In 1787, Edward Gibbon completed his great work on the Decline and Fall of the Roman Empire. In it, he put forward two main causes for the decline and fall: the attacks of the barbarians from without, and the disintegration marked by the advent of Christianity from within. His views on Christianity have remained controversial, but nevertheless these two explanations have been the main chapter headings of discussion ever since.
Yet to these, a third must surely be added, that of the effects of inflation. In the third century, Rome underwent one of the most violent and prolonged periods of inflation that the world has ever seen, and this led to the weakening and then the eventual collapse both of the market economy and that had driven the Roman world, and of the open society that had sustained it.
In the study of history, the role of inflation has received less attention than it deserves. Most historians of the Roman Empire consider inflation as being one of the troubles that afflicted the Roman empire in the third century, yet it surely deserves a far greater role as being perhaps the greatest single cause of the troubles of the third century.
It is only comparatively recently that monetary economists have begun to look at the part played by inflation and the various diseases of money in history of the modern world. The Tudor inflation is sometimes described, but few connect it with the social horrors of the burning of martyrs that accompanied the inflation. The inflation that accompanied the French Revolution is noted in half a page, but few make it one of the centrepieces of that interesting era, turning what began as a not unreasonable displacement of the King into the horrors of the terror of 1793, followed three years later by the arrival of a sound money man, Napoleon, the Margaret Thatcher of the French Revolution. There is some connection between the inflation that struck Germany in 1923 and the arrival of Hitler 10 years later, yet these are rarely pulled together into a comprehensive account of the rise of the Nazis.
The advent of the new thinking came for me in what I consider to be the greatest work of history of the 20th century, Milton Friedman and Anna Schwarz’s study of The Monetary History of the United States 1867 to 1960. In this book he makes two remarkable discoveries. Firstly he shows that a rise in inflation or the converse, deflation, came after a rise or fall in the money supply, normally lagging it by two years or so. And secondly he provides a detailed account of the monetary history of the United States in this period and shows how it is reflected in the social and political history. The most impressive account is that of the great Depression of the 1930s showing how much it depended on monetary mistakes made by the Federal Reserve Bank in America.
It is time to take his insights and to apply them to the Roman Empire and describe in detail how it was that changes in the money supply and the debasement of the coinage brought about inflation, and the role played by this inflation in the changes and disasters that occurred in this century.
Should we really call it Late Antiquity?