.
He will have his grain harvest in, and faces a choice. Store the grain, or sell for silver. He will want
to know how prices will change up to and including the next year's harvest. To do that he is
interested in how the world is changing. No wars or rumours of wars? With a fixed supply of money,
ie silver, and increasing grain shipments from Egypt, his expectation is that he will get less silver for
his grain the next year. Should he sell his land or plant vines or olive trees and wait? As supplies from
Egypt grow, grain becomes a smaller part of Roman GDP, and land and property prices, particularly
around Rome are rising, hence grain prices are a poor guide to price inflation in this economy of
Augustinian Rome. For tracking price inflation, however, grain prices are the only game in town.
What adjustment to make ... ?

Adjustments are a problem. Once begun, it is difficult to avoid making adjustment. It gets complicated
very quickly, simplicity is soon gone. So, where to begin?

About china and the Roman Empire, you can draw a paralel: They both achieved wealth by focusing on producing and being inventive about how to exploit people without people rebeling. This doesnt last forever as we can see tho.

So where Attila comes into this picture?

This site gives a timeline of the opium trade with China.

http://www.irinnews.org/indepthmain.aspx?InDepthId=21&ReportId=63040
1601 -    Ships chartered by Queen Elizabeth I are instructed to purchase the finest Indian opium and transport it back to England.
1620s-1670s -    From 1637 onwards opium becomes the main commodity of British trade with China.
1729 -    Chinese emperor Yung Cheng issues an edict prohibiting the smoking of opium and its domestic sale, except under licence for use as medicine.
1796 -    The import of opium into China becomes a contraband trade. Silver is smuggled out to pay for smuggling opium in. But three years later China's emperor, Kia King, bans opium completely, making trade and poppy cultivation illegal.
1839 -    Lin Tse-Hsu, imperial Chinese commissioner in charge of suppressing the opium traffic, orders all foreign traders to surrender their opium. In response, the British send expeditionary warships to the coast of China, beginning The First Opium War.

From the same article, some conclusions:


I could envision government as a series of sidechains off the main blockchain used to contract with government. Social funding could have a 'use-by' date preventing bloat and waste while providing safety nets as needed by simply spinning up new sidechains. Special interest groups would campaign via blockchains openly and transparently, with cause and effect clearly on display. Ultimately, this might allow taxation to become totally voluntary as you can choose which blockchains you are conducting business in. Some blockchains could have local enforcements and if you don't wish to support a local blockchain, it would come at the cost of being an outcast in your local community - but that's what government from the bottom up would feel like.

Work on my modelling to resolve some things that do not work out right is ongoing, and I will
post on that later. When I read anything on Imperial Rome I tend to question it, especially
when the writer is *absolutely certain* of his findings. With that caveat, a summary:

The Civil wars end in 31AD, and the military becomes progressively stronger as the economy
and the Empire expands. While the centre is settled, fewer legions are needed to hold the
frontier. The Empire, population and productivity peak around 124AD and after 200AD, the
decline sets in. With unrest in the centre, more troops are needed, and the military takes
a progressively greater share of GDP. Diocletian breaks up the Army and the Empire in
305AD, but it is too late for the western provinces, because all the silver and gold is gone.

That summary was developed using grain as a proxy for inflation. If that changes my view
will change. Today, in my humble opinion, the Roman Financial system, and its interaction
with the army is a far better explanation than others including "The Dole", or "Excessive
Administration", or "Socialist Policies" for the decline of Imperial Rome. However, reasoned
contrary opinion is both desired and welcomed.

Grain as a component of GDP in Imperial Rome (a rough approximation would be today's diesel fuel)
Source - The Complete Roman Army by Adrian Goldsworthy, pg 95 (and others)
From the account of Quintus Julius Proculus from Damascus, Auxiliary, AD81
Derived figures for gross national consumption, percentages (rounded for simplicity):
Food            50
Clothing        20
Entertainment   10
Shelter         20

(Food would have a slightly higher percentage for a family of four, but I'm going with the
above figures until someting better comes along.)
Suggested figures are that grain provided 67% - 75% of calorific intake. Hence a figure of
40% for grain as a proportion of GDP seems plausible. And if the price of grain doubles or
trebles as sometimes happens? and what does that do to productivity?
Schiedel has a figure of 50 million tonnes of grain equivalent for the GDP of Imperial Rome.
I am taking that to mean the actual grain production in 124AD was 20 million tonnes, with a
price of 9 Drachmae per Artaba, and 5 billion denarii.

