The largest and most imperative of the Roman government’s financial tasks was to meet the costs of this expanding army on which everything depended.
Under Augustus, the pay of a legionary soldier had amounted to 225 silver coins (denarii) each year. At the end of the first century AD Domitian had brought this figure up to 300. Septimius raised it again to 500,1 and increased the pay of his reconstituted praetorian guard from 1,250 denarii to 1,700. His son Caracalla introduced a further 50% pay rise, amounting to an annual charge on the exchequer of about seventy million denarii. Caracalla is reported to have said, ‘No one but myself ought to have money, and I must have it to give to the soldiers.’2 Yet the increases in army pay which resulted from this policy, comprising a five-fold multiplication of the expenditure of Augustus, must be related not only to the greater size of the army but to the rise in the cost of living that had occurred during the same two centuries on a scale at least as large as the augmentation of pay, and perhaps a good deal larger. That is to say, the soldiers of the second century AD, before the pay rises of Septimius and Caracalla, had been poorly remunerated. This had been convenient for the government, which, except in emergencies, was able to afford its army. But it imposed a strain upon military loyalty and efficiency, and during the crises that followed, emperors felt that they could not take such risks.
However, their efforts to satisfy the troops by increases in wages rapidly became useless and irrelevant. For all this pay became little more than incidental pocket-money, owing to the total depreciation of the currency.
The empire had inherited from Augustus a magnificent coinage of a range never seen before. This included a gold piece (aureus) and the related silver denarius, both of which possessed a precious metal content worth as much, or very nearly as much, as the official valuations attached to the coins. The ancient public was convinced that the market value of a coin depended on the amount and worth of the metal it contained. Like people in our own century who were angry when first given bank-notes in exchange for their money, Romans and Greeks did not understand the token principle. In its issues of gold and silver, Rome had long paid deference to this attitude. With regard to base metal coinages, on the other hand, the government of the Republic had little by little induced the population to accept bronze small change which bore a token valuation exceeding the purchase price of its metal. When, however, that disparity between intrinsic and official worth became too glaringly noticeable, the Republican authorities had been obliged to discontinue even these bronze coinages, although many towns of the empire were allowed to maintain the lucrative issue of similar local token pieces on their own initiative. But then Augustus succeeded in reviving an official token currency of the Roman state. He did this by abandoning the discredited bronze in favour of two more attractive looking substances, yellow brass and red copper. Greatly overpriced, with a large margin of profit to the emperors, coinages in these metals soon circulated throughout Italy and all the western provinces.
Yet people throughout the empire remained unable to accept the notion of gold and silver coinages with a bullion content falling below their official valuation. Nevertheless, emperors soon began to infringe on this requirement in two ways. First, they made the coins in each metal lighter; and secondly, they adulterated the silver. These were both, in effect, disguised capital levies upon those who received the coinage. The former course could not be adopted very drastically since it was detectable, but debasement of the silver seemed an attractive solution. However, it raised a hazardous problem of confidence. For the debasement of denarii was resorted to in order that larger numbers should be issued; and the imperial administration was not aware – or, concentrating on current emergencies, did not care – that, if the quantity of coins was multiplied without a corresponding increase in the goods on the market, this would intensify the already existing tendency for prices to rise and the general standard of living to fall. In such circumstances it was inevitable that old, good coins would be hoarded, and the inferior new ones retariffed downwards – a process penalising people with fixed cash incomes who had accepted the new pieces before retariffing, and inflicting losses on those who had lent large sums for fixed repayments.
And so the Roman government gradually moved into the danger area. It was tempting to issue debased silver coins which looked decent to begin with; it was also irresistibly tempting to multiply their numbers. When Trajan issued abundant denarii which were worth 85% of their face value, irrevocable damage had perhaps not yet been done.3 But other slow encroachments followed, and amid wars, earthquakes and plagues, the ethical code of Marcus Aurelius did not prevent his officials from depreciating the silver coinage by a further six per cent. By now the intrinsic value of thedenarii was only three-quarters of its official value; and the situation soon grew worse when Septimius, needing more coins amid the stresses of civil war, again sharply debased the denarius (194–5) so that its contents now fell short of official valuation by 40%.
