Early Stages and Republic

The city of Rome was already in the Iron Age a centre for the movement of goods and people coming from the rest of peninsular Italy and the wider Mediterranean region. Its very favourable strategic location on a major navigable river, the Tiber, and not far from the sea, along with the control it exercised over important natural resources (the saltpans at the mouth of the Tiber, under Roman control from very early on: Dion. Hal. 2.55.5) greatly contributed to its prominence. Recent studies have stressed that the early Roman economy was not limited to agriculture and pastoralism but was, in fact, relatively diversified.²

Rome's increasing military and political dominance over her neighbours in Central Italy and, later, in the rest of the peninsula throughout the 4th and 3rd centuries bce brought territorial expansion and important socio-economic reforms—for instance, the abolition of debt-bondage (nexum), which, according to Roman historiographic tradition, occurred at the end of the 4th century bce. Strategic needs were addressed by the foundation of colonies (see colonization, Roman) in Italy and by the Roman people’s collective ownership of the land confiscated from defeated communities (ager publicus). The distribution of land allotments on the ager publicus and the illegal or excessive occupation of this land by wealthy landlords were one of the reasons for the severe socio-political strife that Rome experienced in the 2nd century bce.³ Rome's military engagement and territorial expansion outside of Italy during the Middle and Late Republican periods caused other key changes: (a) a great influx of wealth which largely benefitted the small number of individuals forming the aristocracy, although the abolition, in Italy, of the direct taxation on land (tributum) in 167 bce benefitted all landowners; (b) an influx of slaves captured in military campaigns; and (c) the emergence of sizeable villa estates engaged in the large-scale production of cash crops. The most important products of this “villa economy” seem to have been wine, olive oil, and the products of animal husbandry. One should, however, be mindful of the bias in the surviving evidence. Wine and oil are very visible archaeologically, both in terms of the containers used for transmarine transport—the amphorae—and the processing facilities such as masonry vats and elements of presses made of stone. Archaeological finds (amphorae; shipwrecks) attest, for the mid-2nd–1st century bce period, the large-scale export of wine from Italy to southern Gaul in particular.⁴ For local Celtic elites, wine was a prestige item, sought after for ritual and social practices. This network of economic exchanges involved entrepreneurs, Roman military forces abroad, consumers within and outside Roman territory, and the city of Rome itself.

The Principate

It is believed that levels of economic performance in the Roman world peaked around the 2nd century ce and were not surpassed until well into the early modern period. While a range of data exists offering information on economic processes in antiquity (e.g., consumer goods, coins, containers used to transport foodstuffs, settlements, building material, remains of plants and animals) we do not have any systematic record of the quantities produced, traded, and consumed. Therefore, scholars have used different kinds of data as proxies for Roman economic development, taking temporal and spatial variations in the quantity and/or quality of these proxies as an indication of economic change.⁵ However, determining the meaning of such variations is not straightforward, and it is often difficult to relate them to economic performance. A good example concerns population growth, which could be an indicator of increasing economic output, but only if not counterbalanced by a per capita reduction in the level of consumption.⁶

