It Didn’t Begin with FDR: Currency Devaluation in the Third Century Roman Empire
Since the reordering of Augustus, during the first two centuries of the empire, the Roman state manipulated the intrinsic value of the denarius argenteus, the main axis of the imperial monetary system, from the theoretical 3.892 grams and between 97.0 and 98.0 percent silver to 3.22 grams and 56.5 percent silver at the end of the second century AD.
The increase in military expenditure, social aid, payments to specific pressure groups, new public works, and various types of excesses greatly strained the indebtedness of the Roman state. Inflation was moderate in these first two centuries, averaging 0.7 percent per year, but excessive public spending seriously threatened to push overall prices and the stability of the imperial economic system out of control.
Caracalla, the “new Alexander,” continued and expanded the war policy of his father, Septimius Severus: he increased military pay to twenty-four hundred sesterces a year to undertake new campaigns against the Alamanni and Parthians, whom he bribed for peace, and to pay for everything, he again increased taxes and pursued a new expansive monetary policy. He devalued the three main coins: the aureus to 6.6 grams of gold, the denarius to 51.5 percent silver, and the sestertius to 24.8 grams of brass.
But his main invention was the creation of the argenteus antoninianus, weighing 1.5 denarii, or 5.11 grams, containing between 46 and 51 percent silver, but with the face value of two denarii, which became the standard coinage during the third century. At that time, inflation was still below 1 percent per annum and general prices were 2.67 times those of the Augustan period.
His successor, the prefect of the praetorium Opilius Macrinus, tried again to raise the official content of the denarius to 58.0 percent silver and to abandon the antoninianus project, but after his short-lived reign, Heliogabalus again returned to excessive public spending. The eccentric emperor-priest lowered the weight of the aureus to 6.35 grams of gold, the content of the denarius to 46.5 percent silver, and the weight of the sestertius to 22.5 grams of brass, as well as resuming the minting of the antoninianus with a content of 43.0 percent silver. The copper ace of Augustus began to disappear.
The fall from grace of the Severan dynasty marked the beginni
Article from Mises Wire