The Insane Wealth of the Roman Empire

the roman empire defined and dominated human  history for centuries at one point the empire encompassed 20 of the global population and vastly  outperformed the rest of the world in technology government organization production and military  might china was perhaps the only exception having achieved significant technological advancements  during this period as well as such the standard of living that many roman citizens enjoyed far  outpaced other societies at the time having an average income and access to public utilities and  other amenities that would not be matched again until the emergence of modern national economies  in the 17th century in order to examine the economic factors at play in rome during the  first two centuries a. d it's important to first understand what economic data is available  to begin with and what limitations exist in understanding those conditions due to a lack of  empirical evidence and other relevant information from there we can nevertheless paint a generalized  picture of the roman empire's economy at a macro level we can then measure its approximate size  at maximum output extrapolate social economic class data from that measurement assess the  true living standards of the inhabitants and draw conclusions concerning its major pitfalls  and other key confines by way of comparison to more modern economies it is an interesting study  in and of itself to scrutinize what data and other evidence is available concerning early roman  empire economics in doing so in equally important is knowing the limitations and assumptions  by which we have to come to understand those economic forces the types of data we are relegated  to employ and the degree of error we can accept when making generalizations or drawing conclusions  on the subject when it comes to basic historical documentation on the roman empire itself we  are already relying on evidence that is scarce of which is certainly limited in substance in  detail and in some cases modified or embellished on purpose or for that matter biased as a case in  point only a single surviving roman shield exists in good condition today likewise accurate resource  material in which to measure and characterize its economy is painfully limited as a result it  should come as no surprise that historians have for a long time shied away from directly assessing  and or otherwise investigating specifics about the ancient roman economy when attempts have been  made these studies often report wildly different results and conclusions with the relatively recent  birth of the field of ancient economic history and the subsequent explosion and interest with  regards to the subject cautious generalizations and tactful conclusions can in fact be made but  with caveats it is truly unfortunate that some of the best direct evidence concerning the economy  has long expired for instance simple market transactions which we know were indeed recorded  by merchants and traders alike no longer exists in original form according to an article in the  journal of economic perspectives by peter turman entitled the economy of the early roman empire  the inherent problem is this market transactions of this type were often recorded by incising wax  coverings on wooden oblongs which while effective at the time was extremely perishable because of  the lack of direct evidence we must therefore rely on four basic categories of indirect evidence  all of which are less than ideal sources the first is vague remarks contained within literature  written at the time the second being government proclamations that while important enough to be  painstakingly chiseled into stone are also quite vague and almost certainly overstated the third  being general archaeological data and the fourth is egyptian papyra which only survived due to  extreme dry conditions of northeastern africa it is also possible to utilize other more  indirect sources of information including things like mediterranean shipwreck frequency  and even ice sheet core samples containing measurements of carbon dioxide generated at the  time as previously mentioned written sources from the period are often flawed because they are  riddled with fabrications exaggerations and or functioned as propaganda that otherwise makes it  difficult to decipher between hard reliable fact versus the work of a savvy emperor or employee of  the state looking to make their aim more appealing or entertaining to the masses this forces one to  have to often read between the lines for example turman describes the mazeros papyrus that records  in incredible detail a maritime loan concerning an impressively large voyage from its poor grammar  one can deduce that it was hastily written most likely by a scribe thus leading to the  conclusion that these sorts of loans were also so commonplace as to not necessitate particular care  in transliterating its functional or contractual detail outside of business transactions and  accounting records other valuable resources of information lie in the evaluation of the  level of sophistication of rome's buildings in infrastructure and of other durable goods  produced at the time with these sources of information adequately defined and documented and  their limitations equally known and understood one can then proceed with an economic analysis and  evaluation albeit with a certain level of caution and high degree of transparency mechanically the  early roman economy was first and foremost based on agriculture and reliant on slavery around 90  percent of the population more or less depending on the time period lived in the countryside  with a majority making their living and farming or in an occupation adjacent to agriculture 10  to 20 percent of this rural population was slaves either by birth capture or punishment of whom were  considered property of the state of interest to note slavery in the roman empire took on a much  different form than our modern conception of slavery of the american south according to peter  turman roman slavery is designated as open slavery by anthropologists meaning that it was possible  for a slave to be freed and in doing so fully accepted into society still most roman slaves were  relegated to harsh lives consisting of menial or strenuous work as servants minors farmers builders  haulers sex workers etc there were some however that were in fact skilled workers a significant  percentage of these skilled slaves were even physicians or accountants by and large their  primary function within society was to perform hard labor for which the state and ruling class  benefited it should be noted that rome was by no means the most slave dependent ancient economy the  spartans for example had entire population centers designated as helots basically slaves slash  serfs who outnumbered the actual spartans by some seven to one nonetheless a substantial proportion  of the roman economy did indeed rely on slave labor the exact degree of which continues to be  debated amongst scholars another key feature of the roman economy was its broad fairly advanced  and integrated market-based system with the vast majority of the economy actively functioning  beyond the reach and scope of the central government these markets operated organically  with typical supply and demand forces at play they provided the necessary day-to-day business  transaction environment and in this regard they were truly the oil within the gears of the roman  economic machine according to turman it appears that by the 1st and second century a. d the empire  was sufficiently integrated to allow for the use of comparative advantages thus leading to regions  of the empire specializing in certain industries that contributed to an increase in both efficiency  and productivity turman goes on to argue that the high quality of life afforded to the romans at  least by comparison to other societies at the time is largely attributed to the integration and  complexity of these markets as evidence of this an explosion of trade during the first two centuries  was most certainly a driving force behind rome's economic growth at the time of which the  preponderance of this activity was based within the private sector without a doubt the early roman  empire also had a fairly sophisticated banking and finance sector along with a generally uniform  currency romans often took part in the loaning of monies to one another and for every reason from  financing to consumption to production financing maritime trade was commonplace and even included  insurance policies to that effect interest rates were usually one percent a month and the frequency  in which these particular rates were utilized most likely meant that the loan market was not a  completely free enterprise although it was possible to find alternate rates from the norm  commercial banks also existed that even issued mortgages unquestionably the early roman empire  was a hotbed of sophisticated financial activity finally a good proportion of rome's overall wealth  and prosperity resulted from warring conquering and plundering nearby populations in north africa  the middle east and germany as time progressed however emperors increasingly waged more costly  and less lucrative wars ultimately putting a significant financial strain on the empire  at different intervals throughout its history interestingly during the era of pax ramana from  augustus's reign in 27 bc to marcus aurelius's in 161ad rome experienced unprecedented stability and  peace which in itself contributed in large part to the expansion of trade and wealth generation  in the region in an article published in the journal of roman studies entitled the size of the  economy in the distribution of income in the roman empire by walter sheedle and stephen j frinson the  authors attempted to overcome the lack of reliable economic data by combining multiple different  data sources and employing various statistical methods in an effort to reduce the inherent  error involved in measuring the size of the early roman economy by utilizing expenditure data  on the consumption side estimating group specific incomes and studying the relationships between  significant economic indicators such as the ratio of unskilled rural worker incomes to the average  gdp per capita the authors were able to generate an approximate gdp equivalent to 50 million metric  tons of wheat which is about 20 billion sesters per year as measured at the empire's demographic  peak in the mid 2nd century in an effort to view this in today's standards albeit with a high  margin of error this is roughly equivalent to 50 to 90 billion us dollars which would place  the roman economy as low as 94th to as high as 66th in terms of today's most affluent nations  notably this is a mostly meaningless comparison which does not take into account purchasing power  parity nor the tremendous time gap between then and now and the countless differences therein  but is nevertheless intriguing and impressive to contemplate further their findings scheidel  and verizon come to the conclusion that only five percent of this gdp was captured and or taxed  by the central roman state and that the top 1.

