Friday, June 28, 2019

History Repeats:

There are lots of ways to kill off a civilization. Wars, politics, economic collapse. But what are the actual mechanics? It might be a useful thing to know whether or not we are killing ourselves off.
Ancient Rome is a good place to start. They had an advanced civilization. They had running water, sewers, flush toilets, concrete, roads, bridges, dams, an international highway system, mechanical reapers, water-powered mills, public baths, soap, banking, commerce, free trade, a legal code, a court system, science, literature, and a republican system of government. And a strong army to enforce stability and peace (Pax Romana). It wasn’t perfect, but they were on their way to modernity.

But Rome collapsed. I often wonder what would have happened if it hadn’t. Could we have avoided a thousand years of the Dark Ages?

What the hell happened to Rome?
Dictators. After 500 years, the famous Roman Republic ended with the dictator Julius Caesar taking power. Four hundred years later his progeny and usurpers ran the Empireinto the ground and Rome fell to invading barbarians.

Rome fell because the dictators ruined the Roman economy and the institutions that had made it prosperous. Rome was falling apart before the barbarian invasions.

How did the Caesars do that? They were profligate spenders. As emperors with absolute power usually do, they thought big: infrastructure (roads, temples, palaces), a huge bureaucracy, and, as the key to maintaining their power they had a very large, loyal, and well paid army. As a consequence, massive government spending far outstripped revenue. They had what today we call a deficit problem.

They did two disastrous things to solve their deficit.
First, they kept raising taxes which became punitive. Not caring much about the consequences to the merchants, small farmers, and peasants, they came up with new ways to squeeze money out of their citizens. Onerous taxes led to tax evasion. The government’s response was to double down and implement laws that restricted economic freedoms in order to raise even more taxes. Heavy taxes forced property owners, small and large, off the land. Large feudal estates run by political cronies arose in their place. Laws were enacted that forced peasants into virtual serfdom. Business owners and their children were prevented from changing jobs or towns. And, taxes had to be paid either in gold or in kind or they would lose everything. Gold became scarce. Gold money was only lawfully available to the government, army, and bureaucrats.
Second, they debased the currency which led to inflation. It was the equivalent of printing money to pay for things. The resulting bouts of high inflation destroyed much of commerce and agriculture. Like most dictators they thought they could stop rising prices by implementing price controls, but that just led to gold and goods disappearing from the economy. Black markets grew despite threats of capital punishment. Unemployment and homelessness rose. Their large welfare system kept running short of money. Commercial, legal, and moral institutions were falling apart. Corruption was endemic. The resulting booms and busts and depressions were destroying the economy.

By the time the Goth and Visigoth invaders came along, Rome was so weakened that they could not hold back the waves of invasions. At the end, Roman citizens saw the government as the enemy and the invading barbarians as their saviors. Rome fell in 410 CE.

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