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August 25, 2009

Inflation and the Fall of the Roman Empire


Joseph Peden's lecture to the Mises Institute Seminar on Money and Government in Houston, Texas on October 27, 1984 makes ancient economics seems all the more topical decades on as we Latter Day Spenglerians contemplate the twilight of the West.

I've been asked to speak on the theme of Roman history, particularly the problem of inflation and its impact. My analysis is based on the premise that monetary policy cannot be studied, or understood, in isolation from the overall policies of the state. Monetary, fiscal, military, political and economic issues are all very much intertwined. And the reason they are all so intertwined is, in part, due to the fact that the state, any state, normally seeks to monopolize the supply of money within its own territory.

Monetary policy therefore always serves, even if it serves badly, the perceived needs of the rulers of the state. If it also happens to enhance the prosperity and progress of the masses of the people, that is a secondary benefit; but its first aim is to serve the needs of the rulers, not the ruled. And this point is central, I believe, to an understanding of the course of monetary policy in the late Roman Empire.

Posted by Ghost of a flea at August 25, 2009 11:48 AM


Interesting. I read somewhere that gold has pretty much held its value against bread (as in 'loaves of') since at least Hammurabi's day.

Posted by: The_Campblog [TypeKey Profile Page] at August 26, 2009 08:57 AM

What a brilliant discussion, thanks for the tip.

It is disturbing to see so many parallels to our modern age and I even noted patterns very reminiscent of things (e.g. corporatism as a means of collectivizing the citizenry in service to the state) Jonah Goldberg presented in Liberal Fascism.

Surprising how little new there is under the sun, and how quickly people are to fall into pitfalls that are (or at least could be) well known.

Posted by: ThomasD [TypeKey Profile Page] at August 28, 2009 12:12 AM