An Economic Allegory

The Emperor Cult
By Tim Case

“Most of the harm in the world is done by good people, and not by accident, lapse, or omission. It is the result of their deliberate actions, long persevered in, which they hold to be motivated by high ideals toward virtuous ends.” ~ Isabel Paterson, The God of the Machine

17/03/08 “Lew Rockwell” — – Too often history is viewed through the blinders of what ruler made what decision, or what war occurred, on what date. This had led to many not understanding the effects the state and its leadership could or will have on their lives.

This, I believe, also leads to one of the reasons for a continuing admiration, if not adoration, of the state and the state leadership.

We don’t know or aren’t told what effect such and such ruler’s decisions had on the masses of people and their lives. What did they feel or think? How did it change their lives? What was the people’s response; was it flight, fright, or fight? Let me give you an extreme, but not uncommon example.

Preceding the U.S. entry into WWI, America’s president, Woodrow Wilson, set the stage for one (of many) of the Federal government’s most profane periods in American history.

While still “neutral” President Woodrow Wilson in his State of the Union address on December 7, 1915, said in part:

“There are citizens of the United States, I blush to admit, born under other flags, but welcomed under our generous naturalization laws to the full freedom and opportunity of America, who have poured the poison of disloyalty into the very arteries of our national life; who have sought to bring the authority and good name of our Government into contempt… necessary that we should promptly make use of processes of law by which we may be purged of their corrupt distempers… I am urging you to do nothing less than save the honor and self-respect of the nation… disloyalty, and anarchy must be crushed out… I need not suggest the terms in which they may be dealt with.”

He was speaking of the German-Americans and many who heard or read his speech took it as a directive to attack German ideas and beliefs. Whole communities went so far as to suspect anyone who spoke German of treason to the U.S. government while being loyal to the German Kaiser.

California Congressman Julius Kahn went even further when speaking of the German people living in America:

“I hope that we shall have a few prompt hangings and the sooner the better. We have got to make an example of a few of these people, and we have got to do it quickly.”

The hatred that was being garnered against these American citizens is exemplified by the New York Times headlines of April 6, 1918: “Senators favor shooting traitors,” then six days later by the Chicago Tribune’s headlines “Cure treason and disloyalty by firing squad.”

In 1918 my grandmother, who was of German heritage, was 22 years old. Many years later I asked her why she wouldn’t speak German, even though I knew she could speak it fluently. What she told me was chilling.

She related to me, with tears in her eyes, that during 1915 to 1918 she was so frightened that she would be arrested, shot or hung by the federal government, for speaking her native language that she swore she would never speak German again. She never did and she forbad me from ever leaning German as a second language!

Was my grandmother an isolated example? No, there were many among the loyal German communities that lived in fear and were dehumanized by being called “Huns” or worse.

It is easy to see then how the perception of history may change when we can show the consequences of government policy on people’s lives, along with the dates and events.

While some may think of the events of the early 1900’s as being recent history, it is still history. Furthermore with history, regardless of the era, we are dealing ultimately with the lives of real men, women and children who lived it, suffered through it, and struggled to cope with the events that were overtaking them.

The same is true of those who lived, worked, and supported the Roman Empire.

When Augustus Caesar took the throne in 27 BC, at the age of 36, it marked the end of almost a century of revolution, civil wars, civil disturbances, confiscations of property, and prohibitions. Tacitus tells us that the whole world was exhausted and was thrilled to acquiesce to the Roman Empire just to have peace.

One of Augustus’ first acts was to reform the tax system. Next he again standardized the silver coin of the realm, the denarius, at 84 to the pound and the realm’s gold coin, the aureus, at 40 to 42 to the pound.

This had a calming effect on the Romans and restored the unity, pride and material affluence of the people (in fact only about 10% of the population would actually benefit from the prosperity) in the Roman Empire which also solidified Augustus’ reign as emperor.

During the early days of the republic the Romans had lived comfortably with a modest tax which can be rightfully called a wealth tax. However, by the time of Augustus the Roman people were saddled with a progressive tax and a system of tax collection that was fraught with repression and criminal extortion.

Augustus’ idea was to set a flat tax based on wealth and population. This new tax was modeled on the ancient tax system of the early republic and was based on both population and individual wealth. This is probably what he meant when he said of himself:

“I restored many traditions of the ancestors, which were falling into disuse in our age, and myself I handed on precedents of many things to be imitated in later generations.”

The effect of Augustus’ new tax system was that it standardized the amount of revenue the Roman state would receive yearly and stopped the brutal progressiveness of the older tax system.

This placed the citizens of Roman Empire in a unique position, because now they knew each year what their tax liability was but more importantly they knew that anything they earned above the required tax was theirs, no matter how much their income increased.

The obvious result of such a tax system was that there was now a major incentive to become producers, especially since the marginal tax rate above the required tax was zero. Never mind that the wealth earned this year would be assessed and taxed next year; they now had a full year to use their money to increase their income before their wealth was reassessed.

The Forum Romanum called by the Romans Forum Magnum or just the Forum, was the center of Roman life; as such it was the Roman heart of commerce and banking along with being the location for the administration of justice.

The importance of the Forum made the streets leading to and from it prime locations for businesses which supported many bookshops, shoe shops, the finest spice shops and the daily needs of Rome’s citizens.

Augustus’ pro-growth tax system brought about the lowest interest rates in Roman history. This is turn led to people borrowing investment capital for new businesses or speculating in commodities.

Business ventures require loans, and loan contracts were quickly standardized throughout the empire.

