The history of money – why do we need cryptocurrencies part III

We are returning to our history of money. After the trip to ancient Mesopotamia, Egypt, and China and Greece, it is time for the most magnificent empire that was created before our era.

Ancient Romans can be considered as Americans or nineteenth-century British. They created a military and economic power whose scope included almost all the world known to them. In order to fully reflect their power, it is worth noting that the descendants of Romulus (the mythical founder of Rome) built a state that territorially surpassed only the Mongol and British empires.

From the farmer to the hero

The Romans began their careers with being … farmers. Such a job, however, quickly got bored and they discovered that their calling was, however, expansion. Caused mainly by internal conflicts concerning the lack of arable land. So what’s the pissed farmer doing? He’s building an empire!

The Romans discovered that the one who created the best scheme of action wins. Therefore, they built an innovative army, and also developed an interesting way to treat the defeated lands. Under the “peace” treaty, they forced the defeated devotion of part of their land for the “people of Rome”. They often settled their colonizers and Romanized conquered (it was possible everywhere, except the famous Gallic village ;-)).

At the same time, legislation, the concept of ownership and administration played an important role in their culture. Trade was also extremely important, but it was not highly appreciated by the elite, who considered it a job intended for lower classes.

Despite the reluctance to trade, the law was adapted to its development. It provided for compliance with contracts and property rights and quick settlement of disputes. The regulations were also standardized throughout the Roman Empire (except for the conquered Egypt, where many elements of the local system were preserved – there is no strong history for old tradition …).

Peace helps the economy

It is said that war is the driving force for the economy. And this is true, but only partial. The greatest flourishing of the Roman Empire occurred in the times of pax Roman – the period of general peace. Although Roman legions participated in the fighting, it was rather on the outskirts of the superpower. The destruction of hordes of ancient pirates also contributed to the rise of sea trade. You can judge Romans as imperialists who conquered, but you must honestly admit that to some point they fully understood the slogan “Economy, fool!”, Which many centuries after them the presidential campaign was won by an American.

Coins appear

The economy is also – currencies! At the beginning of their country, the Romans used as a unit of account … oxen and sheep (the author of this text quietly counts that it will inspire someone to create OxCoin or SheepCoin). Later on, bronze nuggets and copper bricks appeared in the market.

It is difficult to set a date for putting into circulation typical money. Generally, the textbooks give the third century BC. This date is strange, but also shows an important phenomenon. Why strange? For, as you know from the previous section, the Greeks, with whom the Romans had contact, used coins much earlier, since the seventh century BC. As you can see, they appear only at a certain stage of economic development.

In 289, b.c. The Romans appointed officials to supervise the state mint (such heads of central banks). It produced silver coins marked with the symbol I (one ace). The basic coin was a denarius. The unified payment system was owed to Octavian August (ie the first emperor), who introduced into circulation a golden aureus equal to 25 silver denarii. This operation was necessary because earlier different currencies were still used in the area of ​​the Empire.

How was the Romans living?

Although it was not the Romans who invented the coins, they eventually became masters of the financial world. Their bankers gained a dominant role in the contemporary world (another association with the Americans?), And Rome became the financial capital.

It was not worse for other citizens of the Empire, because in the subsequent decades of the first and second century AD there has been a rapid increase in the population. Historians estimate that since the stabbing of Juliusz Caesar (44 BC) to the death of the famous Gladiator Marcus Aurelius (180 AD), the Romans were twice as many. The reason was, of course, the flourishing of trade and the economy. Some brave economists are also trying to figure out how much the craftsman earned in the early years of our era. Reportedly, his income can be compared to how much the home worker on the day of the payment was brought by an employee of a British factory in 1850 or an Italian worker in 1929 (assuming that they had not visited the pub or the birreria before). What does this mean? Well, the fact that such a developed civilization allowed people to live more prosperously than, for example, some inhabitants of the villages and cities of Africa, Asia or Latin America today. The average life expectancy in the years of the greatest prosperity of 25 years, which may not be a long period from our perspective (maybe many of you would already be on the “other side” if it lived in those days), but it still was a better result than this one which occurred in earlier communities.

Inflation enters the scene

Exactly! On the occasion of Rome, we will mention the heroine who will come back in our story more than once. We are talking about inflation. It appears in history somewhere in the third century AD For the first time, the rulers also tried to fight her. And those are ways that will keep coming back for centuries. Emperor Diocletian wanted to steer the economy in a central way by introducing edict about price and payroll control and reorganizing the tax system. This type of activity was continued by his successor Constantine.

The Empire was banging. First of all, the expenses for its maintenance grew. They even started to exceed income. When it turned out that taxes can not be collected in coins, Diocletian ordered to collect tribute in kind. It had worked! But – you guessed it – only for a short time. Production has dropped (no one likes to work hard, with the prospect of putting a significant part of the fruits of their work to someone else), farmers abandoned their farms. The same happened to trade. The cities also began to depopulate, while private, large estates grew in strength.

Desperate Diocletian tried to continue to save the economy more and more interesting, but ineffective ideas. In 332, he issued a document that attached farmers to their land and established the inheritance of the trades of a merchant, a craftsman, a farmer and an official. Perhaps it sounds like a vision of modern parents who dream about having their children take over the family business, but it did not save the Empire from falling.

Why did the Rome fall?

The reasons for the fall of Rome can be traced to the economy. At one point, the inhabitants of the Empire ceased to be innovative. No progress in technology can be easily explained. Why would a farmer or a craftsman invest in development when he was aware that he would not benefit from higher income or higher production due to high taxes.

In addition to this, there was a certain laziness of the elites who believed that they must devote themselves to the practice of fine arts, not to focus on economic development. An example of such thinking? Archimedes – the Greek science genius – despised the practical application of his discoveries. It’s as if Henry Ford invented the concept of his Ford T, but never implemented it! There was no thought about how to modernize the issue of work tools, because the plebs dealt with it, such as Aristotle or Saint Paul considered it natural. This should be a warning to those elites who do not want to implement innovations in the markets. In this way, we are approaching the so-called dark centuries …

To be continued…

source of image: imf.org

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