2 – Economic Depression
Once again, we have to lay the blame at the feet of the Severan Dynasty. As I previously mentioned, the Severans relied on the military to keep power, and every member of the dynasty, barring Alexander, devalued the currency. Caracalla was one of the main culprits as he increased soldiers’ pay by 50% during his short reign and devalued the currency. Caracalla doubled the inheritance tax paid by Roman citizens to fund the expenditure, and when he still didn’t have enough, he made almost everyone in the Empire a citizen to take taxes from them.
He wasn’t the first Emperor to debase the currency; far from it. Emperor Augustus introduced the silver denarius as the basic coinage of the Empire, and it was around 95% silver. The coin was 75% silver by 117 AD, and when Caracalla had his way, the coin was only 50% silver. It was apparently 5% silver by the time Gallenius became emperor and 0.5% near the end of the crisis. Not content with debasing the silver currency, Caracalla did the same with gold coinage.
Under Augustus, 45 coins equaled a pound of gold. Caracalla increased it to 50 coins, and by the start of the crisis, it was 72 coins per pound of gold. As the quality of the coinage diminished, the soldiers started to demand higher wages. If that wasn’t bad enough, it caused the price of goods to skyrocket across the Empire. By 265 AD, the cost of items increased by approximately 1000% when compared to the beginning of the crisis.
The rampant inflation caused the economy to crash as money was practically worthless. Citizens relied on barter, so the Roman government, which had relied on taxes to stay afloat, was almost bankrupt. As a result of the inefficient barter system, the government had to collect taxes in the form of goods and food instead of money.
Further disaster awaited as Rome’s famed internal trade network collapsed. Since the days of the Pax Romana, Rome’s economy depended on trade between ports in the Mediterranean and road systems within the Empire. It was relatively easy and safe for merchants to travel from one end of the Empire in a matter of weeks. Civil unrest during the crisis made it hazardous for merchants to travel and the debased currency made trade difficult.
Although the army had swelled in size in the years since Augustus, paying the salaries of soldiers was difficult which led to a decline in the high standard of Roman warriors. The Empire increasingly relied on mercenaries to maintain order and fight battles, and when these men didn’t receive payment, they had no problem turning their back on Rome. Worse still, many of these mercenaries decided to fight against their former employers. If all of the above wasn’t bad enough, the third century saw the rise of several enemies who were all determined to destroy Rome.