Economic System of Rome

Ancient Romans ruled over a vast area of land which inherited great natural and human resources. Due to this reason, Rome's economy remained focused on farming and trade. The main aim of this agricultural and slave-based economy was to feed the huge number of citizens and legionaries which inhabited the Mediterranean region. Over the course of time, the Ancient Romans gradually developed a more stable economy after the creation of an agricultural surplus, urbanization, territorial expansion, forced taxation, the spread of coinage, and the need to feed the great city of Rome itself and supply its huge army wherever it might be on a campaign.

It is generally believed that the Roman economy was predominantly based on farming, essentially agriculture, much of it at or close to subsistence levels. Yet in many regions of the Roman Empire, there were significant changes in rural settlement and output following the incorporation of land within the empire. The conquest of huge territories gave unparalleled opportunities for the reorganization of landholding arrangements. The imposition of the Roman taxation system may also have had an impact, but above all it was the organization of labor and production by the local elites operating within the new framework that meant that significant surpluses could be generated from unprecedented crop specialization at the regional level. ¹

The Romans apparently did not formulate any economic theories, yet their economic legislation reveals a mastery of the discipline on one hand but tyrannical tax collection and corrupt practices on the other. The entire Roman legal system was designed, in reality, to preserve economic relations instead of social welfare. These few clues reveal the importance of the Romans’ contribution to economics: they had the ability to conceptualize and define; a strong tendency to systematize, albeit more from an empirical than an abstract point of view; and finally a solid cultural base: though derived in part from the Greeks, it was readily adapted to the traditions and needs of the Romans. ²

Agriculture

Agriculture was regarded as the only occupation which the elites and the ordinary, both considered honorable; and although this sentiment was undermined and practically nullified by the opening-up of short cuts to wealth which followed the conquests of the later Republic, it retained sufficient strength to inspire the treatises on husbandry which have come down to us. ³

There were farms of all sizes, from peasant smallholdings to vast estates owned by the rich but worked by slaves. Upper-class Romans were landowners who, like aristocrats throughout history, saw farming as the most honorable source of wealth. Buying land, to be passed down through the family line, was a more secure investment than trade. Country estates also enabled wealthy Romans to indulge in their passion for hunting. ⁴

During the early years of the Roman Republic, agriculture consisted primarily of small family-owned farms. Largely self-sufficient, these farms sometimes used slave labor. The farmers often sold their surplus crops in town and city markets. As Rome expanded, much of the land it conquered became the property of the Roman state. In the early republic, the patricians (and in later years, the nobles) began taking over some of the public land, occupying more than the law allowed. Often, they took the land without paying even the nominal rent tax. On this land, they eventually created huge agricultural estates known as latifundia. Unlike the self-sufficient family farms, the latifundia operated as profit-making businesses. They were owned by absentee landlords and worked mostly by large groups of slaves. During the period of the late republic, this type of estate farming dominated agriculture. This way, the rich kept the food source under their control and kept the poor under their control also. At times, the peasants used to die of hunger but it did not bother these self-centered greedy elites. Even today the followers of this cruel Roman traditions establish their control.

In southern Italy, these estates became huge grazing ranches. Overgrazing, especially by sheep, caused such severe soil erosion in the region that the land has not fully recovered to this day. Although Italy contained some of the largest estates, large estates also existed in all provinces of the empire. The latifundia became essential in meeting the food needs of towns and cities.

Many farm owners were required to partake in lengthy military service overseas. They could not easily farm their plots and were often eager to sell them. As a result, many small farms were sold to wealthy landowners, whose great estates became even larger. Some of the farmers who sold their land moved to the cities to find work. Others became farm laborers or tenant farmers, who leased land from the large estates and paid rent in both money and crops. ⁵ Vast number of free farmers (those who were not slaves) worked as tenants for large landowners. Tenant farmers paid the landowners rent and kept the crops they raised. Some landowners also used a system called sharecropping: Instead of charging rent, they took a share of the crops their tenants raised. Slaves were also used to work on large farms, although the number of slaves on farms began to decrease during the first century B.C. Owning and taking care of slaves was more expensive than simply hiring tenant farmers.