Very important issues in the study of the Roman economy include the role of the Roman state, the size of the population and how it changed over time, and whether the Roman Empire ever escaped Malthusian constraints on the economy, with its population enjoying improved standards of living resulting from increased productivity.⁷ Due to the lack of statistics on population size, determining the number of inhabitants of the Roman world and the ratio between numbers of urban and rural inhabitants has been and still is one of the main challenges in studying the Roman economy.⁸ While there is consensus that the overall population steadily grew from the late 2nd century bce to around the mid-2nd century ce, estimates are essentially divided between the proponents of a “low count” figure and those in favour of a “high count” (c. 55 million and c. 75 million inhabitants for the whole empire, respectively).⁹ The reason this matters in studying the Roman economy is that without knowing the size of the total population we cannot fully assess productivity levels, per capita consumption, pressure on the land, wages, standards of living, and, most importantly, gross domestic product (GDP)—all the means by which modern economies are measured. Nonetheless, there have been attempts to estimate the size of the Roman empire’s population and then derive estimates for its GDP. In the late 20th and 21st centuries, scholars strove to approach the study of the Roman economy in quantitative terms in order to compare it with other preindustrial but better-documented economies. Estimating population and GDP were part of this effort.¹⁰ The best current estimates of the GDP of the Roman Empire in the 2nd century ce suggest a total output and consumption equivalent to 50 million tons of wheat per year.¹¹ The degree of economic inequality was huge, with elites (c. 1.5 percent of the imperial population) controlling about one-fifth of total income. Quantitative data such as inscriptions reporting the cost of building projects and various archaeological datasets have been used to infer conclusions about the Roman economy.¹² Indeed, material evidence rather than literary evidence has lately played an increasingly important role in the study of the ancient economy, shifting the focus to questions of economic performance. Studies of the Roman economy, and ancient classical economies in general, have long grappled with the issue of the nature of the ancient economy. Ancient economic activity was determined—and constrained—by social practices and values (see euergetism; patronage, non literary), but whether these traits made ancient classical economies fundamentally different from modern ones is a matter of debate.¹³ Theoretical approaches applied to the study of the Roman economy in more recent years, which range from neo-institutional to development economics, have tended to emphasize that, with respect to key economic features, the Roman economy of the imperial era shared some traits of modern economies.¹⁴ For example, although the technological limits of antiquity (e.g., the speed of communication and transport) have generally been seen as factors that would have prevented the development of a proper market economy, some scholars believe that the Roman Empire was a genuine market economy.¹⁵

The Agrarian Economy and Rural Markets

In the Roman Empire, due to the varied geography of the provinces and their distinctive socio-political developments, significant differences occurred in the organization and practice of agriculture between areas and across time. The so-called Mediterranean triad dominated Roman agriculture: cereals, grapevines, and olive trees (see agriculture, Roman; cereals; wine, Greek and Roman; olive).The large number of villa estates that characterized Late Republican Italy can be taken as a sign of the rationalization of production. While there were regional differences in the development of villas in Italy over time, these market-oriented agricultural production units were a salient feature of the Roman agrarian economy. The density of villas, especially those comprising elegant residential quarters and a working farm, was closely linked to a territory’s level of urbanization. Villa estates near Rome or other large urban centres produced high-quality fresh products such as honey, game, and fish, a type of farming the Latin agronomists call villaticae pastiones (Varro, Rust. 3).¹⁶ Villas, and the specific type of land management they entailed, also became a feature of various provinces and are often seen as one of the direct outcomes of the Roman conquest.¹⁷

Weekly markets authorized by the authorities and held periodically in different towns of a given region, such as those attested epigraphically for Campania and southern Latium in Italy, were the occasion for small and middling farmers and artisans to sell their produce and acquire what they needed. Fairs organized by wealthy landlords on their rural estates seem to have been a distinct Roman development (see, e.g., Plin. Ep. 5.4, 13). However, the produce of large estates was commercialized via wholesale buyers (negotiatores) such as those referred to in Pliny the Younger’s correspondence about his estate in Tifernum Tiberinum and the grape harvest he had sold on the vine (Plin. Ep. 8.2).

Urbanization

A remarkable feature of the Roman world in the imperial era is the high level of urbanization it achieved, something panegyrics of the imperial period comment on (e.g., Aristid. Or. 26.93–94).¹⁸ Some cities were extremely large metropoleis, including Rome (c. one million inhabitants), Alexandria (with an estimated population of 500,000), and Carthage and Ephesus (c. 200.000 each) (see urbanism, Roman). They were huge centres of consumption but also acted as hubs for the exchange of ideas and knowledge and offered a wide range of specialized services and urban amenities, including in manufacturing and retailing.¹⁹ Towns and cities were markets for the distribution and consumption of commercial products coming from both nearby and afar, administrative centres, and centres for the management of the labour force, which included significant numbers of slaves (see “Labour”). The relationship between Rome’s rural economy and the development of cities has been central to the study of the Roman economy, particularly with regard to how the rural economy supported the urban population and whether urbanization and the changes it caused were conducive to economic growth. Urbanization can indicate different things, not necessarily mutually exclusive: it can be seen as an indicator of population growth, economic growth, and division of labour, or as a phenomenon of nucleation essentially driven by social and political factors, such as the rise of a city-based ruling class.²⁰

