Crisis of The Third Century - Economic Impact

Economic Impact

Internally, the empire faced hyperinflation caused by years of coinage devaluation. This had started earlier under the Severan emperors who enlarged the army by one quarter and doubled the legionaries' base pay. As each of the short-lived emperors took power they needed ways to raise money quickly to pay the military's "accession bonus" and the easiest way to do so was by simply cutting the silver in coins and adding less valuable metals like bronze or copper.

This had the predictable effect of causing runaway inflation and by the time Diocletian came to power, the old coinage of the Roman Empire had nearly collapsed. Some taxes were collected in kind and values were often notional in bullion or bronze coinage. Real values continued to be figured in gold coinage, but the nearly pure silver coin, the denarius, used for 300 years, was gone (1 pound of gold = 40 gold aurei = 1000 denarii = 4000 sestertii). This currency had almost no value by the end of the third century and trade was carried out by barter — every aspect of the Roman way of life was affected.

One of the most profound and lasting effects of the Crisis of the Third Century was the disruption of Rome's extensive internal trade network. Ever since the Pax Romana, starting with Augustus, the empire's economy depended in large part on trade between Mediterranean ports and across the extensive road systems to the Empire's interior. Merchants could travel from one end of the empire to the other in relative safety within a few weeks, moving agricultural goods produced in the provinces to the cities, and manufactured goods produced by the great cities of the East to the more rural provinces.

Large estates produced cash crops for export, and used the resulting revenues to import food and urban manufactured goods. This resulted in a great deal of economic interdependence between the empire’s inhabitants. The historian Henry Moss describes the situation as it stood before the crisis:

Along these roads passed an ever-increasing traffic, not only of troops and officials, but of traders, merchandise and even tourists. An interchange of goods between the various provinces rapidly developed, which soon reached a scale unprecedented in previous history and not repeated until a few centuries ago. Metals mined in the uplands of Western Europe, hides, fleeces, and livestock from the pastoral districts of Britain, Spain, and the shores of the Black Sea, wine and oil from Provence and Aquitaine, timber, pitch and wax from South Russia and northern Anatolia, dried fruits from Syria, marble from the Aegean coasts, and – most important of all – grain from the wheat-growing districts of North Africa, Egypt, and the Danube Valley for the needs of the great cities; all these commodities, under the influence of a highly organized system of transport and marketing, moved freely from one corner of the Empire to the other.