Keith Hopkins, Economic Growth of the Roman Empire
Part 2 of The Political Economy of the Roman Empire
Keith Hopkins wrote:
[Continued from Part 1, sections 1-6]
7 Economic Growth
Over the past few years, there have been several attempts to locate economic growth in antiquity. Of course, some scholars have denied that it occurred. Certainly, there was never in antiquity the steep curve of economic growth that marks the modern world. Perhaps the very search is an attempt to find the roots of modern experience in classical antiquity, which forged so many aspects of western culture.
All that said, I still think the Roman empire provided conditions for modest economic growth (a growth that was minuscule by modern standards but significant for the experience of some Romans):
by extending the area of cultivated land, especially in northwestern Europe and the Balkans;
by increasing the size of agricultural units to achieve economies of scale;
by using systematic accounting methods to control costs or measure relative rates of return from different crops;
by allowing and encouraging the growth or persistence of towns, with their relatively sophisticated division of labour;
by achieving significant increases in productivity, but only in very limited spheres, which had only a superficial impact on the total economy.
Under Roman rule, the northern provinces adopted some of the superior farming techniques, first tried out in the southeast, such as crop rotation, selective breeding (for example, to produce larger oxen) and new crops (for example, peas and cabbage were first introduced into Britain under Roman rule – with long- term effects on British cooking). Even if some of the extra land brought into cultivation was marginal, with lower productivity, nevertheless the total impact of Roman conquest was both to increase average agricultural productivity and aggregate product.
We have exiguous but significant evidence in Roman agricultural handbooks that at least some landowners were thinking (however inexpertly) about relative rates of return from different crops and the most effective use of labour and draught animals. The Heroninus archive from Roman Egypt in the third century AD shows systematic attempts to control draughtanimal costs by the unified management of the scattered farms that made up a large estate. Perhaps what is most surprising is that the central Roman government, at the end of the third century and in the fourth, actually tried to increase agricultural productivity (and its own tax returns) by encouraging farmers to cultivate extra land (emphyteutic leases) and to use innovative techniques. Alas, we have no idea how successful or isolated these initiatives were. But at least Roman rulers tried, and that is quite unexpected.
Successive empires that came under Roman control, and the Roman empire in particular, encouraged the growth of towns and so of non- agricultural occupations. Towns, even pre- industrial towns, make possible a relatively sophisticated division of labour and concentrate higher value production. There are eighty- five different occupations recorded in stone inscriptions and painted slogans on the street walls of the small town of Pompeii (population c.12,000?), 110 in the small town of Kōrykos in southern Turkey and 268 occupations named on stone inscriptions found in the city of Rome. All these lists are likely to be incomplete, and besides, having separate names for slightly different occupations or hierarchical gradings within occupations may reflect cultural differences as well as differences in occupational specialisation. That said, relative numbers can serve as a crude index of economic development. Compare, for example, the Roman number with the more than 350 occupations found in London in the eighteenth century.
What is particularly striking about the towns of the Roman empire is their number, their location mainly in the coastal regions around the Mediterranean Sea and the size of the largest cities. Rome, as we have seen, had a population (if our ancient evidence is to be trusted) of about 1 million people; Alexandria is thought to have had a population of half a million people. Antioch and Carthage had populations of well over 100,000. Although each of these secondary but major cities began as the capital of a mini- empire later conquered by Romans, they maintained or even expanded their populations even after they ceased to be the seats of kings. Unlike Rome, their populations were not subsidised by free distributions of basic food. They had to support themselves by the services that they provided, by manufacture and by trade. Only to a limited extent can they be envisaged as ‘consumer’ cities, that is, unproductive cities, living off the expenditure of agricultural rents by their richest inhabitants. That said, it seems doubtful that the population of all the towns in the Roman empire exceeded 20 per cent of the total population.
The Roman empire was huge, and large enough to effect important economies of scale. One obvious saving was in military expenditure. The Roman army at about 300,000 soldiers in the first century AD, and fewer than 400,000 in the second century, was significantly smaller than the aggregate armies of the mini- empires, kingdoms and tribes that the Roman empire conquered. The Roman imperial army in the first century constituted barely 2 per cent of all adult males in the empire, whereas average military participation among Romans in the last two centuries BC was 13 per cent of adult males. That was one part of the peace dividend. But the cut in overall military expenditure (Ptolemaic Egypt alone had been credited with an army of 240,000 soldiers) indicates that the apparent wealth of Rome in the first two centuries AD was not so much the product of economic growth as it was the product of piling up into Rome (and, to a lesser extent, other cities) the transferred savings from the taxes previously spent in the conquered kingdoms.