Just looking at the data, the variations in grain prices can be explained by fiscal and
monetary changes. Except, that is, for the Augustinian period, and there is an explanation
for that. Which leaves the period of Aurelian through Diocletian, and the hyperinflation.

And this:
In 41/2 A.D. Claudius introduced tetradrachmae (four drachmae pieces) minted from billon,
an alloy less than 25% silver, and equal to 1 silver denarius. So what happened to grain
prices prior to 41AD?
Each silver Drachma weighs ~4.3 grams (it varies a lot) and the Denarius of Augustus weighs
3.8 grams, and the Attic standard was 1 silver Drachma = 1 silver Denarius.

Today's equivalent would be to pay in Litecoin instead of Bitcoin but paying the same number of coins.
The poor sods in Egypt were being ripped off even as far back as 41AD. It looks like it took
until ~68AD for them to figure out that scam.

Can't find any arguments against your explanation. This is a great thread and I'm learning a lot from your research. The social issues interest me as I attempt to draw connections on how society can limit government to servitude. I view 'The Dole' as citizens commission on conquest. If the financial system had truly pegged citizens commission to net conquest returns in timely manner, how would that change history or our future is where my interest lies.

Things in today's world are moving somewhat faster than in Roman times, and I am
compelled to set aside the work I was doing to integrate coinage into the model, at
least until things quieten down a little. With the usual caveats, here are some
notes on where we are today.

Debasement of the coinage was completed in the late 1960's and early 1970's with fiat
money continuing to expand exponentially. Post 2000 the real economy diverged from
the monetary system with money remaining inside the banks, and progressively lower
rates of growth in the real economy, and moving into negative growth rates in 2014.

Theoretically ("it's really simple"), a sufficiently large stimulus should re-ignite
growth. In the real world, that just doesn't make sense, because the present world
has diminishing returns on anything that doesn't scale.

There is a more general case to be made, but first, here is Steve Kopits on Oil:
http://www.youtube.com/dLCsMRr7hAg
http://energypolicy.columbia.edu/sites/default/files/energy/Kopits%20-%20Oil%20and%20Economic%20Growth%20%28SIPA%2C%202014%29%20-%20Present$
.... and oil supply determines global GDP - supply constrained demand.
"counter-intuitive by historical patterns"
"productivity of capital has declined by 5 percent over the last decade"
"demand constrained model, price = marginal cost" (customer pays)
"supply constrained, ... do with less rather than pay more"
"borrowing money to pay dividends"
"major divestment programs" "is this sustainable?"
Oil Majors - 20 to 30 percent reduction in CapEx 2013 - 2015
Given no increase in oil production " ... OECD GDP growth will continue to lag
indefinitely, with a long term GDP growth rate in the range 1-2% entirely plausible
and indeed likely."
"In turn, if this is true, then current national budget deficit levels and debt
levels will prove unsustainable, and a second round of material and lasting
adjustment will be necessary"

I would caution that the eight percent efficiency gains in recession are also
unsustainable. Typically companies in difficulties defer maintenance and other
similar costs that are inevitably added back in at a later date.

In the general case, the world spends some ten percent of its energy in mining.
Mining includes the fossil fuels that provide 90 percent of that energy, and
all sectors show a drift towards higher energy costs as ore quality declines.
Overall a ERoEI figure of 16 is plausible for 2010, with a figure of 10 for
oil production. At some time in the future, that 16 will fall to 10 and then
to 9. Everything else being equal, to maintain the standards to which we have
become accustomed, we need to use one percent less less energy for our daily
activities either by doing less or by increased efficiency. We will not maintain
that balance for very long, thanks to exponential decreases in ore quality.

