The Roman Empire wasn’t built in a day, so it didn’t fall in one either. As said, the final collapse happened in 476 AD, but the actual fall started far before. The final collapse is not an unambiguous topic with only one correct answer, as Alexander Demandt’s book title says it: “210 Reasons why Rome fell”. However, this essay will examine the following research question: “In what ways and to what effect did the economic factors contribute to the fall of the Roman Empire?” and more specifically, will look into how the Roman state fell fundamentally due to economic deterioration, such as inflation and excessive taxation, which resulted in a decline of the military, and horrible living conditions, which further weakened the once-great empire’s ability to withstand a foreign invasion, culminating in the collapse of Western Rome in 476 AD.
The Roman economy can be described as being simple yet powerful, since it was based on two simple things: agriculture and slavery, and even though it can be considered to be sophisticated to an extent it is important to remember that it was in fact predominantly a subsistence economy. This was a result of the majority of the labor force, almost as high as 80-90 per cent being peasants, who “produced most of what the consumed and consumed most of what they produced”. This self-sufficient production always stood outside of the money economy. Major sources of revenue for the state were taxation and plundering. Taxes were originally collected by tax farming, which was introduced by Gaius Gracchus in 123 BC. It meant that the responsibility of collecting tax revenue was moved from the Roman state to private groups and individuals. However the system was highly abused and thus reformed by Emperor Augustus, and the state turned to direct taxation. Direct taxation continued until a crisis happened in the 3rd century. During the time of crisis, the state had to turn to requisition due to a bad economic situation. The looting, in turn was made possible by the superior Roman military. When new areas were conquered, the valuables would be taken and the strongest individuals would become slaves, ready to serve their new masters. The downside to plundering was, of course, the fact that it ended with the Roman expansion. This meant that a major source of revenue was depleted, but the need for the gold and resources was still there. To fix this, the state often turned to taxation, which quickly became quite oppressive, especially during the period of the later empire. Slavery was undoutebly one of the cornerstones of the empire’s economy. It goes without saying that slaves formed the lowest class of the Roman class society. However they were involved in all branches of society, including domestic life, entertainment, intellectual life, and military, so they were a lot more than just farmers or industrial workers.
Slavery became popular on a nation wide scale, when the Romans experienced vast expansion way back during the beginning of the republican period. This expansion resulted in a prominent increase of wealth within the upper classes of Roman society and hence made the substantial growth in slavery possible. The forced labor never came short in supply for mining, agriculture or construction, but the problems of this reliance, were highlighted when economic problems started to arise. Slavery stigmatized the work ethic and undermined the competitive position of free peasant farmers and artisans, thus preventing the emergence of a large and vigorous middle class, that would be able to create wealth. This lack of middle class affected the tax base, further harming the Roman economy.
Economic problems faced by the empire This section will look into the three major economic shortcomings, that the Empire experienced and played a part in the final collapse of 476 AD. More specifically, it will outline what the actual shortcomings were, how they affected the empire, and how significant they were. 2:1 Debasement of coinage and inflation Inflation as a concept during the ancient times, was very much alike as it is today. It refers to the rising costs of commodities and therefore to the reduced value of the currency. However the main cause for the rampant inflation that occurred in the Roman empire for a long time was the debasement of coinage. In a nutshell, debasement means that the intrinsic value of coins are lowered.
The constant debasements however did not improve the state’s fiscal position. This was because the people would hoard coins with higher silver content, and pay their taxes with the coins that possessed less silver in them, so “the bad money drove out the good.” Consequently, the real revenue may have decreased.
The decline of the silver content of Roman coinage, Haines 1941 Throughout the empire, the traditional units of Roman currency/coinage from least valuable to the highest were the bronze or copper sesterce, the silver denarius and lastly the gold aureus. Out of these three, the denarius was considered the basic coin and unit of account. This was because of the aureus coins didn’t circulate widely due to its value. Therefore the denarius, consisting of silver, was often the target in these debasements.
The debasement of currency dates all the way back to the early days of the Roman Empire. There is evidence, as the figure suggests, of debasement that dates back as far as emperor Nero’s rule that lasted from 54-68 AD, but the real problems started to arise towards the end of Roman expansion. The great expansion of the republic and later of the empire brought the empire huge amounts of loot and wealth, but overtime the costs of the expansion were overtaken by the costs of maintaining what was already in the possession of the romans. This meant that any further conquest or expansion from now had to pay for its upkeep out of its own resources. The fate of the Empire was now dependent on the ability to pay for their armies. Consequently, when these costs exceeded the revenues, the emperors decided to manipulate the currency/coinage rather than attempting to increase the revenues in other ways, but no amount of manipulation could keep up with the expenditure. The less valuable the coins became, the worse the situation was in the empire. As seen in figure 1, the value of the currency got lower and lower, which finally contributed to the crisis in the end of the 3rd century. This being said, the constant debasement of coinage, and the transition from intrinsic money - value was seen good - to a fiduciary one, in which the value was seen as bad, marked the decline of the Roman Empire.