Another arena for massive growth was in the production of coinage. Duncan-Jones reckoned that by the middle of the second century AD there were 7,000 million sestertii of silver coins in circulation, which is roughly four times my estimate of the volume of Roman coins in circulation in the middle of the last century BC. And the volume of Roman coinage had already grown ten times in the century before that. But more of that in a moment. Confirmation of the huge volume of Roman silver- lead mining (silver was produced by cupellation as a byproduct of lead mining) comes impressively from an apparently incontrovertible source.
I refer to the Greenland icecap and the peat bogs or lake sediments of France, Germany, Ireland, Spain, Sweden and Switzerland. A whole series of recent studies from a variety of sites has shown with remarkable concordance that the volume of wind- borne contaminants from smelting mineral ores reached a significant peak in the Roman period. Hong and associates showed that lead pollution from systematic samples of the Greenland icecap, datable to between 500 BC and AD 300, reached densities four times the natural (i.e. prehistoric) levels. Renberg and associates showed that lead contamination in a wide assortment of sediments from southern Swedish lakes reached a peak in or around the first century AD. Shotyk and associates showed, in a study of a Swiss peat bog, that there was a huge upsurge in lead pollution from the first century BC to the third century AD, when pollution (and presumably production) began to decline.
There seems little doubt among these investigators that the main source of contamination in this period was lead smelting and cupellation for silver and copper in the Roman empire, and particularly Spain. Hong and associates showed that copper production in the world rose sevenfold in the last five centuries BC, continued at a high but reducing level in the first five centuries AD and then fell sevenfold to reach a trough in the thirteenth century. Once again, they are convinced that classical civilisations, and in particular the Roman empire, were the major source of this wind- borne pollution.
Ancient methods of smelting were so inefficient that in the period 500 BC to AD 500, according to these estimates, some 800 metric tons of copper were carried in the high atmosphere to Greenland. Lead pollution in antiquity reached levels not reached again until the eighteenth century. And lead production in the Roman period averaged at least three times the level reached in the first half of the last millennium BC. If air- borne pollutants constituted 10 per cent of lead smelted, total production in the Roman period can be estimated as on average 32,000 tons per year, reaching a peak of about 50,000 tons. This may be compared with an average world production of only about 4,000– 7,000 tons per year in the period AD 1000–1500. In sum, Roman levels of metal production (lead, copper, silver) were very much higher than the levels in either earlier or immediately subsequent periods.
These scientific estimates of ancient pollution and total production give us an unprecedented vision of economic growth and inefficiency in classical antiquity. Of course, the scientific conclusions may be both speculative and subsequently disputed. And they do relate to only one small sector of the Roman economy. Perhaps tens of thousands of Roman miners, woodcutters, charcoal burners and donkey- drivers slaved in harsh conditions to produce these metals for consumption as coins and divine statues. And, perhaps, their mining activity was made possible by rich men (or emperors) investing fortunes in some mines that burrowed deep underground. But the basic productivity of each worker was probably low, and tens of thousands of miners is but a tiny fraction of the millions of peasants working in agriculture. As so often in Roman economic history, we confront a Janus image: on the one hand mass low productivity and on the other hand seemingly impressive advance, but in a narrow sector.
We can approach the implications of a massive growth in money supply more conservatively. The most important product of the Spanish mines was silver, which was used from the third century BC onward principally for minting coins. As the Roman empire grew in size, the money supply increased dramatically. And the money supply grew, even more dramatically, once peace had been established throughout the empire under successive emperors (31 BC– AD 235). Peace and stable government helped mould the whole of the Mediterranean basin and beyond into a single (relatively) integrated monetary economy.
