Military, Civil Administration, Taxes, Politics and Economics of the Roman Republic and Empire

The evolution of the Roman republic and later of the Roman empire is interesting because of the interplay between social, military and poltical dimensions as the drivers of change. To that extent, this post is probably best understood in the context of the other two on the rise and fall of the Roman republic and on the fall of the Roman empire. To that effect, it recaps the political and economic insights described in those two posts and adds some further facts I stumble across while reading about Roman antiquity.
The post is divided in 5 sections that discuss the main issues I was interested in:

• The military structure of Rome
• The Civil Administration
• Taxation
• Political Stability
• Economic structure

Military Administration of the Roman Republic, Principate and Dominate

As the animation below shows, the Roman Republic slowly grew from a small city state on the border between Latins and Etruscans at the centre of the Italic peninsula to progressively dominate the very peninsula by the end of the third century BCE, at which point its expansion exploded into the Mediterranean Sea, encompassing Iberia, North Africa, the Balkans, Greece, Asia Minor, the Levant and eventually Egypt.

This progression is explained by the flexibility of the Roman state towards the organisation of its army. This attitude  allowed it to evolve from a hoplites phalanx army,

… and a small enclave in central Italy

…to a Manipular army in 315BC, as a response to the defeats suffered at the hands of the Samnites,

… that conquered the Italian Peninsula, the southern coast of Spain and defeated Carthage and defeated Macedonia in the next 200 years.

Although the manipular legion was successful in the clashes with Pyrrhus of Epirus between 280–275 BCE, and Carthage, between 264 BC to 146 BCE, these conflicts had shown the need for more flexible formations and the financial problems caused by the need of citizen soldiers to arm themselves according to the census requirements had become problematic. Thus entered Gaius Marius, a plebeian consul who in 107BCE the imposed a new Cohortal army structure in what became known as the Marian Reforms. Marius introduced a professional army, mainly made up of poor proletarian Romans of the  capite censi, divided into smaller units.

This is the professional army of the legionaire and his pillum, the decurion and the centurion that brutally conquered Gaul, Asia Minor, the Levant and Egypt and ruled over the western hemisphere for the next 500 years. Indeed, the only innovation of the Imperial army of the Principate was the normalised addition of extensive auxiliary non heavy infantry units. Rome would survive and overcome the might of more sophisticated upcoming foes but as a military autocracy, not a Republic.

The image below offers a limited sample of formations and deployments of of the Roman army used over the years.

The Roman Empire reached its zenith during the reign of Hadrian (117-138). As we can see, by this stage the auxiliae made up the majority of the army.

The 212CE Edict of Caracalla (AKA the Antonine Constitution), extended Roman citizenship to all inhabitants of the empire. According to Cassius Dio this was a backhanded reward from a greedy emperor, as it made all these new citizens liable to pay imperial taxes. More likely than not it was a necessary response to increasing military funding needs.

It is difficult to know what effect this had exactly on the auxiliae-legion separation as the first was supposedly only available to non-citizens and one of its main appeals was the citizenship grant at the end of one’s military service. However, Elton (1997:148-52) reports that the difference continued to exist even after the citizenship grant. This supports Dio’s view of a tax motivation for the citizenship grant, with appropriate measures taken to maintain the distinction between auxilia and the legions.

In response to the crisis of the third century, Diocletian reformed once more the Roman army, in part institutionalising successful ad hoc reforms of Galienus  The entire structure of the army was changed from the garrison system of heavy border fortification to what Luttwark calls defence in depth, with comitatenses field armies staying close but away from the borders where smaller limitanei policed and warned of incoming attacks. The tetrarchic reforms of Diocletian did not last beyond Constantine I who the difference between border troops and field army remained, so that thanks to the Notitia Dignitatum we know what the army would have looked like.

The size of the army also matters. Clearly as the empire increased and decreased, as it faced increasingly sophisticated foes. It was not just a matter of finding efficiencies and become more tactical. the army had to grow. The figure below (data here) attempts to clarify the pace of this expansion and to guide the reader through its main stages and drivers. It shows the population, surface and body citizen of the Roman state, through its various institutional configurations, while pointing out the main (military) tribulations (defeats) experienced by the Romans and the reforms enacted as a solution to these crises.

