Free Money: The Impacts of Debasements on Ancient Rome 

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An ancient Roman peasant watches a tax collector visit each house, hoping he can afford the tax collector’s high demands.

Debasement and Inflation

The tax collector arrives, and the peasant scrambles to find enough money to pay, it isn’t enough. The tax collector restates his price, but the peasant cannot find anything valuable enough to satisfy the tax collector. Then, as his final option, the peasant gives away the last thing he has to offer, his freedom. Unfortunately, this was a common scenario in late ancient Rome when the tax rates were so high that selling themselves into slavery was many peasants’ only option.

Taxes were this high in part because of Rome’s high inflation, most of which had resulted from repeated debasements. In the hopes of making it easier for citizens to earn money, the Roman government repeatedly lowered the value of it’s currency. This process is what is known as debasement. Rome debased their currency by lowering the silver and gold content in the most common coins, the denarius and aureus, respectively.

The short term benefits of the debasements allowed the government to pay their workers more and increase their loyalty however, these were outweighed by the long term consequences on Rome’s economy.

Reasons for Debasement

One of the Roman government’s reasons for debasing currency was to gain more money in order to pay their increasingly higher expenses. According to Joseph R. Peden, the Roman army from Augustus to Dioclecian went from 250,000 troops to 600,000 troops.

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This means that the budget for the military was more than double its previous amount. Debasing the denarius would allow the government to mint more denarii from the same amount of silver and pay for more soldiers. Each time a new emperor was elected, that emperor would assemble his own new imperial court, praetorian guard, and also build his own palace. These costs were very expensive and emperors had to pay their workers somehow so debasements were a way to get more money for the treasury. These costs became even more expensive during times of instability. During 69 CE, there were four consecutive emperors in the same year. This quadrupled the normal imperial costs because there were four palaces to be built, four imperial courts to hire, and four praetorian guards that all needed to be paid. Debasements were especially helpful for paying government costs during 69 CE. The grain dole was also a huge part of Rome’s budget. It was a service which provided monthly grain at a fixed price or for free to the Roman population. Under Augustus, the grain dole gave out five modii (with one modii being equal to approximately 2.4 gallons) of grain to 150,000 people per month, totaling to 1.8 million gallons of grain per month. Taxing the people for this was not an option as the whole point of the grain dole was to give out grain at an affordable price and by raising the taxes to pay for the grain it would just force people to pay for the grain indirectly. Debasements allowed the Roman empire to get more coins to pay for the grain dole. Between the emperor’s own costs and the safety and services of its people, the Roman government had quite a high budget. One of the simplest ways for the Roman government to meet that budget was by debasing currency.

Paying Roman Army

Another major reason for the Roman government to debase their currency was that it would help them gain more loyalty from their army and their own people. With more money to spend, they could pay their army more and make the peasantry happy with lower taxes. As Constantina Katsari says about the Roman army, “If their demands were not met, then their loyalty was sold to the highest bidder.” As shown before, the Romans had a huge, expensive army however, the soldiers in that army were oftentimes more loyal to their commanders than to their emperor which would lead to threat of mutiny. This was because the Roman army was made up of many people from Rome’s allies as well as hired barbarian mercenaries, meaning much of the army was not too loyal to Rome. In order to solve this problem, many emperors paid the army very well so as to keep them loyal to Rome and its leaders. One such example of these payments is the donativa, a bonus paid to the military whenever an emperor came into power. This bonus quickly became a tradition and according to Joseph Peden, an emperor could be killed if he didn’t pay the donativa. Debasing currency came in handy in this situation because the emperor’s needed money for the army and raising taxes would have upset the public very early on in their reign which was unfavorable. The Roman people’s loyalty was strongly dependent on taxes. If tax rates were very high, the Roman people would’ve needed to pay more money in taxes making them unhappy. As historian Bruce Barlett put it: “…rather than raise taxes, Nero and subsequent emperors preferred to debase the currency by reducing the precious metal content of coins.” This solved the problem of not having enough money in the treasury without upsetting the peasants and losing their loyalty to the empire. Debasements were an easy way for the government to acquire money that could be used to gain loyalty.

Lasting negative impacts of debasements

Despite these short term benefits of debasing coinage, the debasements had lasting negative impacts on Rome’s income from taxes. Bruce Bartlett explains that Romans would hold onto the purer coins and pay their taxes with the cheaper, diluted coins causing the government to get less money from taxes. Although the debasements helped citizens earn more money, this money was not as valuable as it was in the past. At certain points in Rome’s history, taxes were so high that many citizens could only pay in goods rather than in cash. This shows that the Roman government got less money from their taxes because the government would need to spend money on transportation in order to get the goods to where they would be used. According to Joseph R. Peden, at one point in Rome’s history, the denarius had become so inflated that taxes had to be collected in gold coins instead of the silver denarius. Although this was a more stable currency than denarii, this was also a more expensive one. For rich citizens who already had gold coins, this was easy to pay for they had the right coinage for the taxes. In contrast, for the poorer Romans, this tax became hard to pay because all of the sudden their silver coins had lost some value and the coins they needed to get a hold of gained value. This made it so that some Romans weren’t able to pay their taxes, making the government earn less money. Near the end of the Roman empire, taxes became so harsh that citizens went to extreme measures to evade them. Historian Bruce Bartlett says that many Romans that didn’t have much land signed on as tenants to larger landowners or even became slaves. If a citizen all the sudden became a slave he or she was exempt from taxation, meaning that the government would not get any money from that person. All of this demonstrates how the Roman government lost out on tax money due to their highly inflated coinage.

In the short term, the advantages of debasements were increased loyalty as well as bigger budgets however, these benefits were tainted by their long term impacts of Rome’s struggle to get money from taxes. Being able to pay for the high expenses and loyalty were undoubtedly good for Rome’s survival reflected in Rome’s larger, more powerful army, as well as in happier citizens. When the means used to achieve these benefits undermined the empire’s resources by diminishing tax revenue, they lost their usefulness. All of this weakened the Roman army. Ultimately, just as the peasant gave his freedom to the tax collector, Rome gave its own freedom to the barbarians.

Bibliography

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