Farmers and their families typically raised vegetables, fruits, livestock, grains (such as wheat and barley), grapes, olives, and figs. Fruits—such as apples, peaches, pears, plums and cherries—were also important crops. They also grew nuts, including almonds, walnuts, and chestnuts, and various herbs ⁶ but after the end of the Republic, most tenants and farmers who owned their own small plots of land struggled hard to survive. Farm life got tiresome, and there was a long tedious list of never-ending chores which they had to bear. ⁷

Trade

The task of just feeding, clothing and housing Rome’s 1 million-plus inhabitants demanded huge efforts, not only from the surrounding imperial hinterland, which supplied much of the raw material (foodstuff, wool, stone, wood, metals), but also, and especially, from the great numbers of craftsmen and workers who turned the raw materials into finished products. Consequently, Rome was a hub of constant, relentless and frenetic activity. ⁸

The city of Rome was the economic heart of the empire. As Rome grew, there were more opportunities for people with skill or money to start small businesses. Similar opportunities developed in smaller cities around the empire. Some provincial cities became centers of a particular trade. Capua, in Italy, for example, was known for all kinds of items made from silver. Patavium (the modern Italian city of Padua) was famous for wool clothing. Lugdunum (Lyons in France) was a glassmaking center. Cities in Asia Minor produced goods like carpets and cloth.

A typical city in Roman times had many of the same businesses and professions that we have in modern cities. Pompeii, which was destroyed by the eruption of Mount Vesuvius in 79 A.D. (although it was small compared to Rome), it had all the merchants and shops people needed to live their daily lives: barbers, surgeons, bakers, cloth makers, carpenters, goldsmiths, and grocers. Some professions in Pompeii included mule driving and mat making. ⁹ Less educated or less skilled people could find short-term jobs, such as unloading ships or doing errands for the wealthy.

Local Manufacturing

Most urban artisanal production and distribution was small-scale, even in a city like Rome. Yet its combined economic impact was far from negligible. Roads bustled with business activities. Many streets were lined with shops and workshops, which were a very visible and familiar part of the urban commercial life. The numerous inscriptions of Roman artisans working in the famous Via Sacra testify to this thriving business life. Most of the commodities manufactured and sold in these shops were probably destined for local use and consumption.

The workshop indeed was the typical Roman production unit, larger ‘factory-style’ enterprises being few and far between, and often state-sponsored which processed cinnabar ore or minium, the product of state-contracted mining operations in Spain, to produce ‘Pompeian red’ paint. Workshops producing the same type of goods would often cluster in specific neighborhoods. Thus, in Rome the vicus materiarius (neighborhood of the carpenters) the vicus lorarius (harness-makers), the vicus-ionum ferrariarum (iron workers), the vicus turarius (perfumers) the scalae anulariae (stairs of the ring-makers), and so forth were found.

Roman shops were easily recognizable by their wide entrances. Part of the merchandise was displayed at the store fronts on counters, where customers could handle the goods. A wider selection could be found inside. Most of the shops were part of large houses and had upper levels and back rooms that were used as storage room and dwellings. The modern separation of living and working space clearly did not apply to the Roman business life. Signs, frescoes and small texts often indicated the identity and specialization of the artisan. On the front of a Pompeian house, the walls on either side of the doorway were decorated with frescoes representing Venus and Mercury as protective gods and several work activities, such as wool-combing and felt-making. ¹⁰

Main Employers

It was noted that two types of businesses provided many job opportunities throughout the empire: construction and finance. The various emperors’ building projects created jobs for laborers and people who manufactured and transported building materials. The Romans used cement for many of the buildings, but marble was also used in some of their most important structures. Some of this marble was taken from quarries on the Italian peninsula and some was imported from Greece, Egypt, and Asia Minor. Other building materials included wood, brick, and tile.

Other than war, the business that produced the biggest profits was finance, both public and private. Finance involved lending money and making investments. Money lenders served some of the same purposes as modern banks, loaning money to business persons who were looking to start a new venture or expand an old one. The borrower had to repay the money with interest.