Political Administration – Republic, Principate and Dominate

Roman administration was neither stable nor necessarily coherent. Titles began as functional before often becoming honorific and their meaning was fluid throughout the duration of the Roman polity in its many incarnations. However, 3 main  (fluid) shapes can be discerned:

The first period is the Republic, lasting all the way to the rise of Octavian as Augustus and Princeps of the republic. Following the fall of the Kings of Rome, the Roman state had 2 main branches: a legislative and an executive branch. Both also enjoyed judicial power within their own specific remits.

The legislative branch of the Roman Republic was made up of 4 assemblies: the Plebeian Council, the Century Assembly, the Tribal Assembly, the Senate.

The executive branch was made up of a hierarchy of Magistrates who were in charge of the management of the Roman Republic. These included  in descending order of  power: censors, consuls,  praetors, curule aediles and quaestores 

The hierarchy of these roles can be witnessed in the cursus honorum, the accepted career path for aspiring Romans of Senatorial rank. After 10 years as Military Tribune in the Roman Army, a man no younger than 30 could run for the Quaestorship

Another office that was important, was the office of Tribune of the Plebs, which was introduced in 494 as a resolution to the first secession of the Roman plebs to the Mons Sacer. With time, this office gained increasingly more power, until eventually its holders were made senators after a term of office. Plebeian Tribunes, elected by the plebeian council, were sacrosanct within the city of Rome, meaning that plebeians had the imperative of killing anyone who obstructed their path. They also enjoyed ius intercessionis, which allowed any plebeian to appeal a judicial ruling to the Tribune of the Plebs. They presided over the plebeian council and could call the Senate into session and propose legislation before it. Finally, if present, they could indefinitely veto any measure of the senate.

As the Republic expanded and acquired new provinces, their management stretched Rome’s administrative capacity beyond the ability of existing magistrates to manage the new and vast amount of work-flow. The solution was the creation of pro-magistracies. This administrative role should not be confused with an extraordinary magistracy. Promagistrates were administrators who had held the equivalent magistracy in the past and who were now appointed by a senatus consultum to act as a regular magistrate, fulfilling such responsibilities as would have be suitable to that magistrate, but without actually holding the magistrate’s office. Thus there were propraetors, proquaetors, proconsuls and procurators. Generally, the governors of the provinces of the Roman Republic were either promagistrates. Their level of imperium as described by the type of promagistracy they held depended on the stability of the province they were in charge of and the number of legions needed to hold it. Propraetores tended to oversee relatively peaceful provinces while proconsuls who enjoyed senior imperium would be given more military resources and posted on frontier or rebellious provinces.

It is important to notice that the ideal picture described above was very fluid. Some of those institutions were created before or after others,

The second period is associated with the Principate and lasts from the rise of Augustus to the fall of Alexander Severus. Politically, the system was identical to what it had been until Caesar Augustus. The difference however, which was the culmination of the changes that began with the Marian Reforms, was that the checks and balances that had limited the term of office, re-election and accumulation of several magistracies was eliminated. Consequently, all or most magistrate offices and the imperium that went with them was concentrated in the person of the Augustus. De facto, the emperor’s hold on the army allowed him to impose his will. Legally, the accumulation of offices gave him overarching power. As a censor, he had the power to chose the new Senators, thus effectively controlling membership to the only remaining countervailling political force.

The legal person of the emperor enjoyed consular imperium (power to command), tribunitian postestas (power of coercion) and sacrosanctity. Aside from rare periods of particular imperial deference to the Senate, these legal properties made the consulship a mere administrative and eventually purely honorific role.  It also meant that plebeians lost their voice as the Emperors were perpetually endowed with tribunitian power. The plebeian council disappears after the reign of Tiberius.