Hence there are two checkpoints in our trajectory, further in the future for
the general case, and now for our use of crude oil (because oil's ERoEI is
already at 10 and oil is the binding resource.)

In a world constrained by oil supply, the dynamics of price and flow are
unfamiliar. Payment is increasingly in currency other than the US$ and may
be in roads, hospitals and schools at rates set for many years. Much depends
on innovative improvments in efficiency and the use of alternatives to oil.
One of many possible models of flow and price is here:
http://www.thehillsgroup.org/depletion2_022.htm
That shows a steep downward slope in the price of oil from 2012 to 2020,
(and a presumption of falling oil consumption, not shown).

Recent data on oil and gas (click on report):
http://oilprice.com/Energy/Energy-General/Early-Signs-Of-A-Pullback-In-Drilling-Activity.html

I said previously that I see a parallel between oil today and grain in
Imperial Rome. And back in Imperial Rome circa 350AD, opressive taxation,
crony capitalism, and fifty years of appropriation by the army had so
impoverished the freemen peasants that they were abandoning the land for
slavery, causing food production to fall amidst hyperinflation. Goods
that attracted tax were falling in price while the price of food
increased, so care is needed when attributing price variation. Lacking
paper fiat currency, ox carts were needed to move debased currency
from place to place, (the HFT trade of that day.) And this: "Previous measures
to ease the tax burden, however, were ineffective because they only
relieved the wealthy."

Economists have been taught to believe that, today, unconditionally,
the central banks can always create hyperinflation by creating and
distributing money - "helicopter money". That may change :
http://www.voxeu.org/article/helicopter-money-today-s-best-policy-option

But to cut to the chase: OPEC will act to maximise the value of their oil,
and that means they will reduce their production to maximise flow x price.
Growth will fall in the OECD economies causing increases in budget deficits
and financial distress particularly for exporters. Faced with that dilemma,
Japan seems likely to be the first to try some form of "helicopter money".

One final thought: When you have no good choices, you have reached an
optimal solution ;-)

And on that thought, it's back to Rome until the next crisis  ....

@OP

Thanks for creating this thread. Its become difficult to find material worth reading around here; to find so much in one place is brilliant.

Some grain merchant who made a big boat, everyone thought he was a golden boy, he became glutinous, lost a fiew loads he probably used leaky storage and the grain got wet or eaten by rodents. Anyway he didn't make it to the history books.

Actually there was no Bitcoin equivalent back then, we plunged into the dark ages. Bitcoin offers something new never seen before, the closest we have to understanding it is gold, but Bitcoin is better in many ways.

The Byzantine Empire lasted almost a thousand years without, it appears
a devaluation to its currency. The beginning is here :

http://armstrongeconomics.com/2014/05/19/constantine-saint-or-just-another-political-fraud/

That may cast doubt on my suggestion to collapse cybercurrencies every
fifty years. Or does it? Do not rush to judgement without the full facts ...

The Byzantine empire ends ...

After 305AD the Roman Empire split into two parts: The Eastern, Byzantine
Empire ruled from Constantinople, and the Western Latin Empire, ruled from
Rome. Somehow, Constantinople seems to have got the gold, and lasted until
1204AD ... kinda long (I trimmed this quote) but interesting.

This from 'Marco Polo' by Laurence Bergreen - quote :
The original plan for the Fourth Crusade was simple enough: Pope Innocent III
and the preacher Foulques of Neilly-sur-Marne proposed to conquer the muslim
warriors. And they wanted the support of Venice. ...

After careful negotiations lasting eight days the Republic agreed to furnish
35,000 knights, squires and foot soldiers, 4,500 horses, ships specially built
for the occasion - all for a steep price. ...

the unemployed Crusaders would assist them in achieving a slightly different
goal: subduing Zara a rebellious city across the mediterranean sea. ...
The arrangement completed the transformation of the Crusade from a religious
campaign into a commercial enterprise. ...

In the mental calculus of the Crusaders, the Orthodox Church had come to seem
almost as nefarious as Islam, and therefore deserving of vengance. Any
justification, however far-fetched, would do because Constaninople was an
extremely rich and vulnerable prize. ...