One type of investment opportunity was known as tax farming. During the Republic, people called publicani collected taxes on behalf of the Roman government in parts of the provinces. They paid the government for this right and then kept what they collected. Publicani also won contracts to build public buildings. They raised money to start their businesses by selling shares of their business. They offered investors a percentage of the profits they made, based on how much money the investors risked. ¹¹

International Trade

Trade was carried on from early in Rome’s history, with entrepreneurs buying goods from one location and selling them in another. In the late republic the term negotiator seemed to imply a financial dealer or banker, but it came to mean someone generally engaged in the trade of goods. Negotiatores handled the transport business and acted as middlemen, sometimes dealing in specific products. Some negotiatores were agents of large trading companies, which were owned by wealthy investors, and they were of many nationalities. Mercatores were merchants dealing with specific commodities and may even have been employed by negotiatores, along with sailors and river boatmen. ¹²

Spain, rich in gold and silver, in fine wool, and a prolific soil, traded largely with Rome. ¹³ Apart from these items, Romans had a product they could trade with other states i.e. salt. Romans collected it along the mouth of the Tiber River. Salt not only added flavor to foods but also helped preserve them. Another important trading commodity was wine. During the 6th century B.C., the Romans sold wine to the Carthaginians and to their closer neighbors on the Italian peninsula. By trading with their neighbors, the Greeks and the Etruscans, Romans were able to get goods from a wide geographic area. Ivory came from the Middle East or Africa, and amber (a golden brown semi-precious stone) came from northern Europe. Roman artisans learned to make beautiful and practical items out of imported materials such as these. They also used metals and stones found locally. By the time of the Republic, Romans were trading handcrafted goods around the Mediterranean, especially pottery and bronze items. In return, Rome received grains and other foods it needed to feed its growing population.

As Rome’s empire expanded beyond the Italian peninsula, it traded with more distant lands. Roman glassware has been found in what is now Norway and southern Russia. Roman metal goods also reached a wide market. After Augustus, trade with Asia increased. Romans imported luxury items from the East—silk from China, spices from India and nearby islands. Other popular imported goods included perfumes and gems. The Romans paid for these items with gold and silver, since they did not have similar luxury goods to trade in return.

Wherever Roman troops were victorious, traders followed. The traders set up businesses throughout the empire to export needed items to Rome. Some of these traders worked for themselves, while others worked for large companies. The traders used the Roman road system to transport their goods. Items from more distant lands came by ship. Rome lacked a port city, so goods sent by ship were unloaded in other cities and then taken by road to Rome. In the first century, the emperor Claudius built Portus i.e. ‘the Harbor’—near the older port town of Ostia, which was about 18 miles from Rome. The English word port comes from the name of this Roman port city.

Rome also traded with parts of Africa that were beyond the empire’s borders. Some of the most desirable goods from that region were exotic animals that did not live in Europe. Some, such as parrots and monkeys, were kept as pets by the rich. Other animals, such as crocodiles, lions, leopards, and elephants, were used in the gladiator games held in Rome and other cities. The animals fought each other to the death, and also fought the gladiators. During one game, the emperor Commodus killed five hippopotamuses. ¹⁴ The Roman government spent large amounts of money to capture, transport, and take care of all these foreign beasts. It was a sign of the empire’s wealth—and its tendency to waste its money on lavish games and desires which were not done to help the poor, but for the entertainment of the rich who used to consider others akin to the cattle of their farms and ranches.

The silkworm (bombyx) was first mentioned in ancient literature by Aristotle; and the manufacture of silk from its cocoon was carried on in Assyria, from where bombycinae vestes were imported to Rome and island of Cos. ¹⁵ It was not until the reign of Justinian that silkworms were imported from Khotan and the industry established at Constantinople which was quite expensive according to local currency and barter trade of that time.

Merchant Ships

Traditionally, the vessels designed for commerce and trade were shorter, wider and heavier than their military counterparts. Being stouter in design, such ships were more seaworthy in all weather, especially when filled with goods. As their purpose was purely economic, space was devoted to storage instead of weapons or implements of war. Oars were normally limited in number, as the crews were small. Merchantmen relied upon sails, using oars only for maneuvering in special situations or in an emergency. These limitations made merchant ships easy prey for a quick attack, even in convoys, although in a good wind and with enough warning, sails made them faster. For defense they required assistance from the navy of Rome. ¹⁶

Customs Duty

Goods being imported or exported were subject to a portorium, a customs tax. The tax was levied at all frontiers, but the great ports were the busiest places for customs officers, and there were as many as a hundred functionaries checking ships’ cargo manifests. The tax, which went straight to the emperor’s treasury, or the fiscus, was usually levied at a rate of 2 to 2.5 percent of the goods’ value. But some luxury commodities attracted much higher rates, sometimes as much as 25 percent. ¹⁷