Administratively, the situation remained similar to what had happened during the Republic, but some innovations had to be introduced to account for the newly created role of the Emperor and his overlordship over the Senate. The Empire became divided in Senatorial and Imperial Provinces. The compromise Monarchical-Republican structure of the Principate demanded a mixed political and administrative structure, if for appearances sake only. Senatorial provinces remained under the command of a propraetor or of a proconsul. It is important to realise that the emperors control of the Senate still gave him control of these appointments so that the distinction was a matter of form, not substance. To administer Imperial provinces the Principate also introduced other offices such as:

• The legatus Augusti pro praetore – This was an Imperial Legate of praetorian rank. He commanded regional legions, acted as regional chief judiciary and head of the local administration.
• A prefect, or a praefectus (he who is put in charge) was the governor of imperian provinces that only only had auxiliae military units present

Both were aided by a civilian Procurator who was a fiscal or public finance administrator in charge of managing local resources. After the mid first century, coinciding with the reign of Claudius  and continued after the Flavian dynasty and the established duration and stability of the Roman occupation of its provinces and the Pax Romana it enforced, the military administration of imperial prefects was replaced by civilian management. The only exception to this remained the province of Egypt (and later for a brief period that of Mesopotamia), the governor of which retained the unique honour of being titled of  Praefectus Augustalis. Egypt was considered the private property of the Emperor, who held quasi pharaonic status over the province and forbade senators to visit it.

With power shifting away from the Senate and to the imperial person, a need arose to manage the workflow that now overwhelmed him and to create a decision making structure across dimensions that reflected the new power structure. Four, perhaps, institutions stand out:

• The main institution that clearly symbolised the Senate’s loss of power was the Consilium Principis, first created by Augustus as a legislative advisory body and further complemented by Hadrian with a judicial parallel. Hadrian also organised the first bureaucratic reforms of the Empire. The Consilium was a permanent body at the disposal of the emperor for legal advice, legislative drafting and to offer judicial responses.
• Financially, the senate aerarium taken from senatorial provinces now also had to compete with the fiscus, headed by a rationalis or a rationibus (can’t tell the difference between them), appointed by the Emperor to manage the imperial accounts.
•  The last institution to arise as crucially important during the Principate was the Praetorian Guard. First created by Augustus, as his bodyguard it was reformed and institutionalised during the reign of Tiberius by the leadership of the first single praetorian prefect Sejanus. It’s monopoly of force within the limits of Rome gave the emperor the ability to coerce the Senate and the people of Rome into doing his bidding. However, the Praetorian Guard was a sword with two edges. The power held by the praetorian prefects and the 12,000 men under their command allowed them to play an important role in the rise of Claudius, Otho, Didimus Julianus, Caligula, Domitian and Pertinax. The guard also provided soldiers for the imperial intelligence service, until it was discreetly replaced by the Frumentarii (originally wheat collectors) during the reign of Hadrian in the second century.

The third period is the Dominate. After the crisis of the third century the Roman Empire went through a number of Administrative reforms, first with Diocletian and later with Constantine. Any republican pretence was abandoned and all administration was directly and exclusively under the authority of the Emperor(s). These reforms resulted in the increased division of the empire’s civilian administration.

After rising to power in 288, Diocletian engaged in a number of reforms of the Roman civilian and military administration. He divided the empire into 2 parts: pars Occitens (west) and pars Oriens (east). Each was ruled by a senior Emperor titled Augustus who delegated some a junior emperor, titled Caesar. Each part was also divided into 2 praetorian prefectures, one of which was generally larger than the other and controlled a province that produced surplus agricultural produce (North Africa and Egypt). The larger of the two praetorian prefectures was under the control of the Augustus and the smaller was under the control of the Caesar. Each praetorian prefecture was further subdivided in into a number of Dioceses, which were themselves composed of provinces. According to the Laterculus Veronensis the resulting decomposition of the empire led to the creation of 100 provinces in the Dominate where the Principate had only known 36+1 (Italy).

After 323 Constantine I continued these reforms. He sought to balance of the by Praetorian Prefects by creating the office of the Magister Officiorum. Constantine other main reform was to reverse the ban on senators in the administration of the empire, which had slowly become a fact of administrative life since the mid third century. Administrative revisions of the number of provinces also continued until the reign of Theodosius, so that the 100 provinces created by Diocletian had increased to 116 by the reigns of Honorius and Arcadius.

The Roman Civil Service Post Diocletian

Diocletian‘s rearrangement is supposed to have had two purposes. It was supposed to spread power so widely that no single local administrator had access to sufficient resources to challenge the emperor. The separation between civil and military administration and the exclusion of the senatorial class from the army would have would have furthered the cause of internal stability and the hegemony of the August. A much less Machiavellian reason also drove the above and below reforms. Rome needed to increase its administrative capacity in order to cope with the resurgence of threats on its borders, be it the Marcomanni, the Jutunghi, the Sasanian Persians, or the Goths.

