Following the Boom and Bust of the Roman Economy
The Roman Empire is ironically known for both its greatness and its weaknesses. The Roman economy is no exception. The Roman economy represents an ancient economy that was large and powerful enough to create an empire that spanned the Mediterranean and lasted several centuries. The Roman economy is also known for its deficiencies which eventually led to the decline and fall of the Roman Empire.
Origins of the Roman Economy
The city of Rome emerged sometime between the 8th and 9 th century BC from a collection of farming communities that had established fortifications near the Tiber River . According to legend, Rome was founded in 753 BC. The city was ruled by kings until 509 BC when the last king was overthrown. After this, Rome became a republic and remained one until 31 BC, after which Augustus Caesar made Rome into a monarchy in 27 BC. This was the beginning of the Roman Empire.
During the early Republican period , the Roman economy was largely based on agriculture. The backbone of this agrarian economy was made up of small-scale farmers. They would raise crops and sell them in the city. These farmers were not only responsible for providing food for the city of Rome, but also for its protection. By the Republican era, Rome had adopted the Greek hoplite style of military organization. The city was defended by a volunteer militia made up of Roman citizen landowners. Roman farmers would till the land in peace time and take up whatever weapons and armor they could afford to fight for the Republic in war time.
As the Roman Empire grew, the Roman economy also developed significant trade and manufacturing sectors. Map of Roman Empire at its greatest extent. ( Public domain )
Over time, as Rome began to fight longer and more expensive wars, it became less practical for soldiers to have to constantly come back from war and till their fields. Roman agriculture became increasingly large scale, until most agricultural production was performed by large estates owned by the very wealthy Roman elite which were worked by slaves. As the Roman Empire grew, the Roman economy also developed significant trade and manufacturing sectors. The Roman economy was complex for the ancient world, containing many aspects of a modern market economy. Nonetheless, the Roman economy was still simple and agrarian by modern standards.
Roman Dependence on Trade and Imperial Supply Chains
Agriculture remained central to the Roman economy throughout its history. The primary agricultural products in the Roman Empire included grain, olives, and grapes. The olives for olive oil, the grapes for wine, and the grain for bread were all important for the Roman lifestyle.
Agriculture remained central to the Roman economy throughout its history. ( Public domain )
Grain was incredibly important for the Roman economy. One of the reasons that the Roman Empire continued to grow was to gain access to more grain-growing provinces. Two of the major sources of grain in the later Roman Empire were North Africa (modern-day Tunisia) and Egypt. There was also a significant amount of grain produced in Sicily. The distribution of grain in the Roman Empire was very much dependent on trade and imperial supply chains. Grain would be shipped to the Port of Rome, Ostia, where it would then be shipped all over the Empire. Farmers were allowed to submit a portion of grain as a tax to the Roman government instead of a monetary tax amount. This provided a source of free grain which politicians could distribute to gain popularity. According to some historians, however, this provided little incentive for farmers to produce more grain because more grain meant more taxes. Despite the grain production in the Roman Empire, many people were not able to make enough to buy grain for themselves and grain had to be doled out by the government as a result.
Slavery as the Bedrock of the Roman Economy
Slavery was another important aspect of the Roman economy. While agricultural slaves were relatively rare during the early history of Rome, the eventual loss of most independent small farms left much of the agricultural land in the hands of the Roman elites who used large numbers of slaves to tend their fields.
Slavery was an important part of the Roman Economy. (Ashmolean Museum / CC BY-SA 2.0 )
Slaves were also used in urban contexts in workshops of various sorts. Roman bakery slaves are known to have been poorly treated, though many Roman slaves actually lived relatively pleasant lives.
Roman slavery was distinct from the slavery of the early modern period: it was not race-based and it was far easier for slaves to gain their freedom. Eventual freedom was in fact expected for most slaves. Once slaves bought their freedom, these new freedmen often had better opportunities than the freeborn poor because they already had industrial and managerial training that they could use to find work. There is even evidence of poor freeborn Romans selling themselves into slavery to increase their future prospects.
It has been said that slavery held the Roman economy back. For example, it could be argued that technologies utilizing waterpower and horsepower, which could improve agricultural yields, were never developed during the time of the Roman Empire because slaves were considered sufficient to do the work. The same could be said of manufacturing. Ancient historians point out that some, though not all, of the technology necessary for an industrial revolution, such as steam power, was available to the ancient Romans. One possible reason that there was no industrial revolution in ancient Rome might have been that they were too reliant on slaves to consider creating steam-powered engines.