5 of households made up one-fifth of that  income which compared to modern standards is relatively low a small middle class made up  another one fit and the remaining population who lived close or slightly above subsistence  level made up the remaining portion this assumes the non-elite classes received an income  of about 425 to 540 kilograms of wheat where less than 154 kilograms is considered starvation levels  the average income then was in the range between close to subsistence to about two-thirds above  subsistence meaning that a vast majority of the population about 90 percent were indigent while  the majority of excess income was consumed by the top 3 percent that leaves approximately 5  to 12 of the population to be considered middle class not quite elite status but certainly not the  lower or slave classes to frame this another way the ginny coefficient which is a measure of income  inequality that ranges from zero perfectly equal to one perfectly unequal places the early  roman empire between . 42 and . 44 in another study by mill and novak they found that among 13  other historic economies the genny coefficients range between 0.

24 and 0. 64 with a median of  0. 45 this places the early roman empire's economy almost directly in the middle of this range by  way of comparison more modern economies such as britain in the early 19th century had a gini  coefficient of 0.

59 this implies a general lack of wealth beyond subsistence meaning the amount  of surplus that elites had available was limited indeed over half of all generated income was  allocated toward covering the absolute minimum gross level of subsistence of interest too is  that the combined wealth of the middle class was comparable to the combined wealth of the elites  according to the study the demands of the economy was largely driven by non-elite markets which  is contrary to reductive model findings this identifies the private sector non-elites as being  the primary drivers of inter-regional exchange meaning that the integrated day-to-day markets  rather than the state guided the roman economy in 43 a. d emperor claudius had fully conquered  the southern portion of britain but scotland the northern half had managed to stay free of roman  rule by 85 a.