For all these reasons the shape of the administration changed beyond recognition. By the death of Theodosius in 395, the Empire was divided along 5 administrative levels. The totality of the Empire was divided into two parts, the East (Oriens) and the West (Occitens) each ruled by an Augustus (emperor) who would nominate a Caesar as his heir, rather than as an administrative/military assistant like in the Tetrarchy. From the point of view of civilian administration, each was further sub-divided into a Praetorian Prefectures, headed by a praetorian prefect. The West had 2 such subdivisions, the praetorian prefectura per Galliarum and the praetorian prefectura per Italiae.  The East had another two praetorian prefectures, per Illyrici and per Orientem. Each praetorian prefecture was divided into an irregular number of Dioceses. Dioceses were then divided into 7 to 13 provinces.

It is practical to divide the Dominate’s administration in 3 levels: Central, Regional and the Household service. As repeated throughout this post, the Empire’s structure was rather fluid and power was mostly personal, so that which of  these held more sway with the emperor would have varied over time.:

The Regional Government

The role of the Praetorian Prefect also changed. From his role as the head of the powerful praetorian Guard during the Principate, his responsibilities were successively curtailed so that by the time of Constantine I, it had become a purely civilian role. Four Praetorian Prefects were created, which governed the praefectura each. The Praetorian Prefect became a regional 2^nd-in-command to the Emperor, responsible for one of the 4 praetorian prefectures of Italy, Gaul, Oriens (East) and Illyricum.

Each Praetorian prefecture was then subdivided into various Dioceses under the government of a Vicarius. In this task, he is aided by a large staff (which may also be replicated at other levels of government).

• The princeps (i.e. chief of staff was chosen from among the senior agentes in rebus (couriers or special investigators, ‘men of affairs,’ from the ministry of the interior headed by the master of the offices), from the salary class of the ducenarii (those earning 200,000 sesterces a year – the highest regular pay grade in the Roman civil service; the highest officials from governor up were not civil service).
• A cornicularius (“chief of staff”).
• Two numerarii (chief accountants).
• A commentariensis (keeper of the commentary,” the official diary).
• A nadiutor (adjutant; literally “helper,” an assistant).
• A nab actis (“acts-keeper,” archivist).
• A cura epistolarum (“curator of correspondence”).
• An unnamed number ofsubadiuvae (“deputy assistants”).
• Various exceptores (lower clerks).
• Singulares et reliquum officium(various menial staff).

Below the Dioceses stand the Provinces, which are governed by Praeses, Consulares, and Correctores. Below provincial level, stands the municipal council of the curiales made up of decurions, local grandees whose main function was tax collection by the late empire.

Central Government

The Magister Officiorum was the head of the central government, a sort of prime minister or chancellor. His immediate head of staff was Comes dispositonum, a deputy to the very powerful magister officiorum (“master of offices”); responsible for organizing the imperial calendar and preparing the correspondence for distribution to the proper offices for transcription. He was probably the head bureaucrat responsible for the daily management of affairs across governmental departments. Governmental departments were divided into four bureaus, or the sacra scrinia, each under a respective magister, who headed a team of Notarii (notaries):

• the scrinium memoriae: handled imperial decisions called annotationes, because they were notes made by the Roman emperor on documents presented to him, and also handled replies to petitions to the Roman emperor
• the scrinium epistularum: handled correspondence with foreign potentates and with the provincial administration and the cities,
• the scrinium libellorum: the third dealt with appeals from lower courts and petitions from those involved in them,
• the scrinium epistolarum Graecarum: handled the documents issued in Greek and the translation of Latin documents into Greek

Another important duty transferred to the office by Emperor Constantine was the supervision of the agentes in rebus, a corps of trusted messengers who also functioned as controllers of the imperial administration, under the leadership of the head of the Cursus Publicus, the Praefectus Vehiculorum. This control of the feared agentes, or magistriani, as they were colloquially known, gave the office great power.

