Printing more fiat is the equivalent to debasing a currency
Debasement and the decline of Rome Kevin Butcher1 On April 23, 1919, the LondonDaily Chroniclecarried an article that claimed to contain notes of an interview with Lenin, conveyed by an anonymous visitor to Moscow.2this explained how ‘the high priest of Bolshevism’ had a plan ‘for the annihilation of the power of money in this world.’ the plan was presented in a collection of quotations allegedly from Lenin’s own mouth: “hundreds of thousands of rouble notes are being issued daily by our treasury.this is done, not in order to fill the coffers of the State with practically worthless paper, but with the deliberate intention of destroying the value of money as a means of payment ...the simplest way to exterminate the very spirit of capitalism is therefore to flood the country with notes of a high face-value without financial guarantees of any sort. Already the hundred-rouble note is almost valueless in Russia. Soon even the simplest peasant will realise that it is only a scrap of paper ... and the great illusion of the value and power of money, on which the capitalist state is based, will have been destroyed.this is the real reason why our presses are printing rouble bills day and night, without rest.” Whether Lenin really uttered these words is uncertain.3What seems certain, however, is that the real reason therussian presses were printing money was not to destroy the very concept of money. It was to finance their war against their political opponents. The reality was that the Bolsheviks had carelessly created the conditions for hyperinflation. The ‘plan’ to destroy money in order to bring about a moneyless society was rationalised after the fact.4 Russia was not alone in recklessly pursuing an inflationary policy at the time. In the same article, Lenin allegedly applauded the actions of European states, and ‘the frantic financial debauch in which all governments have indulged’, which would hasten the fall of the capitalist system. However, their actions were short-sighted attempts to overcome fiscal deficits, not part of a master plan to put an end to the money economy.nevertheless, the interview concluded, the result would be the same. Money would lose its value and the existing society would be undermined. how are these observations relevant to the theme ofroman debasement and imperial decline? Like the Bolsheviks, theromans stand accused of destroying the power of their own money by recklessly issuing worthless currency to cover state debts.no one, of course, has attempted to claim that what theromans did was in any way a deliberate plan.indeed, it is generally thought that those 1it is a great pleasure to be able to offer this essay to Andrew Burnett, who was there at the very beginning of my academic career. Because of our shared interest inroman provincial coinage, in 1984richardreece invited Andrew to act as joint supervisor for my PhD on Syrian coinage at the London institute of Archaeology.in that capacity Andrew provided support and encouragement that extended well beyond the narrow horizon of the doctorate; and it is difficult to find a way to express sufficient gratitude. He has continued to extend that kindness to this day.this essay is not about provincials, but another subject thatiknow is one of Andrew’s interests: the history of numismatics as a discipline.he already knows my thoughts on some of the questions posed here, butioffer this piece in the hope that he will find something interesting (and credible!) in the argument. 2the following quotations, with a discussion of their veracity, are to be found in White and Schuler 2009. 3While the ‘plan’ was certainly voiced bycommissariat of Finance, Lenin seems to have been opposed to the policy, preferring to retain money: ‘Since the spring of 1921 ... we have been adopting ... a reformist type of method: not tobreak upthe old social economic system—trade, petty production, petty proprietorship, capitalism—but torevivetrade, petty proprietorship, capitalism, while cautiously and gradually getting the upper hand over them, or making it possible to subject them to state regulationonly to the extentthat they revive’ (Lenin 1965: 109-116). See Arnold 1937: 107. 4White and Schuler 2009: 217.
managing theroman currency had no grasp of anything that we might regard as monetary policy.5in their wide-ranging survey of the Roman Empire, Peter Garnsey and Richard Saller endorse the notion that ‘regular monetary policy’ was rudimentary or non-existent, and that the state was interested only in short-term fixes engendered by debasement of the coinage, without any understanding of consequences.6the standard account ofroman imperial coinage is a story of decline due to poor management and the underlying bankruptcy of theromanempire, even at its height.7 that story is familiar enough.rome’s expansion under therepublic had brought booty and wealth, but eventually costs of expansion were overtaken by costs of maintaining what was already possessed; and little or no further expansion and conquest under the emperors meant that henceforth theromanempire had to pay for its upkeep out of its own resources.8The State’s survival came to depend on its ability to pay for its armies.9When these costs exceeded revenues, emperors manipulated the coinage rather than attempting to raise revenues by other means, but no amount of manipulation could keep up with expenditure.10the decline ofrome was marked by repeated debasements of the coinage, and the transition from an intrinsic money to a fiduciary one. In this model, coinage with intrinsic value is seen as ‘good’ money, and fiduciary coinage is ‘bad’. The tipping point came after the middle of the third century when, like the roubles of the Bolsheviks, the currency of imperialrome became a ‘worthless product spewed out by the mints’; there were ‘floods of debased coins’, every one of which was a ‘botched, anomalous, trashy bit of metal’. Debasement had been ‘carried to the point of frenzy’.11in the end, it could proceed no further and the ‘great, wretched piles of shoddy change’became valueless even to the state.12A command economy employing taxation in kind replaced the old system of money taxes, and society was reorganised under closer government supervision in order to ensure the state’s survival;13a transition famously characterised by Michaelrostovtzeff as nothing less than the destruction ofroman capitalism: When the safety of the State ... appeared incompatible with the liberal economic system, the latter was gradually discarded, and eventually replaced by a system which was a blend of Orientalétatismand city- state “socialism”.14 Chester G Starr expressed the significance of the transition even more starkly, and as recently as 1982: ‘to modern man, the corrupt, brutal regimentation of the Laterempire appears as a horrible example of the victory of the state over the individual’.15As Lenin had supposedly forecast foreurope, so it had been with ancientrome: a liberal society had been undermined by a worthless currency, and new order had arisen from its ruins. Kevin Butcher 5Crawford 1970; Jones 1974: 74. 