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4 § DGC Magazine April 2009 Issue
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by Paul A. Rosenberg
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or several years I’ve heard people compare thecurrent condition of the United States, and the Westin general, to the fall of the Roman Empire. I sometimesobject to this because the comparisons are usuallyunfair and uninformed. Rome – both Republic andEmpire – was built upon slavery, as was Greece. Our Civilization is built upon a commercial model, which iscompletely different. People sometimes complain aboutbeing “wage slaves,” but that bears no comparisonwhatsoever to the actual slavery of the classical world.(I should probably add that the United States is not anempire. It is a hegemon, not an empire.)That said, there are valid comparisons between thedecline of the Roman Empire and the situation we facenow. In my opinion, the best comparison is with theCrisis of the 3rd Century, a little-discussed but utterlycrucial moment in Roman history.WESTERN CIVILIZATION IS FALLINGAn explanation of why the West is failing – and why ithas been for some time – is a bit much for a magazine
article, but sufce it to say that I believe this to be true.
In our situation, as in Rome’s, the crucial change wasthe transfer of surplus capital from individual producersto the central state.In Rome this occurred as the Republic was failingand the Principate (early Empire) was beginning. Thisoccurred in the West roughly one hundred years ago,as income taxes plucked earnings out of the hands of the people who produced them and transferred them tocentral states, to be spent by politicians.THE CRISIS OF THE 3RD CENTURYThe Roman Empire (but not the Republic) requiredlarge-scale plunder in order to exist. For one thing, Romehad so many people on the dole that is was essentiallya welfare state. Roughly 15 to 25 percent of its grainsupply was provided by the central government. Julius
Caesar had 320,000 beneciaries in Rome. Claudius
(41-54) had 200,000 heads of families getting freewheat. Rome paid for all of this (and much more) withplunder from conquered territories. Everything heldtogether until they reached the point where conquering
distant, new territories was so difcult that the cost
was greater than the amount of plunder they couldtake from them.At that point, the entire operation began rotting whereit stood. This is what struck the Empire in the 3rdCentury.Properly, the Crisis of The Third Century ranbetween 235 and 284 A.D. This was the momentafter expansion became too costly and everythingwas forced to change. Economic problems beganimmediately, as the treasury ran low on funds and theemperors began to mix base metals into their silver 
coins. This, as always, created ination and led to an
economic depression.Minted coin was the sole monetary instrument in thisera, and there was no machinery for creating credit.There were no banks in our sense, and only twosources of wealth: agricultural and mineral.In my opinion, the West – which currently attempts tooperate welfare states on top of a commercial model – has reached its limits, much as Rome reached theirsin the 3rd Century. A major component of this (maybe
the major component) has been at currency. Within
a commercial model, creating currency approximatesincreased production. This allowed the welfare statesof the West to operate long after they would havefailed based upon real money.Fiat currencies supercharged and extended thewelfare states of the West. But now, that game maybe over.WHAT CAME NEXT FOR ROMEIt was the Crisis of the 3rd Century and Rome’smisguided efforts to survive it that gave shape to theDark Ages that would follow two centuries later.The Empire’s efforts to overcome the 3rd Century’seconomic depression led to a much larger governmentbureaucracy and tax burden. This fell primarily uponlandlords, because commercial activity was shrinkingand because the landlords were stationary. Merchantscould avoid the tax-gatherer; landowners could not.The landowners were clever people, however, anddid develop a method of avoiding taxes, by sayingthat their tenants had moved along in search of better wages. (Taxes were charged, more or less, on thenumber of tenant farmers.)To counter, the Senate passed laws that tied the tenantfarmers (called coloni) to their tenancies and made
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