The other immediate subordinate of the Magister Officiorum was the Comes sacrarum largitionum-a Vir illustris– Master of the ‘Sacred Largess’, who operated the imperial finances. He controlled all of the mints (each led by a Procurator), was in chief of a long list of officials (more Procurators, rationales, Praepositi and Primicerii) who collected senatorial taxes, custom duties and some land taxes. He was also responsible for the yields of the mines, provided budgets for the army’s uniforms manufactured by the Gynaecii (managed by the Procurator Gynaecii) and the weaponry manufactured by the fabricae (managed by the primicerii fabricae). His competence also included several minor Comites:

• Comes Auri ‘gold count’
• Comes sacrae vestis—Master of the wardrobe of the emperor.
• three regionalcomites largitionum: for Italy, Africa, Illyricum
• a comes commerciorum for Illyricum.
• a comes metallorum per Illyricum, responsible for the region’s gold mines

The Imperial Household Staff

The last level of administration considered here is the royal household. The Emperor’s private household matters had its own administration, which included

• Comes domesticorum-a vir illustris– Head of the Domestici, a corps of bodyguards of the emperor who were stationed in the imperial palace. There were two of these comital commanders, for the cavalry and for the infantry (Comes domesticorum Equitum  Comes domesticorum Peditum).
  • Comes rerum privatarum—Powerful imperial officer responsible for the private estates or holdings of the emperor and his family (res privata). He maintained the properties and collected all monies from rent, of which most went to the public funds and some to the privy purse administered by thecomes privatae largitionis.
• Comes privatae largitionis—Keeper of the privy purse, answerable and subordinate to the comes rerum privatarum.
• The Praepositus Sacri Cubiculi, which translate to “provost of the sacred bedchamber” was the head of the emperor’s servants. He was usually a Eunuch who acted as the grand Chamberlain. There was also a Primicerius Sacri Cubiculi, similar to the Praepositus in principle but with a lower rank. It appears that the lowest level, before slavery, was that of the Cubicularius, a staff eunuch under the authority of command of a praepositus or a primicerius.

Political Stability

As I discussed elsewhere (a detailed guide here), the Roman Empire, because it was an absolute military autocracy without any accepted procedure for the orderly succession of the Emperor, was very unstable politically. This can be seen in the exponential shape of the distribution of reign duration of the various Roman Emperors from Augustus all the way to Zeno. In the figure below, the “blue line” represents the empirical cummulative density function of the distribution of the duration of the reign of Roman Emperors, and the “red line” represents the corresponding theoretical (ideal) exponential distribution which is a better match than the normal distribution, the “green line”.

In this respect, the Roman Empire was in no way different from many other monarchies that have ruled over various parts of the world. Indeed, it seems to be a basic feature of empires in general.

Beyond centralised political competition, there’s an interesting point that should be made about economic and political centralisation, and balance between centrifugal and centripetal forces within a large empire, which are atemporal and relevant still today. The economic centralisation and the geographical trends discussed below, natural though they may have been as per our understanding of new economic geography, were relevant in supporting fault lines in the fabric of the western empire that were partly responsible for the turbulence described by the figure above. These were always present and were exacerbated by foreign invasions that stretched the military capacity of the empire and left frontier provinces exposed to depradation. The cases of Postumus, Constantine III, Marcellinus, Aegidius and Syagrius are interesting and diverging cases in point.

Taxation in the Roman Empire

AHM Jones’ The Roman Economy (1974:26-29) is probably the most authoritative source on the history of Roman public finances. As mentioned earlier, imperial taxes (the fiscus) would have been the purview of the rationalis, while the aerarium of the senatorial provinces is likely to have remained under the purview of a quaestor, at least in the beginning of the principate.

According to Jones’ description of the tax system of the cities the Quaestors managed the civic treasury, “under the strict control of the senior magistrates and the council”. There appear to have been separately managed specific purpose funds, such as the “sacred moneys of the gods”, a “cornbuying fund”, an “oilbuying fund”, “endowments for gymnasia” and funds for public celebrations.

During the Roman Republic, tax revenues on the cities were collected as “stipendium, a block levy on the city, (…) or decumae  and scriptura, a tithe on the crops and pasture dues, which were farmed to publicani by Roman authorities”

“Under the empire, the farming of direct taxes was generally abolished, and (…) the old stipendium, decumae  and scriptura was substituted a land or rather property tax

AHM Jones’ The Roman Economy (1974:35) describes the late Roman tax system in quite a lot of detail.