6Garnsey and Saller 1987: 21. The state’s complete inability to cope with inflation is imagined in the lively metaphor employed by MacMullen (1976: 116): ‘Government ... reacted like a frightened child at the controls of a runaway express train, pushing all sorts of levers and knobs.’ 7Mattingly 1927: 125, 126, 192. 8Jones 1974: 124; Hopkins 1978; Tainter 1988: 129, 134, 188. 9rostovtzeff 1926: 413. 10Walker 1978: 106-148; Tainter 1988: 188; Corbier 2005a: 390. 11MacMullen 1976: 109; 113; 125. 12MacMullen 1976: 117; Tainter 1988: 139. 13Rostovtzeff 1926: 464; Callu 1969: 482-3; Jones 1974: 139, 168, 198; Crawford 1975: 570-1; Tainter 1988: 141; Heather 2005: 65. For a critique, see Corbier 2005a: 381-3. More generally, it has been seen, rightly or wrongly, as marking the shift from a monetised economy to a ‘natural economy’: see comments in Corbier 2005a: 329. 14Forrostovtzeff’s view of ‘capitalism’ characterising ancientromeandits‘liberaleconomicsystem’,see Rostovteff 1929/30: 206-8 (though he did not deal with the decline of the coinage in this article). On his views, see Rebenich 2008: 47; Ward-Perkins 2008: 194. On his treatment of the Laterempire as an inferior age characterized by the rise of the masses, see Cameron 2008: 236. 15Starr 1982: 165; a process stretching back to the beginning of the third century, according to Paul Petit, who saw ‘un régime de totalitarisme naissant’ in the economy of the Severan period (1974: 73). 182
Starr’s opinions might seem quaint or even rather comical now, and estimations as to the scale of the crisis, and whether the third century should be considered a crisis at all, may have moved on a great deal since Rostovtzeff and even since Starr wrote, as has thinking about the nature of theroman economy; but the crisis or ‘collapse’ of the coinage persists in a form more or less as it was fashioned in the nineteenth and early twentieth centuries.16On this point modern and earlier scholarship remains more or less in agreement.this legacy is not without interest, because I think it illustrates how the influence of events in the nineteenth and twentieth centuries shaped contemporary ideas about the ancient monetary economy, and how certain ideas about the nature of money have fashioned our perception ofroman currency. the process by which scholarship developed a story of the ‘decline’ and ‘collapse’ of the roman imperial coinage is the central theme of this essay.it does not seek to provide new solutions to problems.instead it aims to supply the background to features that have gained widespread acceptance: that debasement of the denarius caused inflation in the first half of the third century; that the ‘radiate’ or ‘antoninianus’ introduced bycaracalla in AD 215 was a double denarius and therefore a major debasement; and that a vast increase in the supply of coinage caused catastrophic hyperinflation in the mid third century. Admittedly what is presented here is no more than a very rough sketch of a topic that would otherwise require much more space in order to do it justice, and a longer description would take fuller account of changes to the coinage during the first and second centuries; but, seeing that the third century is central to the story,iintend to focus on that period, and specifically the years between Caracalla’s introduction of the ‘antoninianus’17in AD 215 and what is generally seen as the nadir of that denominationc. AD 270. no modern account of the third century, be it a ‘crisis’ or a ‘transition to late antiquity’, can avoid mention of the notion that there was financial and monetary chaos and economic dislocation in this period.it has become symbolic of change.18though scholars of late antiquity have sought to bury the concept of a general crisis, the causes that transformed the empire of Augustus into the empire of Diocletian are still debated as if the outcome would have been more agreeable had the state been blessed with more competent managers.19Even today, the period from 200 BC to AD 200 is treated as the period when the Roman economy was at its most ‘modern’; the third century is seen as a retreat from this.20the spirit ofrostovtzeff still has resonance. it might be objected that the scholarly perspectives presented here have been superseded. the notion that coinage was solely a tool of the state, used to make state payments, has been challenged,21as has the belief that all money consisted of coins and that the quantity of money was constrained by the supply of metals,22and likewise the notion that all debasements were fiscal and designed to cover shortfalls in revenue;23but one important harbinger of the ‘old’ views remains generally accepted: that the antoninianus was an inflationary, overvalued coin that DEBASEMEnTAnDTHEDECLInEOFROME 16to claim that there is absolute consensus on this would be disingenuous; see, for example, Depeyrot 1988;rathbone 1996; and Bland 2012 (emphasising a greater degree of monetization in this period). 17in this essayihave preferred the term ‘antoninianus’ to describe this coin, which many numismatists now prefer to call the ‘radiate’, in acknowledgement of the role of Mommsen, who first used the term, and who was also responsible for the claim that it was an inflationary coin (below). 18‘Inflation and debasement of metal content are familiar ingredients of the Crisis’ (Swain 2004: 3). On its centrality, see Alföldi 1938: 15-16; Potter 1990: 32-4; Duncan-Jones 2004: 43. 19Bowersock 1996: 36. 20note, for example, the debate over growth in theroman economy up to the third century (Hopkins 2002, Hitchner 2005), and that one of the causes of the apparent decline in the activities of bankers (a key feature of the early empire’s ‘modernity’) is attributed to the third century decline in the quality of the coinage and a rise in prices (Andreau 1999: 32). 21De Cecco 1985; Howgego 1990. 22Coins only: Jones 1974: 188; Tainter 1988: 133. Recent studies have emphasised the role of credit in expanding the money supply: Harris 2008; Hollander 2007. 23Locascio 1