Tunisian mosaic of slaves carrying wine jars. (Pascal Radigue / CC BY 3.0 )
Far Flung Trade Routes of the Roman Empire
Some historians have suggested that at the height of the Roman Empire, the Roman economy allowed for a standard of living similar to 17th or 18th century Europe. If this is true, it was likely due to trade. The Romans were able to establish trade routes throughout Europe, Asia, and Africa. Far flung trade routes allowed them to attain silk from China , gold and silver from Spain, iron and tin from Britain, exotic animals and ivory from Africa , and spices and cotton from India.
Part of the Tabula Peutingeriana, an illustrated ancient Roman road map, showing Dacia, Epirus, Macedonia, Dalmatia, Achaia, Sicily and Cyrenaica. ( Public domain )
These trade routes were facilitated by the renowned Roman roads built to mobilize the Roman legions . After the legions built the roads, it was only natural that they would become major trade routes. Trade goods could be transported short distances by oxen or horse-drawn wagons and carriages. Land travel was, however, slow, dangerous and the amount that could be carried was limited by weight considerations. Oxen could carry more than horses, but horses were faster. Goods that only needed to be transported short distances and certain small expensive luxury goods could be transported by land, but most goods were transported by sea.
At its height, in the 1st and 2nd centuries AD, the Roman Empire completely encircled the Mediterranean Sea and part of the Black Sea . The Roman navy had also virtually eliminated piracy, making maritime travel a relatively safe and timely method for transporting goods. Food, precious metals, and stone were mostly transported by sea. Storms, as well as poor navigation equipment and charts, however, still created danger for Mediterranean ships which were relatively primitive compared to later seagoing vessels.
Industry and Manufacturing in the Roman Empire
Mining was one of the most important industries in the Roman Empire. Silver and gold from Spain were used to make coins. Stone quarried from Italy and Greece was used to make the arches and monuments for which Rome is famous, and Britain was an important ancient source of iron for weapons which Rome used to maintain regional dominance.
In addition to coins, weapons and other items important to the Roman state, many towns and cities across the Empire had local industries which produced pottery, glassware, weapons, textiles, and jewelry among other commodities.
Olive oil produced around Cordoba, Spain, was shipped directly to Rome via the River Guadalquivir, known for its famous Roman bridge. ( CC BY-SA 2.0 )
The Roman Market Economy
In the late 20th century, the economist and historian Carl Polanyi suggested that there were three types of economies in the ancient world: economies that were based on reciprocity, redistribution, or exchange. Economies based on reciprocity are common in traditional societies where people distribute goods based on obligations and social traditions. The goal is to distribute goods fairly based on obligations that derive from relationships. In redistributive economies, all the goods produced are collected by a centralized institution and then redistributed.
Exchange economies rely on currency or bartering to distribute goods. Exchange economies are essentially market economies. Ancient Rome appears to have had a functioning market economy based on its labor and capital markets. In contrast, Medieval Europe is believed to have had a primarily reciprocal and redistributive economy with a few isolated cases of market economies around cities.
Fresco from Pompeii, showing everyday life in Roman market. ( Public domain )
Modern anthropologists do not necessarily agree with Polanyi’s characterization of ancient economies. Many ancient economies that were not thought to be market economies are now known to have had at least some market elements, including the Assyrian Empire and the Aztec Empire. Nonetheless, historians agree that the Roman economy was a primitive market economy where the exchange of goods was partly governed by the price-fixing of the market.
On the other hand, the Roman political economy was not entirely market oriented. Many industries were essentially organs of the Roman state. Also, the Roman government was required to provide its citizens with rations of grain because many of them were not able to feed themselves, especially in the late Roman Empire, as the Roman state began to decline.
The English painter Thomas Cole painted Destruction to show the fall of the Roman Empire. ( Public domain )
The Roman Economy and the Fall of Rome
The explanations for the fall of Rome are innumerable. Part of the reason for the fall of Rome appears to be weaknesses in the Roman economy . One weakness may have been that the Roman Empire simply stopped expanding. The Roman Empire had to continually grow to increase access to grain and natural resources to support its economy. Once the Roman Empire stopped growing, it was probably inevitable that Rome would run out of resources.
