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The Daily Reckoning
Paris, France
Friday, 18 April 2003 (Good Friday)
The Daily Reckoning PRESENTS:
A history briefer on the rise and fall of Rome, Bonner-style.
by Bill Bonner
You could have it all
my empire of dirt
I will let you down
I will make you hurt
Hurt, by Trent Reznor
of Nine Inch Nails
"What I don't understand," Elizabeth began a conversation on
our last day in Rome, "is why the barbarians -- the Huns, the
Goths, and the Vandals and so forth, wanted to destroy the
empire? They could see that people lived better inside the
empire than outside... I mean, they had central heating, warm
baths, art...and just look at all those beautiful buildings.
Wouldn't it have made more sense for them to join it, rather
than tearing it down?"
We had no answer, save resignation.
"Yes, well, you might as well ask why the Roman's went to all
the trouble to build up their empire in the first place?
Wouldn't it have been much more reasonable to enjoy life here
in Rome... ?"
And here we offer readers a history of the rise and fall of
the world's greatest empire as brief as the latest Italian
underpants.
In the 8th century B.C. Rome was nothing more than a
collection of villages along the Tiber, inhabited by a
collection of tribes, principally Latin, Sabine, and
Etruscan. Gradually, these 'Romans' grew in number and power
-- and went to war with almost everyone. In a celebrated
early incident, perhaps only legendary, they invited their
neighbors, the Sabines, to a feast...and then stole their
women. The Sabine men did not celebrate; instead, they took
offense and nursed a grudge. But there was hardly a tribe,
kingdom or empire in Europe, North Africa or the middle-East
with whom the Romans did not pick a fight. After the Sabine
war, there were wars against the Albii, the Etruscans, the
Volcii, Carthaginians, Etruscans again, the Latin league --
and this is only a partial list -- the Volsquii, the Equii,
the Veieii, the Gauls, Samnites, more Gauls, Epirians,
Carthaginians again, and more Gauls, Macedonians, Syrians,
Macedonians again, slaves in Sicily, Parthians...and even
Romans in the civil wars ....and we have not even arrived at
Ceasar's wars against the Gauls in 58-51 BC. Roman history
has another 500 years of wars to go!
The civil wars in the 1st century BC put an end to the
Republic...then, Ceasar crossed the Rubicon and it was a new
era in Rome, an era of Empire. It was as if Tommy Franks
decided to move his army to Washington and make a regime
change of his own. Some people would object, of course....the
liberal papers would howl...but most people wouldn't care.
In ancient Rome, as in modern Washington, people chose their
ideas like they chose their clothes -- they wanted something
that not only did the job, but also something that was
fashionable. And at the time it was a la mode for emperors
and individuals alike to pretend that they lived in a free
republic, which honored citizens' rights, but in practice...
the government, and its leader, could do what they liked. And
what they seemed to like doing was going out and making war
against everyone they thought they could beat.
Back then, of course, war was a paying proposition. When
emperor Trajan took Ctesiphon (near modern Bagdad) he
captured 100,000 people who were sold into slavery. When
Augustus took Egypt, he used the Nile's wheat harvest to feed
the growing population of rabble in Rome.
But while some people came out ahead, in the aggregate, wars
then -- as now -- were negative gain enterprises. And as the
empire grew, the costs mounted too, to the point where both
became grotesque and insupportable.
"Until the rule of Augustus (who was installed as the first
ruler of the Roman Empire in 27 BC)," writes Marc Faber, "the
Romans only used pure gold and silver coins. In order to
finance his vast infrastructure expenditures, Augustus
ordered the government-owned mines in Spain and France should
be exploited 24 hours a day, a measure which increased the
money supply significantly and also led to rising prices. (It
is estimated that between 27 BC and 6 BC, prices in Rome
doubled.) In the second half of his reign (6 BC to AD 14),
Augustus reduced coinage drastically, as he recognized that
the expanded money supply had led to the rise in prices."
But Rome wasn't built in a day...nor was its money destroyed
overnight. In 64 AD, in Nero's reign, the aureus was reduced
by 10% of its weight. Thereafter, whenever the Roman's needed
more money to finance their wars, their public improvements,
their social welfare services and circuses, and their trade
deficit, they reduced the metal content of the coins. By time
Odoacer deposed the last emperor in 476, the denarius
contained only 0.02% silver.
Still, the impulse to build up an empire seems to be as
strong as the impulse to tear one down. To the question, when
does a country aim for empire, comes the answer: whenever it
can.
Every country in Europe has at one time or another reached
for the imperial purple. Portugal and Spain discovered and
conquered vast jungles, swamps and pampas...and built empires
of them. For Spain, the conquests were extremely profitable -
- after they found huge quantities of gold and silver. But
nothing ruins a nation faster than easy money. The money
supply grew larger with every ship's return from the New
World. People felt rich, but prices soon soared. Worse, the
easy money from the new territories undermined honest
industry. In the bubble economy of the early 16th century,
Spain developed a trade deficit similar to that of the U.S.
today. People took their money and bought goods from abroad.
By the time the New World mines petered out, the Spanish were
bankrupt. The Spanish government defaulted on its loans in
1557, 1575, 1607, 1627. and 1647. The damage was not only
severe, it was long-lasting. The Iberian peninsula became the
'sick man of Europe' and remained on bed-rest until the
1980s.
France and England built their own empires in the 18th and
19th centuries. Napoleon's conquests took less than a dozen
years to complete...but the empire collapsed even faster. By
the end of the 19th century, all that was left of the French
empire were a few islands no one could find on a map and some
godforsaken colonies in Africa that the French would soon
regret ever having laid eyes upon. Almost all were lost,
forgotten or surrendered by the 1960s -- with nothing much to
show for them except what you find in the Louvre...and a
population of African immigrants who now weigh heavily on
France's social welfare budget.
England's empire was much grander, stretched further, and
left more debris when it collapsed. But the end result was
about the same: the pound had been degraded and the British
were nearly bankrupt, while the crime rate in central London
rose to surpass that in New York... thanks largely to
immigration from the former colonies.
Germany lost its overseas colonies after WWI. It then created
another empire -- by conquest -- in the late '30s and early
'40s. The enterprise ran into Russia's empire in the East --
resulting in history's largest and bloodiest land battles. In
the end, thanks partly to American intervention on the side
of the Russians, the German empire was destroyed. The
Russian's empire collapsed under its own weight 44 years
later.
Empires, like bubble markets, end up where they began. Rome
began as a town on the Tiber, with sheep grazing on the
hills. A bull market in Roman property lasted about a 1000
years -- from 700 BC to about 300 AD, when temples, monuments
and villas crowded the Palatine. Then, a bear market
began...which also lasted at least 1000 years. As late as the
18th century, Rome was once again a city on the Tiber...with
sheep grazing on the hillsides, amid broken marble columns
and immense brick walls. They had been built for a
reason....but no one could recall why.
Bill Bonner
A history briefer on the rise and fall of Rome...
Linear Mode