The main tax, the iugatio and the capitatio, was assessed on the land and the rural population. It covered the heaviest item of expenditure, the rations and fodder (annona [militaris and [stipendum) of the army, the civil service and other state employees, such as the workers in the imperial arms factories, [as well as] for public works, including roads and the imperial postal service (cursus publicus). It probably also the grain supply to the city of Rome by the Praefectus Annonae (see also Kuhlmann (1993)’s and Rummel (2011)) Another levy,also assessed on land and rural workers, provided uniforms for the army and the civil service.

Other taxes which were often used to pay the “periodical donatives to the army” included “the gleba, the aurum oblaticium and the aurum coronarium” and applied to senator and decurions.

Traders also contributed to state revenues through “customs and direct taxes (the collatio lustralis, [or chrysargyron]).”

Economy of the Roman Empire

Our understanding of the Roman Economy is limited by the scarce data available. However, some snapshots can be inferred regarding economic activity, population and the distribution of wealth.

The best description of GDP and population estimated for the Roman Empire are definitely provided in Madison (2007). The figure below clearly describes the the fertility of northeast of Africa, Hispania and Anatolia as well as the cosmopolitanism of the Levant and  Greece as trade hubs, whose riches were directed to Italy, towards the nobility and the Emperor, as well as to the poor norther frontiers along the Rhine and the Danube rivers.

Unfortunately, there is very little in the way of time series of income inequality in the Roman Empire. The best proxy for this is provided by estimations of income inequality for the year 14AD, by Milanovic, Lindert and Williamson (2007) and by Scheidel and Friesen (2009) for the period immediately prior to the Antonine Plague (165-186), from both of which unfortunately correspond to the empire, not republic.

According to Figure 6 in Milanovic, Lindert and Williamson (2007), the top 1% of Romans controlled 16% of all the income and the top 5% of Romans controlled 40% of the wealth. in 14AD. According to Scheidel and Friesen (2009), “In this system, some 1.5 per cent of households controlled 15 to 25 per cent of total income, while close to 10 per cent took in another 15 to 25 per cent, leaving not much more than half of all income for all remaining households”. 

Due to these transfers, the population tended to be attracted to Italy, which accounted for +/- a fourth of Europe’s population and around a sixth of the empire. However, because it survived on handouts and rents guaranteed by the protection of the state, the population of Italy quickly fell (through death and migration) after the fall of the Western Empire and the ultimately ill fated campaigns of Justinian (see also  Schnurer (1956:339)).

These realities were the result of complex dynamics. The taxation described earlier, the army, the civil service, invasions and civil wars all played important Roles. Taxation was of crucial importance in the empire particularly as it transited from the Principate to the Dominate with the large extension of the army and the civil service, which imposed large human and capital costs. As the public sector slowly expanded, it came to have dominate the region’s economy. In my opinion, the best discussion of the structure of the Roman economy is provided by Hopkins (1980), who proposes a 3-sphere description between producers and consumers. Because of the size of the army and the civil service, the Roman economy required agricultural surplus to feed these highly specialised and unproductive sectors of the economy.

Surplus was required in terms of grain and oil for the purposes of feeding the army and the civil service who were often paid in kind. It was also necessary to provide free or dicounted grain to Rome. This was no small amount. Rickman (1980) and Garnsey (1989) offer some fascinating insights about Rome’s dependence on grain imports, putting them somewhere between 200,00 tons and 400,000 tons per year. Apparently, Africa was responsible for supplying Rome during the first 8 months of the year while Egypt fed Rome during the remaining 4 months.

Surplus was also required in metal form, particularly gold, silver and copper in order to make the currency necessary to pay wage salaries to both of these sectors. Hirt (2010) offers the best description of the distribution of mines throughout the Roman Empire. His figures seem to suggest that there’s some concentration of mining on the Danube frontier, but also in Hispania, Greece and Asia Minor.