Labour

The Roman agrarian economy featured different types of labour: slaves, wage labour (seasonal, except in Roman Egypt where wage labour prevailed year-round), and tenants (who could be free or slaves, as the servus quasi colonus category in Roman law attests). Roman law gave much attention to tenancy, including the particular case of tenants on imperial estates.²¹ On average, in cities of the empire, slaves and freedmen made up a large proportion of the labour force. However, it is not possible to determine the exact ratio between free and servile labour. Rome and other big cities of the empire such as Alexandria attracted large numbers of immigrants, both those forcefully relocated as slaves and those migrating in search of better opportunities. A large proportion of the population of these cities was transient and subject to the diseases harboured in the cities.²² In the case of Rome, malaria, which was endemic in the region, seems to have had a particularly negative impact on new immigrants.²³

Another important feature of large Roman cities that had a bearing on labour was the fact that a notable portion of the urban economy centred upon elite households which employed hundreds of slaves and freedmen. The effects of the availability of servile labour on the emergence of an integrated, open labour market where labour demand and supply were linked by price-setting mechanisms, as well as its effect on technological progress, are hotly debated issues.²⁴ Factors arguing for an open labour market, at least in the city of Rome, are (a) the fact that slaves and free people performed the same occupations; (b) that there were no real obstacles to the acquisition of skills; (c) that women participated in a wide range of economic activities, not confined to the domestic sphere; and (d) that hired labour, which is conducive to high levels of labour mobility, was an important form of labour in the Roman world.²⁵ Arguing against the open labour market, one can refer to (a) the fact that slaves and free individuals were imperfect substitutes, since particular sectors of the economy were completely in the hands of servile labour; (b) that the availability of training does not mean that education was available to anyone who had talent; and (c) that ties of dependency bound many free workers. In terms of employment opportunities offered by the city of Rome, one of the most important sources of employment for both skilled and unskilled labour was the building industry.²⁶

Industry and Trade

The fact that the Roman economy was mainly agrarian does not imply that industry was not developed or was unimportant. The scale of operations, the organization of industry, and the role of elite investment in it are all key questions that have occupied modern historians. Division of labour and standardization in specific types of production such as in the manufacturing of building material, pottery, bricks, and tiles, is attested from the Republican period onward. Food processing (e.g., the manufacture of fish sauces and the salting of meat and fish) and textile production were important industries in several regions of the Roman world. Quality textiles were also exported outside the empire to as far away as India. The establishment of regular transmarine shipments to trade foodstuffs destined for Rome (e.g., grain and olive oil from North Africa) also favoured the development of local manufacturing activities for items that could travel as part of the cargo. For example, the tableware known as African red slip, produced in North Africa, found wide distribution in Italy, whereas ships returning from Italy to North Africa took bricks and tiles produced around Rome as cargo/ballast. Professional associations (collegia; see associations, Roman) or guilds existed for several occupations. Unlike medieval guilds, Roman collegia had manly religious and social functions and do not seem to have had a primary role in regulating production, although they may have had an important role in offering financial credit to their members.²⁷

Urban production, while high in aggregate terms, was primarily small-scale, occurring in small workshops. Large-scale production, as in the case of the so-called Samian tableware made in Gaul, could be achieved by a combination of technical innovation (larger kilns in which between 25,000 and 30,000 vessels could be fired in one session) and organization. The site of La Grafensenque, which had a pottery production area of ten hectares and fifty kilns, featured several independent producers who worked together to share only certain stages of the production, thus reducing costs and making the process more efficient.²⁸ The presence of many producers at the same site also presumably made distribution easier: wholesale buyers had to visit only one location.