This debasement had become too visible, and the issues too large, for public confidence to be retained, and the consequences now became apparent.4 An imperial decree found at Mylasa (Milâs) in Asia Minor indicates that illicit exchange-rates were flourishing, and forbids them on the ground that this wild speculation made it impossible for the citizens to secure the necessities of life (209–11).5 However, almost immediately afterwards, Caracalla was impelled by his heavy military expenditure to issue an abundant silver coinage which was not only debased but of light weight also, this lightness being concealed by the issue of a new and larger denomination (named antoninianus after the emperor’s official name). Its size and handsome appearance were meant to distract attention from the fact that its official value of two denarii6 could not by any means be merited by weight. Meanwhile at Ephesus (Selçuk) the price of a loaf of bread had doubled in the course of a hundred years; and probably the pattern was universal. But the government’s preoccupations were too pressing for these warning signs to be noted. Although it continued to protest its concern for the quality of the money,7 the multiplication of ever more debased coins continued and gathered pace, until Gallienus, needing an immense number of coins to pay the army and unable to afford (or even find) the silver to put in them, issued antoniniani made almost entirely of bronze, with a thin surface coating of silver-wash. The real value of these antoniniani had sunk to 0.5% of their pre-inflation worth. The commercial world, throughout the empire, rejected this currency; the psychological basis for any confidence at all had vanished. A papyrus tells us the sort of thing that happened. Faced, two years later, with a temporary ruler’s coinage of this same depreciated character, Egyptian banks refused to accept it and closed their doors. They were ordered to open again, and told to ‘accept and exchange all coin except the absolutely spurious and counterfeit;’8 but such injunctions were useless when the basis for voluntary acceptance had vanished. And meanwhile the gold coinage, formerly so stable, was providing no sort of a prop, and indeed, except as gifts for distribution to the army (p. 49), had almost ceased to exist. Because of the exhaustion and insecurity of the mines, it was inadequate in quantity, and its standard was so variable that the coins seem to have been bought and sold according to weight. Moreover, even this only happened rarely because the inflation of base silver money sent almost every aureus out of the market into hoarders’ chests.
The new achievements of portrait sculpture
1 Marcus Aurelius as priest: the philosopher king, responsible and resigned
2 A youth of the later years of the second century
3 A young man: perhaps belonging to one of the many races of the empire that were neither Greek nor Italian
4 Agmat, daughter of Hagago, shortly before 200. In the special style of Palmyra, meeting place of the eastern and Mediterranean worlds
5 An African
6 Bronze head of Septimius Severus, who modelled his official appearance on Aurelius but set the empire on a new and grimmer course
7 Probably Clodius Albinus, a north African like Septimius who overcame him. The exalted upward gaze goes badly with his coarse features
8 The new sort of spiritual interpretation: a sensitive study of an imperial woman, probably Septimius’ wife Julia Domna
9 Sophistication in the early third century: another of the Syrian beauties of the Severan court
10 Julia Mamaea, the Syrian who ruled for her son Severus Alexander (222–35)
11 The formidable Thracian giant Maximinus I inspired sculptors to dp work of great expressiveness
12 The tormented features of Philip the Arabian (244–9) are rendered with uncanny insight
13 Probably Herennius Etruscus, killed by the Goths in the Dobrogea with his father Decius
14 & 15 Trebonianus Gallus. Such are the soldier emperors who battled against encroaching disintegration
16 Probably Gallus again: an Etruscan who reigned for two brief and nasty years (251–3) before the recovery started
17 A brief return to the Hellenic spirit. Gallienus (253–68), who began to restore a collapsing world, and liked philosophers
18 A cryptic, complex personality of the stressful age of Gallienus
19 Probably Claudius II Gothicus (268–70). From Aquileia in vital north Italy, where individual artistic schools flourished
20 Intense other-worldly strivings were making both religion and philosophy popular. A ‘soul-portrait’ from Asia Minor, c. 280
21 A priest and sage, from the important, long-lived school of sculptors at Aphrodisias (Kehre)
22 Portraits now show a subtle, piquant tension between the old individualism and the supra-personal abstractions that were to come. Perhaps Numerian (282–3)
23 The huge, grave eyes of Numerian’s brother Carinus regard another world, but the curly beard and sensual expression echo Hellenism
24 Classical modelling is now abolished in favour of the drill, and detail subordinated to broad geometric effects. C. 275–85
25 An Ostian who looks weary of his world and its multitudinous, fantastic creeds
26 A late example in the wonderful series of Roman portraits of old women. From Tripoli in Libya, near the end of the third century
27 Under Diocletian (284–305) the Roman world is ruled by four oppressive autocrats, whose outward harmony concealed grave strains
28 Diocletian and Maximian, or their successors. The nightmarish pseudo-naivete of this type of late Roman art has left classicism far behind
The collapse of the silver coinage produced catastrophic effects during the decades following the death of Gallienus. In Egypt, for instance, papyri tell us that 30 litres of wheat cost seven-eighths of the Greek currency unit (drachma) during the second century; from twelve to twenty drachmasin the first half of the third century; and by the time of Diocletian the figure was as high as 120,000. Between the years 258 and 275, prices in many or most parts of the empire are likely to have risen by nearly 1,000%. The result was untold misery. In particular, the wages and salaries of soldiers and other state employees were virtually eliminated.