The consequences of the debasement were everything but pleasant for the empire, and as mentioned, it was the cause for the inflation that started to ravage the empire. It was on an extreme level, especially after 337 AD, when Emperor Augustus’ reign ended and he was unable to fix the failing economy of Rome. The inflation kept terrorising the state for nearly 200 more years, and during this time taxes increased severely. Internal problems were compounded by the economic situation, such as the concentration of wealth in fewer and fewer hands, which often led to mob riots. Also this decrease in tax base caused problems for the military. The inflationary cycle harmed the state's ability to pay their armies, since the soldiers refused to be paid in harshly debased currency and the tax collectors also refused to accept it in payments. All of these problems were consequences of debasement, and the inflation which was the main consequence of it. In this context, inflation, that was caused by debasement can be considered to be a long term cause for the collapse. Debasement hit its peak in the middle of the 3rd century, and the coinage was described as being ‘worthless product spewed out by the mints’ because the debasement was carried out to a frenzy.
The inflation that followed, was a factor in the crisis of the 3rd century and it was not able to be stopped, thus also being a credible factor in final collapse in 476. 2:2 Excessive taxation In the Roman system, taxation was always there as one of the main sources of revenue, but it became a cornerstone of the empire, when the expansion of Rome ended. The taxation was never light in the, but it grew heavy during emperor Diocletian’s reign in the 3rd century (284-305 AD) and the burdens were further increased by enormous expenditures in the later years. The main sources for tax revenue varied. In the 1st century, the land tax was the empire, but it became The inflation and the end of expansion led to a breakdown in the financial system, which led the new emperors to make radical reforms. Emperor Diocletian who reigned from 284-305 AD, reformed the taxation system. As a consequence of his reforms, the Romans living in Italy lost their traditional immunity from direct taxation. The new system of taxation was formed focusing on payment in kind - wheat, barley, meat, wine, oil and even clothing - rather than worthless coinage. In order to impose this system, a large ever growing bureaucracy was needed to take care of the land evaluation and arbitrary classification. This necessitated even more taxes. On top of that, internal problems escalated more often, since the Roman rule was never actually popular among the ordinary people, but the system initially brought them benefits such as peace and order, rule of law and freedom. These things changed with the hostile conditions of the 3rd century crisis and the constant harassment by the tax collectors. External problems escalated more often thus making the military demand more payments, which also increased taxes.
Fifty years after Diocletian’s reign, the Roman tax burden had doubled, which hurt the small farmers since it made it almost impossible for them to live on their own production as they were used to in the past, which according to A.H.M Jones was the final nail in the coffin for the Roman economy. The taxes were not only onerous, but new harsh tax avoidance measures were introduced. The farmers and their descendants were quite simply tied to their land, in perpetuity, since they were prevented from abandoning their work by laws; similarly the craftsmen and merchants working in towns and cities (still paid their taxes in gold and silver) were herded into state controlled guilds, to tie them to their occupations and localities forever. Taxes became such a burden, that parents were often forced to sell their children to slavery, in order to raise enough funds to satisfy the taxman. Non payment was punishable by torture, and even burning alive, which shows the extent and the level of taxation in the new system, and it can only be described to be extreme. A Roman historian Lactanticus described the situation as follows: “the resources of the farmers were exhausted by outrageous burdens of all taxes, the fields were abandoned, and the cultivated land reverted to waste.” The state became disrupted by starvation, which led to some of the citizens escaping the empire, and others welcomed the barbarian invasion with open arms. The burden of taxation weakened the military, but as importantly was the factor that affected the lives of ordinary citizens who were not keen on the system in the first place, and in the end, the collapse of the empire was a relief for many.
Agriculture contributed massively to the Roman economy, and it was working efficiently during the republican Rome era. Back then, a jugera, which is about four and a half acres of land was sufficient to support a family, which shows how intensive agriculture was. These fairly small pieces of land were able to supplement the progressive population. The cities were small at the time and reflected the independence of the people from the countryside. The first signs of agricultural decline were seen in 196 BC, which shows how long of a time period the decline took. The main cause for the initial decline in 196 BC was the decision from the leader at the time Scipio to support poor citizens by giving them grain from the granaries. This noble idea backfired when a land reform was introduced by Gracchis. As a consequence, the 7 jugera, that used to be enough was not enough for even the average farmer and a large portion of them were struck by poverty The decline continued, worsening the conditions especially from the second century AD onwards. Many farms were abandoned and the land were focused in the hands of just a few large proprietors. Often the tenants fell into debt, and were just barely better off than slaves. Because of these terrible conditions, many of the farmers escaped to cities. This however was ended by laws that was passed, which bound the farmers into their soil as serfs.