Route Security

The Roman navy suppressed pirates, and the army built the famous network of great highways. These were built with military needs in mind, but they helped to open up the Empire, and with the open seaways helped to tie the many peoples and provinces together. Trade and prosperity grew. Merchant ships carried the wines of Italy and Spain to Gaul and Britain, while huge freighters, the supertankers of their day, bore the grain harvest of North Africa to feed the people of the city of Rome. ¹⁸

Mining

The Roman state took a strong interest in the mining of precious metals needed for the tri-metallic currency which was used throughout the empire, either by operating mines directly (under military supervision, and sometimes using slaves, condemned criminals, or tributary labor as part of the workforce), or by contracting operations to lessees. There is evidence for state control or supervision of the extraction of gold, silver, and copper; one might expect a similar interest in tin, the other main element in copper alloys. Lead, since it often occurs in the same ores as silver, was also often extracted under state control.

The principal gold mines of late Republican Italy were near Bessa in the Biella Alps (1st century B.C.), exploiting alluvial deposits by hydraulic means on a massive scale – legislation was introduced to forbid mine contractors employing more than 5,000 people. Gold mines were also worked in the Limousin region of Gaul, but largely abandoned by the late first century B.C. ¹⁹

Money

The original medium of exchange used throughout the Italian Peninsula and Sicily was un-coined bronze—i.e. copper with a very small alloy of tin—which was not cast in pieces of fixed weight, so the scales were necessary in all transactions. The unit of weight was the pound (libra), and the formless lumps of bronze (aes rude), of which many are still in existence, have been thought (in some cases) to approximate to multiples of the Attic pound of 327.45 g. ²⁰ The Romans adopted coins relatively late, in about the middle of the 3rd century B.C., accepting the system from the Greek cities of southern Italy. Early Roman coins did not carry portraits on the obverse (front). The first to do so was struck in 197 B.C. to commemorate the victory of Titus Quinctius Flaminus over the Macedonians. Portraits on coins disappeared again until the time of Julius Caesar, some 150 years later. ²¹

Gold coins (staters) were issued from the time of the Second Punic War, in three denominations, and Sulla, Pompey and Julius Caesar struck aurei of various weights. Silver denarii from the 2nd and 1st centuries B.C. continued in circulation into the 1st century A.D. Silver denarii of Mark Antony struck in the east were so debased that they were not hoarded, and some continued to be used in the 3rd century A.D. These late republican gold and silver coins contained the features recognizable in imperial coinage and were struck in the provinces on behalf of the generals to pay their armies. ²²

Banking

Banks and bankers were integral to Rome's economy. ²³ The Romans adopted certain banking practices from the Greeks and developed new ones. During the first centuries B.C. and A.D., most Roman banks were small. In place of professional bankers, wealthy businessmen and merchants conducted most financial transactions. They established new methods that improved the banking system. One of the most important of these was the introduction of bills of exchange, which are written authorizations to pay a sum of money to a specific person. This is similar to the use of checks today. Instead of cash transactions, most Roman bankers conducted business through these bills of exchange. This system gradually spread throughout the Roman world.

As the Roman Empire expanded, the owners of large estates handled most local banking activities. As a result, banks remained small. During the A.D. 200s, however, the Roman imperial government took over some banking within the empire and created a more organized banking system. Over time, the government passed laws to regulate the banking system, and some of these laws influenced banking during the middle Ages and afterward. ²⁴

In most cases, Roman bankers, called argentarii (singular, argentarius}, were either money changers who exchanged the various kinds of Roman coins for foreign currencies (or vice versa) or private businessmen. Most of them were equites or freedmen (since patricians generally considered dealing with money to be beneath their dignity) who lent people money. In the late Republic and early Empire, the most prevalent range of interest rates for such loans was 6 to 10 percent in Italy and the more economically stable provinces. In outlying provinces, where issuing loans was riskier, the rates could be much higher. (It was common for provincials to borrow money to pay their taxes, from which Roman citizens were long exempt; such borrowers frequently ran up large debts that they could not fully repay.) Bankers also provided other important services, such as taking money and other valuables on deposit; buying, selling, and managing land and buildings; and collecting outstanding debts for someone else. Agents for these bankers typically ran money-changing tables (mensa publica) in forums, marketplaces, and other central public areas. ²⁵ Due to this banking system, many people lost their wealth and even their lives. When a person took some loan from the bank, s/he was bound to pay it back along with interest otherwise the bank would take over his/her property and even have the person killed or enslaved. This was the core reason why Islam totally rejected and condemned usury because it was a tool which the cruel and wealthy used not only to destroy the economy, but also the social structure of the society. Then they would control it completely and have a new system installed which would be as per their will.