In the mid- second century BC, when the Roman empire included parts of Spain, southern France, Italy, northern Africa and Greece, according to a crude and inevitably fallible estimate, the gross number of Roman silver coins in circulation was only 50 million denarii. A century later, in about 50 BC, when the Roman empire included virtually the whole of the Mediterranean basin (except Egypt), the volume of silver money in circulation had increased eightfold, to about 410 million denarii. The biggest known stimulus to this growth was increased expenditure on paying soldiers and on fighting wars and the correspondingly increased income from taxation. Soldiers and taxpaying subjects needed coins. In the same period, taxes rose more than sixfold, from about 13 million denarii per year in the mid- second century BC to 85 million denarii per year in 62 BC. Please note that money supply (as estimated here) was several times (much more than five times, if we include the silver coinage minted in the cities of the eastern Mediterranean) as large as the tax flow. Does this indicate that money transactions were servicing much more than the payment of taxes and the reciprocal flow of trade that taxes stimulated?
By the mid- second century AD, when the Roman empire was at its greatest territorial extent, the volume of silver coinage in circulation had again grown. By a similarly fallible estimate, the volume of silver coinage in circulation was roughly four times greater than it had been in 50 BC (1,716,000,000 instead of 410,000,000 denarii, excluding Egypt). The earlier figures cover only the silver coins minted in Rome and circulating principally in the western half of the empire (including Italy). The later figures comprise silver coins circulating in the whole of the Mediterranean basin and beyond. But it is doubtful that the whole increase in the number of silver coins circulating can be attributed to this extension of the geographical area covered. It seems more probable that this huge increase in the volume and value of silver coins circulating throughout the whole Roman empire reflected a rise in the volume and value of goods bought and sold for money.
The huge growth in the Roman money supply under the emperors is corroborated by the radical restructuring and unification of the coinage system that the Roman emperors instituted and maintained. Julius Caesar, Augustus and their successors minted huge volumes of gold coins (well over 1 million gold coins a year on average). By the middle of the second century AD, according to Duncan-Jones’ admittedly speculative estimates, the value of gold coins amounted to twice the value of all silver coins in circulation. The whole configuration of the Roman monetary economy had been revolutionised. The total value of the coinage system (gold plus silver) had, by these estimates, grown twelve times since the middle of the last century BC. But prices had perhaps only doubled.
Of course, gold coins constituted only the top tier of the money market. A single gold coin perhaps supported a poor citizen family in the city of Rome for a month. Even so, gold coins were not out- of- reach rarities. Young soldiers, for example, typically received three gold coins when they were recruited. Emperors gave regular, though smaller, bonuses in gold to their troops and to the citizens registered for the free wheat dole in the city of Rome on accession, on announcing an heir or to commemorate an anniversary. Complementarily, subjects paid a special tax in gold (aurum coronarium) on precisely the same occasions. The emperors had diversified the Roman monetary system out of silver and bronze into a three-tiered system of gold, silver and bronze.
By the mid- second century AD, the Roman monetary system (outside Egypt, which had its own rather inferior coinage but again one that expanded enormously under Roman rule), again according to Duncan-Jones’ innovative and speculative estimates, consisted of 120 million gold coins (aurei struck at forty- five to the Roman pound) worth 3,000,000,000 denarii and about 1,700,000,000 silver denarii. All the gold coins and the great majority of the silver coins (perhaps three- quarters of the total) were minted at Rome itself; the rest were minted in Syria and Asia Minor, but to a compatible standard and purity. Bronze coinage (with perhaps more than 5,000,000,000 coins in circulation) was mostly produced locally and circulated locally. It represented only about 5 to 10 per cent of total value.
By these estimates, in the mid- second century, Roman gold coinage in total weighed 880 tons and by recent values (c. US$400– 600 per troy oz. in 2005– 6) was worth $11,000,000,000– 17,000,000,000, not much for a modern industrial economy but a huge investment for a pre- industrial state. The silver coinage also constituted a huge investment. It weighed in total something over 5,000 tons at a time when producing a ton of silver cost up to one thousand man- years of labour (mining, draining, carting, felling timber, making charcoal, smelting, refining, guarding, transporting, minting). From 1530 to 1630, by comparison, on average Europe imported from America about 140 tons of silver a year. The Roman silver coinage system would have absorbed only about 50 tons per year for more than a century.
How was it possible for the Roman coinage system to grow so much without hyperinflation? I assume here that classical economic principles, and in particular Fisher’s price equation, holds where P = the price level, M = the money supply, V = the speed of circulation and Q = the quantity of goods bought and sold. We know nothing or very little about the speed at which money circulated in Roman conditions. For the moment, let us assume that V was constant. So if money supply increased twelvefold (albeit over a considerably greater geographical area) and if prices only doubled (though the database for any such conclusion is dangerously, even recklessly, thin), then it must be that the quantity of goods traded in the market increased hugely between 50 BC and AD 150.
