The Roman Empire: an Economic Failure
The history of economics is often only discussed from Mercantilism to the present era and the Neo-Classical school. However, Many of these economic theories that are discussed today originated over a millennia before in the Roman Empire. Prior to the insurgence of mercantilism was the era of the dark ages and the infamous feudal system that time and time again has been proven only to hinder growth or stop it all together. The feudal system didn't just appear from nowhere it was slowly developed over time and emerged out of a more complex economic system that mirrors the economies that arose from the feudal system. The Romans over centuries had developed a complex and volatile economy based on currency and free trade. However, the Roman economy was young and naive and eventually crumbled taking the empire along with it. The Romans were still able to leave their mark in the history of economics and their economic theories live on still today. The Roman Empire was the epicenter of the world market during their reign over much of the civilized world. So why did the Romans fall? Much of their failure is due to there failing economy. The Romans made many mistakes but at the same time did make corrections but in the end their efforts were for not. The beginning of the Roman Empire is marked by the appointment of its first emperor Augustus Caesar. Augustus was truly a classical school economist (if there had been a classical school at that time. Augustus first began a currency system moving the people from a barter economy to a more manageable money economy. The Printing of the first coins was done in copper and to give the currency it linked to a commodity. A head of cattle was used as the commodity to give value to the currency and thus the coin resembled the fact. The coin was in the shape of a cowhide complete with four legs protruding from the corners. The Mediteranian had been devastated by years of war and all neighboring economies were weak and combined with the
References: Bailey, M.J. (1956) " The Welfare Cost of Inflationary Finance." Journal of Political Economy 64(2). Bartlett, Bruce (1194)"How Excessive Government Killed Ancient Rome" The CATO Journal 14(2). "A Few Different Economic Systems in History" Retrieved November 26, 2003, from http://myron.sjsu.edu/romeweb/economy/econsys.htm Hopkins, K. (1980)"Taxes and Trade in the Roman Empire (200 B.C.-A.D. 400). "Journal of Roman Studies 70. Thornton, M.K., and Thornton, R.L. (1990)"The Financial Crisis of A.D. 33: A Keynesian Depression?" Journal of Economic History 50(3).