The sack of Constantinople in April 1204 lasted for three days of destruction
and death. ...

Pope Innocent III professed himself horrified when news of the sack of
Constaninople and the atrocities undertaken in the name of Christendom reached
his ears. He excommunicated multitudes of Crusaders before realising that they
had been absolved of their crimes in advance, and that his stance might weaken
the Papacy in the face of determined adveraries. At that, he fell silent, and
stood by as the wealth of Constantinople found its way into Roman Churches and
Cathedrals.

Unquote

The Byzantine Empire steadily degraded after that loss, never to recover.

It's been a year. Left to themselves, things generally go from bad to worse.
So, how bad might it get?

For 2015,
Personal possession of gold or bitcoin becomes illegal, with some exceptions.

Oil averages US$40 for 2015, making half the industry unprofitable, and investment
in new production collapses. World GDP growth is zero in real terms. Sovereign defaults
begin, and cities start bankruptcy proceedings. The world begins a Minsky moment.

For 2020
Oil production has not recovered, and oil prices are at US$30 per barrel. Production
has fallen five percent per year with global real GDP, with oil production declining
from a peak of 93 million bpd in 2015 to 72 mbpd. Air and road travel are restricted,
and cities with populations above one million begin to collapse, with the outer urban
areas suffering interruptions to electricity and water supplies. National infrastructures
begin to collapse. New currencies are introduced. War marks the end of the Minsky
moment.   

We have not learned from history.   

Throughout history religion and wealth are intertwined. This is not something
that banks or places of worship are anxious for you to know, but this is
definitely something worth thinking about.

The bronze age Temples of ancient mesopotamia gave credibility to silver tokens,
turning these into money. Later the Greeks seemed to prefer their banks to be
separate from their Gods.

The Temple of Saturn held the Treasury of Rome, and from there in 49 BC Julius
Caesar seized 15,000 gold bars, 30,000 bars of silver, and 30 million sesterces.
The Senators had fled Rome after Caesar crossed the Rubicon, and with them
went the debts that were owed.

From that time until around 300 AD, the Roman Temples were safe, except from
barbarian raids, though over centuries gold accumulated there. Consider this
when reading about Constantinople - www.statemaster.com/encyclopedia/second-rome

"It seemed impossible to many that the capital could be moved. Nevertheless,
Constantine identified the site of Byzantium as the correct place: a city where
an emperor could sit, readily defended, with easy access to the Danube or the
Euphrates frontiers, his court supplied from the rich gardens and sophisticated
workshops of Roman Asia, his treasuries filled by the wealthiest provinces of the empire."

So Constantinople rose as it was destined to fall, with the wealth of pagan
Gods transferred from their Temple banks to the Emperor's treasury, a scene
likely repeated as the boundaries of empire ebbed and flowed.

Note also that Constantinople did not attempt to circulate a silver coinage,
and that silver was scarce in the western empire until maritime trade brought
silver from South America a thousand years later. Where did the silver go, if
not to China to pay for silks and spices?

At first glance, the Byzantine Empire had a stable currency for close to a
thousand years. Closer examination suggests it began by extinguishing debts
and seizing treasure, and was in a state of constant turmoil in which
Constantinople and its trade were the only fixed features, until centuries later
the Fourth Crusade ended its primacy.

Excess wealth, like excess debt, seems to invite destruction.

A brief comment on today's bitcoin pricing: The price is descending at a rate
that suggests that the big miners are selling bitcoin to pay for the electricity
they consume, and hoarding the rest. At that rate, expect a price below $200
by April. As I said at the beginning of this thread, we should think about
an improved form of cryptocurrency.

What you describe is a feature not a bug, I agree with your hypothesis, but will add there is more at play, I think Gavin is correct to caution investors, if you're correct and miners are dumping it's cheep coin, but if Gavin is warning investors to stay out it's a cautious Bitcoin is a highly risky idea.

Still to stay on topic I think history has a lot to teach us, it's just understanding it that limits us.

Just the connotations the word barbarians invokes clouds our judgment enough to obscure the facts.  

Greece drawing the line on debt, the oil shock and the drums of war getting louder.

