The study of the economies of the ancient city-state of Rome and its empire during the Republican and Imperial periods remains highly speculative. There are no surviving records of business and government accounts, such as detailed reports of tax revenues, and few literary sources regarding economic activity. Instead, the study of this ancient economy is today mainly based on the surviving archeological and literary evidence that allow researchers to form conjectures based on comparisons with other more recent pre-industrial economies.
During the early centuries of the Roman Republic, it is conjectured that the economy was largely agrarian and centered on the trading of commodities such as grain and wine.Garnsey, Peter, et al. The Roman Empire: Economy, Society and Culture. 2nd ed., University of California Press, 2015, www.jstor.org/stable/10.1525/j.ctt9qh25h. Financial markets were established through such trade, and financial institutions, which extended credit for personal use and public infrastructure, were established primarily by interfamily wealth.Temin, Peter. “Financial Intermediation in the Early Roman Empire.” The Journal of Economic History, vol. 64, no. 3, 2004, pp. 705–733., www.jstor.org/stable/3874817. In times of agricultural and cash shortfall, Roman officials and moneyers tended to respond by coining money, which happened during the prolonged crisis of the First Punic War and created economic distortion and difficulties.
Following the Punic Wars, during the late Republic and the early Roman Empire, the economy became more monetized and a more sophisticated financial system emerged. Emperors issued coinage stamped with their portraits to disseminate propaganda, to create public goodwill, and to symbolize their wealth and power. The Roman Imperial monetary economy often suffered bouts of inflation in part by emperors who issued money to fund high-profile imperial projects such as public building works or costly wars that offered opportunities for propaganda but little or no material gain.Andreau, Banking and Business in the Roman World, p. 2; Harris, "The Nature of Roman Money," n.p.
Recent archaeological and quantitative research has used coin-hoard evidence to study the spatial integration of the Roman economy. One study of georeferenced Republican coin hoards dated to 155 BCE–2 CE applied spatial interaction modelling and social accounting methods to examine monetary circulation across Roman territories. It found that coin circulation was associated with settlement hierarchies, transport routes, and urban infrastructure, and that the effect of distance on circulation declined over time, a pattern linked to infrastructure expansion, administrative coordination, and monetary standardisation after the adoption of the denarius.
Emperors of the Antonine and the Severan dynasties overall debased the currency, particularly the denarius, under the pressures of meeting military payrolls.Harl, Coinage in the Roman Economy, 300 B.C. to A.D. 700, p. 125–136. Sudden inflation during the reign of Commodus damaged the credit market.Harris, "The Nature of Roman Money," in The Monetary Systems of the Greeks and Romans, n.p. In the mid-200s, the supply of specie contracted sharply.Harl, Coinage in the Roman Economy, 300 B.C. to A.D. 700, pp. 128–129. Conditions during the Crisis of the Third Century, such as reductions in long-distance trade, the disruption of mining operations, and the physical transfer of gold coinage outside the empire by invading enemies, greatly diminished the money supply and the banking sector by the year 300.Harris, "The Nature of Roman Money," in The Monetary Systems of the Greeks and Romans, n.p.; Harl, Coinage in the Roman Economy, 300 B.C. to A.D. 700, pp. 128–129. Although Roman coinage had long been fiat money or fiduciary currency, general economic anxieties came to a head under Aurelian, and bankers lost confidence in coins legitimately issued by the central government. Despite Diocletian's introduction of the gold solidus and monetary reforms, the credit market of the Empire never recovered its former robustness.
Banking system
The setup of the banking system in Rome allowed the exchange of extremely large sums without the physical transfer of coins, which led to fiat money. With no central bank, a professional deposit banker (argentarius, coactor argentarius, or later nummularius) received and held deposits for a fixed or indefinite term and lent money to third parties.Jean Andreau, Banking and Business in the Roman World (Cambridge University Press, 1999), p. 2. Generally, available capital exceeded the amount needed by borrowers and so loans were made and credit was extended on risky terms.name=":18">David Kessler and Peter Temin, "Money and Prices in the Early Roman Empire," in The Monetary Systems of the Greeks and Romans, in The Monetary Systems of the Greeks and Romans (Oxford University Press, 2008), n.p. The senatorial elite were involved heavily in private lending, as both creditors and borrowers, and made loans from their personal fortunes on the basis of social connections.
Banks of classical antiquity typically kept less in reserves than the full total of customers' deposits, as they had no incentive to ensure that customers' deposits would be insured in the event of a bank run. It was common consensus among Romans at the time, especially by Seneca's ideologies, that anyone involved in commerce should have access to credit.W.V. Harris, "The Nature of Roman Money," in The Monetary Systems of the Greeks and Romans, n.p. That tendency toward fiat money caused the money supply to fluctuate consistently.
Mining and metallurgy
The main mining regions of the Empire were Spain (gold, silver, copper, tin, lead); Gaul (gold, silver, iron); Britain (mainly iron, lead, tin), the Danubian provinces (gold, iron); Macedonia and Thrace (gold, silver); and Asia Minor (gold, silver, iron, tin). Intensive large-scale mining—of alluvial deposits, and by means of open-cast mining and underground mining—took place from the reign of Augustus up to the early 3rd century AD, when the instability of the Empire disrupted production. The gold mines of Dacia, for instance, were no longer available for Roman exploitation after the province was surrendered in 271. Mining seems to have resumed to some extent during the 4th century."Mining," in Late Antiquity: A Guide to the Postclassical World p. 579.
