Saylor.org's Ancient Civilizations of the World/Economic Structure

Economic Structure

Ancient Rome commanded a vast area of land, with tremendous natural and human resources. As such, Rome's economy remained focused on farming and trade. Agricultural free trade changed the Italian landscape, and by the 1st century BCE, vast grape and olive estates had supplanted the yeoman farmers, who were unable to match the imported grain price. The annexation of Egypt, Sicily and Tunisia in North Africa provided a continuous supply of grains. In turn, olive oil and wine were Italy's main exports. Two-tier crop rotation was practiced, but farm productivity was low, around 1 ton per hectare.

Industrial and manufacturing activities were smaller. The largest such activities were the mining and quarrying of stones, which provided basic construction materials for the buildings of that period. In manufacturing, production was on a relatively small scale, and generally consisted of workshops and small factories that employed at most dozens of workers. However, some brick factories employed hundreds of workers.

The economy of the early Republic was largely based on smallholding and paid labor. However, foreign wars and conquests made slaves increasingly cheap and plentiful, and by the late Republic, the economy was largely dependent on slave labor for both skilled and unskilled work. Slaves are estimated to have constituted around 20% of the Roman Empire's population at this time and 40% in the city of Rome. Only in the Roman Empire, when the conquests stopped and the prices of slaves increased, did hired labor become more economical than slave ownership.

Although barter was used in ancient Rome, and often used in tax collection, Rome had a very developed coinage system, with brass, bronze, and precious metal coins in circulation throughout the Empire and beyond—some have even been discovered in India. Before the 3rd century BCE, copper was traded by weight, measured in unmarked lumps, across central Italy. The original copper coins (as) had a face value of one Roman pound of copper, but weighed less. Thus, Roman money's utility as a unit of exchange consistently exceeded its intrinsic value as metal. After Nero began debasing the silver denarius, its legal value was an estimated one-third greater than its intrinsic value.

Horses were too expensive and other pack animals too slow. Mass trade on the Roman roads connected military posts, not markets, and were rarely designed for wheels[citation needed]. As a result, there was little transport of commodities between Roman regions until the rise of Roman maritime trade in the 2nd century BCE. During that period, a trading vessel took less than a month to complete a trip from Gades to Alexandria via Ostia, spanning the entire length of the Mediterranean. Transport by sea was around 60 times cheaper than by land, so the volume for such trips was much larger.

Some economists like Peter Temin consider the Roman Empire a market economy, similar in its degree of capitalistic practices to 17th century Netherlands and 18th century England.

Roman Coinage

Roman Aes Signatum

The development of coinage in Ancient Roman civilization came as a result of its place on the trade routes between the Greek colonies in Southern Italy, and Etruscan city-states to the north of Rome. It was not until the reign of the Etruscan king Servius Tullius (r. 578 - 535 BCE) that history records the first minting of coins in Rome. This early coin was stamped with the image of cattle (pecus) from which derived the Latin word for money (pecunia). Minting coins meant that Romans could slowly replace the heavy bronze ingots, such as the Aes Rude(Rough Bronze) and the Aes Signatum (stamped bronze) which had been the traditional currency of Rome from the early 8th century BCE. As Rome expanded its reach across the Mediterranean world, contact with new cultures and the discovery of new mineral resources meant that coins of copper, silver, and gold could be minted.

General Coin Types and Denominations

The earliest Roman coins were cast bronze based on the As (plural- Asses). The standard As originally weighed 1 pound, which could then be divided into 12 ounces (Latin - unciae). Denominations of these early coins, based on the amount of material it contained, were represented by raised dots. For example, a coin containing 4 ounces of material (or 1/3 of a 12 ounce As) would be represented by four raised dots. Due to the Augustan monetary reforms, the As and the Quadrans denomination which had been bronze since their inception, were changed to copper.

The availability of silver in the late 3rd century BCE made it more popular as a coin material. An early silver coin was the quadrigatus, so named for the image of a quadriga (four-horse chariot). It was introduced around 269 BCE. Further standardization of the monetary system eventually led to the use of the denarius (pl. denarii) in 211 BCE as the principle Roman coin. In the mid-Republic period the Denarius had a value of 10 Asses. Two denominations of the denarius were the Victoriatus(valued 5 Asses) and the Sestertius (valued 2.5 Asses). Augustus also targeted the Sestertius during his reforms. He changed the coin's composition from bronze to brass. By the time of Constantine in the early 4th century CE, the denarius was no longer in use. It had been replaced in the 3rdcentury CE by the short-lived double denarius or antoninianus, and later by the follis or silvered-bronze coin introduced during the reign of Diocletian in the late 3rd century CE. Of all Roman coins, the follis (pl. folles) is the hardest to assign value, due to the rapidly changing economy during the later Roman period. Folles, as opposed to other coins, are categorized not by weight of material, but by the coins' diameter.

Gold coins were rare during the Roman Republic. The aureus (from Latin aurum-"gold") was not a regularly minted coin until the time of Julius Caesar. The aureus had a value of 25 denarii. As with the denarius, the aureus did not survive into the Late Empire. It was replaced by a coin known as the Solidus, said to have a value of 1000 denarii due to the debasement of the denarius' value by that time.