Debt forgiveness appears to be coming.  By force through default or with peace through negotiation.

A brief history on the politics of debt, banking and religion: http://armstrongeconomics.com/2015/02/06/debt-forgiveness-the-seventh-year/

   As in the debasing of antiquity, I get the feeling at some point the game of monetary musical chairs is going to be over, and someone is going to lose big. Probably the people who are not aware of what's going on, aka, the working people.

t may be a while before I put another post up here.
I have done all I can to set out the lessons available
from Imperial Roman history. The data just is not there
to allow me to do more without diluting the certainty
that I prefer. You either understand the things written
here and can see in our world the limited options to
have anything close a best choice or you don't. Read!
and try to understand that then, as now, choices for
everyone are becoming more restricted as time passes.

I'd suppose there are some who will read this, and say
they're just here to know whether buy or to sell,
(reprising the role of Cypher in this real world.) To
you I can say there are no good choices, just close
this web-page now and forget you've been here.

For you persistent readers, I'd suggest following up
Martin Armstrong's predictions of a stronger US$ and
the deflation that implies. In other areas I would
suggest caution when considering his views. I think
we both agree that the next year or two will be quite
difficult to navigate.

Bitcoin? It's best hope is Russian acceptance, but
do not hold your breath on that. So maybe next year?

My view of the world may differ from that of Martin's.
I view the world more as a Game of Thrones. The Dothraki
are in the middle east, but I leave it to you to put
names to the Lannisters and to the Baratheons, and to
the other components some refer to as the Deep State.
The balance of power swings this way and that, but for
the present, governments and companies are directed by
these others. In turn they set policies and taxation
and choose war and peace.

I'll agree with Martin that all of the above are subject
to the ebbs and flows of the natural world, and thus have
less power than might be supposed. These rhythms differ
from those of Imperial Rome. Oil has joined grain as
binding resources on the economy, and financial markets
make ponzi financing possible, but there now seems to
be a human cycle that acts every seven years or so.

And if "they" have less power, then "we" are limited
only by our inability to see how to act in our best
interests. "They" will do their best to keep that
knowledge from us, and that is both their strength
and their weakness. Choose wisely.

Cool story, bro!

There is a topic related to Imperial Rome that I still puzzle
over. Now, within the US Presidential campaigns, I may have found
a new perspective on the outcomes. The two quotes below are
enlightening:

Trump "I could stand in the middle of 5th Avenue and shoot somebody and I wouldn't lose voters,"
Clinton "Like with a cloth or something?"

Short on policy, long on Entertainment. Imperial Rome was famous
for its "Bread and Circuses" - just the sort of nebulous concept
that defies the ability to attach numbers. This made the true
importance and impact of this policy difficult to grasp, and
allowed it to escape its proper inspection.

Bread and Circuses flows from context: With the defeat of Antony
and Cleopatra, Rome's wealth and survival were assured. Uncertainty
was reduced to storms and floods and to political infighting. One
form of instability leads, I suggest, to a form of stability.

Thus Rome moved from a Republic to an Empire. But with Wars, and
Rumours of Wars gone as a topic of conversation, and little new
in the way of weather, and even political and religious structures
set in stone, what were the plebs, the Roman Mob, to do for
Entertainment?

The last thing an Emperor wanted was his policies on taxation and
welfare debated on the streets of Rome by a knowledgeable population.
Thus was born a social contract - "Bread and Circuses" - the plebs 
were provided with sufficient bread and entertainment and would
leave the running of the Empire to the Elite. For the bulk of the
population, the marginal economic utility of education fell to zero.

With these thoughts in mind, I can again ask myself these questions:
What was the real story behind Caligula?
Who was Catiline?

 :'( :'( :'( :'( :'(

Great job buddy! For me personally, the main conclusion from the history of all empires is that none of them is eternal.

I would say that a cryptocurrency that resets itself is probably rather counter-productive, and in my opinion a terrible idea if you want it to go on for more than a generation. The crypto could never have any considerable value because it would all get wiped in the future, and thus investing large amounts or placing the value at greater than $1/coin would be completely useless and just be looking for a lot of lost wealth.

