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The downfall of Rome and its possible implications for free markets

Copyright © by (deceased in July 2016) and Erik Möller 1996

Version 1.01, Oct 18 1996

Summary: The causes for the downfall of Rome and its historical consequences, the possible implications for a more and more liberated economy

Keywords: Rome, USSR, free markets, Middle Ages, media, foreign trade

1. The downfall of Rome
2. The Middle Ages
3. Consequences for the future

1. The downfall of Rome

Should our economic system collapse one day, there would be many possible consequences. As an historical example, one can look at the downfall of the Roman empire. The records are incomplete, but an increasing impoverishment of provinces becomes clear, first cities, then complete regions. This was an effect of typical accumulation of capital. In the long run, money goes where money is.

The state failed then. It would have had to move money from the rich to the poor. Only this way, the economic circulation could have been preserved. Instead the state demanded the same taxes like before from the poor regions in order to preserve its structures. In these regions, criminality increased, armed gangs made up of impoverished, destitute farmers and citizens wandered around. Local uprisings occurred more and more often.

Fighting criminality and those uprisings required increased spendings of the state in actually economically useless organs like army and police. Thereby the economic process was burdened further. When wild Germanics crossed the borders for plundering again, it was too much. The local population preferred to keep their area under Germanic rule. The taxes to the empire had become a burden for them, as they did not receive an adequate return service anymore.

This decision was mainly made by the poor masses. In the cities there were still people in leading positions not impoverished who still profited from the order of the empire. (The historical foundation of the legend of King Arthur comes from this time, after the breakdown of the empire. Arthus and his knights represented the richer, more civilized Christian citizens, the oligarchy -- while the country population allied with the invading vikings and maintained a heathen culture again.)

2. The Middle Ages

As the masses of the population were not willing to fight for Rome anymore, the empire split up into independent provinces, dukedoms, counties. The feudal structure of the Midle Ages formed. The resulting standard of living for large parts of the population was better than in the last years of the empire (300 to 400 AD).

Totally, though, the standard of living was considerably lower than in the empire during its best time (about 100 to 200 AD). The feudal states had together higher spendings for military and police than the empire before. Besides the mediaeval aristocracy hardly invested in municipal or overregional infrastructure. Instead it spent the surplus for its own welfare and protection. Wars between the feudal lords and among the knights were the rule, not the exception.

The foreign trade declined to a minimum as all nobles demanded customs for their areas. The work-sharing that once existed in the empire, from the granary of Egypt to the copper mines of England, vanished completely. The prices for those products changed drastically without foreign trade, many production places had to end their work and shut down.

The consequences were worst for the culture of mind. The rate of illiteracy rose, as the standard of living declined. The only institution that still taught reading and writing was the church. It remained as the central intellectual organization of the Roman empire. It formed the overregional communication and message system. The church was the mass medium of the Middle Ages. In order to control thinking from the Vatican to the single bistumes and church communities, exchange of letters was necessary.

This way the monestaries in the Middle Ages were what academies, universities and public libraries had been at other times. They became the basis for the intellectual development of Europe to the darkness of the Middle Ages. The longer the Middle Ages lasted, the more impressive and wonderful seemed the Roman Empire and the ancient thinkers to those who still knew of it. Finally, in the Renaissance, books from the Roman Empire were spread again, more than 1000 years after its downfall.

3. Present time

If uprises would break out in industrial states today, they probably could still be suppressed through the martial law, with the military. Thereby the state could ensure its survival. But waht if the state itself is considered as a menace by the majority of the population? Then it could be that the military is not ready to defend it and it is replaced by autonomus administration structures.

The size of these administrative regions is determined by the size of the militia/police/army that can still control them. The parallel to the regional structures of the Middle Ages is obvious. A building up of power strucutures according to the feudal structures of the Middle Ages would also be possible. The role of the church could be taken over by overregional TV networks.

It is decisive, however, if overregional economic structures remain. Should the overregional trade and transport be seriously hindered, by way customs or unrests, the consequences could be unimaginable! The Roman Empire was an agricultural state, its regions could necessarily feed themselves. But today agriculture is industrialized and mechanized.

Without this industrialized agriculture, the harvests could be so small that only about 10 per cent of today's world population could survive. This applies especially to the population of the industrialized countries. For preserving the agriculture there, overregional transport and trade are absolutely necessary. Fertilizer, oil for the motors, spare parts and raw material for machine building must be provided and distributed.

All these things are only existing centralized at very few places and cannot be decentralized (theoretically, but small factories and power plants have a much lower grade of efficiency and would have to be built first -- certainly no solution). The functionality of an overregional economy is therefore absolutely necessary for the survival of the population.

When the USSR broke down, it could be watched how sensitive an overregionally organized economy is. Since the 80s, there was a lack of machines and spare parts for the agriculture. The harvests declined. The situation got worse when after 1991, after the end of the union, new regional administrations and customs formed. Therefore, the links of overregional trade slowly (!) started disintegrating, with more and more serious consequences for the remaining states. According to official statistics, Russia's GNP decreased by 18 % from 1991 to 1992 and by 12 % from 1992 to 1993.

The danger of a breakdown of an overregional economy thereby not only lays in the obvious consequences of uprisings, battles and unrests. Even if these don't appear, or only in a neglectable amount, a number of suddenly appearing trade hemmings can also lead to a collapse. For a regional ruler, the effects of customs or other encroachments in transport and trade are not recognizable. He will see his advantage in it, but not the overregional consequences.

In a time of unrest, decisions would be made by many of such local rulers, which would be necessary for their survival and power preservation, but which could lead to the collapse of a whole continent. Not the missing will is the problem, but the sensitivity and the complexity of an industrialized economy.

Copyright © 1996 by Erik Möller and Seneca.