The decline also disturbed the taxation system. Taxation became more oppressive and the methods were aso more extreme as mentioned above, but the shortcomings in agriculture definitely did not make the population more eager to pay them. Even when the crops were bad, the expenses of the government do not diminish. A tax, that might seem alright from a full bin of grain gets immediately oppressive from a bin that is only full halfway. The widespread decline in agriculture, of course alleviated at times also harshened the taxation methods, and both of these problems grew worse and worse, until the state collapsed in 476 AD. 3. Economic factors contributing to the downfall of the military The economic shortcomings mentioned played a crucial role in the fall, no doubt, but they also affected the Roman legions, which will be the main point of the third section. Even with all the causes taken into consideration, Rome still fell to a military invasion, that it was unable to withstand. Some of the reasons for this will be explored in the following section. All the economic problems mentioned above played a role in the decline of the military. The decrease in tax base, which was caused by inflation meant that the financial support for the military was weakened. This was a catastrophe, since almost half of the imperial expenses were used to pay for the military. By the mid-fifth century, the army started to experience harsh defeats, especially in the west where they failed to stop barbarian groups from overtaking lands from the empire. The military was in desperate need of more men, but the funds could not be raised. It is fair to say that in the imperial period, the power and strength of the army was almost directly tied to the tax base The military was also crumbling from inside, because of economic reasons.
Even though the Roman legions are world famous still to this date, the size of the army was quite small compared to the Roman population. Still, what the army lacked in size it made up in training and discipline. This however was shattered when the imperial coffins were drained and the state was forced to hire low-pay soldiers including mercenaries and volunteers. This addition destroyed the discipline that once existed within the ranks, and the once glorious army became barbarized losing its military tactics in the process. This crumbling from within meant that the Roman military wouldn’t be able to fight a constant war on its borders, that it had been doing for ages. The mercenaries played their part in the fall, without a doubt. They were able to join the roman military because of the extent that the empire was taxing their native soldiers. The main problem with the mercenaries was their lack of allegiance to Rome. They only followed their commander because he was the one responsible for paying them. Out of the mercenaries, the barbarian soldiers, known as the foederati gained Roman protection and they eventually made up as high as 80 per cent of the Roman military. The Roman army was thus weakened over time and started losing land first close to the border and later large areas closer to the center of the empire. This deteriorated the already shattered economy, and therefore destroyed the empire’s ability to pay for the foederati. Without the pay, the mercenaries had no reason to fight in the Roman army, which then led to a change in sides. A good example of this was Alaric who was the leader of the visigoths, who were a barbarian group who invaded the empire in the late mid fifth century. Alaric had served in the Roman army so he knew a lot about the defences of the city and the Roman military tactics which helped their victory over the Romans. Eventually, the economic situation got to a level, where the Roman state was unable to pay its armies, which then often turned their swords on Rome itself. This was a sum of centuries worth of bad economic policies. The agricultural decline started way back in the republican era (196 BC).
The deterioration continued, and from the 2nd century AD onwards resulting in many abandoned farms, and the wealth, in the form of land was in the hands of the few, which led to a reduction in the tax base, which harmed the military spending. The debasement policy that caused inflation was the main reason for the bad economic state of Rome, which led to the hiring of countless mercenary soldiers, that had no allegiance to Rome and with the continued economic drought, quickly there was no reason for the mercenaries to fight for Rome. The inflationary cycle also harmed the payments for the military, since soldiers sometimes refused to be paid in the strongly inflated currency. Even though it was the Germanic tribes, such as the Goths and Vandals, who delivered the final death blows to Rome, the invasion however would not have been successful in the years prior to 476, if it wasn’t for the economically drained, and weakened Roman legions. The long term economic shortcomings, which led to a severe short term decline in the army was the reason why the once great and prosperous empire fell. Conclusion In conclusion, The economic factors in the fall and collapse of Rome are significant, and can not be looked over.
The fall of Rome was a gradual process with a catastrophic ending. The long term economic causes, including inflation, excessive and greedy taxation, and agricultural decline all played a role in the demise of the once great empire. These economic problems affected the state’s ability to pay their armies, and keep their citizens satisfied. Eventually, the Roman legions became unorganized and unmotivated, unable to protect the borders of Rome. The ordinary people suffered from starvation and poverty, thus leaving the country or some even welcoming the barbarian invasion. Although the final collapse of the western Roman empire (eastern counterpart continued as the byzantine empire) was an event of great historical significance, being an end of civilisation, for most of the ordinary Roman people, it was a relief.