Financing The Empire

[Guest icewendigo]

I was wondering how the roman empire's economy was working?

 

Did the Empire borrow money to finance constructions or soldiers?

 

Who paid taxes and what was it used for?

Were taxes collected as currency or as commodity(grain,salt?)

[M. Porcius Cato]

It would be helpful to indicate the time period you're talking about.

 

From the early to late Republic alone, the finance regime changed enormously. Over this time, the taxes paid by Romans themselves were eliminated once the coffers were filled by wars of conquest and by the auction of farming rights to the rapacious publicani. Also, although much money was initially raised via rents paid to the state for use of public lands (just the lands in Campania raised 1/4 of the republic's money), these revenue sources were exhausted as the farmers' lands were slowly confiscated by political-generals (such as Caesar) to settle their troops. The form of taxes also differed by place and time. For example, Syracusa initially paid their taxes in grain, which was sold at auction (at least until the Gracchi started handing it out for free). In other locations, taxes were paid in metal. Finally, donatives by conquerors (such as Pompey) filled a large portion of the Temple to Saturn (i.e., the treasury), although this was completely emptied by Caesar after he marched on Rome.

[caldrail]

I was wondering how the roman empire's economy was working?

 

Did the Empire borrow money to finance constructions or soldiers?

 

Who paid taxes and what was it used for?

Were taxes collected as currency or as commodity(grain,salt?)

 

Generally speaking the economy of Rome wasn't planned. They didn't borrow money at government level (at least not usually - emperors like Caligula would borrow and didn't care too much about giving it back) because financing was done by individuals. There were some seriously wealthy people back then who were expected by public pressure to put money into the economy - either by donating funds to callers or by paying for public works. This wealth was gathered by all sorts of shenanigans both legal and distinctly dodgy.

 

One of the reasons for the decline in the west is that money was being spent and not recouped by conquest. Taxation had risen so high that the economy was grinding to a halt, and a lot of coinage went abroad for luxury items or perhaps animals for the circus.

[Favonius Cornelius]

When you think of empire and economy, you might as well think of one thing: agriculture. Everything depended on it, and any trade in rares, spices, vases and whatever else was dwarfed by this form of income. I think that agricultural goods offset taxation in many forms, many of which probably were deals between landowner and tax collector, tax collector and governor, governor and the top ministers. I'd say plain food was a more common 'currency' than the fancy coins themselves. For a good read on the realities on Roman economics I suggest The Roman Empire by Peter Garnsey and Richard Saller. Reminds me to do a review on that one.

[metforce]

I was wondering how the roman empire's economy was working?

 

Did the Empire borrow money to finance constructions or soldiers?

 

Who paid taxes and what was it used for?

Were taxes collected as currency or as commodity(grain,salt?)

 

 

For Late Roman period I'd suggest AMH Jones. He may be dated but I've always found his writing pretty detailed to the point of being boring at times. But he put a lot of time reviewing some of the mundane aspects of late imperial life including tax collection and govenment functions. Keep in mind there were a lot of differences throughout the empire because the Romans usually adopted local traditions into the imperial system.

[DecimusCaesar]

I read that the Roman coinage began to lose its value in the Later Empire, with silver coins containing virtually no silver what so ever. This lead to coins losing all value and the people turned back to bartering.

 

But as Caldrail has pointed out, one of the failures of Roman economics is that they depended largely on conquest in order to fill the coffers, and in order to do that they had to pay the army, so a large percentage of Rome's Economy was spent on maintaing the army (especially in the Later era, when the army swelled up to 600,000 recruits). So basically it was a vicious circle of needing conquest to prop up the economy and having the vast majority of tax going to pay for the military. (This applies to the Later era rather than the Republican and early Imperial Era).

 

But the Later Empire couldn't afford to pay for wars of conquest as the soldiers had enough trouble defending the frontier, so the economy went into collapse. It comes as no surprise to see that it was the poorer classes who had to pay for this, and it was in effect they who financed the Empire.

[M. Porcius Cato]

But the Later Empire couldn't afford to pay for wars of conquest as the soldiers had enough trouble defending the frontier, so the economy went into collapse.

 

While I admit that this sounds good, I don't think this explanation for the collapse in the economy actually works very well. There was virtually no change in the number of soldiers needed to defend the border before, during, and after the largest collapses in the economy during the late empire, so how could this variable explain anything?

[docoflove1974]

Everything depended on it, and any trade in rares, spices, vases and whatever else was dwarfed by this form of income. I think that agricultural goods offset taxation in many forms, many of which probably were deals between landowner and tax collector, tax collector and governor, governor and the top ministers. I'd say plain food was a more common 'currency' than the fancy coins themselves.