Hydraulic mining, which Pliny referred to as ruina montium ("ruin of the mountains"), allowed base and precious metals to be extracted on a proto-industrial scale.Wilson, Andrew (2002): "Machines, Power and the Ancient Economy", The Journal of Roman Studies, Vol. 92, pp. 1–32 (17–21, 25, 32) The total annual iron output is estimated at 82,500 tonnes.Craddock, Paul T. (2008): "Mining and Metallurgy", in: Oleson, John Peter (ed.): The Oxford Handbook of Engineering and Technology in the Classical World, Oxford University Press, , p. 108; Sim, David; Ridge, Isabel (2002): Iron for the Eagles. The Iron Industry of Roman Britain, Tempus, Stroud, Gloucestershire, , p. 23; Healy, John F. (1978): Mining and Metallurgy in the Greek and Roman World, Thames and Hudson, London, , p. 196. Assumes a productive capacity of c. 1.5 kg per capita. Healy, John F. (1978): Mining and Metallurgy in the Greek and Roman World, Thames and Hudson, London, , p. 196 Copper was produced at an annual rate of 15,000 t,Hong, Sungmin; Candelone, Jean-Pierre; Patterson, Clair C.; Boutron, Claude F. (1996): "History of Ancient Copper Smelting Pollution During Roman and Medieval Times Recorded in Greenland Ice", Science, Vol. 272, No. 5259, pp. 246–249 (366–369); cf. also Wilson, Andrew (2002): "Machines, Power and the Ancient Economy", The Journal of Roman Studies, Vol. 92, pp. 1–32 (25–29) and lead at 80,000 t,Hong, Sungmin; Candelone, Jean-Pierre; Patterson, Clair C.; Boutron, Claude F. (1994): "Greenland Ice Evidence of Hemispheric Lead Pollution Two Millennia Ago by Greek and Roman Civilizations", Science, Vol. 265, No. 5180, pp. 1841–1843; Callataÿ, François de (2005): "The Graeco-Roman Economy in the Super Long-Run: Lead, Copper, and Shipwrecks", Journal of Roman Archaeology, Vol. 18, pp. 361–372 (361–365); Settle, Dorothy M.; Patterson, Clair C. (1980): "Lead in Albacore: Guide to Lead Pollution in Americans", Science, Vol. 207, No. 4436, pp. 1167–1176 (1170f.); cf. also Wilson, Andrew (2002): "Machines, Power and the Ancient Economy", The Journal of Roman Studies, Vol. 92, pp. 1–32 (25–29) both production levels unmatched until the Industrial Revolution;Callataÿ, François de (2005): "The Graeco-Roman Economy in the Super Long-Run: Lead, Copper, and Shipwrecks", Journal of Roman Archaeology, Vol. 18, pp. 361–372 (361–369); Hong, Sungmin; Candelone, Jean-Pierre; Patterson, Clair C.; Boutron, Claude F. (1996): "History of Ancient Copper Smelting Pollution During Roman and Medieval Times Recorded in Greenland Ice", Science, Vol. 272, No. 5259, pp. 246–249 (247, fig. 1 and 2; 248, table 1); Hong, Sungmin; Candelone, Jean-Pierre; Patterson, Clair C.; Boutron, Claude F. (1994): "Greenland Ice Evidence of Hemispheric Lead Pollution Two Millennia Ago by Greek and Roman Civilizations", Science, Vol. 265, No. 5180, pp. 1841–1843; Settle, Dorothy M.; Patterson, Clair C. (1980): "Lead in Albacore: Guide to Lead Pollution in Americans", Science, Vol. 207, No. 4436, pp. 1167–1176 (1170f.) Spain alone had a 40 percent share in world lead production. The high lead output was a by-product of extensive silver mining which reached 200 t per annum.Patterson, C. C. (1972): "Silver Stocks and Losses in Ancient and Medieval Times", The Economic History Review, Vol. 25, No. 2, pp. 205–235 (228, table 6); Callataÿ, François de (2005): "The Graeco-Roman Economy in the Super Long-Run: Lead, Copper, and Shipwrecks", Journal of Roman Archaeology, Vol. 18, pp. 361–372 (365f.) At its peak around the mid-2nd century AD, the Roman silver stock is estimated at 10,000 t, five to ten times larger than the combined silver mass of medieval Europe and the Abbasid Caliphate around 800 AD.Patterson, C. C. (1972): "Silver Stocks and Losses in Ancient and Medieval Times", The Economic History Review, Vol. 25, No. 2, pp. 205–235 (216, table 2); Callataÿ, François de (2005): "The Graeco-Roman Economy in the Super Long-Run: Lead, Copper, and Shipwrecks", Journal of Roman Archaeology, Vol. 18, pp. 361–372 (365f.) As an indication of the scale of Roman metal production, lead pollution in the Greenland ice sheet quadrupled over its prehistoric levels during the Imperial era, and dropped again thereafter.Hopkins, The Political Economy of the Roman Empire, p. 197.
The invention and widespread application of hydraulic mining, namely hushing and ground-sluicing, aided by the ability of the Romans to plan and execute mining operations on a large scale, allowed various base and precious metals to be extracted on a proto-industrial scale only rarely, if ever, matched until the Industrial Revolution.Wilson 2002, pp. 17–21, 25, 32 The most common fuel by far for smelting and forging operations, as well as heating purposes, was wood and particularly charcoal, which is nearly twice as efficient.Cech 2010, p. 20 In addition, coal was mined in some regions to a fairly large extent: Almost all major coalfields in Roman Britain were exploited by the late 2nd century AD, and a lively trade along the English North Sea coast developed, which extended to the continental Rhineland, where bituminous coal was already used for the smelting of iron ore.Smith 1997, pp. 322–324