The Economy in Trouble
“Nothing is surer than death and taxes,” goes the oft-repeated joke. But to the Romans of the Empire it was no joke, for many, it was truly hard to decide which was worse!
The economic oppression of the later Empire increasingly ate the spirit, loyalty and pride out of the citizenry, high and low, and fostered a rash of other ills. It tore away at community and national spirit. The costs of running a gigantic empire were massive. They caused a perpetual administrative struggle to maintain a stable economy.
The ever-burgeoning government bureaucracy became horribly expensive. Especially after Diocletian’s (late third century), greatly enlarged military establishment caused great economic strain. Food, supplies, weapons, new frontier posts and fortification of towns cost fantastic amounts. Extravagant and excessive spending on buildings and engineering works added to the financial load.
It took a veritable army of officials to man and work the complicated dual supply and demands of both the government services and the military. This necessitated laying still heavier burdens of taxation upon already over burdened people.
There were land taxes, property taxes, occupation taxes, poll taxes, crop taxes, commercial taxes; taxes on almost everything. No stone was left unturned for revenues.
There were other economic problems which aggravated the revenue problem. Rising prices, loss of money’s purchasing power, the escape of the rich from taxation, the poor growing poorer, the decline of production, soil exhaustion and droughts, disease epidemics decimating provinces, peasant rebellions, barbarian incursions and expensive wars, all violently shook and weakened the economic superstructure of the Empire.
While commerce and industry were important to the economic base of the Empire, agriculture was the chief source of wealth. Hence, landowners were heavily taxed. The poor farmer had special troubles.
The rich could afford great numbers of cheap slaves to work their vast estates. The poor small farmer couldn’t compete.
“The big farmers could undersell him, both in cattle and in produce, in the market. The result was, in the course of time, that the small, independent farmer was driven to the wall” (James Westfall Thompson, Economic and Social History of the Middle Ages, p. 33).
The small farmer either had to sell out and flee to the city, or become a tenant farmer, hardly better than a slave. Forced to mortgage a part, then all of his farm, he usually found himself evicted from his land by a covetous grand proprietor who bought the mortgage from the broker.
“Latin literature abounds with complaints regarding this evil, which thinking men saw was sapping the vitality of the nation. The free yeoman class, that middle class which is the bone and sinew of every healthy society, was gradually being crushed out. But the protest of these enlightened citizens went for naught. The evil of land monopoly was spread over the whole Rome Empire” (ibid., p. 33).
And at the same time, imported foodstuffs from newly conquered lands were undercutting the small farmer’s prices. Since the Empire always imported more than it exported, the balance of trade was always against Rome. The heart of the Empire suffered at times from its own version of trade war.
There were other resulting evils. “Many of the dispossessed gave up the struggle and drifted to the towns there to become dependent or clients of the rich, or to be engulfed in the increasing idle proletariat of the cities fed at public expense (the annona) and amused with the baths and the circus” (ibid., p. 32). That is a familiar story, reminding us of the evils of present-day sky rocking welfarism and the massive migration to urban areas from the farms.
As in Rome, small farmers today are leaving the fields in droves and fleeing to the cities, aggravating problems already there. Small farmers today just cant make it. Increasingly farm buildings lie desolate. Many farmers can’t meet the expenses of modern farming at the prices they are receiving. Only the growing number of agricultural monoliths consistently make a respectable profit.
“Since the end of World War II, more than 20 million Americans have abandoned the countryside to take up residence in the nation’s cities and suburbs. The great exodus was prompted in part by a technological revolution in agriculture which put 3 million farms out of business and 6 million farmers out of work. It also was stimulated by television, national-circulation magazines and other mass media which brought the age-old lure of city lights right into the living rooms of town and country America” (The Drovers Journal).
Farming today is no longer looked upon as a noble occupation witness the fleeing of the farmers’ sons and daughters to the alluring jobs and glamour of city life. Reliable, steady hired hands are becoming a thing of the past. The age of the average farmer is in the mid-50’s.
