CfAR (March 2015)
by Philip Kay
OUP (2014) h/b 384pp £80 (ISBN 9780199681549)
The ‘Oxford Studies on the Roman Economy’ series has already produced some first-rate volumes, Miko Florh’s The World of the Fullo and Annalisa Marzano’s Harvesting the Sea among them, and here is another. It is highly technical, grappling with very contentious problems arising from the meagre data available over the period in question from c. 200-50 BC, i.e. the second Punic War to the virtual demise of the Republic. But the speculative conclusion—that the Roman economy between 150-50 BC expanded by the real (i.e. inflation-adjusted), per capita average annual compound growth of 0.54%—is indeed a striking one, suggesting a revolution undreamt of in e.g. Moses Finley’s influential view of a ‘primitive’ ancient economy (compare also the review of Acton’s Poesis above).
Roman expansion across Italy from the 5th C BC saw enough of a rise in wealth for it to be able to start building e.g. roads and aqueducts. This was wiped out by the two Punic Wars against Carthage (over Sicily 264-212 BC and against Hannibal 218-202 BC); but there was still private money in the system since the Roman rich, to a large extent, bailed out Rome when the going got tough.
But the eventual conquest of Carthage and the provincialisation of Spain (with its fabulous silver mines), Greece and much of the Near East (the last two partly as a result of taking revenge on Hannibal’s supporters) saw great tsunamis of bullion rolling into Roman coffers in the 2nd C BC: booty, war indemnities and taxes. Roman income from 300-200 BC was about 5,000 talents; from 200-150 BC it was 45,000 talents, indemnities making up 27,280 talents of that amount. Over the next 50 years income from the mines came on-stream and more taxes from further provincialisation.
Surprisingly, this perhaps 10-fold increase in money supply from 150-50 BC generated only modest inflation, K. calculates: a compound rate of perhaps 0.67% per annnum over this period. This is even more surprising because K. argues that banks were also going strong in the 2nd C BC, lending out money, expanding money supply and so creating demand. The result was a huge expansion in building projects—buildings, roads and aqueducts—but even more on the military, making warfare self-perpetuating. Unlike today, war was seriously good business. When C. Gracchus in the 120s BC handed over tax-raising in Asia to the publicani, demanding up-front the total expected revenues from that source for five years (!), K. argues that this was the first attempt to produce a stable state budget for growth. Inevitably those involved in this expansion at home and abroad became very wealthy indeed, as the growth in e.g. specialised, investment farming, the wine trade, slaves and luxury goods indicates. Presumably it was the enormous general growth in economic activity that kept a lid on inflation.
K also sees a major change in the 1st C BC—the disappearance of bankers from our sources. Their function was taken over by seriously wealthy aristocrats, lending and borrowing among themselves to fund their own pet projects, especially their own private armies with which they attempted to win power by force, reducing the Republic to ashes in the process.
This is the briefest possible sketch of K.’s superbly marshalled, but as he emphasises conjectural, conclusions, which draw some confirmation from parallel developments in Europe in the 13th and 16th C AD when expanding money supply brought similar increased economic activity. It will create a great deal of further interest and even more argument.