to solve many of Rome’s economic problems. He canceled
some debts while creating a new mechanism to help debtors
repay their obligations. He also reformed provincial taxation,
removing the publicani as collectors in the east. In Italy he
limited the number of slaves who could work as shepherds to
help prevent slave revolts.
THE DEVELOPMENT OF THE ECONOMY IN THE
IMPERIAL ERA
Under Augustus (r. 27 b.c.e.–14 c.e.), the fi rst Roman em-
peror, the economy staged an impressive recovery, owing in
no small part to the end of a series of disastrous civil wars.
Nevertheless, Augustus did institute important economic re-
forms, such as giving salaries to provincial governors to pre-
vent corruption and excessive exploitation. He took control
of the fi nances of the army, creating a special treasury, the
aerarium militare, to pay for retirement bonuses for soldiers.
Cash sums began to replace grants of land and thus reduced
anxieties concerning property rights. Many veterans were
settled in colonies outside Italy, easing demand for Italian
land. Augustus also reformed the management of the food
supply, appointing a special offi cial to oversee the transpor-
tation, storage, and distribution of grain at Rome. From the
reign of Augustus on, the emperor’s personal wealth came to
play a substantial role in the state’s fi nances. Th e use of Ro-
man coins continued to spread throughout the empire, no
doubt facilitating trade, but there was still no unifi ed mon-
etary system. Egypt had a separate system with its own spe-
cial coinage, and many communities throughout the empire
minted their own coins for local use. At the same time, gold
coinage, fi rst minted in quantity during the civil wars of the
late republic, began to assume a larger part of the money sup-
ply, probably becoming the preferred means of exchange in
long-distance commerce.
Although there were occasional crises, the Roman econ-
omy fared quite well during the fi rst two centuries of the em-
pire. Some emperors enjoyed sizable budget surpluses and
could lavish expensive gift s on the army and inhabitants of
Rome. Others emperors were less fortunate or more rapacious.
Th ey raised money through higher taxes, new taxes, or auc-
tions of imperial property. According to Suetonius, Caligula
(r. 37–41 c.e.) instituted a sales tax on food and a 2.5 percent
tax on legal transactions. He may have also levied new taxes
on porters and prostitutes. Although early in his reign Nero
had lowered or abolished some taxes, he later became des-
perate for money and created a new tax on tenants and also
raised funds through the manipulation of grain prices. Like
many other emperors, Nero also confi scated the estates of his
enemies. In the aft ermath of the short-lived but destructive
civil war of 69 c.e., the emperor Vespasian raised some taxes
while creating new imposts as well. He was also accused of
raising money by creating monopolies of some commodities
and then charging infl ated prices for them.
Many emperors worked to promote the economic de-
velopment of the empire (although they would not have con-
ceived of their behavior in these terms) and the welfare of
their subjects. Claudius (r. 41–54 c.e.) sought to secure the
city’s grain supply by insuring merchants’ ships, off ering cash
incentives for the construction of new vessels, and building a
new harbor and lighthouse at Ostia, Rome’s port city at the
mouth of the Tiber. He also drained the Fucine Lake in cen-
tral Italy, creating new farmland. Following the eruption of
Vesuvius in 79 c.e., the emperor Titus (r. 79–81 c.e.) created
a relief fund by appropriating the property of those who had
died in the disaster and had left no heirs. Several emperors,
starting with Nerva (r. 96–98 c.e.), created foundations to
distribute money to poor boys and girls in Italian communi-
ties so that they could buy food.
Emperors typically fi nanced large construction projects
in the city of Rome. Vespasian, for example, began construc-
tion of the Colosseum, which his son Titus dedicated in 80
c.e. Such buildings beautifi ed the city, but their construction
and maintenance also provided jobs for the lower classes at
Rome. Some emperors simply gave gift s of money to the peo-
ple, and by tradition gift s of cash were occasionally made to
the soldiers. Increasingly in the second century c.e. emperors
would patronize other communities in Italy and elsewhere
in the empire in addition to Rome. Th e stationing of army
units in various locations in the provinces also contributed
to the economic development of these regions, since soldiers
had money to spend and many military supplies would be
purchased locally.
In the latter half of the second century c.e. the empire
began to experience economic as well as military and politi-
cal diffi culties. Th e silver coinage was repeatedly debased.
(Th at is, its silver content was reduced.) As the intrinsic
value of the coins declined, prices began to rise. Although
Trajan’s (r. 98–117 c.e.) conquest of Dacia and its rich gold
mines in the fi rst decade of the second century c.e. helped
feed Rome’s mints, precious metals seem to have been in in-
creasingly short supply. Part of the problem was that there
were few rich territories left for Rome to conquer, and it
was expensive to defend what Rome already possessed. Im-
ports, particularly from the east, also drained the empire of
some gold and silver. In the fi rst century c.e. Pliny the Elder
claimed that millions of denarii were exported each year to
the East to pay for spices, gems, textiles, and other luxury
goods.
Although the Crisis of the Th ird Century, the massive
breakdown of the imperial system from 235 to 284 c.e., was
primarily a military and political crisis, it had severe eco-
nomic ramifi cations. Warfare disrupted trade and the further
debasement of the silver coinage brought about considerable
infl ation. Taxes were also raised. Th e empire began to recover
under the emperors Diocletian (r. 284–305 c.e.) and Con-
stantine (r. 306–337 c.e.), but economic problems persisted.
Diocletian’s Prices Edict of 301 c.e. attempted to deal with in-
fl ation by setting maximum prices for all goods and services.
Th e law specifi ed execution as the punishment for those who
charged too much. Th e measure failed, as did Diocletian’s two370 economy: Rome