Other Financial Tools

There were forms of cashless payments for which the law of debt provided the legal frame. The commonest form was probably the use of nomina (credit or bonds). Cicero alludes to the practice when mentioning the purchase of a house. Nomen was the term for a written entry made into an account-book when a loan was made or taken out. It could either refer to the entry made, or to the actual loan that the entry referred to. If a purchase was made by nomen, the purchase price was extended as a loan and paid later in the form of some monetary transfer, or in installments.

Already by the mid-second century B.C., it was recognized that nomina (loans or their written testimony) could be transferred by delegatio or transcriptio to third parties. In 49 B.C., Quintus Cicero tried to pay off a loan to Atticus by assigning to him a debt owed to Quintus by Egnatius. In 45 B.C., Faberius wished to pay off a debt by assigning to Cicero several of his nomina (which, however, Cicero did not accept.). In principle, therefore, any large payment could be settled without the use of cash by constructing a loan, or by transferring a debt claim. During the Republic such transfers still required the consent of all parties involved, but by the second century A.D. they had become less personal and quite standard. Legal historians have explained such strategies as constructions to circumvent the general principle of cash exchange. But a purely legal explanation downplays the impact of these practices on the development of money. They transformed a monetary economy based on cash into one based on both cash and monetary instruments.

Another type of cashless transfer of money was permutatio, literally meaning the ‘exchange of one thing for another.’ The transaction has been variously translated as ‘barter’ or ‘written order of payment between banks’ or ‘bill of exchange.’ It has also been suggested that it originally involved an exchange of different currencies. Cicero alludes to the practice several times without explaining it. In all cases, permutatio seems to have had the function of transferring money from one place to another by using money that was in one place, and the currency, in which it was needed. Thus Cicero, travelling to Cilicia where he served as governor in 51 B.C., stopped over in Laodicea to collect money owed to him by the administration. He referred to the operation as a publica permutatio, a transfer of public funds, and the money was handed over to him by a tax-collector. Subsequently he paid to the tax-collectors 2.2 million sesterces, which he had accumulated during his proconsular government of the province. When sums were transferred for private purposes, no tax-collectors would be involved, and other channels had to be used. Cicero, once again not in Rome, asked Atticus to give to his son Marcus, who happened to be studying in Athens at the time, his stipend by permutatio. Atticus, who had many contacts in Greece, found a creditor who advanced the money to Marcus. The creditor in fact owed money to Atticus, and by paying the cash to Marcus, he paid off his debt to Atticus. Cicero, in turn, paid over to Atticus rents of houses that he leased out in some quarters of Rome. Permutatio was thus a procedure, rather than a document or legal claim, involving a network of relationships and obligations built up over time and various transactions. Although its primary objective seems to have been to move public resources around the empire, individuals could make similar arrangements if their economic activities had reached a degree of complexity. ²⁶

Finance

For centuries the monetary affairs of the Roman Republic had rested in the hands of the Senate, which was steady and fiscally conservative. The Aerarium (state treasury) was supervised by members of the government rising in power and prestige, the Quaestors, Praetors and eventually the prefects. With the dawn of the Roman Empire, a major change took place, as the emperors assumed the reins of financial control. Augustus initially adopted a system that was, on the surface, fair to the Senate. Just as the world was divided into provinces designated as imperial or senatorial, so was the treasury. All tribute brought in from senatorially controlled provinces was given to the aerarium, while that of the imperial territories went to the treasury of the emperor, the Fiscus.

Initially, this process of distribution seemed to work, although the legal technicality did not disguise the supremacy of an emperor or his often used right to transfer funds back and forth regularly from the aerarium to the fiscus. The fiscus actually took shape after the reigns of Augustus and Tiberius. It began as a private fund (fiscus, meaning purse or basket) but grew to include all imperial monies, not only the private estates but also the public lands and finances under the imperial eye. The property of the rulers grew to such an extent that changes had to be made starting sometime in the early 3rd century A.D., most certainly under Septimius Severus. Henceforth the imperial treasury was divided.