Our copper-nickel “sandwich” coins are signs of economic deterioration, but look at the Roman experience: “By the third quarter of the third century the silver coins had become copper pieces washed in silver and issues of gold had virtually ceased. There was vast inflation; by the end of the third century prices had risen to two hundred times the second-century level” (Roman Civilization, edited by J.P.V.D. Balsdon, p, 73).
Mr. Rostovtzeff, in his book, Rome, put it this way: “The emperors in their need for money issued a vast quantity of coins. Not possessing enough of the precious metals for these issues, they alloyed the gold with silver, the silver with copper, and the copper with lead, thus debasing the coinage and ruining in the end mint that had once been rich. This measure cut at the root of trade and industry. The government mint in the third century became a vast manufactory of base coins” (p. 276). Is thre any similarities to our government printing paper money which is not backed by gold or silver?
Diocletian, in the late third century, struggled to restore the quality of the economy, and for a time succeeded in establishing a semblance of order. But the financial state was in such turmoil that he had to proclaim an edict fixing maximum prices on all goods to curb inflation.
Portions of that decree have come down to us and the following are a few telltale excerpts revealing the emperor’s anguish at the collapsing economic situation: “For, if the raging avarice which without regard for mankind, increases and develops by leaps and bounds almost from hour to hour, and even minute to minute, could be held in check by some regard for moderation, but there is seen only a mad desire without control to pay no heed to the needs of many” (Elgin Groseclose, Money and Man A Survey of Monetary Experience, p. 43).
Sound familiar? The modern version manifests itself in a continual push-cost spiral fantastic wage demands followed by commodity price increases, resulting in ballooning inflation!
But Diocletian’s edict backfired! Rather than fix prices, it made people afraid to sell. “Therefore, demand skyrocketed and so did prices! Utter economic stagnation resulted. The price-fixing decree was a failure and abandoned within five years.
Even though Diocletian’s and Constantine’s total administrative and economic reforms were a temporary help to the Empire, the ultimate conclusion crept closer and closer.
Another significant factor that played a part in the decline of the Empire needs mentioning. Many historians note that the economic base of the Empire was seriously shaken at times by rampant disease epidemics.
There was a devastating plague under Marcus Aurelius in the second century, and several more from time to time in the third century. As well, barbarian incursions added to these epidemics, causing loss of population in some areas for long periods. Also drought and famine wrought havoc periodically. These, among other trends, played a part in weakening the Empire.
Another significant factor that contributed to the breakdown of the character and spirit of the populace was welfare. The dole became a way of life. Roman wealth and government welfare spoiled the citizenry. Many became so accustomed to government doles of food and other services that the government could ill afford to cut down these services lest it face a major uprising.
At times, the city of Rome had from one third to one half of the population receiving part or all of its subsistence from public charity. The problem faced all major cities of the Empire, but probably not to the same extent as in Rome.
Of course, that shouldn’t shock us in modern America and Britain. We are well on our way to advanced welfare states (if we are not already there). In New York City, as of 2010 the population of New York City was 8,175,133 and one in five are on welfare. And similar problems are bemoaned by despairing city officials everywhere in a modern America cursed by the burden of welfare loads! These welfare payments are called entitlements and the people become so dependent upon them they will riot to keep them. Witness what is taking place in Greece today and what will soon be taking place right here in America. If you think we are wrong, try taking away welfare, food stamps, etc. and see what happens. That is one reason Congress is faced with such a dilemma in producing a budget. We can’t afford all these entitlements but, for fear of losing their seats in Congress, they will not take them away!
“The history of the dole carries a warning. Even under the Empire it became a permanently demoralizing factor in the social and economic life. People were schooled to expect something for nothing. This failure of the old Roman virtues of self-reliance and initiative was conspicuously shown in that part of the population that was on relief. It had far wider aspects. Emergencies that would not have dismayed the men of the Republic were too much for the men of the later Empire” (H. J. Haskell, The New Deal in Old Rome How Government in the Ancient World Tried to Deal with Modern Problems, pp. 228-229).
Although today, welfare is needed by many just to survive, the real tragedy is our way of life which has pushed so many to depend on, and far too many to abuse government help.
