Wednesday, April 24, 2013

Back to the Future

I have written in the past about the hidden history of the Middle Ages, first regarding law and kingship, and most recently about the societal relationships – far more liberal that what preceded or followed this period.

I am now reading a book about the economy during this time period, “The Birth of Western Economy,” by Robert Latouche, first published in French in 1956.

I intend to cover this book in more than one post, as I have done with other books in the past.  In this post, I will introduce the author’s general themes, and offer some detail regarding his descriptions of the fall of Rome – details that offer eerie similarities to what we see in the west today (yes, I know, this is a tired theme.  For me, I have never spent time in this area.  I will do so here.)

Latouche is not necessarily favorable toward free markets – being supportive of state coinage, efficient taxation, and price controls.  I believe it is appropriate to recognize this throughout my review of his work in order to place his interpretations in context, while at the same time remaining focused on his more factually-based descriptions of the period. 


Latouche describes his purpose in this work:

…to trace the gradual development of economic life in Western Europe during the period ending with the eleventh century…. It is harder to know where to begin than where to end.  We shall choose that point of time which saw the break-up of the Mediterranean economy, known also by a more general term – the economy of the ancient world.

He describes some of the myths, or “idols” as he labels these, which must be confronted: the false labeling of the medieval economy as a “natural economy, in contrast with the “money economy” that is suggested to have both preceded and followed this Middle Age; the false notion of a “closed economy,”  fully self-sufficient within a single domain; the reality of small landowners side-by-side with the great landowners; and the continuation of city life after the fall of Rome through the entire period under study in this work.

Before he gets to the Middle Ages, he spends time on Rome’s fall.

The State Control that Marked the End of Rome

Latouche describes the last centuries of Roman rule: an economy that showed signs of deterioration as early as the late second century A.D., and, via state intervention, the attempts in the third and fourth century to halt and reverse the deterioration.  In his descriptions, I find much that is too familiar in our own time.

The Elder Pliny was no doubt being rather absurd when he expressed that generals no longer cultivated the land…. Wistfully they looked back to those far-off days, which seemed like a golden age, when the State of Rome, confined within the narrow bounds of Latium, was inhabited by small landowners who were at the same time ploughmen and soldiers.

Could this not describe America, both literally and figuratively?  In the literal sense, a “narrow bound” along the eastern seaboard, populated by men “who were at the same time ploughmen and soldiers”?  Figuratively, America has certainly moved significantly toward a land populated by a growing proportion of people who consume without first producing.

The Romans were not content with asking their conquered peoples to feed them, a demand which in itself was already causing uneasiness, but even more serious in its consequences was the fact that conquest brought them undreamed of wealth, which they looked upon as inexhaustible.

It is interesting to consider the conquests of the U.S. – certainly in the last century, it has not been a conquest for direct control of land, but a conquest for controlling the subject population – control brought on by the implementation of institutions favorable to regulated democracy, beginning with a central bank.  Such wealth does seem inexhaustible in our day as well – the status of the dollar has allowed for Americans to consume in abundance, in exchange for pieces of paper painted with the pictures of dead presidents.

The skillful exploitation of these riches…won for the West two centuries of prosperity symbolized in two words: pax romana; but a prosperity so suddenly achieved was by its very nature too artificial to stand up to hard knocks.

No comment necessary, I believe.

Life in Rome during the first century was undoubtedly attractive; there was bustle and movement, endless argument and discussion, entertainment in plenty, and even a certain amount of work.  But the population of this Babel…which drew in the produce of the whole world like an octopus, was being fed at the expense of the ‘Public Assistance” by free distributions of every kind.

When I first contemplated comment on this chapter of the book, I considered using passages such as the ones cited here in a manner portraying these as if they were written about the West, and particularly the US, today – only at the end revealing the statements as applying to Rome.  Had I done so, would you have nodded your head while reading these lines?

The Empire infused new life into old towns, created numerous colonies…. [lacking] the stimulus of great industries…. They were centres not of production, but of expenditure.  They constituted for the Empire sources, not of wealth, but of impoverishment.

Does this not apply to (the admittedly failed and failing attempts in) much of US foreign policy, foreign financial aid, and military adventurism – certainly for the last fifty years?  Vietnam, Iraq, Afghanistan, much of the Middle East and North Africa?  Have these not only been drains of wealth, centers of expenditure?

Like today and over the last hundred years and more, there were writers in first and second century Rome warning of where this path would lead:

‘We, the heads of families, have abandoned the scythe and the plough,’ wrote Columella following in the wake of Varro, ‘to creep inside city walls and instead of using our hands to dig up fallow fields and vineyards, we would rather use them to applaud with at the theatre and circus.’

One might look at the abandonment of manufacturing and other productive endeavors for the pursuit of financially engineered gains driven by fiat for a similarity.

All of this devolution culminated in the third century, with the fulfillment of the many gloomy prophecies.  The author describes this period as…

…a sinister age, the least known in the whole history of Rome, since the chief historical work devoted to it, the Historia Augusta, is a later fabrication of the fourth century.  After the reign of Severi we seem to plunge into a long tunnel, to emerge only at the beginning of the Late Empire under Diocletian, and when we step out into daylight, unfamiliar country lies all about us.

Apparently we are treated to both an official fabrication of history and, more importantly, a transformed Rome once it has emerged from this period of darkness.   What of this transformation?  What was different about the Late Empire? 