Julius Alexander, the lender, required a promise in good faith that the loan of 60 denarii of genuine and sound coin would be duly settled on the day he requested it. Alexander, son of Cariccius, the borrower, promised in good faith that it would be so settled, and declared that he had received the sixty denarii mentioned above, in cash, as a loan, and that he owed them. Julius Alexander required a promise in good faith that the interest on this principal from this day would be one percent per thirty days and would be paid to Julius Alexander or to whomever it might in the future concern. Alexander, son of Cariccius, promised in good faith that it would be so paid. Titius Primitius stood surety for the due and proper payment of the principal mentioned above and of the interest.

Transacted at Alburnus Maior, October 20, in the consulship of Rusticus (his second consulship) and Aquilinus.

We have no way of knowing what this gentleman wanted to use the 60 denarii for, but consider for a moment the timing of this loan which closed on October 20th.

In ancient Rome wheat was the staple of the people, which made its supply critical. Estimates of the yearly market need in Rome for wheat range from 20 to 40 million modii; where a modii is approximately 15 pounds or ¼ bushel of wheat. This means that the average consumption of wheat in ancient Rome was 30 million modii – 450,000,000 pounds – annually.

Given that at this time the population of Rome was in the neighborhood of 5,000,000 we find the average need per person, annually was 6 modii: 90 pounds – 1½ bushels. Of course these totals are going to be greater or lesser based on gender, age, ability to pay and doesn’t take into account the state’s grain welfare program.

However, it shows that Rome required vast amounts of wheat, and highlights its tenuous position.

Something happened to the grain shipments in 18 BC because Augustus Caesar wrote:

From that year when Gnaeus and Publius Lentulus were consuls, when the taxes fell short, I gave out contributions of grain and money from my granary and patrimony, sometimes to 100,000 men, sometimes to many more.

There are many things that could hinder the flow of wheat to Rome but the one thing that not even the might of Rome could change was the weather on the Mediterranean Sea.

The transporting of goods overland was cost prohibitive except for short distances and that left shipping via the Mediterranean Sea to bring the majority of goods to Rome. That is until November of each year when the storms on the Mediterranean closed it to trade until March of the following year. Even during October and April it would be dangerous to sail the Mediterranean, due to sudden storms, so we can assume that wheat imports would begin to taper off in October of each year and would not resume again until sometime in April.

The five plus months when the wheat ceased to arrive must have caused the price to rise based on the simple laws of supply and demand since this law was the controlling factor in Rome’s economy.

If Alexander, son of Cariccius took out the loan because he was a baker and wanted a hedge against wheat shortages for the five months that the Mediterranean was closed to shipping; he would have been able to purchase 120 modii – 30 bushels, 1800 pounds – of wheat.

Many have called the era from Caesar Augustus until the death of Emperor Marcus Aurelius, in 180 AD, the golden years of the Roman Empire. In some ways it was. Augustus’ sweeping reforms dealt with all aspects of the Roman life and set the stage for a very successful period in Roman history. Gibbon even goes so far as to call this period the time when the “human race was most prosperous and happy.”

What is missed in all the jubilation is that Caesar Augustus was ahead of his time. His Fabian socialist ideals were the firm foundations upon which the misery of countless generations would eventually rest.

The Roman people loved their emperor and the peace that came with Augustus’ programs. They were caught up in their success and daily life; raising their children, paying their bills along with the myriad of things that just living entails.

Like the sirens of Greek mythology whose sweet singing lured mariners to destruction on the rocks, so is the promise of the state; regardless of the age.

The Romans were simply people, and being human they either didn’t see or refused to believe the destruction that was overtaking them even as the producers in their society started becoming insolvent then dejected due to the heavy controls that the state was imposing on their lives.

By 192 AD the tax base began to fail; as tax revenues decreased the Roman state began to micromanage the economy, which bound farmers to their farms and craftsmen to their workbenches. All businesses soon became de facto organs of the state; it was business at the point of a sword which tried to control and direct all aspects of the markets. The Roman state’s efforts were to no avail, commerce continued to deteriorate due to the tax burden.

The Roman state’s answer was to exacerbate the problem by increasing the money supply, so denarii with less silver content were issued.

As inflation raged prices sky rocketed (at one point inflation reached an estimated 15,000%), people began to put aside and hide the older, high silver content coins and pay their taxes in the newly issued coins of less value. International trade soon slowed to a crawl. The “real” value of the state’s revenues, as expected, was proportionally reduced.

It wasn’t long before the Roman state began requisitioning cattle and food directly from the farmers, and other producers were simply robbed, as needs arose, by the army. The result was social chaos ensuing from state terrorism which some have christened “permanent terrorism.”

The Roman state even went so far as to demand that state permission be given before anyone could change their residence or occupation. The state fixed prices and wages which eventually led to a complete failure of the visible market, since there was no work there was nothing to buy or sell so the people resorted to food riots, lawlessness and city flight.

The same creeping socialism that affected the Roman Empire has been at work in America since the adoption of the Constitution over the Articles of Confederation, and like those ancient people of Rome we are caught in its trap. Was it the love of the state or our foolishness that resulted in our not seeing what is now overtaking us? Future historians will have to decide.

For the present we will continue to put up with TSA theft of private property, special travel ID’s, threats from Homeland security that permission will be needed for employment and government regulations designed to “monitor” commerce.

As our civilization continues its slide into the socialistic abyss of monetary suicide and as the real possibility of famine lurks on the horizon, let’s at least not allow the words of the Roman poet, satirist, and literary critic, Horace to be a vision of our future.

Time corrupts all. What has it not made worse?
Our grandfathers sired feebler children; theirs
Were weaker still – ourselves; and now our curse
Must be to breed even more degenerate heirs.

Tim Case is a 30-year student of the ancient histories who agrees with the first-century stoic Epictetus on this one point: “Only the educated are free.”

Copyright © 2008


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