For several years I’ve heard people compare the current condition of the United States, and the West in general, to the fall of the Roman Empire. I sometimes object to this because the comparisons are usually unfair and uninformed. Rome – both Republic and Empire – was built upon slavery, as was Greece. Our Civilization is built upon a commercial model, which is completely different. People sometimes complain about being “wage slaves,” but that bears little resemblance to the actual slavery of the classical world. (I should probably add that the United States is not an empire. It is a hegemon, not an empire.)
That said, there are valid comparisons between the decline of the Roman Empire and the situation we face now. In my opinion, the best comparison is with the Crisis of the 3rd Century, a little-discussed but utterly crucial moment in Roman history.
WESTERN CIVILIZATION IS FALLING
An explanation of why the West is failing – and why it has been for some time – is a bit much for an magazine article, but suffice it to say that I believe this to be true. In our situation, as in Rome’s, the crucial change was the transfer of surplus capital from individual producers to the central state.
In Rome this occurred as the Republic was failing and the Principate (early Empire) was beginning. This occurred in the West roughly one hundred years ago, as income taxes plucked earnings out of the hands of the people who produced them and transferred them to central states, to be spent by politicians.
THE CRISIS OF THE 3RD CENTURY
The Roman Empire (but not the Republic) required large-scale plunder in order to exist. For one thing, Rome had so many people on the dole that is was essentially a welfare state. Roughly 15 to 25 percent of its grain supply was provided by the central government. Julius Caesar had 320,000 beneficiaries in Rome. Claudius (41-54) had 200,000 heads of families getting free wheat. Rome paid for all of this with plunder from conquered territories. Everything held together until they reached the point where conquering distant, new territories was so difficult that the cost was greater than the amount of plunder they could take from them.
At that point, the entire operation began rotting where it stood. This is what struck the Empire in the 3rd Century.
Properly, the Crisis of The Third Century ran between 235 and 284 A.D. This was the moment after expansion became too costly and everything was forced to change. Economic problems began immediately, as the treasury ran low on funds and the emperors began to mix base metals into their silver coins. This, as always, created inflation and led to an economic depression.
Minted coin was the sole monetary instrument in this era, and there was no machinery for creating credit. There were no banks in our sense, and only two sources of wealth: agricultural and mineral.
In my opinion, the West – which currently attempts to operate welfare states on top of a commercial model – has reached its limits, much as Rome reached theirs in the 3rd Century. A major component of this (maybe the major component) has been fiat currency. Within a commercial model, creating currency approximates increased production. This allowed the welfare states of the West to operate long after they would have failed based upon real money.
Fiat currencies supercharged and extended the welfare states of the West. But now, that game may be over.
WHAT CAME NEXT FOR ROME
It was the Crisis of the 3rd Century and Rome’s misguided efforts to survive it that gave shape to the Dark Ages that would follow two centuries later.
The Empire’s efforts to overcome the 3rd Century’s economic depression led to a much larger government bureaucracy and tax burden. This fell primarily upon landlords, because commercial activity was shrinking and because the landlords were stationary. Merchants could avoid the tax-gatherer; landowners could not. The landowners were clever people, however, and did develop a method of avoiding taxes, by saying that their tenants had moved along in search of better wages. (Taxes were charged, more or less, on the number of tenant farmers.)
To counter, the Senate passed laws that tied the tenant farmers (called coloni) to their tenancies and made them hereditary. Thus the coloni and their children were tied to the land, and the landlord could no longer avoid taxation. Because of this relationship, the coloni came to look to the landlords for protection and to settle their disputes. As the government became weaker and more distant, the landlords became more powerful. (Laws were passed to stop this process, but they were not enforced.) As the Empire withdrew, the landlords became the last vestige of government. This, over time, led directly to manorialism, also known as medieval serfdom. And serfdom lasted a long, long time.
WHAT COMES NEXT FOR THE WEST
At this moment in the West, politicians and their associates are attempting to address the current crisis. They have many options in front of them, but all will involve much heavier demands upon their populations. If this is the final unwinding of the welfare state game (which is not yet certain), standards of living will decline and the various rulers will have to resort to dire measures in order to keep the game going. This will not make life pleasant, and things could get very bad. (There is even a scenario that is worse than the Dark Ages.)
There does remain hope, but it requires a significant number of people in the West to wake up and to act: Not to talk, not to argue, not to debate, but to act. If enough people do this, we may avoid a fate similar to that of the Romans.
If not, the West is doomed. The only question is when.
© Copyright 2010 by Paul A. Rosenberg
Paul is the CEO of Cryptohippie USA, a highly regarded provider of internet anonymity technologies.
This article is excerpted from Paul’s book, Production Versus Plunder
A version of this article was first posted at Digital Gold Currency Magazine