It is a good concept for an authoritarian government that should never expect for their currency to have any value in the international stage, but it sucks as a free market idea.

Money should erode imho as everything in nature and most importantly "trust". So a reset mechanism in a crypto to simulate inflation is consistent with reality. The only things that always gain momentum, end up in a bang.
People always confuse money with assets see (red above) money is asset, asset is not money.

How is it anything that diverges from bitcoin perspective is auto-tagged authoritarian, never-mind don't answer.

"Boredom"
Humans need to keep on moving, if they can't move ahead they will move backwards, they can't stand still.
Romans needed a breakthrough, which never came. Remember they used to say that they discovered anything that was to discover. Couple that with the fact that they conquered what was to be conquer, they pretty much reached a plateu in science/wealth/arts which no peak on the horizon. It was then that they turned to the mystical/unseen and started to introduce foreign religions and ideas (Caligula god-king), the breakthrough eventually came in the form of Christianity.

The cycle between science and mystical.
Jung would refer to it as the spirits of the times and depths, so its a deeply rooted personal conflict that manifests into larger scale, ie Helinistic/Roman -> Christianity -> Enlightment -> Internet :)

Whoever wrote that opinion about ancient Rome had a lot of anti-Roman biases. Bread and circuses weren't the trivial things he suggests. Those things began with the Roman republic, not Imperial Rome.

Bread refers to wheat. It's important to understand that food was expensive for the masses. The Roman government sold discount wheat to the poor, and provided a free ration of corn to a lot of people too. They could make cereals and bread out of wheat, and use corn for different meals and even to feed livestock. Think of all of that as the first food stamps program.

Circuses refers to different forms of entertainment that some Roman politicians provided for the public. There was no internet or video games. Races, sports, gladiator fights, public executions of criminals by lions all provided entertainment. But those were also civic events to stimulate pride and harmony.

Whoever wrote that quote seems to think erroneously that during Imperial Rome society was dumbed down. That's unbelievable rubbish. The wealth allowed the arts and poetry to flourish. "Education fell to zero"? Really? Then how did they develop a civil service to run a growing empire?

Caligula was a psycho emperor. Catiline was a politician who organized a failed coup while Cicero was consul. Cicero spent the rest of his life bragging to everyone who would listen that he suppressed the Catiline conspiracy. Good times.

Now you have me thinking more about the Catiline fiasco. Cicero has been my favorite politician of the ancient world. But I think he mishandled the Catiline conspiracy. After the conspirators were arrested, he had them executed without trials. That caused a huge controversy and the debate continued for decades.

Cicero was a lawyer and he made a fancy legal argument that, as consul, he had authority to execute without trials during an emergency. When the conspirators were arrested, people were afraid that there could be more conspirators, or that the arrested conspirators would be rescued by a mob that would succeed with the coup. But Romans regarded each citizen's right to a trial as fundamental, and the executions caused a lot of blowback.

I think Cicero weakened the Roman constitution with those executions. That added to the slippery slope of the Roman republic.

If we think about it, suspending a constitutional right during an emergency set a dangerous precedent. Now we have prisoners in Guantanamo held indefinitely without trial. Now the US government executes its citizens without trial by blowing them up with drones. Do you see what Cicero started?

Cicero really screwed up another situation years later. Caesar and Pompey invited him to join them in a triumvirate to govern Rome. Cicero declined. If he had accepted, he was the perfect guy to mediate the conflicts between Caesar and Pompey. That's why they wanted him. If he had joined the triumvirate, Cicero could have prevented the civil war, and maybe helped to reform the republic, at least for another while.

So I'm mad at Cicero. But he spent his life trying to preserve the republic.

Cicero was a Sith lord

Wow thanks for posting this OP and for the bump.  I'd missed it. 

Surely anyone who has attempted to trace back the mistakes made which have led us to the road which champions stupidity over wisdom, who has attempted to find the origin of the orcs, has found themselves looking at the rise of the Roman empire as the start of the reign of Sauron.  A more obvious disastrous unmitigated disaster for us all is hard to find, though surely the history continues backward still. 