Another reason appears to be that the Roman Empire was heavily dependent on long distance trade and supply chains. The majority of the grain produced to feed the population of the Roman Empire was grown either in modern-day Tunisia or Carthage, or in Egypt. Once the western Roman Empire lost control of Carthage to the Vandals in the early 5th century, the city of Rome was not able to feed its population. At one point the city was mostly abandoned due to the lack of food. The same could probably be said of other resources as well.
- Exotic Goods and Foreign Luxuries: The Ancient Roman Marketplace
- The Roman Empire’s Crisis of the Third Century
- A Millennium of Glory: The Rise and Fall of the Byzantine Empire
Once Rome began to lose control of critical provinces, the empire was not able to feed its population or even pay its armies. It could be said that outsourcing, particularly of grain production, made the Roman Empire vulnerable if the supply chains on which it depended ever became disrupted. The disruption of supply chains was not the only factor leading to the fall of Rome, but it definitely contributed to the collapse of an empire already dying due to civil wars, constant invasions, and declining birth rates, among other problems.
Likewise, one of the reasons that the eastern Roman Empire, or the Byzantine Empire, was able to remain intact for almost a thousand years longer was because it was able to keep its economy together. The eastern Roman Empire still had control of Egypt, the other breadbasket of the Roman Empire, so it was able to continue to feed its population. By the time Egypt was conquered by the Arabs in the 7th century, enough local agriculture had developed in Greece and Asia Minor that the Byzantine Empire was able to continue to sustain itself despite the loss of Egypt and most of its eastern lands.
Furthermore, the vast wealth of Rome was not evenly distributed. Most of the luxuries of Roman life were available only to the very wealthy. Most people lived in much poorer conditions. The average Roman apartment lacked plumbing and was overcrowded. Also, the widespread trade networks of Rome did not necessarily benefit the poor who were more vulnerable to the diseases which were also carried by trade.
The fall of the Roman Empire is used as a cautionary tale in many ways, particularly when it comes to the importance of maintaining a strong and balanced economy for the survival of a civilization. How similar is modern civilization’s economic situation to that of Ancient Rome? This may be an important question to consider.
Top image: The Roman economy represents an ancient economy that was large and powerful enough to create an empire that spanned the Mediterranean and lasted several centuries. Source: Manuel Gross / Adobe Stock
By Caleb Strom
“Ancient Roman Economy.” N.D. UNRV. Available at: https://www.unrv.com/economy.php#:~:text=Ancient%20Rome%20was%20an%20agrarian,by%20small%20scale%20industrial%20production.
Barjamovic, G., Chaney, T., Coşar, K. and Hortaçsu, A., 2019. Trade, merchants, and the lost
cities of the bronze age. The Quarterly Journal of Economics. Available at:
Black, John. 2014. “The ancient invention of the steam engine by the Hero of Alexandria”.
Ancient Origins . Available at: https://www.ancient-origins.net/ancient-technology/ancient-invention-steam-engine-hero-alexandria-001467
Grant, Ryan. 2011. The Growth and Decline of the Roman Economy. Distributist Review . Available at: https://distributistreview.com/archive/the-growth-and-decline-of-the-roman-economy
Hornblower, Simon, and Nancy Thomas de Grummond et al. 2020. “Ancient Rome”. Encyclopaedia Britannica . Available at: https://www.britannica.com/place/ancient-Rome#ref26584
“Roman Republican Legion.” N.D. UNRV Roman History . Available at: https://www.unrv.com/military/roman-republican-legion.php
“Roman Roads.” N.D. UNRV Roman History . Available at: https://www.unrv.com/culture/roman-roads.php
“Roman Slavery.” N.D. UNRV Roman History . Available at: https://www.unrv.com/slavery.php
Smith, Michael, E. 1980. “The Role of the Marketing System in Aztec Society and Economy: Reply to Evans”. American Antiquity Vol. 45, No. 4. Available at: https://www.jstor.org/stable/pdf/280158.pdf
Temin, Peter. 2006. “The Economy of the Early Roman Empire”. Journal of Economic
Perspectives. Available at: https://pubs.aeaweb.org/doi/pdfplus/10.1257/089533006776526148