A high volume of regional and interregional trade was an important feature of the empire (see trade, Roman); from shipwreck evidence, it is believed that transmarine trade peaked in the 1st and early 2nd centuries ce.²⁹ Although elites may express, in literary writings, a disinterest in trade, they did benefit from its profits through intermediaries, who were often their freedmen.³⁰ One difficulty in studying the mechanisms of Roman trade and the extent to which it behaved according to the market economy is the fact that a large quantity of goods circulated within elite households (goods moved from elite rural estates to their urban residences for use by their extensive households and also for distribution to clients and subordinates). Another difficulty is created by the state's redistributive role in moving surplus agricultural production, acquired via either taxation in kind or procurement contracts, as part of the distributive system supporting Rome and the Roman military (the annona of the city of Rome and the annona militaris). With regard to trade with regions outside the Roman empire, the most important in financial terms was the trade with India via the ports of the Red Sea: luxury goods such as spices, pearls, ivory, and silk were imported, while the major exports were wine and textiles. The Muziris papyrus attests to the great value cargoes coming from India could have (in this specific case, the cargo was valued after tax at HS 6,911,852; the customs tax at the 25 percent rate must therefore have been HS 2,303,951). Strabo (2.5.12) wrote that 120 ships sailed every year for India from Myos Hormos on the Red Sea. Therefore, it is possible that one-third of the state’s military budget, estimated at 643–704 million sesterces, could have been met from the customs revenues of the Red Sea trade.³¹

Money

In the early Republic, the city of Rome did not have coins, but relied on standard units of bronze (c. 324 g), which were used probably not as means of commercial exchange but rather to assess fines. Later, from the end of the 4th century bce, it relied on coinage issued at first by the mint of the Greek city of Neapolis in the south of the peninsula (small bronze emissions). The so-called Romano-Campanian coins, comprising both bronze and silver issues using the same weight and unit standards as the Greek coinage, were minted in the name of Rome, probably by a Campanian mint, but the identification is uncertain. However, by the late 3rd century bce Rome had its own mint and a new monetary system based on the silver denarius (see coinage, Roman).

Mining (see mines and mining, Roman) was critically important to the production of coins, and hence to the Roman economy, since coins were made of gold, silver, and bronze-based alloys. It is remarkable that levels of Roman silver production were only matched in early modern Europe, as suggested by the ice cores evidence for isotopic lead pollution related to the extraction of silver from lead ore.³² This evidence indicates large mining output but cannot tell us anything about how changes in the use of metal related to the overall growth or decline of the economy. Major mining areas exploited by Rome were the Iberian Peninsula (lead/silver, gold, copper) and the Balkans.³³ Opencast mines and the use of the ruina montium technique (Plin. HN 33.74–76) made dramatic changes to the landscape, as can still be appreciated in the region of Las Medulas in Spain.

With respect to the Late Republic and early Roman Empire, essential issues debated by historians are the degree to which the Roman economy was monetized, the level of money circulation in the countryside, and whether individuals could carry out complex financial transactions without necessarily exchanging cash.³⁴ It appears that the Romans used credit to increase the money supply and that they were capable of complex financial arrangements that involved the transfer of funds over long distances.³⁵ Other important issues are to what extent the Roman government pursued a coherent monetary policy and the state’s role in providing money, including the effects of its tax policy.³⁶ The issue of monetary policy is not easy to resolve, considering that, on the one hand, Roman money was never fully fiduciary (its face value was linked to the metal content of the coins), and, on the other, older, better quality coins were not recalled from circulation when coinage needed to be debased (see debasement, monetary). This prompted consumers to hoard coins containing a higher quantity of precious metal, undermining confidence in the lower-quality coins. Debasement was particularly severe during the 3rd century ce. Banking and bankers must also be mentioned (argentarii, coactores argentarii, and nummularii; see banks).³⁷ They primarily held people’s deposits and facilitated transfers of money, but bankers also provided loans and credit at public auctions, although it is unclear to what extent they regularly offered credit for commercial ventures.