 

This makes sense, particularly with grains. Question: what about salt? I know it was prized, but how much was truly available, and how much was it used as a tradable commodity? I'm guessing that sea-side areas had desalination 'plants' (or whatever process they had) early on, or did they?

[M. Porcius Cato]

I agree that salt makes some sense as a medium of exchange, but I'm much less convinced that other food-stuffs would work, however much they were valued. After all, if you were a doctor and had the choice between advertising your services for a quantity of metal, salt, or tomatoes--which would you choose? Obviously, metal would be the first choice not only since it's always in high demand (meaning you can trade it later), but more importantly it's of uniform quality, can be saved forever, and can be subdivided without destruction. In contrast, if you accept tomatoes for your services, you could end up with a bad tomato, couldn't save it for very long at all, and couldn't use it to make change for another purpose. I grant that not all food stuffs are as lousy exchange media as tomatoes, but along the basic dimensions I've mentioned, food stuffs simply don't compare to gold, silver, and other metals.

[Favonius Cornelius]

Oh wow...that is a damn good question about the salt, and my lack of knowledge on it is juicy (sometimes it seems like we've discussed everything, then a tasty morsel like this pops up). I'll have to do digging on salt, or hopefully someone around here knows more?

 

Cato I agree with you. Actually when I say used as currency, I do not mean it was used in necessarily so direct a way. For instance, the doctor would probably indeed be paid in currency and little else. However local taxes could be have been offset or paid in full by agricultural product. Two neighbors could barter their products for things they need. Also a town could fulfill its quota to the province in the same way, and a governor of a province could make up for a lack of tax or just replace said tax with agricultural goods. Any of these levels could accept agricultural produce, then resell it for actual coin.

 

In the end, the flow of agriculture was the beating heart of the Roman economy one way or another.

 

EDIT: Heh just realized, as a Quaestor I guess discussion on economic topics is fitting.

Edited July 18, 2006 by Favonius Cornelius

[docoflove1974]

Oh wow...that is a damn good question about the salt, and my lack of knowledge on it is juicy (sometimes it seems like we've discussed everything, then a tasty morsel like this pops up). I'll have to do digging on salt, or hopefully someone around here knows more?

 

Can't wait for AD to pop in on this one

 

What brought salt to mind was actually 2 items:

1) English salary < ME salarie < Latin salarium 'money for salt (as part of Roman soldier's pay) [all of this according to Webster's, and the OED wasn't loading up for me tonight, so I'll come back to that later.]

2) As a corollary, salt has always been highly valued, or so I'm told, as a spice, because of its preservative properties...hence the phrase 'to be worth its [weight in] salt'...or so the folk etymology goes.

 

Dammit...now I'm hungry...popcorn is calling me...

Edited July 18, 2006 by docoflove1974

[Andrew Dalby]

Oh wow...that is a damn good question about the salt, and my lack of knowledge on it is juicy (sometimes it seems like we've discussed everything, then a tasty morsel like this pops up). I'll have to do digging on salt, or hopefully someone around here knows more?

 

Cato I agree with you. Actually when I say used as currency, I do not mean it was used in necessarily so direct a way. For instance, the doctor would probably indeed be paid in currency and little else. However local taxes could be have been offset or paid in full by agricultural product. Two neighbors could barter their products for things they need. Also a town could fulfill its quota to the province in the same way, and a governor of a province could make up for a lack of tax or just replace said tax with agricultural goods. Any of these levels could accept agricultural produce, then resell it for actual coin.

 

...

 

I mildly disagree with Favonius here -- because my experience is (and I don't think I'm the only one to find this) the tax people are just the ones who WON'T make bargains. If the tax people want money, they'll take money. No credit cards. No salt. No wheat. It is indeed one of the best reasons for inventing and maintaining a currency, that once it's off the ground you can demand that people pay their taxes in this currency.

 

What you have to do, if you are a taxpayer, is to make your other arrangements before the taxman sends in his final demand. This is why I only 'mildly' disagree! You still need surrogate currencies, but at a slightly earlier stage. And in these cases salt (along with wine, olive oil, and wheat) can be very useful as surrogate currency, because they are reasonably easily stored and moved, at least over short distances, and everyone can agree on their value based on the current market rate. Actually, if people trust one another, you don't even have to move them. You say to your rich neighbour, you pay that cash for me to the taxman and you own this block of olive oil in its amphoras in my cellar. Such arrangements do take place now, and I'm prepared to bet that they took place under the Roman Empire as well. (And before you know where you are, your neighbour owns your whole farm and your daughters are at work in his bar in Rome.)