The most spectacular transformation was in the outward appearance of the towns.  Since the defence of the Empire was based on the protective system of limes on the frontiers, many towns were open and the absence of fortifications allowed them to spread and grow unhindered.

The appearance of these towns underwent a drastic change after the first barbarian invasions in the third century….  Most of the cities of Italy and Gaul were fortified between the end of the third and middle of the fourth century.

Additional change was driven due to the aforementioned aversion to work on the land specifically and all other manual labor in general:

Their citizens held only one branch of manual labour in respect – work on the land – and they themselves no longer engaged in it.  The outlets open to their energies were forensic oratory, teaching, and above all the holding of magisterial office.  If they wished to make money they went in for banking – usury in other words – or became publicans, that is to say farmers of the public taxes.

Little was produced; commodities and the needs of daily life were supplied by the colonies, or other laborers outside of the cities.  In the meantime, and for this point in time, “tax farming” was considered a lucrative and desired profession.

Others indulged in trade, dealing in corn, wine, oil, consigning them to important centres and chiefly to Rome.  The majority, however, like our own landed gentry, lived on the resources of their estates and occupied their leisure hours as pleasantly as possible.  This way of life earned them no censure.  On the contrary, they would have lost dignity had they engaged in manual labour or industry.

In our time, there is no censure either for the idle rich, or the idle poor.

This long-standing practice against manual work had, however, disastrous consequences.  The flight from the land, and contempt for work considered fit only for slaves, concentrated in the big cities and particularly in Rome, an idle plebs, a swollen proletariat, made up of freemen and freed slaves, which continued to grow in numbers under the Empire.  This lower class existed on free, or nearly free, distributions provided by the state, distributions first of grain, or bread, then of oil and meat, to which were added from the third century onwards distributions of wine and salt and even of tunics and handkerchiefs.

Much as in our time, except to this list one can add Obamaphones – a program actually started under that so-called conservative champion, Reagan!

Back to Rome.  The imbalance could not long last.  In Rome, government interventions in the market were introduced in an attempt to halt the decay.  Are we not living a rhyme of this history? 

…the Roman Emperors from Aurelian to Majorian applied a series of forceful remedies, so that the late Empire figures in history as a decisive experiment in state socialism.

And here we come to it; futile attempts to direct the market.  Of course, it was the army that was the focus of the benefits of these interventions: the need to feed close to half a million men a day spread out over the entire Roman world.  This, while at the same time, more and more fled from the work of farming.

No serious attempt seems to have been made to revive agriculture…to make work easier by inventing more efficient tools, or even, as the Merovingians did later, to take advantage of the water-mill, which was nevertheless known and the use of which would have effected a savings in manpower.

Those barbarians from the earliest Dark Age, the Merovingians, developed a more-efficient means for farming than did the Romans, with all their might and sophistication.

The simplest solution was to demand more and more from taxation…. 

Since the ancient world had no knowledge of paper currency, the crisis showed itself in a depreciation in the weight and purity of the metal coins in current use.

The result of such actions can be easily predicted. The beneficiaries, then as now, were the wealthy – those who were positioned to benefit from inflation:

During the fourth century there came into being a wealthy class of great landowners and high officials, of whom a modern historian has said that they lived in a world of luxury poles apart from that inhabited by the plebs….they…held great fortunes in personal property, ingots of precious metal, many of which probably came from dismantled pagan temples, and hoards of gold coins….. At the opposite end of the scale the rest of the population, the plebs, had to make due with what this same historian calls the currency of inflation, namely a small copper coin known as the denarius communis or follis….

Shocking, isn’t it?  The benefits of inflation made the wealthy wealthier and the poor poorer. 

Diocletian attempted to resolve the inflation problem through price controls, through a detailed scale of prices for commodities and for workman’s wages.  As noted in the preamble to his edict:

They wished to put a stop to the dishonest practices of merchants who were forcing up unduly the price of provisions and other commodities thereby doing serious harm to the entire country, especially in places where troops were garrisoned and wherever soldiers were obliged to buy the necessities of life out of their army pay.

It was the fault of the dishonest merchant!  Of course, the price controls only worked to cause shortages, as documented by the pamphleteer Lactantius:

The only effect of [the publication of Diocletian’s edict]…was to make the price controlled commodities vanish from the market, so that its authors were eventually compelled to repeal it. 

Rome went further, tying farmers to the land, preventing landowners from removing the farmers, eventually binding tradesmen in various trades – from shipper to baker to butcher – to their work, not allowing any change.  As these people were reminded, their lot was directly tied to the public treasury; therefore they were bound to stay put.

Withdrawing Consent

Such action, of course, made life difficult if not impossible for the remaining productive working class.  Over time, they moved out of the city and offered services to the wealthy landowners.  Those with a small farm would trade the farm to a wealthier landowner, in exchange for protection and sustenance.  Alternatively, many small farmers would band together, forming a large farm.

Ultimately, to escape the oppression of Rome…”these men actually born free are turned into slaves.”  According to Salvian, the most outstanding feature of this time “is the rapid rate at which free peasants grouped in villages (vici) were handing over land to the powerful owners of large estates.”

Such was the effect of the fall of Rome on the population.  Much of what occurred looks unfortunately familiar to us in our time.