Currency & The Collapse Of The Roman Empire

Tyler Durden's picture

At its peak, the Roman Empire held up to 130 million people over a span of 1.5 million square miles. Rome had conquered much of the known world. The Empire built 50,000 miles of roads, as well as many aqueducts, amphitheatres, and other works that are still in use today. Our alphabet, calendar, languages, literature, and architecture borrow much from the Romans. Even concepts of Roman justice still stand tall, such as being “innocent until proven guilty”. And so, as Visual Capitalist's Jeff Desjardins asks (and answers): How could such a powerful empire collapse?


Courtesy of: The Money Project


The Roman Economy

Trade was vital to Rome. It was trade that allowed a wide variety of goods to be imported into its borders: beef, grains, glassware, iron, lead, leather, marble, olive oil, perfumes, purple dye, silk, silver, spices, timber, tin and wine.

Trade generated vast wealth for the citizens of Rome. However, the city of Rome itself had only 1 million people, and costs kept rising as the empire became larger.

Administrative, logistical, and military costs kept adding up, and the Empire found creative new ways to pay for things.

Along with other factors, this led to hyperinflation, a fractured economy, localization of trade, heavy taxes, and a financial crisis that crippled Rome.

Roman Debasement

The major silver coin used during the first 220 years of the empire was the denarius.

This coin, between the size of a modern nickel and dime, was worth approximately a day’s wages for a skilled laborer or craftsman. During the first days of the Empire, these coins were of high purity, holding about 4.5 grams of pure silver.

However, with a finite supply of silver and gold entering the empire, Roman spending was limited by the amount of denarii that could be minted.

This made financing the pet-projects of emperors challenging. How was the newest war, thermae, palace, or circus to be paid for?

Roman officials found a way to work around this. By decreasing the purity of their coinage, they were able to make more “silver” coins with the same face value. With more coins in circulation, the government could spend more. And so, the content of silver dropped over the years.

By the time of Marcus Aurelius, the denarius was only about 75% silver. Caracalla tried a different method of debasement. He introduced the “double denarius”, which was worth 2x the denarius in face value. However, it had only the weight of 1.5 denarii. By the time of Gallienus, the coins had barely 5% silver. Each coin was a bronze core with a thin coating of silver. The shine quickly wore off to reveal the poor quality underneath.

The Consequences

The real effects of debasement took time to materialize.

Adding more coins of poorer quality into circulation did not help increase prosperity – it just transferred wealth away from the people, and it meant that more coins were needed to pay for goods and services.

At times, there was runaway inflation in the empire. For example, soldiers demanded far higher wages as the quality of coins diminished.

“Nobody should have any money but I, so that I may bestow it upon the soldiers.” – Caracalla, who raised soldiers pay by 50% near 210 AD.

By 265 AD, when there was only 0.5% silver left in a denarius, prices skyrocketed 1,000% across the Roman Empire.
Only barbarian mercenaries were to be paid in gold.

The Effects

With soaring logistical and admin costs and no precious metals left to plunder from enemies, the Romans levied more and more taxes against the people to sustain the Empire.

Hyperinflation, soaring taxes, and worthless money created a trifecta that dissolved much of Rome’s trade.
The economy was paralyzed.

By the end of the 3rd century, any trade that was left was mostly local, using inefficient barter methods instead of any meaningful medium of exchange.

The Collapse

During the crisis of the 3rd century (235-284 A.D), there may have been more than 50 emperors. Most of these were murdered, assassinated, or killed in battle.

The empire was in a free-for-all, and it split into three separate states.

Constant civil wars meant the Empire’s borders were vulnerable. Trade networks were disintegrated and such activities became too dangerous.

Barbarian invasions came in from every direction. Plague was rampant.

And so the Western Roman Empire would cease to exist by 476 A.D.