Aurelian tried to deal with this situation by a monetary reform. But, like Caracalla’s, it was only another debasement, in what was intended to be an attractive disguise. For Aurelian, too, coined a new piece containing no more than 5% of silver but possessing reassuringly increased dimensions designed to soften the shock of its over-high official valuation, which was probably as high as five denarii.9 Aurelian also tried to enforce acceptance of his new currency, and write off the past, by calling in old and better coins. The rates which he paid for these demonetised issues proved unsatisfactory to their owners who, instead of handing them over to the government, buried immense quantities away. Aurelian’s measures no doubt caused panic and hardship. But as a temporary palliative to galloping inflation they had some success, for prices seem to have remained reasonably steady for nearly twenty years.
Then, however, came a new spiral of inflation, and many of the steepest price increases of the whole half-century occurred between 290 and 300. Aurelian had not been able to revive a silver coinage, and the loss of Dacia’s mines had meant that he could coin very little gold. But Diocletian made a determined endeavour to issue a stable coinage in all three metals of gold, silver and silvered bronze (c. 294/5). In the last named alloy he produced larger and more generously silvered pieces than had appeared for years. These bore the same value marks, indicating five denarii, as had been seen on Aurelian’s coins of half the size. This unusual idea of diminishing by 50% the official values of his coins was a measure of deflation by which Diocletian hoped to bring down prices and stabilise them at a lower level. But the public instead hastened to turn this new currency into goods (which it was able to obtain at favourable rates) with the result that prices rose more sharply than ever. Nor was Diocletian’s precious metal currency of much assistance. It is true that this included gold coinages (c.AD 286) of an exact standard such as had not been known in recent times and of a higher weight than before, as well as silver issues (c. 294) which, even if still rated above their intrinsic worth, were the best that had been minted officially for over a century.10 Yet the gold and silver coins were not numerous enough to stabilise the situation. Although a tax on land had to be paid in these metals and cities were compelled to sell him bullion, Diocletian’s stocks were still not sufficiently large for the issues to attain substantial dimensions.11 The result was that they soon came to be virtually demonetised like their predecessors, changing hands at high artificial rates. Accordingly, they did nothing to stop the rise of prices, which continued with an ever-increasing momentum.