The fiscus was retained to handle actual governmental revenue, while a patrimonium was created to hold the private fortune, the inheritance of the royal house. Just as the Senate had its own finance officers, so did the emperors. The head of the fiscus in the first years was the Rationalis, originally a Freedman due to Augustus' desire to place the office in the hands of a servant free of the class demands of the traditional society. In succeeding years, the corruption and reputation of the freedmen forced new and more reliable administrators. From the time of Hadrian (117-138 A.D.), a rational was hailed from the Equestrian Order (Equites) and remained so through the chaos of the 3rd century A.D. and into the age of Diocletian.

With Diocletian came a series of massive reforms, with total control over the finances of the Empire fell to the now stronger central government. Under Constantine this aggrandizement continued with the emergence of an appointed minister of finance. He maintained the general treasury and the intake of all revenue. His powers were directed toward control of the new sacrum aerarium, the result of the combination of the aerarium and the fiscus. ²⁷

Taxation

The Roman state traditionally had a vital interest in the productivity of the empire’s farmers, since its revenues were based primarily on agriculture. These revenues came from land taxed directly by the imperial government or from the rents and other income from imperial estates. In the early empire, the land tax, termed conventionally the stipendium or the tibutum soli was assessed on the basis of productive land, although other assets such as the capital connected with the land might have been liable to taxation as well. The method of assessment apparently varied from province to province and often derived from the traditional taxing systems that the Romans found when they annexed a given province. In some provinces the taxes on the land were collected in kind (produce), and in others, taxes were paid primarily in cash. Under certain circumstances, taxes that in theory were to be paid in kind could be commuted in cash, but with the inflation of the third century the imperial government increasingly resorted to exactions in kind of agricultural products and other commodities to support military annona (the principle tax that government imposed on the provinces). The single most important tax was the artabia, a tax of wheat assessed as a fixed quota (generally one artab per aroura, with some variation) for land that cultivated this crop. Owners of other types of agricultural businesses paid different types of taxes. It seems likely that, in the grain producing provinces such as Africa and Egypt, the imperial government as a matter of policy maintained a taxing system that depended on payments of wheat as a means of exercising control over the supply of food for the city of Rome and for the army. In the later empire, agriculture continued to provide for the basis of taxation. ²⁸

For centuries, the imperial tax system was a demonstration of the favored status of Rome and Italy, and mirrored Rome's policy toward its provinces and subject peoples. The government of the Republic followed the Greek model in its program of taxation, which had no direct taxes, with the exception of emergencies or extraordinary situations. There were, however, forms of indirect revenue enhancement. The most important of these were the 5% charge on the manumission of slaves (vicesima manumissionis) and the harbor tax. Allies or clients of Rome did not pay any taxes either, but fulfilled their oaths with troops and with ships.

All of this changed as the Republic acquired provinces. Each territory had to yield a fixed sum in direct and indirect taxes, but there was no set method for collection. Whatever local system was in place at the time could be retained so long as it fulfilled the purpose and was reasonably efficient. A more uniform formula for taxation was put in place by the imperial regime of Augustus. The key to taxation was the census used in every province to determine populations. From those figures came new quotas. Rome and Italy were, of course, spared every kind of direct tax but continued to pay indirectly. Thus, the census was increasingly important to the entire imperial financial system.

All Roman citizens were immune to direct taxation until the year 217 A.D., when Caracalla issued the monumental Constitutio Antoniniana, by which all residents of the Empire were given full citizenship. All were now subject to payment, except for Italy, which retained its historic privilege until at least the time of Diocletian in the late 3rd century A. D. That emperor ended Italian supremacy and instituted direct taxation, the same found in every other province.

The direct tax, collected from the provinces, was called Tributum. During the Republican era the tributum consisted of a fixed amount (Stipendium) or a tithe (decumae). With the dawning of the Empire and the application of the census, more accurate means of judging population were available. Based upon the census figures, a number of taxable regions per province (areas eligible for taxation) was found known as the iuga or capita, a group of taxable units that would vary from census to census. The direct tax, tributum solis or the land tax was calculated from the capita. Anyone who owned land paid, but provinces also had to make payments in other items or services. These included arms, food and or other supplies for the legions that defended them or the bureaucrats who administered the cities. For those who did not own land there was a different tax, the tributum capitis, or poll tax. All members of this group who were over the age of 20 or 25, male or female, were liable, but females had to pay only half. Two forms of the tributum capitis existed, one for the country and another for the city.