Finally, the imperial government had to pay wages, provide grain and equipment to its civilian and military staff both in the center as well as in the provinces, particularly those on the northern and western borders. The 2 images below attempt to capture the main features of these dynamics both geographically and sectorally:

For the sake of simplicity, the figure immediately above only really describes what would have been the main features of the Roman Economy. It ignores both banking and the foreign sector, because although they existed, they were not that dominant probably. That being said, a more detailed version could have looked like this:

In that case it would have been important to discuss  the roles of :

• the Rest of the World (RoW) would have sold luxury goods to Rome (mainly from Persia) and slaves and amber from Germania.
• Firms, as we understand them today have no exact equivalence in Roman times, from what I was able to ascert. However, there are two interesting forms of economic organisations that would probably fit our understanding of what a “firm” is: The Colegia and the Societas.

1) The Colegia, or colleges, were in effect cooperatives and/or trade unions akin to the guilds of the middle ages. They were not specific to economic activity and seem to have included both cooperatives of artisans, labour unions and cultural clubs. Freda Utley in her 1925 MA thesis studies them in quite extensive detail, particularly in relation to the provision of food supplies to Rome and Constantinople and the privileges and duties associated. The following colleges can be highlighted. :

• Navicularii (merchant sailors)
• Pistores (bakers)
• Piscatores (fishermen)
• Suarii (pork dealers)
• Pecuarii (mutton dealers)
• Boarii (beef dealers)
• Olivarii (olive oil dealers)
• Aurifices (goldsmiths)
• Lapidarii (stone cutters)
• Fullones (fullers – cleaners of cloth)
• Collatores (dye workers)
• Mabricenses (armorers)
• Mancipes thermarum (those responsible for the maintenance of public baths)
• Mancipes salinarum (those responsible for salt storage)
• Haustores (those who fill the casks of wine)
• Exasciator (he who opens and shuts the barrels)
• Palancarii (wine casks carriers)
  Custodes Cuparum (guardians of the casks)

It is important to note that the manual labour conducted on the mines, the mints and the weavers (gynaecia) was not conducted by freemen, but rather by prisoners, slaves and on occasion colonni, due to their dangerous nature.

2) The Societas, described by Jean Andreu , which normally one or more well endowed aristocrats and some entrepreneurial commoners who would manage and carry out the day-to-day business. They could be of 4 types:

• the societas (simple), “was an association of persons that could be established to pursue any goal, ranging from personal affairs to purely financial relationships. Examples for businesses organized as a societas included the provision of financial services (as so-called argentarius), maritime transport (as so-called exercitor), and joint trading in oil (oleum), wine (vinum), grain (frumentum), slaves (mancipium), or clothes (sagaria). It is most remarkable that all sources, despite the diversity of the businesses conducted, have one thing in common: No societas seems to have consisted of more than a few partners, and most sources provide evidence of only two partners.“
• the societas publicanorum “was a modification of the societas meant to carry out state contracts. Such contracts covered a range as wide as the tasks and items that the government put out to tender: the collection of taxes (vectigalia); the lease of mines and quarries for minerals such as gold (aurum), silver (argentum), or iron (ferrum); the erection or maintenance of public infrastructure like temples (templum), water pipes (aqua), or roads (via); the support of the army (exercitus), or the import of grain (frumentum). It is again very remarkable that there is hardly any evidence for a societas publicanorum consisting of a larger number of capital providers. Among the many sources that touch upon the societas publicanorum, there is only one specific reference: A group of nineteen state contractors that formed, together or separately, three associations to support the Roman armies in the Second Punic War (3rd century BC). Overall, it appears from the sources that the societas publicanorumwas typically not much larger than the basic societas.“
• the societas danistaria was “a private company set up to lend money at interest“
• the societas peculium was “a separate estate of slaves and other persons that were subject to the authority of a pater familias, the head of the family. The peculium had two facets: For those who were under paternal power, the grant of a peculium gave to some extent independence and autonomy. For those who exerted authority, the grant of apeculium offered the prospect of participating indirectly, and therefore at lower risks, in business ventures. If several patres familias had combined their funds and vested a common slave with the capital, they could have mitigated some of the structural disadvantages of a societas. Contrary to widespread imagination, though, the sources do not support the assumption that the peculium of common slaves was in fact used to fund larger enterprises.“
• Banks, known as argentarii, societas danistaria, coactores argentarii and later nummularii – We know that banks would have played an important role still during the empire as evidenced the many laws about interest rates and the discussions of the business dealings of the argentarius L Caecilius Iucundus by Jean Andreau, which would have made the Roman Empire look more like some 18th century European countries according to Peter Temin.