In 301–2 Diocletian made a further vigorous endeavour to check this avalanche. He now issued an edict fixing maximum prices for all goods and maximum wages for all workers, throughout the whole of the Roman empire.12 This anticipation of modern Prices and Incomes Policies was based on the supposition that the increase of prices had been the fault not of the currency but of avarice among the combines and cartels of wicked profiteers. ‘The monstrous prices that human speech is incapable of describing’, complained the rulers, ‘mean that in a single purchase a soldier is deprived of his bonus and salary, and that the contributions of the whole world to support the armies fall to the abominable profit of thieves.’ The government’s overriding concern for the soldiery is apparent. Inflation or deflation being equally disastrous means of providing the army with its needs, it seemed that the only chance was to maintain stationary price levels; and these were enforced under threat of execution. The new rates were all quoted in terms of Diocletian’s reformed currency. Ceilings were fixed for over 900 commodities, ranging from pork sausages at 2 denarii a pound to cloaks of 1,500–10,000 denarii each. In the fragments that have come down to us, 41 maximum freight charges are recorded, and the salaries of 130 grades of labour. This edict, the most valuable document of all ancient economics, declares the official death of the world of free exchange and uncontrolled laissez-faire economic activity, and does so with an elaboration which was not seen again for another sixteen hundred years. And yet, even if it played a part in restoring a money economy (p. 54), the edict was a failure in its main task of limiting prices, because the authorities neither owned nor controlled the means of production and consumption, and proved unable to enforce the acceptance of their orders. The result was that goods disappeared from the market13; and inflation resumed its inexorable course. Diocletian’s edict, accepting the spiral of recent years, had equated a pound of gold with no less than 50,000 denarii.14 Yet in less than a decade after the edict the figure was already up to 120,000 or above, and by AD 324 it had risen to more than 300,000.15 To base a price and wage structure on so rapidly depreciating a currency was hopeless, and Diocletian’s novel attempt to create this structure on a comprehensive basis had failed.
Meanwhile, throughout all these years, the collapsing currency had been quite insufficient to meet the most urgent need of all, the payment and satisfaction of the soldiers. However much their regular pay was increased (p. 44), the low value of money still meant that it remained an inadequate pittance. Accordingly the emperors used two methods to supplement these annual sums.
First, it had long been customary to augment the pay of praetorians and legionaries by donatives. Originally shares of war-spoils, these were money gifts or bonuses handed over by emperors or left in their wills, in order to commemorate joyful events or anniversaries. In particular, each new imperial accession was the occasion of a donative. In the military crises of the second century these payments increased in size and frequency; and whereas donatives in the middle of reigns might make use of the contemporary debased coinage which was also employed for army pay, bonuses celebrating imperial accessions had to be paid in good, undebased gold coin.
Two transient emperors of the Civil War period after the murder of Commodus largely owed their downfall to refusal or inability to honour fully the promises regarding donatives that they had made at their accessions.16 The lesson was learnt by Septimius, who increased these gifts to such an extent that they henceforward became a systematic purchase of military fidelity, glossed over by anniversary ceremonials intended to stimulate religious and patriotic emotions. At an earlier date the praetorian guardsmen had received a good deal more money than the legionaries on these occasions,17 but now, as the legions became the most significant element in the political scene, their donatives caught up with those of the guard. In a mutiny after the death of Gallienus, the soldiers were given twenty gold coins (aurei) apiece,18 and the substantial gold medallions of the day often found their way into officers’ hands.
During the civil wars after Diocletian’s abdication, as on many other occasions, these donatives were a decisive military and political factor. Their multiplication by the emperors over the years indicated that the army had become predominant in the state, and that it had to be bound to themselves by personal links of gratitude. And yet, even though these donatives were no luxury but a necessity, the propaganda on the Roman government’s coins, while loudly taking credit for every other kind of imperial generosity including free distributions to civilians, remained silent concerning these donatives for century after century. They were presumably regarded as nothing to boast about, because soldiers ought to have retained their famous, anxiously praised loyalty (FIDES MILITVM, FIDES EXERCITVVM) without such special measures.
The huge sums required to pay the donatives had to be obtained by increases in taxation. The land-tax and poll-tax, the direct contributions which fell upon provincials, did not seem the best medium for such exactions, because the collection of larger sums would have raised insuperable practical difficulties. Instead Caracalla fastened upon a sort of extraordinary income-tax which was known as crown money. This had originally consisted of gold levied by Roman Republican generals from provinces and conquered peoples to make crowns for their Triumphs. From the time of Augustus onwards, many emperors accepted ostensibly voluntary presentations from the provinces and cities of the empire, though seldom from Italy. Marcus Aurelius, in spite of financial pressure, refused such gifts, or partially remitted them. Caracalla on the other hand, faced with even heavier military expenditure, made repeated demands for crown money, proclaiming fictitious victories which required celebration in this way.19 He also doubled two of the traditional indirect taxes on Roman citizens, the death duty and tax on the liberation of slaves, and by making almost everyone into a citizen he greatly increased the number of payments (p. 82).20 By the use of these stringent methods Caracalla became one of the few emperors who overestimated rather than underestimated his needs, since at his death a large credit balance remained in the treasury (217).