*  *  *

The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

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HRH Feant's picture
HRH Feant (not verified) Jan 3, 2017 2:49 AM

Indeed. Roman farmers abandoned their farms. Why? When the price you owe to the state, in taxes, exceeds any profits, it no longer becomes profitable, or worthwhile, to farm.

Sad that in 2000 years society has failed to learn the sins of the past.

Diluting the currency is the last great sin. They never learn.

Troy Ounce's picture


Ask yourself. How else can politicians get elected, pay for their promises and sit on the plush for eternity?

Not by working hard, communicate the harsh reality and honesty!.

Answer: we (the electorate) do not want the hear the inconvenient truth. We will go for the reassuring lie.

Have a look at this cartoon. It says it all:

It is not "they" never learn. It is "we" never learn.

Squid-puppets a-go-go's picture

"there's only so much you can fuck with the formation and preservation of capital

before farmers stop making food and meat seeking people descend upon unwitting zoo animals"


oh - and this article might well add - the Eastern Roman Empire (Byzantines) survived another millennium with their more prudent monetary policy.

What led to the Byantium demise?


excessive bureaocracy

Motasaurus's picture

600 years of being besieged by the Muslim hordes probably didn't help either.

fleur de lis's picture

Yes, that was what triggered the Crusades.

The Europeans were forming indiviual languages, cultures, borders, but they were united by a predominantly Christian culture and adapted Roman administration.

The Islamics kept attacking, invading, burning, looting, killing, and taking slaves from European coastal cities for 300 years nonstop.

Having invaded and seized all of the Middle East and North Africa, they inherited all the old Roman urban infrastructure which only needed repair and maintenance.

Trade routes, shipping lanes, roads, ports of call -- all of it waiting to be refitted and made functional again.

But they were too stupid and destructive to notice.

It was easier to trash a functional city for loot and slaves.

Many places they took fell apart and quickly went downmarket and crumbled.

The Europeans had no choice but to organize and fight back.



Motasaurus's picture

Yep. The First Crusade wasn't organised until after the Muslim hordes had burned the Church of the Holy Sepulcre (the most Holy site in all Christendom) to the ground, burn and enslaved the entire Coptic population of North Africa, particularly in Alexandria (the birth place of Christian Theology), Sacked and burned the basillicas on St Peter and St Paul in Rome (The second and third most Holy ssites in all Christendom) and had beseiged Constantinople for 200 years.

northern vigor's picture

Emperors invented the term bread and circus...keep the urbanite Romans fed cheap and entertained with idiotic spectacles. 

Our emperors took B&C to the extreme. 

JohnGaltUk's picture

Our collapse will be text book.

Martin Armstrong has done a lot of research into the Roman Empire.


GreatUncle's picture

It's not if but when ... underenath driven not just by greed but ever more challenging for people through technological efficiency.

Reset is on the way and that's when the chaos begins, 2008 was delayed and as you look into the world now economically nothing is doing well a slow demise.

Trigger point in a persistant decaying system is when the CB's, unable to continue throw in the towel.

northern vigor's picture

Nations fall when lawyers and bureaucrats outnumber farmers.

TruthHunter's picture

This article actually touches on some of the reasons a PM based monetary system

has severe limitations. Notice when he says that the silver would wear off the bronze coins.

Attrition as well as limited sources of new silver meant that economic growth would be artificially constrained.


Also, environmental degradation in Egypt(salt) and North Africa(fine soil erosion) was a major contributor to the decline.

When the Vandals virtually shut down Mediterrean shipping, a weakened Western Empire fell to the Germanic tribes.

The coup de gras was an environmental catastrophe caused by  a super volcano in Central America and/or an asteroid

striking the Gulf of Carpentaria. 

AssN9's picture

The currency system was not inhibited by silver limitation, it had full faith and confidence as a store of value, globally. But they had completely removed it...Inflating living costs and the cost of doing business combined with out of control bureaucracy and unbearable taxation in an attempt to sustain it. Silver was the foundation of every great empire- do the research.