It doesn’t take a degree in economics to see the many economic crises in our modern nations! Welfare and the dole are only one aspect of the devastating financial burden. Ever-increasing taxation is another demoralizing load the public has to carry. Every American and Britain is more than well aware of the voracious tax bite which gobbles up a bigger chunk of his income with each passing year.
In 1902, the total bill for taxes of all kinds in the U.S. amounted to $18 per capita. By 1948, it had risen to $377; by 1960, $709. In 1968 it was more than $1,000 and by 2009 it was $13,097!. And every year sees another rise.
State and municipal taxes are rising astronomically, too. Cities are finding themselves at the end of the taxation rope. With the exodus of the white-collar middle class to the suburbs, city tax bases are crumbling. According to taxfoundation.org as of 2009, the average per capita state and local taxes were $4,160!
Taxes, combined with the evils of inflation, are causing many to practice the principle of “live today, forget tomorrow.” People have no reason to save their money, said a secretary in London. “If you keep it the government will soon find some way of taking if from you.”
Taxpayers complain they realize little for their money. Services in education and other vital functions get poorer; many get pinched or curtailed. Most of Western civilization is merely repeating the financial mistakes of the Roman Empire and surprisingly also the mistakes of a pre-Roman people recorded in biblical history.
Long ago when ancient Israel wanted to replace God’s government with a monarchy like the surrounding Gentile nations, the prophet Samuel was instructed to give them solemn warning of what such a government would be like. In the language of the day, he warned the people that the king would take their sons and daughters to serve in his armies, that it would cost them dearly to finance such a government and that the people would cry out to God because of the burden of man’s rule. But the people wanted their own way. And God allowed them to have it to teach them a lesson.
The modern descendants of those ancient Israelites have still not learned that lesson! Today the burden of big government is heavier than ever. Taxes soar and the offspring of our populace still spill their blood in an endless round of wars in the world’s “hot spots.” Since the first World War, how many parents have cried out to God in anguish? “Why did you take my son on the battlefield?” And when have people not cried out about the staggering weight of taxation? But notice the words of the Creator: “And ye shall cry out in that day because of your king (government) which ye shall have chosen and the Lord will not hear you in that day” (I Sam. 8:18).
Far more relative to the average Westerner is the soaring inflation that is eating away at everyone’s standard of living. Nobody likes it, but few accept their part in causing it! Millions on small or fixed incomes, especially the poor, aged or needy welfare recipients, are oppressed by inflation but can do nothing about it they are hapless, helpless victims.
Despite high interest rates, millions upon millions of people plunge headlong into debt. They live for the pleasure of the moment, and pursue an endless array of gadgets and thrills. But the “piper has to be paid.” Once again, it is the experience of ancient Rome being repeated.
Writes historian William Stearns Davis in his book, The Influence of Wealth in Imperial Rome (pp. 163-164, 167): “As an almost unavoidable corollary of the huge Roman fortunes, went the accumulation of debts. Even men of grave and respectable habits caught the mania of their age, that of living beyond their incomes. The typical Roman of birth and fashion may then be imagined as regularly in debt, and frequently on the brink of ruin.”
The average American is in the same sinking financial boat. Total debt in the United States, both public and private, stands at an astronomical 57 trillion dollars and rising.
Debt living is the typical American way of life! More than 65% of all Americans use installment credit and one third of these are believed to be on the brink of serious financial trouble.
On top of all this is the growing threat of worldwide trade war. Under the sudden crushing burden of quadrupled oil import costs, nations are seriously tempted to “beggar their neighbors” by promoting exports and limiting imports. In fact, the first warning shots of trade battles have already been fired. The trouble is, few have heard the volley of shots.
Charges and countercharges of protectionism, discrimination and bad faith regularly hurtle back and forth across both the Atlantic and the Pacific. Yet, instead of gearing up for the fight for economic survival and sacrifice, Americans and Britons are seemingly more interested in enjoying an ever-higher standard of living. A standard of living that will not last!
Installment 7 will be coming soon on the Modern Romans.