Based on this information, it is possible to add some detail to the circular flow described above and illustrate it with the appropriate Late Roman numenclature:

Although these figures show an idealised economic structure that must have crystallised during the Antonine dynasty of the late second century, Hopkins (1980) argues that this was the slow result of years and years of economic consolidation and public sector expansion since the times of the republic. Interestingly, two phenomena would have probably taken place.

If, on the one hand, as Hopkins (1980) argues the establishment of these economic relationships increased trade in the Mediterranean sea and monetised the economy, the crisis of the third century and the devastation it brought, and the unwillingness of the Roman state to create public debt forced the devaluation of the Roman currency, created enormous economic destruction.

Taking the Quantity Theory of Money as an example, if MV = QP, then, if M ( the amount of cash (denarius) in the economy) increases and Q (amount of produce) decreases, then P (the price level in the economy) must increase and or V must decrease. This is consistent with the observation of decreased monetisation (V decreases) of the Roman Economy and with the increase in prices seen above. This would have also been consistent and supportive of the de-urbanisation, increased economic localism and subsistance farming of the third century.

One fascinating aspect of the Roman Empire was the parallel labour supply of slaves, servants, tenants and farmers categories. Two different dynamics should be distinguished throughout Roman history. First, the concentration of land due to the corrupt distribution of the ager publicus, the absence of farmers during the Punic Wars and endebtment led to the creation of the large latifundi tended to by slaves that Pliny the elder disparagingly observed. On the other hand the crisis of the third century, the Gothic invasions and tentative settlement of the fourth century and their depredations put enormous strain on an already stretched Roman treasury. Thus, the reign of Theodosius creates the difference between servus and colonnus, according to Jones (1974). Thus we must distinguish between slaves (servus – Servi Poenae or servus publicus) who were legally not citizens and colonnii who were poor citizens, tenant farmers, that were tied to the land and whose limited capacity to meet tax payments had motivated them to create a proto-serf relationship with local grandees to whom they delegated their tax responsibility either

•  in exchange for protection against tax collectors, thus transferring the risk to the grandees, whose larger estates would have been able to spread the risk to a larger source of income and whose better connections would have allowed them to buy forgiveness from authorities
• or because of the harassment of local grandees.

Late Roman codes, in their continuous and vain effort to avoid depopulation of productive farms and maintain stable economic output and the imperial revenues associated with it, tie them to the land, much in the same way that other workers were similarly forced to keep their profession and that of their father. Two types of colonni emerge from the legal codes, although the differences are vague:

• Colonnus Adscripti
• Colonnus et Servus

If you are curious the best discussion of the differences between slavery and serfdom is the one by Rosa (2011). A monetary economy apparently makes a big difference, but not all.

Another Political and Economic synthesis

The main insight I take from the information above is the complexity that the Roman state eventually achieved, the reasons behind this trend and its implications. Although the first two are evident from the long discussion above and mostly descriptive the latter is more complex.

The main conclusion I take then is about the role of different states as promoters of competition. The Roman economy was very centralised, particularly at the end. The state, as is generally the case, was the single largest economic player. Ancient Rome, despite possessing more knowledge than the Renaissance was grossly ill-suited to promote competition and unable to facilitate technological growth. It effectively operated a monopsony of purchases that directed the private sector for the purposes of war across the vastness of its reaches. In exchange it offered patronage, rents and price controls, which together with homogeneity and a superior arrogance towards the non Hellenistic world first, and the non-Judeo-Christian world later, which created all the wrong incentives.

Yet once a divided Europe grasped the knowledge of its glorified ancestors, the competing forces tearing it apart pushed it further ahead. A development such as the industrial revolution would not have been possible under the Roman Empire and its state which centralised everything and stifled all competition. It is a chilling realisation that to my mind no better example exists of creative destruction than the 1300 years that followed the collapse of the Western Roman Empire. Whether its collapse was a good or a bad thing completely hinges on whether one considers progress to be more or less important than stability, considering its cost.