Debugas's picture

the article talks about gold and silver but fails to explain why roman empire collapsed

It was definitely not because of lack of gold or silver mined


High standard of living in the center (metropoly) could only be sustained by constantly draining the wealth from the perifery

Once perifery could no longer provide the metropoly greed collapsed the whole thing

sinbad2's picture

Debasement of the currency, and a lack of countries to pillage.

That is exactly the same issues facing the US. QE is exactly the same as cutting silver coins with lead.

The US is desperate to get into central Asia, because it is the only region not pillaged. 

They con the suckers(I was one of those suckers) with stories about how the target is coming for you, but it's all BS.

All wars are about money, your rulers get rich, from yours and your children's blood.

spanish inquisition's picture

The dollar use to be backed by the full faith and credit of the US government, now maybe down to 5%.

sinbad2's picture

Credit, what credit, the US buys things from China, things that require materials energy and labour, it pays for those things with bits of paper.

Backing the currency would mean that China could acquire American assets with those bits of paper, but the US will not allow China to buy real assets in the US, so the US does not back its currency.

Probably why China keeps swapping US dollars for gold.

kommissar's picture

private individuals are moving their assets (usd) out of china into the usa (and other countries), to buy private land.  i grew up in bellevue, wa, and now most of that city is owned by asians.  chinese parents are buying houses for their children to go to university in the usa.  

that's the back door you're overlooking.

DeeZ_nutZ's picture

somehow fuckers print this article every year (or different versions of this article)  - let me guess - should we all buy silver?  right?  

wrong! this time the trump will fix it all!  he will just tweet the shit out of the enemies (aka sore losers).

FinMin's picture

I don't see how this is shilling silver; but we would all be wise to take the lesson of local autarky in preference to trade and its attendant administrative costs.

Sir SpeaksALot's picture

it cant be fixed. or maybe it can but

it would require the 1% to give their wealth to the poor, and ban the banks and banking system,

replacing it with some other system, similar to blockchain for example.


kev the bev's picture

Perhaps that`s why they may reintroduce PM`s into the currency rather than encourage the populace to go down the bitcoin route if it`s too difficult for them to manage. Could be that PM`s may be a great investment going forward.

Dennisen's picture

"Those who cannot remember the past are condemned to repeat it"

George Santayana

Squid-puppets a-go-go's picture

he came up with that checking the kitchen fruit bowl for the third time looking for his car keys

xzandrax's picture

Fuck the Roman empire. It's economy was based ot slave labor. Even they did invent the steam engine in Alexandria, can't use it because the life was so cheap. Fuck the Roman empire, it was the EU or SSSR of the ancient times, no borders and promises of prosperity but just for the 1%. So fuck the Roman empire and morons that worship it.

Squid-puppets a-go-go's picture

check you out. 1600 years ago, still holding a grudge.

Still, I'm personally a bit miffed about 1066

Motasaurus's picture

Not me. My family held a prominent (2nd or 3rd most powerful) position after helping secure the Norman conquest (we came to Normandy with Rollo, and crossed the channel with William.

I'm still upset by 1485 when the royal branch of my house fought with the losing side in the War of the Roses. Though there was at least one branch of my house on every side of that civil war. My namesake even went into exile with Henry Tudor and served as Kings Guard to him and his son.

But still, we lost our Royal standing over that whole affair.