But the raising of all this money was of very little avail. Owing to the rapid rise in prices and depreciation of the currency, the sums needed for the army were far beyond what any taxes paid in money could provide. Besides, the system of taxation was too inflexible; fixed taxes fell unfairly and non-progressively on an agricultural economy, and the system was scarcely more satisfactory for the administration, since whether expenses were normal or exceptional the revenue remained the same. The government had no means of borrowing money. Faced with emergencies, Marcus Aurelius sold public property, Septimius, Caracalla and Maximinus I (235–8) – who earned the reputation of a grasping extortioner, confiscated personal possessions. Yet even if the proceeds from these more or less desperate measures provided just enough cash in difficult times, the multiplication of debased currency led to so rapid a rise in prices that the soldiers could not nearly subsist on pay and donatives alone (p. 44).
Accordingly the emperors had recourse, on a huge scale, to the supplementation of these cash sums by free distributions of rations and clothing and the raw materials for arms.21 These payments in kind, which came to be called the anonna militaris, were placed on a systematic basis by Septimius and his successors. They are first heard of shortly before 200 in Egypt, where arrangements of this sort were then extended by Caracalla and Severus Alexander. Meanwhile, similar handouts to soldiers were beginning to be made with increasing frequency in other provinces also. As the quality of money deteriorated, and the treasury became more and more anxious to save metal, this quickly became the principal method of remunerating the army.
During the second century, rations, uniforms and arms had been issued against deductions from pay, but as the payments in kind gained in momentum they were all distributed free of charge. The civilian populations, who were compelled to hand over these supplies of foodstuffs and materials, were at first paid for them; and as late as the time of Severus Alexander, such cash transactions are still recorded.22 But by that date what the authorities offered was nothing like large enough to correspond with increased prices. Moreover, it was now by no means universal practice to offer any payment at all. Forced deliveries for the army, without recompense, had already occurred during earlier emergencies, for example in AD 128. In the third century this practice became prevalent and indeed normal. To collect and deal out the goods, an elaborate organisation was set up under the general instructions of the praetorian prefect as quartermaster–general of the army; and along the main highways there was a network of storage centres on which the armed forces received drafts for the products that they required. It may have been Septimius who enacted that each province was required to supply the troops stationed inside its borders with food.28 The provinces in turn delegated the responsibility to landowners, who levied the required products from their tenants. Leading officials of the cities were also ordered to raise extensive contributions, and papyri show towns and villages handing over their cows, calves, goats, hay and wine.
This requisitioning could be avoided, if one was rich enough, by the substitution of cash. Nevertheless, payments in kind were now virtually universal. It may seem strange that so huge an empire could not keep an army of between a quarter and half a million strong without supplementing ordinary taxation by these additional assessments reminiscent of a prehistoric non-monetary economy of kind. But money had become much less useful. And, in any case, the burden of supplying the army could only be met by some such radical and ruthless measures. For the Roman world was so technologically backward that the production of food, fabrics, arms and armour took a long time and was extremely costly; and so was their transportation. The receipts of taxes levied in cash did not provide the government with nearly enough to cover the cost of these operations. Consequently it had to supplement these cash receipts by raising contributions in kind, which enormously exceeded the monetary revenue in value, and constituted by far the most important tax in the empire and the principal means by which the army was maintained.
However, the army was not the only beneficiary from these exactions of goods: another was the ever-growing civil service. A further burden was the need to subsidise Italy. The decentralisation of industry into the western provinces during the second century, due to a stagnant social structure, bad communications and rudimentary credit institutions, had increasingly turned the Italian homeland into a parasite, supported by the emperor’s private estates and by taxation in cash and kind. Rome itself was in a privileged position of unproductive idleness. Its annual days of festival, enjoyed amid the amenities of sumptuous baths and other public buildings, numbered 130 in AD 150; two centuries later the figure had risen to 176. Over a hundred thousand of its citizens received free public distributions. These hand-outs were effected, under imperial direction, by numerous corporations (p. 58), and the authorities were proud that this generosity to civilians (unlike distributions to soldiers) should be commemorated on the coinage. Emperors levied payments in kind in order to collect enough corn to feed the entire Roman population. Under Constantine, these burdens of imported free gifts were duplicated at Constantinople, where 80,000 people received distributions of food. Further heavy burdens on the tax-payer were the imperial court, the public works administration and the official post, which was so formidably organised that mail could travel one hundred and twenty miles in a day.24 Civilians who lived close to a postal station sometimes abandoned their settlements and moved away out of reach of its requisitions.
