Financing The Empire

[Pantagathus]

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?

 

Salt was always important. I've mentioned it elsewhere on the forum before, but I pass along the suggestion that it wasn't just important as a spice and preservative, it was very important as a nutritional (mineral) suppliment for livestock (as it is today).

 

Hispania had extensive salt processing areas for one and interestingly enough I do believe that the original La T

Edited July 18, 2006 by Pantagathus

[M. Porcius Cato]

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!

 

This is a really great counter-example: it seems as illustrative as it is convincing. OK, I was skeptical before, but I'm becoming fast convinced--at least when cash is in short supply, supplementary currencies will evolve.

 

Just to nail it though--is this the only example of oil serving as a supplementary currency? Were there other entries like this, and did anything other than oil appear in the supplementary_value slot? Also, the delivery part seems weird to list as part of the price. I can understand delivery being part of the bargain, but why is it listed as part of the price? Not to maintain my thesis at all costs, but isn't it possible that the oil (like the delivery) was meant to be supplied by the seller (perhaps because the oil was needed to grade the output of the mill)?

[Kosmo]

I think that all it's just about the way words are used. It's obvious that we have 3 types of exchange. Goods for money (usual), goods for goods (barter) and goods for other goods with exchange value. All this 3 types of payment coexisted and the first 2 are still used.

As Rome had a well developed monetary economy I doubt that goods with exchange value were used for the majority of transactions.

[Andrew Dalby]

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 ...

 

This is a really great counter-example: it seems as illustrative as it is convincing. OK, I was skeptical before, but I'm becoming fast convinced--at least when cash is in short supply, supplementary currencies will evolve.

 

Just to nail it though--is this the only example of oil serving as a supplementary currency? Were there other entries like this, and did anything other than oil appear in the supplementary_value slot? Also, the delivery part seems weird to list as part of the price. I can understand delivery being part of the bargain, but why is it listed as part of the price? Not to maintain my thesis at all costs, but isn't it possible that the oil (like the delivery) was meant to be supplied by the seller (perhaps because the oil was needed to grade the output of the mill)?

 

Now we're getting down to the nitty-gritty. I enjoy this kind of thing. What Cato (the Elder) is doing, in this section of his book, is evaluating two quotations for the supply of an oil mill.

 

1. Why? Not because these quotes are useful as such to any potential reader (they were single offers to him or his father (I guess), one of which they selected). Therefore, they are in the book as examples, because they will help the potential reader to judge for himself in his own case. Now your judgment of potential business transactions does have to include hidden costs, and Cato is reminding you of that. He doesn't bother to tell you where he is (but we happen to know their farm was at Venafrum). But he does say that one transaction would have cost more in delivery than the other one, because, when it comes to carting about a stone oil mill, transport is a really significant item.

 

2. So, if you read the text (preferably with my translation and notes, naturally!!) you will see that the oil occurs only in one case (therefore, not required for testing or grading the mill) and is checked off as part of the purchase cost.

 

3. Other examples ... Hmm. I will consider this, Cato. I'm sure we'll find them.

 

 

 

 

 

I think that all it's just about the way words are used. It's obvious that we have 3 types of exchange. Goods for money (usual), goods for goods (barter) and goods for other goods with exchange value. All this 3 types of payment coexisted and the first 2 are still used.

As Rome had a well developed monetary economy I doubt that goods with exchange value were used for the majority of transactions.

 

Actually, all 3 are still used. In business transactions (and even in salaries for corporate employees) additional value items such as company shares may well be included. Company shares, in my view, count as a modern surrogate currency. Gold, crude oil (not olive oil!) and various other commodities are fairly freely traded on certain markets -- they, also, have a recognised value, though it fluctuates. But then, the value of money fluctuates too.

[Kosmo]

Now that we agreed on money and surrogate currency I think that it will be interesting to look at the roman economic policy.

Did they had one? If they did how it was put to life?

Romans had a great road network and excelent maritime and riverine ports. This was build for military reasons, but also for trade benefits.

Mining was another sector that was under goverment supervision because of it's economical and military importance.

Colonisation was made also for military reasons but also with added benefits for agriculture and urbanisation.

The army and her needs developed lands in border areas for food, livestock, timber, stone and ore supply. Manufacture was also greatly improved.

All this reasons made the army an important factor in roman economy.

Romans had money landers, but they did not have a banking sistem and no public banks for the needs of the state.

A way to gather money was to inflate the coinage.

The large urban building projects were used not only for embelishment and prestige, but maybe as a mean to boost the economy in the way Pericle did for Athens.

Romans did carry a large external trade, but this was done by private traders with little public interferance.

With all this they did not go much over the economical concepts of Aristotel and state interference was low.

Sometimes the public policy had bad effects on the econmy like overtaxation, confiscations, inflation and excessive exploatation for the needs of the grain and oil distributions.

Banking, accounting, stock exchange and, more important, business legal entities had to wait for the late Middle Ages and the Renaissance.

[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?)

Financing the Empire 101 (The Late Empire):

 

Just my two bits:

 

The late empire had some very sophisticated financing schemes. Vast teams of accountants were responsible for calculating what the imperial government needed then collecting the necessary funds. This system appears to have run very well as long as there wasn

[Kosmo]

Internal custom taxes were important and this source shrinked as the trade was reduced after the third century crisis.

Also that crisis reduced urbanisation but most of city expanses to keep the great public works from the previous prosperity period where at the same level even augmented by new needs for defence. This put a lot of pressure on provinicial gentry and poor alike.