But does Fisher’s price equation apply in Roman conditions? I am inclined to think that this is a nonsensical question. But I do still have colleagues … who believe that it is impossible or at least unprofitable to use modern economic concepts in order to analyse a pre- industrial embedded economy. For them, the ancient economy was a cultural system, which was dominated by non-rational considerations of status and ritual and so was immune to cold rational analysis or reconstruction.
So let us pursue the question for a minute. At the end of the second century and at the beginning of the third century AD, successive emperors raised soldiers’ pay significantly, so total annual military expenditure over forty years (AD 190– 230) more than doubled (the increase was 142 per cent: see table 13.2). The average volume of silver coins minted per year rose in roughly the same period (AD 180– 235) by 40 per cent and the silver content of the dominant coin the denarius was almost halved (from 71 per cent to 37 per cent) (table 13.3). Prices (again, unfortunately, on exiguous evidence) apparently rose in the same period by 50 or 100 per cent (table 13.3). This chain of cause and consequence does make it seem that the Roman monetary economy is analysable in terms of classic price theory.
It may seem tempting to regard such a massive increase in the money supply and in the probable volume of traded goods as an unequivocal index of economic growth. But I suspect that the huge volume of money minted is explicable only if a large proportion was exported in return for eastern luxuries or if a large proportion, especially of gold coins, were kept inert as treasure, with practically nil velocity. As I reconstruct it, Roman emperors competitively produced silver and gold as a virtual state monopoly, without much regard for the costs of production. They produced coins as economic objects for the facilitation of trade and taxation but above all as symbolic objects of ostentation and political authority. In short, Roman money did not match completely its modern equivalents. Roman money was part real money and part a monument to political ambition. It cannot therefore be readily used as an index of growth.
End notes:
* First published in I. Morris and W. Scheidel (eds) The Dynamics of Ancient Empires: State Power from Assyria to Byzantium, Oxford Studies in Early Empires, Oxford/ New York: Oxford University Press, 2009, 178– 204 (= Hopkins 2009).
** Keith Hopkins died in March 2004, before he was able to revise this chapter for publication. With very minor adjustments, the text of this chapter represents the final version of his manuscript, dated 13 August 2002. Walter Scheidel supplied almost all of the footnotes and bibliographical references in April 2006. Only the references in the main text and elements of footnotes 21, 47– 9, 57, 66– 7, 71, 76– 8, 83, 87 and 89 are derived from Hopkins’ own manuscript. We are grateful to Christopher Kelly for helpful comments on these editorial revisions.
Afterword by Greg Woolf:
[short extract]
… H.’s approach may be characterised as an eclectic historical sociology. It drew most strongly on the founding figures of classical economics and sociology, on the work of Adam Smith, Pareto, Engels and Durkheim as well as Marx and Weber. It was also engaged with certain varieties of current Marxist scholarship, but not … with archaeologists and ancient historians of Marxist inclinations … While some ancient historians found the language of ‘modelling’ unfamiliar and uncomfortable, H. was not a theorist and focused on applications of sociology. … [Hopkins] was much more interested in antiquity than in its historiography. This essay presents a thoroughly materialist account of the workings of the empire, one in which the key variables are the system of government, social structure and economic growth, linked by the means by which revenue was extracted and force controlled, all constrained by the conditions under which production took place. Ancient ideals feature not at all, and when comparison is employed it is with other ancient empires, not with the economies of medieval or capitalist Europe. …
[MGH: A detailed biographical essay on Keith Hopkins by William Harris, which is cited in the Preface to this collection of essays, can be found ONLINE HERE — [Harris 2005: 104; obit. in the King’s College Cambridge Annual Report (2004) 46– 7].
The Source:
Keith Hopkins, ‘The Political Economy of the Roman Empire’, in Sociological Studies in Roman History, edited by Christopher Kelly, Cambridge 2018
Originally:
‘The political economy of the Roman empire’, in I. Morris and W. Scheidel (eds) The Dynamics of Ancient Empires: State Power from Assyria to Byzantium, Oxford Studies in Early Empires, New York/ Oxford: Oxford University Press, 2009.
Evolutions of social order from the earliest humans to the present day and future machine age.