But the main demands came from the soldiers, and particularly from their inexhaustible need and appetite for the payments in kind which had become their main support. By introducing such arrangements Rome had at last succeeded, for the first time in its history, in setting up some sort of a permanent organisation for the maintenance of the army. But the methods adopted caused widespread hardship to civilians. One of the main causes of distress was the unforeseeable irregularity of the demands that fell like thunderbolts upon the population. Accordingly, Diocletian felt it necessary to put an end to this unpredictable, arbitrary state of affairs. His need for large-scale supplies in kind was very great indeed; for his army was much larger than ever before, and the four courts of the tetrarchs had added an additional heavy expense. He therefore placed the whole levy of payments in kind on a systematic and regular basis. First, a novel method of assessment was worked out. Throughout the entire empire the agricultural land was divided into a number of units of measurement (iuga), reckoned to be of equal value to one another but calculated in various ways according to different crops and qualities and regions. Then the produce or materials required from every area were assessed in terms of a certain number of these iuga. Constantine added to the iugum a second sort of unit, the caput or head of agricultural population; Diocletian had apparently employed this method of reckoning to raise a tax in cash, but Constantine seems somehow to have equated and assimilated capita with iuga, employing both sorts of unit for the assessment of payments in kind.25
The government now had an unprecedentedly comprehensive method for estimating the quantity and nature of the goods which each area had to provide. But the main importance of the change was that these assessments were no longer suddenly announced at irregular intervals. Henceforward they were adjusted every year – and every year a new and revised announcement was publicly made. Even if people were no better off than they had been before, they at least knew what they must give. For the first time in history there was an annual budget.
In order to prepare for its compilation the praetorian prefects, whom Diocletian placed in charge of the system, were required each year to estimate the materials needed by the government in their territories. Over-estimates, which meant the wastage of perishable food stuffs, had to be avoided; so did under-estimates, which involved unpopular supplementary budgets. Having worked out their needs, the prefects calculated the amount of the levy in terms of iuga and capita. Next, before the beginning of the financial year, they circulated their requirements to the provinces, which had been increased in number so as to secure closer financial control. The provincial authorities then divided up these lump sums into assessments served on cities and institutions and individuals. In the interests of the greatest possible accuracy, a complete census of the empire was gradually carried out, region by region.
The census was only completed after Diocletian’s death, but in Egypt, for example, the inauguration of the new arrangements had long since been announced by the country’s governor, in terms which show the importance of the innovation (297).
Our most providential emperors, Diocletian and Maximian, and the most noble Caesars Constantius and Galerius, having seen that the levies of the public taxes take place in such a way that some people get off lightly and some are overburdened, have determined to root out this most evil and pernicious practice in the interest of their provincials and to lay down a salutary rule whereby the levies shall be made. I have therefore publicly given notice how much has been assessed for each arura [2/3 acre] according to the quality of the land, and how much on each head of the peasants and from what age to what age, according to their published divine edict and the schedule annexed thereto, of which I have issued copies in this edict. So the provincials, seeing that they have received great benefits, must take care that they make their payment with all speed according to the divine regulation and do not wait to be compelled. All must fulfil their obligations with the greatest zeal, and if anyone be found doing otherwise after such great benefits he will be punished.26
The governor displays a certain anxiety about the likelihood of evasions, and indeed (in an economy unaccustomed to co-ordinated planning) this was one of the imperfections which accompanied the operation. There were others also. That the burden was primarily placed on agriculture was perhaps not so unjust as it might seem, since this produced a very large proportion of the empire’s revenue (p. 61); but the rich were let off too lightly since, although subject to special requisitions,27 they found it comparatively easy to obtain exemptions. Moreover, assessments varied greatly from place to place, and were often arbitrary and inequitable; there were obvious difficulties in striking a fair balance between units that were human and agricultural. Emperors tried to remedy these faults, but only with incomplete success, and censuses remained unrevised for many years. Moreover, the government, having all this administrative machinery under its control, was too easily tempted to raise its total requirements year by year. And yet, however fallible, crude and bleak the functioning of the scheme might be, it displayed a grand and sweeping homogeneity which meant that for the first time this major economic requirement of taxation had been clearly perceived as a whole and taken in hand on the necessary scale like a huge military operation. In the undeveloped fields of economics and public finance, this abandonment of tax-anarchy in favour of an annual budget was Rome’s highest achievement.