[M. Porcius Cato]

What you have to do, if you are a taxpayer, is to make your other arrangements before the taxman sends in his final demand. This is why I only 'mildly' disagree! You still need surrogate currencies, but at a slightly earlier stage. And in these cases salt (along with wine, olive oil, and wheat) can be very useful as surrogate currency, because they are reasonably easily stored and moved, at least over short distances, and everyone can agree on their value based on the current market rate.

 

But what is the point of designating these goods (like salt) a "surrogate currency"?

 

Traditionally, currency is the unit of exchange that facilitates the transfer of goods and services. To say that metal is a currency is a real claim: after all, people could have gone around with pockets full of salt that they used to buy values (or pay taxes). But they most likely didn't. Most likely, salt, wine, olive oil, and wheat were simply values, just like tomatoes or labor, and people sold these values for a proper currency (e.g., metal) whenver the price was right.

 

It seems completely artificial and unnecessary to say that in selling goods for metal currency, metal becomes a currency for exchanging "surrogate currencies". Given a distinction between currency and value, there is no need for the concept "surrogate currency".

 

Maybe you were just trying to be diplomatic, but let's not confuse things.

[Andrew Dalby]

You still need surrogate currencies ... And in these cases salt (along with wine, olive oil, and wheat) can be very useful as surrogate currency, because they are reasonably easily stored and moved, at least over short distances, and everyone can agree on their value based on the current market rate.

 

But what is the point of designating these goods (like salt) a "surrogate currency"?

 

 

Well, if you encourage me to be undiplomatic for a moment (as your namesake often was!) I'd say that you are letting our everyday language and assumptions blind you to economic realities. If you want to use a different word for this concept, that's fine by me, but, sooner or later, you will need a word for it.

 

Speaking theoretically, almost any piece of property has value, but only certain things will be widely acceptable to mark the exchange of value. Cash, where it exists, is usually the most versatile of all. But, especially when cash is in short supply, other things are called on. Not every other thing indiscriminately, but specific items whose value is widely agreed. Do you remember the passage in Cato On Farming where he talks about the cost of an oil mill? Look at how much the oil mill from Suessa cost: Sestertii 400 plus 50 pounds of oil plus delivery. Then, when he adds up the total cost, he counts sestertii 25 for the 50 pounds of oil. So, as I say in my commentary on this passage, this is the record of an actual transaction (otherwise, why mention the oil?). In this transaction, either because the buyer (Cato?) was short of ready cash, or because the seller preferred it this way, oil took the place of some of the cash. Now, are you going to tell me that a cartload of mixed farm produce or secondhand furniture would have done just as well as the oil? Nonsense!

[Skarr]

On the subject of salt, it is well known that salt was a precious commodity in ancient times and Greek coastal cities even used this to trade for slaves with those cities in the interior. After all, salt had many uses, apart from lending mere flavor to food and making it more palatable. In the ancient world, salt was used for bleaching, cleaning of fabric and also in the degreasing, dehairing and softening of leather.

 

It also had its uses for medicinal purposes, including religious purposes as people made offerings of salt at temples. For a certain period of time, the Roman soldiers were partly paid in salt and the Romans also collected a toll from people wishing to use the saltworks that were set up by Numa's grandson on both sides of the Tiber, near Ostia.

 

Rome had enormous wealth, especially from its expanding conquest throughout Italy in the early years of the Republic, with the subjugation of the Etruscans, the Samnites and the Greek cities in the south. Later, as they expanded into Sardinia, Sicily and eventually, Spain, North Africa, Carthage, Greece and Macedonia, the spoils of war helped the censors dole out huge contracts for erecting various grand buildings, temples, monuments and other public works throughout the city. Carthage alone provided 3,200 talents of silver and Rome's subsequent defeat of Antiochus III brought another 15,000 talents. This, plus the taxes they continued to collect from all the cities in Italy and eventually, throughout the Mediterranean, brought tremendous wealth, not only to Rome but also the generals, senators and merchants who stole as much as they could, as corruption in the later Republic became common. The city of Corinth alone yielded untold riches for some of Rome's elite, especially the merchants and other nobles who backed Lucius Mummius's sack of the city.

 

The thousands of slaves also enriched various senators, who acquired huge tracts of public land and bought other pieces of land from impoverished soliders (read farmers drafted to fight Rome's wars for twenty years and finding barren land). As the cities became more crowded and overpopulated, with the poor becoming poorer, the aristocratic class of senators and rich knights (merchants), grew enormously wealthy.

 

It is a familiar tale, leading to the eventual collapse of the Republic after Caesar's assassination.