Ghordius's picture

"Fuck the Roman empire, it was the EU or SSSR of the ancient times, no borders..."

are you claiming that the EU, the USSR and the Roman Empire all lack or lacked borders?

the Roman Empire had huge fortifications at it's borders. stretching from the whole length of the Rhine to the whole lenght of the Danube, including forts in Mesopotamia and two Roman walls between modern England and Scotland. read up on the Roman Limes, read up on Hadrian's Wall

the USSR had the Iron Curtain. specifically, to keep it's citizens inside of it

the EU? it still has national borders. which are open specifically for internal travel among select members of a club that has little to do with the EU, and is called "Schengen Zone"

a club that includes Switzerland, which is not a member, but does not include the UK, which is an exiting member but member nevertheless

Squid-puppets a-go-go's picture

yes Hadrian did come up recently, in some investigation into some 13 yr old boy called Antinous 

CosmicSauce's picture

/whisper "our economy is based on slave labor."


 we're all still living on the plantation. not much has changed. /wool over eyes

kellys_eye's picture

Central Government, over spendng, enforced collaboration, excessive taxation...... of course it would work.  I've heard of this before.  Haven't EU?

Batman11's picture

Look at the money supply leading up to 2008:

Everything is running out of control and the increase in the money supply is going exponential and heading off to infinity.

If we understood money, 2008 wouldn’t have been a “black swan”. We can conclude the FED doesn’t understand money.

Money and debt are opposite sides of the same coin.

If there is no debt there is no money.

Money is created by loans and destroyed by repayments of those loans.

Fisher developed a theory of economic crises after 1929 called debt-deflation, which attributed the crises to the bursting of a credit bubble.

Hyman Minsky came up with “financial instability hypothesis” in 1974 and Steve Keen carries on with this work today.

Steve Keen saw the private debt bubble inflating in 2005. it wasn’t a “black swan” to him.

In 2007 Ben Bernanke could see no problems ahead.

When you see overall debt increasing rapidly a credit bubble is forming, you can then nip it in the bud before the damage gets out of hand. This also can be seen in the nation’s money supply (debt = money).

Get ahead of the FED, understand money.

Squid-puppets a-go-go's picture

Fucking bullshit, Batman11

'If there is no debt there is no money'   

dude, you ever heard of Gold? Silver? Labour? Savings? Capital?

these things are all currency. Debt is a derivative of these things projected from the future. 

Fuck me, have you really bought into the idea that leverage is the only possible economic model?

Batman11's picture

You try buying something in the shops or online without what I call money.

You'll starve to death with your money.

It's how our money works, with your level of ignorance you could become a banker (or central banker) they don't want anyone that knows what they are doing.


bigkahuna's picture

Debt is not the only economic model.

True - probably have issues buying food with real money - but debt based currency always fails

nightwish's picture

The romans sneakily reduced the silver content in coins.

We, however, went straight to paper.

therover's picture

Didn't they try reducing the silver for a bit, in those 1965-1970 Kennedy half dollars ? 

Batman11's picture

Civilisations always fail - humans aren't as clever as they like to think.

Western investors and companies looked for the best returns and invested in the East.

The West is now worried about a powerful China that the West created.

To err is human but do we really need to excel in it?




Squid-puppets a-go-go's picture

omg, you really have bought into the idea

Batman11's picture

Twelve people were officially recognised by Bezemer in 2009 as having seen 2008 coming, announcing it publicly beforehand and having good reasoning behind their predictions.

Steve Keen is one of those experts who is on record as having seen the private debt bubble inflating in 2005.

They all think the problem is debt and the drag on the global economy caused by unproductive lending into things like real estate. Productive lending into the real economy generates real wealth to pay back the debt but in countries like the US and UK 80% of lending goes into real estate.

The Central Bankers are trying to use more debt to get out of a debt crisis; they don’t understand money or debt.

Bankers don’t understand money and debt either and just don’t lend into the real economy to generate the money to pay back the debt.

It’s hard to believe debt has been around for 5,000 years and we are as clueless today as we’ve always been.

In the past they acknowledged their ignorance and had jubilee years every seven years to write off all debt and keep things running nicely.

Sandmann's picture

DEBT is when Government spends more than it TAXES. The result is IOUs building up in the banking system as Tier 1 Capital backing Credit Expansion.