The payments in goods, to which the annual budget was geared, so greatly overshadowed the cash economy that this seemed likely to disappear in favour of the more primitive economy of kind. And yet Diocletian’s Edict on Prices, issued only a very few years after the initiation of his tax-reform (p. 48), was still expressed in terms of cash. Although the edict’s main purpose of controlling prices failed, its adherence to cash values may ultimately have stimulated, or at least heralded, a surprising recovery of the money economy alongside the non-monetary economy which had threatened to wipe it out. The remnants of monetary arrangements had always persisted, and the framework had not been abandoned; some taxes were always paid in cash, soldiers and all other government employees still received cash payments, and wage-earning continued to offer some prospects of advancement. But now money was going to play a larger part again.
The denominations in which Diocletian’s edict framed its price limits were the humble denarii which were the currency of the poor. But the next move towards reviving a money economy took place on the higher plane of the gold coinage. For in 312 Constantine introduced his new gold piece, the solidus, and enforced its acceptance by law. The coin was not, it is true, so heavy as Diocletian’s aureus; Constantine evidently recognised the impracticability of such a standard, issuing his solidi not at 60 but at 72 to the pound. Yet the issue was successful. Even if people were reluctant to abandon the current practice of buying and selling their gold pieces by weight, it soon became established that these new coins were true and full-bodied and worth their face-value.
But the main reason for the success of the solidi was that Constantine before long began to issue them in far larger quantities than Diocletian had managed to coin. This was remarkable in view of the heavy drains on Constantine’s resources. His new subsidisation of the Christian clergy was expensive, and so was the foundation of Constantinople. Nevertheless, the emperor was able to find bullion for his coinage by four principal means. First, he collected two new taxes in precious metals.28 Secondly, he insisted that rents from imperial estates should be paid in the same way. Thirdly, he acquired the substantial bullion reserves of his defeated rival Licinius.29 And finally, at the end of his reign, he confiscated the treasures of the pagan temples (p. 239). All these stocks of gold made it possible to mint solidi in considerable numbers.30 This, in its turn, meant that the relations between the two concurrent sorts of economic framework began to shift back to their former condition; the money economy gained ground again at the expense of its ‘natural’ counterpart. Before long, the government started to commute certain payments in kind into payments insolidi, and this became a regular rule a century and a half later. Diocletian’s annual budget relating to payments of goods had increasingly become a monetary budget, and the whole tendency of the Mediterranean world to revert to the barter-economy of ancient times had been arrested.
Yet this voluminous gold coinage was obviously more beneficial to the ruling class and officials, who wanted to be paid in cash,31 than to the poor who never set eyes on a gold coin. And meanwhile the inflation of the poor man’s silvered bronze currency continued unchecked and attained extraordinary dimensions. The 300,000 denarii to the pound of AD 324 (4,250–4,500 to the solidus) had risen by AD 337 to nearly twenty million (275,000 to the solidus), and twenty years later the denarii which went to a pound amounted to more than three hundred and thirty million. The spiral went on rising to even more astronomical sums,31 until the Byzantine emperor Anastasius I(493–518) inaugurated a coinage including large bronze coins of which people were prepared to accept the required quantity in exchange for solidi. The long epoch of insecure currencies was at last at an end. Stability, then, had not been finally attained until the end of the fifth century. But the decisive step was taken by Constantine, and the introduction of his solidusbecame a major landmark of economic history. The coin dominated the Middle Ages, and was one of the strengths of the Byzantine empire. Solidi retained their weight and purity intact until as late as 1070; and for more than a millennium they provided the basis of trade as far as Scotland, Scandinavia, Russia, Ethiopia and India.