How The Romans Dealt With Inflation
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Rome was killing it from -800 to 500, they nearly made it to a thousand-year Reich. They were the unified ie United States of Rome from 0–400, under a proto-presidential system. Rome was around for so long that a 5% inflation rate almost killed them.
From 200–300 Rome was hit with massive inflation. It sounds laughable today, but a yearly 5% inflation rate quickly compounds into ruin. Over 100 years, the Roman currency devalued by 99.5%. This is how exponential growth works, it drives you into bankruptcy just as Ernest Hemingway said, “gradually, then suddenly.” A bum sponge that once cost 0.5 denarii ‘suddenly’ cost 100. The Roman rulers were up shit creek without a paddle.
As Cornell and Matthews wrote in 1982’s The Roman World,
The later 3rd century saw a momentous weakening of the monetary system. The causes of this were complex, one of them being the Roman authorities’ own lack of comprehension of any theory of monetary circulation, and so of the economic consequences of their own actions.
The Romans didn’t know what the fuck they were doing, but they had to do something. So the permanently warlike empire did the one thing…
