Changes

In the modern world, nation-states, empires, and civilizations are often compared to and judged by the perceived success of Roman culture. There is no doubt that Roman culture was successful and enduring, which has contributed to make Rome the “gold standard” by which most other societies are judged. In terms of longevity, few societies can beat Rome as the Roman Republic began in 509 BC and continued for nearly 500 years before transitioning into the Roman Empire, which saw its last western emperor abdicate his throne in AD 479. Rome is also admired today for its apparent modernity in the ancient world: the Romans brought to the world running water, concrete and a complex system of roads, republican government, and organized sports. Truly, among all the ancient peoples there is no doubt the Romans were the most “modern.” But perhaps just as intriguing as Rome’s longevity and modernity was its collapse.

===Ancient Inflation and A Notable Pre-Roman Example===

The basic concept of inflation was essentially the same in the ancient world as it is today. In the simplest terms, it refers to the rising costs of commodities and the reduced value of the currency. There are many causes of inflation, but the presence of excessive amounts of currency in circulation tends to be the most common catalyst for an inflationary cycle. In modern economies, inflationary cycles often happen when a central bank prints too much money, thereby lowering the value of the currency and raising the prices on commodities. The situation was quite similar in the ancient world, but instead of printing money, kings and other leaders would add impurities to their minted coins. The result was often that not only were there too many coins in circulation, but the ones that were being used were of little value due to their impurities. A situation like this took place in Egypt hundreds of years before the damaging inflationary cycle hit Rome.

Although the Romans kept few records that were directly related to their devaluing of the denarius, the records they did keep, combined with examinations of coins from the period tell the story of a deliberate attempt to stretch the silver they had as far as they could. Similar to the situation in Ptolemaic Egypt, the Romans began adding impurities to their silver coins so that more could be added to circulation. The process had two results: there were too many coins in circulation and the new coins that were being added were comprised more of other metals than silver. It is estimated that the inflation rate reached an astronomical rate of 15,000% between AD 200 and 300! In terms of a tangible example, one Roman pound of gold was valued at 72,000 denarii in AD 301, which would be nearly impossible for any Roman to have that many coins on his or her person. <ref> Malchow and Thiel, p. 23</ref> Finally, the Emperor Diocletian (ruled AD 284-306) realized that drastic measures had to be taken if he were to save the Roman economy and quite possibly Rome itself.

By AD 250, the inflationary cycle had crippled the Roman economy and threatened to bring the entire empire down. Instead of attacking the problem at the source by addressing the currency problem, Diocletian instead decided to enact price controls in 301. The edict only made things worse as it drove consumers to the black market, but the prices continued to soar. <ref> Chadwick, Henry. “Evoi: On Taking Leave of Antiquity.” In <i>The Oxford History of the Roman World.</i> Edited by John Boardman, Jasper Griffin, and Oswyn Murray. (Oxford, Oxford University Press, 2001), p. 451</ref> Suffering from myopia and a lack of understanding of economics, Diocletian’s successors for the most part were also unable to stem the tide of inflation and in fact kept many of his polices, including price controls.