Inflation in ancient Rome

My view of human nature, and behavior in groups and governments, is that it has changed little over the last few thousand years. Perhaps less barbaric in the last few hundred years, but the dynamics are basically the same. The advance of technology makes dramatic changes in the appearance of things, and the fallacious view currently held that human progress inevitably advances can distract from what I consider underlying common threads.

Machiavelli’s Prince, published in 1532, provides political advice to a prince in a monarchical setting. Yet the advice he gives, which some decry as horribly cynical, is in most respects the same sorts of things things that help a politician get elected in 21st century America, a nominally democratic form of government. For instance Machiavelli advises the prince to attend church in a public manner to assure the populous that he shares their beliefs and is devout.

Swift published Gulliver’s Travels in 1726, and his wry and dark satire portrays human vanities and vices that we can easily recognize in our contemporary world, with some political commentary that again translates easily from a monarchy to our own democracy. In one journey he even goes so far as to satirize academic types who are proud to have developed things that are patently useless such as hairless sheep.

Given the notion that human and governmental behavior has evolved little, if at all, over the centuries, it follows that a familiarity with history can prove instructive when one takes today’s world and attempts to predict future developments. One such category of prediction is the notion, advanced by adherents to the Austrian School of economics, of which I am one, is that when governments control currency, they inevitably enrich themselves by debasing the currency–often in order to finance foreign wars. In older times, when currency consisted of precious metal coinage, governments would direct their mints to dilute the precious metal content of the coins, or reduce their diameter while maintaining the face value of said coins. When the public recognized this and hoarded the older more valuable coins, the government would attempt to confiscate said coins and make it illegal for the public to possess them.

Fast forward a few hundred years, and President Franklin Roosevelt, in 1933, criminalized the possession of gold coin. In 1971, President Nixon formally severed any link between the value of the dollar and underlying stores of gold to back up its value. This set the stage for the inflation of the 1970s which continues unabated.

Given these thoughts, I found the following article of interest. There is no consensus view that the causes of the decline and fall of the Roman Empire are accurately known, but the currency side of things has not been much discussed, so I commend you to this interesting discussion:

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