Taxes in the city were based on whatever property that was owned and on wages from a field of work. Collection was in the hands of the provincial government, trickling down to the local community and the exactores, the loathed tax collectors. The treatment given to Matthew in the New Testament accounts was very typical, while in some regions any protest against the Empire was often started with the wholesale slaughter the tax collectors, the most prominent image of imperial tyranny. In the later years of the Empire all means were used to ensure the acquisition of revenues, the main burden falling on Decuriones, or local magistrates. Any arrears in taxes had to be paid by them, an arduous and expensive obligation that could lead to imprisonment, torture and even death if not fulfilled.

The indirect system of taxation was considerably adjusted by the fiscal policy of Augustus. Citizens had to pay the harbor tax but new taxes were added as well. A 4% tax on the price of slaves formed the quinta et vicesima manicipiorum, while the tax on manumission continued. The centesima rerum venalium levied a 1% charge on all goods sold at auction, and the vicesima hereditatum et legatorum imposed a 5% tax on inheritance of estates over 100,000 sesterces by persons other than the next of kin, or on all willed legacies. ²⁹

Economic Decline

The economic background for the decline of the ancient culture was not slavery but the roman colonate. It is certain that the breaking of the ancient economic and intellectual order of society was due to primarily to causes within the Roman Empire. External reasons had little appreciable bearing upon the great change. ³⁰ On the other hand, Bryan Ward-Perkins makes the more traditional and nuanced argument that the empire's demise was brought about through a vicious cycle of political instability, foreign invasion, and reduced tax revenue. Essentially, invasions caused long-term damage to the provincial tax base, which lessened the Empire's medium to long-term ability to pay and equip the legions, with predictable results. ³¹

Economically, the gap between rich and poor increased as the empire descended towards its decline. The middle class seemingly to have disappeared, while the division between the upper and lower classes grew. ³² Most of the causes, initially, point to one place: the city of Rome itself. The loss of revenue for the western half of the empire could not support an army - an army that was necessary for defending the already vulnerable borders. Continual warfare meant trade was disrupted; invading armies caused crops to be laid to waste, while poor technology made for low food production. The city was overcrowded, unemployment was high, and lastly, there were always the epidemics. ³³ An economic downfall followed soon after.

All in all, political, military and economic instability created a 65-year crisis after the reign of Caracalla ended in 217 A.D. During this period, Rome saw over twenty different emperors, each dealing with urgent military challenges at the empire’s borders, steep inflation crippling the economy and constant threats to his tenuous hold on imperial power. ³⁴

The major flaws in their economic system were not due to the fact that the Romans were illiterate or foolish, but due to their selfish and capitalist mindset. It is an accepted fact that no religion or civilization brought an economic system which was based on human and social welfare except Islam. The Islamic economic system focuses on minimal taxation – that too on eligible people – promotes charity, and prohibits usury, hoarding of necessities, and monopolies. None of these components were found in any other civilization, even the so called Great Roman civilization, but still many people consider their systems as great even when the results have proven to be disastrous.

