The Roman Denarius: A Lesson in Silver Debasement
The Roman Republic and then Empire was, prior to the rise of colonial European powers, the closest thing to a globalized economy. At its height, the Roman Empire included parts of Europe, Africa, the Middle East, and Asia. A county so big required a common currency unit and the Romans, known admirers of the Greek ways, not surprisingly chose a silver coin as their standard coin of the realm. The denarius was the one of the most common coins in the Roman Empire and was the heart of the Empire’s economy. The average weight of a denarius was 4.55 grams or 1/72nd of a Roman pound (estimated at 11.4 to 11.6 oz).
The Roman denarius was utilized from around the times of the Second Punic War (211 BC) to the time of Emperor Gordian III (AD 238–244). To give some metric of what the value of the denarius was at the time, it was estimated in 2013 that the typical Roman soldier around 27 BC was paid 1 denarius a day and that this was equivalent to $20. The Roman denarius’s initial silver purity was estimated to be between 95–98% purity when it was first struck and was equal to 10 and then shortly thereafter 16 assēs, a Roman bronze and later copper coin.
What is particularly interesting about the denarius is the number of debasements that the currency incurred during the time period of its predominant usage. Starting in 200 BC, not 11 years after the first denarius was struck, the coin incurred a total of eight debasements of some type through 241 AD. The first debasement in 200 BC retained the silver purity in the denarius but cut its value in the Roman pound to 1/84th by changing its weight to 3.9 grams. In 141 BC the value of the denarius was debased through changing the weight of the assēs. Julius Caesar’s monetary reforms around the time of his death in 44 BC, while deemed successful at taming inflation, are viewed as a debasement due to the revaluation of the the denarius to the gold Aureus and the flooding of the market with lots of gold and silver coins thereafter.
Around 64–68 AD under Domitian the purity of the denarius was reduced to 93.5% and the weight to 3.41 grams, then between 193–235 AD several emperors debased the denarius further to starting at 83.5% and eventually to as little as 50% silver purity. The final debasement of the classic denarius occurred in 241 AD when the silver purity of the coin was reduced to 48%. After this, the denarius’ nature and metal content morphed into something that is difficult to still consider a true denarius. While coins continued to be minted called the denarius, many historians and numismatic experts view the end of the true denarius to be around the time of the final debasement in 241 AD.
The primary cause for the debasement was the funding of the Roman wars and the funding of the Roman social programs, or panem et circenses (bread and circuses) to appease the populations and prevent a revolt in Rome and elsewhere.
Analysis: First, the value of silver coinage to both the elites and the average Roman citizen is demonstrated by the importance of silver content in the denarius. The reasons for the debasement of the denarius and the U.S. dollar share similarities. The Roman Empire and the U.S. funded military adventures for profit tied to political corruption and they were both effectively trapped through their own political choices to support the masses through enormous social safety programs. This led to the government’s inability to fulfill its financial obligations without effectively reducing the true value of the currency in the Roman Empire, as it had in the U.S. in the prior century as all precious metals were eliminated from the currency. The Roman debasement of the currency, much as the debasement of our own U.S. currency along with other Western currencies, has effectively been a confidence game or theft of true wealth from the People with disastrous results.
Much as in the United States and other western countries, the debasement of the currency coincided with a general decline in living standards of the average Roman citizen. This makes perfect sense as debasement of currency leads to less purchasing power, or in other words the average citizen could purchase less with the same currency after each debasement. Finally, the story of the denarius and its debasement tells us that governments (and any centralized powers such as central banks which are private, despite the lie told to the contrary) have a long history of being untrustworthy when it comes to maintaining the purchasing power of currency and should be viewed with extreme suspicion in matters of currency and their intrinsic value.