If fiat currency is a symptom of a disease, a mental illness going back generations, follow others - do not think - kill if you can - &c, it appears that the time of the Romans was the start of the misery which has grown massively to where we find ourselves today: destruction of ourselves and embracing of all destruction in lieu of being able to see. 

For these reasons it behooves us to study carefully the paths taken by those morons, lest we stray onto their miserable path. 

Imperial Rome just is, or was. What matters, is who decides? and the
choices they make. Sometimes there is an unavoidable outcome.

You choose to use a fiat system and that brings rape and pillage as
a lifestyle choice, and forces the expansion of a small village into
an Empire in a winner takes all game of Monopoly. That, in turn,
expands language, law, and lending, all systems with Complexity,
as a net benefit to the community. I'd argue that it was Rome's
ability to engineer better weapons of war, civil, and industrial
systems that gave them the edge. Their habit of slaughtering
everything within cities opposed to their rule was consistent with
their need for growth at any cost. Debt can be a hard master.

Margaret Thatcher famously said that "The problem with socialism is that
eventually you run out of other people's money." Arguably, the same thing
happened to Imperial Rome, and they weren't socialists, were they? 
So, problems everywhere, why? 

Regarding Catiline, I would bracket him between Sulla and Julius Caesar.
Both Sulla and Julius Caesar staged successful coups, suggesting that there
was an underlying cause that promoted charismatic leaders to seize
power. Whether Catiline's rise to challenge the State and his summary
execution were inevitable remains in doubt. I'd also be cautious about
Catiline's character weaknesses because summary execution prevents any
examination of the case for the defence, and character assassination is
often a precursor to political murder. Cicero's actions suggest there was
more to the story than history has recorded. His actions re-wrote Roman Law
to simply read "Might is Right". But all this is for now, mere speculation
and suspicion, an intriguing possibility. All this was prior to Imperial
Rome, begging the question, what changed?   

The Romans were engineers without equal in their time. They built six
storey tenements among other civilian enterprises, an unsurpassed feat
until Otis introduced the safety elevator in 1853. Otis lifts enabled the
building of today's skyscrapers. What sets the old tenements aside from,
say, the Partheon, is the need for that kind of expertise within the
population. That skill, and language, and law, and lending, all require
an informed population.

My recent post suggested that the era of Bread and Circuses, brought
a time when hunger for knowledge was discouraged among the mass of the
Roman population. The Roman elite imported Greek tutors for their
education or spent time in Greece. I'd guess that Roman engineering
education was provided by the Army to their recruits only. Once
Rome's Army became deskilled the breadth of engineering knowledge fell also.

I'll quote Henry Ford in support of this:
"It is well enough that people of the nation do not understand our
banking and monetary system, for if they did, I believe there would
be a revolution before tomorrow morning."

Did Catiline attempt revolution?

Seems Rome was in a situation like UK right now,
A services sector thriving in Rome, while Industry (Farms) in Italy was taking a hit, as Empire expanded and acquired cheaper resources elsewhere. Debt mounted, Real estate crashed for the plebs and the situation reached a critical point. Early warning of that situation could be the Spartacus rebellion, (the weakest chain to feel the economic crisis first). No fiat at the time to easily expand the money supply and resolve liquidity crisis, any attempt to reduce the coin weight results to more hoarding and less liquidity, as vicious circle.  So bankers were taking the economy hostage "enslaving" Free romans.
I think julius eventually resolved the crisis by expansion of the army (employment of plebs) and money supply (Gaul & Germany gold?)

@STT - thanks for this:
https://mises.org/library/inflation-and-fall-roman-empire

Anyone who can crack jokes about Diocletian's Monetary
Polices deserves the applause and laughter from the audience.

I'd perhaps highlight the impact of inflation on the plebs and the legions,
and suggest that only a fraction of the relevant information can be found
by the use of gold as a monetary benchmark. Most of the action,
as the Professor did reveal happened in the silver and bronze or brass coinage.

Choices must be made when following history, the lives
of the Elite are not the lives of the common people, and cannot
be revealed together. Most historians are comfortable flipping
from one to the other, but only the best can fully convey what
they see.