• ¹ David S. Potter (2006), A Companion to the Roman Empire, Blackwell Publishing, Oxford, U.K., Pg. 284-285.
• ² Walter Scheidel (2012), The Cambridge Companion to Roman Economy, Cambridge University Press, Cambridge, U.K., Pg. 26.
• ³ H. Stuart Jones (1912), Companion to Roman History, Oxford at the Clarendon Press, Oxford, U.K., Pg. 304.
• ⁴ Peter Chrisp (2006), E. Explore Ancient Rome, DK Publishing, London, U.K., Pg. 66.
• ⁵ Carrol Moulton (1998), Ancient Greece and Rome: An Encyclopedia for Students, Charles Scribner’s Sons, New York, USA, Vol. 1, Pg. 17.
• ⁶ Carrol Moulton (1998), Ancient Greece and Rome: An Encyclopedia for Students, Charles Scribner’s Sons, New York, USA, Vol. 1, Pg. 17.
• ⁷ Michael Burgan (2009), Empire of Ancient Rome, Chelsea House Publishers, New York, USA, Pg. 99-100.
• ⁸ Paul ErdKamp (N. D), The Cambridge Companion to Ancient Rome, Cambridge University Press, Cambridge, U.K., Pg. 321.
• ⁹ Michael Burgan (2009), Empire of Ancient Rome, Chelsea House Publishers, New York, USA, Pg. 105-106.
• ¹⁰ Paul ErdKamp, The Cambridge Companion to Ancient Rome, Cambridge University Press, Cambridge, U.K., Pg. 321-323.
• ¹¹ Michael Burgan (2009), Empire of Ancient Rome, Chelsea House Publishers, New York, USA, Pg. 105-106.
• ¹² Lesley Adkins & Roy A. Adkins (2004), Handbook to Life in Ancient Rome, Facts on File Inc., New York, USA, Pg. 212.
• ¹³ William Smith (1889), A Smaller History of Rome, Harper & Brothers Publishers, New York, USA, Pg. 287.
• ¹⁴ Michael Burgan (2009), Empire of Ancient Rome, Chelsea House Publishers, New York, USA, Pg. 103-105.
• ¹⁵ H. Stuart Jones (1912), Companion to Roman History, Oxford at the Clarendon Press, Oxford, U.K., Pg. 319-320.
• ¹⁶ Mathew Bunson (1994), Encyclopedia of the Roman Empire, Facts on File Inc., New York, USA, Pg. 918.
• ¹⁷ Norman Bancroft Hunt (2009), Living in Ancient Rome, Chelsea House, New York, USA, Pg. 67.
• ¹⁸ Dr. Simon James (2008), Eye Witness Ancient Rome, DK Publishing, London, U.K., Pg. 60.
• ¹⁹ Walter Scheidel (2012), The Cambridge Companion to Roman Economy, Cambridge University Press, Cambridge, U.K., Pg. 133-134.
• ²⁰ H. Stuart Jones (1912), Companion to Roman History, Oxford at the Clarendon Press, Oxford, U.K., Pg. 338.
• ²¹ Norman Bancroft Hunt (2009), Living in Ancient Rome, Chelsea House, New York, USA, Pg. 68
• ²² Lesley Adkins and Roy A. Adkins (2004), Handbook to Life in Ancient Rome, Facts on File Inc., New York, USA, Pg. 340.
• ²³ Don Nardo (2002), The Green Haven Encyclopedia of Ancient Rome, Green Haven Press, California, USA, Pg. 145.
• ²⁴ Carrol Moulton (1998), Ancient Greece and Rome: An Encyclopedia for Students, Charles Scribner’s Sons, New York, USA, Vol. 1, Pg. 93.
• ²⁵ Don Nardo (2002), The Green Haven Encyclopedia of Ancient Rome, Green Haven Press, California, USA, Pg. 145.
• ²⁶ Walter Scheidel (2012), The Cambridge Companion to Roman Economy, Cambridge University Press, Cambridge, U.K., Pg. 276-277.
• ²⁷ Mathew Bunson (1994), Encyclopedia of the Roman Empire, Facts on File Inc., New York, USA, Pg. 385-386.
• ²⁸ Dennis P. Kehoe (2010), Law and Rural Economy in the Roman Empire, The University of Michigan Press, Michigan, USA, Pg. 165.
• ²⁹ Mathew Bunson (1994), Encyclopedia of the Roman Empire, Facts on File Inc., New York, USA, Pg. 959-961.
• ³⁰ Donald Kagan (1962), Decline and Fall of the Roman Empire, D.C Heath and Company, Boston, Massachusetts, USA, Pg. 36.
• ³¹ New World Encyclopedia (Online Version):http://www.newworldencyclopedia.org/entry/Fall_of_Rome Retrieved: 18-12-2017
• ³² James W. Ermatinger (2004), The Decline and Fall of the Roman Empire, Green Wood Press, London, U.K., Pg. 58.
• ³³ Ancient History Encyclopedia (Online Version): https://www.ancient.eu/article/835/fall-of-the-roman-empire/: Retrieved: 18-12-2017
• ³⁴ Paul ErdKamp (2013), The Cambridge Companion to Ancient Rome, Cambridge University Press, Cambridge, U.K., Pg. 148.