If US Taxpayers in 1960s had paid TAXES to cover spending on Vietnam and Great Society DEBT would not have expanded

Kaervek's picture

Central bankers know all too well, but they do it anyway

Sandmann's picture

You should look at the asymptotic expansion of DEBT after 1964 which basically blew apart Bretton Woods.......just how did the USA fund Great Society and Vietnam War ?

Kaeako's picture

Rome was doomed by whoever first decided to use the legions to secure political power. Breaking a sacred rule, leading to a cycle of centuries of civil war, culminating in the Praetorian guard auctioning the highest office to the highest bidder while completely displacing the old senatorial bloodlines(the actual Romans) from power... How about the ever-expanding bureaucracy, from the few hundred state bureacrats during the golden age of the first century to a 100 times that during the 3rd century. The "empire" was an unimaginable shit-show doomed from the start.

Ghordius's picture

the collapse. "During the crisis of the 3rd century (235-284 A.D), there may have been more than 50 emperors. Most of these were murdered, assassinated, or killed in battle. The empire was in a free-for-all, and it split into three separate states. Constant civil wars meant the Empire’s borders were vulnerable. Trade networks were disintegrated and such activities became too dangerous.. Barbarian invasions came in from every direction. Plague was rampant. And so the Western Roman Empire would cease to exist by 476 A.D. "

things left out from a perspective of people still living in what used to be the Roman Empire, besides the fact that the monetary perspective is only touched lightly, here:

- it took two hundreds years to expand, and some 800 years to go down. total: 1'000 years, roughly

- the Eastern Roman Empire went on for further 1'000 years, until the AD 1590s

- it was reborn on Christmas of AD 800, as Holy Roman Empire, with Charlemain being crowned in Rome by the pope. that second empire went on until 1806. the second 1'000 years spell

- Napoleon tried to recreate it, on a revolutionary and hegemonistic basis, centered on Paris. the net result was a legal order (that was revamped on the basis of the original Roman Law system) that still persists

- Hitler specifically tried to recreate it too, with lots of emphasis on another 1'000 years. his hegemonistic approach centered on Berlin failed, too

now, what we do see in the same area? the EU. based on nation states acting as peers, and sharing common concerns. that's sovereignty coupled with team spirit. that's Berlin, Paris and Rome cooperating, and sharing common concerns with a dozen other national capitals. or not, note. depending on the concern

funnily, the loudest outer opinion on the thing is that it has to fail. it just has, note

that same opinion somehow forgets that if the EU fails... a new attempt might follow again. and again. and again

the EU is the third Roman empire, specifically version 3.03

Russia... offers the EurAsian Union option. call that the beta version of 3.04(ru), of course under a hegemonistic leadership based on Moscow

meanwhile, we might even spend another 1'000 years with that 3.03. zip forward to the year 3017, we might still find articles from outside claiming that it has to go down, soon

meanwhile, the center-right of the thing is still kept hidden by the media outside it. they still refuse to consider it conservative, they still refuse to see the Christian core, because it does not suit those external narratives, and it could give snowflakes... ideas, or make them question those very narratives

narratives like one world empire, one global system, one hegemon

narratives still beholden to the recent past of peak American dominance, of peak unipolarity

narratives that fail to explain the recent alignmnents between Russia, Turkey, Iran and China

narratives that fail to explain the recent wars in Iraq/Syria/Afghanistan

narratives that fail to explain why China is setting itself up as the new champion of free trade... while being a communist state under the leadership on one party

narratives that fail to explain that the former British Commonwealth is looking for a new deal, a new system to Rule the Waves, to have another Oceanic Trade Empire

narratives that would love France, Italy and Germany to end their cooperation (yes, that's the core of the EU. three countries that make up half of the thing, in terms of population and industry)

narratives that, at the end, are partisan... for external forces and centers. Like Washington, Bejing, Moscow, but also London

yes, let's talk about the Roman empire from the perspective of how often it comes back, and how often the target comeback is another 1'000 years, and how often that target was met... or attempted again