Roman economy
The study of the economies of the ancient city-state of Rome and its empire during the Republican and Imperial periods remains highly speculative. There are no surviving records of business and government accounts, such as detailed reports of tax revenues, and few literary sources regarding economic activity. Instead, the study of this ancient economy is today mainly based on the surviving archeological and literary evidence that allow researchers to form conjectures based on comparisons with other more recent pre-industrial economies.
During the early centuries of the Roman Republic, it is conjectured that the economy was largely agrarian and centered on the trading of commodities such as grain and wine. Financial markets were established through such trade, and financial institutions, which extended credit for personal use and public infrastructure, were established primarily by interfamily wealth. In times of agricultural and cash shortfall, Roman officials and moneyers tended to respond by coining money, which happened during the prolonged crisis of the First Punic War and created economic distortion and difficulties.
Following the Punic Wars, during the late Republic and the early Roman Empire, the economy became more monetized and a more sophisticated financial system emerged. Emperors issued coinage stamped with their portraits to disseminate propaganda, to create public goodwill, and to symbolize their wealth and power. The Roman Imperial monetary economy often suffered bouts of inflation in part by emperors who issued money to fund high-profile imperial projects such as public building works or costly wars that offered opportunities for propaganda but little or no material gain.
Emperors of the Antonine and the Severan dynasties overall debased the currency, particularly the denarius, under the pressures of meeting military payrolls. Sudden inflation during the reign of Commodus damaged the credit market. In the mid-200s, the supply of specie contracted sharply. Conditions during the Crisis of the Third Century, such as reductions in long-distance trade, the disruption of mining operations, and the physical transfer of gold coinage outside the empire by invading enemies, greatly diminished the money supply and the banking sector by the year 300. Although Roman coinage had long been fiat money or fiduciary currency, general economic anxieties came to a head under Aurelian, and bankers lost confidence in coins legitimately issued by the central government. Despite Diocletian's introduction of the gold solidus and monetary reforms, the credit market of the Empire never recovered its former robustness.
Banking system
The setup of the banking system under the Empire allowed the exchange of extremely large sums without the physical transfer of coins, which led to fiat money. With no central bank, a professional deposit banker received and held deposits for a fixed or indefinite term and lent money to third parties. Generally, available capital exceeded the amount needed by borrowers and so loans were made and credit was extended on risky terms. The senatorial elite were involved heavily in private lending, as both creditors and borrowers, and made loans from their personal fortunes on the basis of social connections.Banks of classical antiquity typically kept less in reserves than the full total of customers' deposits, as they had no incentive to ensure that customers' deposits would be insured in the event of a bank run. It was common consensus among Romans at the time, especially by Seneca's ideologies, that anyone involved in commerce should have access to credit. That tendency toward fiat money caused the money supply to fluctuate consistently.
Mining and metallurgy
The main mining regions of the Empire were Spain ; Gaul ; Britain, the Danubian provinces ; Macedonia and Thrace ; and Asia Minor. Intensive large-scale mining—of alluvial deposits, and by means of open-cast mining and underground mining—took place from the reign of Augustus up to the early 3rd century AD, when the instability of the Empire disrupted production. The gold mines of Dacia, for instance, were no longer available for Roman exploitation after the province was surrendered in 271. Mining seems to have resumed to some extent during the 4th century.Hydraulic mining, which Pliny referred to as ruina montium, allowed base and precious metals to be extracted on a proto-industrial scale. The total annual iron output is estimated at 82,500 tonnes. Copper was produced at an annual rate of 15,000 t, and lead at 80,000 t, both production levels unmatched until the Industrial Revolution; Spain alone had a 40 percent share in world lead production. The high lead output was a by-product of extensive silver mining which reached 200 t per annum. At its peak around the mid-2nd century AD, the Roman silver stock is estimated at 10,000 t, five to ten times larger than the combined silver mass of medieval Europe and the Abbasid Caliphate around 800 AD. As an indication of the scale of Roman metal production, lead pollution in the Greenland ice sheet quadrupled over its prehistoric levels during the Imperial era, and dropped again thereafter.
The invention and widespread application of hydraulic mining, namely hushing and ground-sluicing, aided by the ability of the Romans to plan and execute mining operations on a large scale, allowed various base and precious metals to be extracted on a proto-industrial scale only rarely, if ever, matched until the Industrial Revolution. The most common fuel by far for smelting and forging operations, as well as heating purposes, was wood and particularly charcoal, which is nearly twice as efficient. In addition, coal was mined in some regions to a fairly large extent: Almost all major coalfields in Roman Britain were exploited by the late 2nd century AD, and a lively trade along the English North Sea coast developed, which extended to the continental Rhineland, where bituminous coal was already used for the smelting of iron ore.
| Output per annum | Comment | |
| Iron | 82,500 t | Based on estimate of iron production at 1.5 kg per head in Roman Britain, extrapolated to population size of 55 million for entire empire |
| Copper | 15,000 t | Largest preindustrial producer |
| Lead | 80,000 t | Largest preindustrial producer |
| Silver | 200 t | At its peak around the mid-2nd century AD, Roman stock is estimated at 10,000 t, five to ten times larger than the combined silver mass of medieval Europe and the Caliphate around 800 AD. |
| Gold | 9 t | Production in Asturia, Callaecia, and Lusitania alone |
Transportation and communication
The Roman Empire completely encircled the Mediterranean, which they called "our sea" . Roman sailing vessels navigated the Mediterranean as well as the major rivers of the Empire, including the Guadalquivir, Ebro, Rhône, Rhine, Tiber and Nile. Transport by water was preferred where possible, as moving commodities by land was more difficult and much more expensive: during Roman times, travel by sea was 50 to 60 times cheaper than travel by land according to Keith Hopkins. During the Roman period, sea trade in the Mediterranean reached its pre-modern peak. Vehicles, wheels, and ships indicate the existence of a great number of skilled woodworkers.File:Roman Empire 125 general map.svg|thumb|350px|The Roman Empire in the time of Hadrian, showing the network of main Roman roads
Land transport utilized the advanced system of Roman roads. The in-kind taxes paid by communities included the provision of personnel, animals, or vehicles for the cursus publicus, the state mail and transport service established by Augustus. Relay stations were located along the roads every seven to twelve Roman miles, and tended to grow into a village or trading post. A mansio was a privately run service station franchised by the imperial bureaucracy for the cursus publicus. The support staff at such a facility included muleteers, secretaries, blacksmiths, cartwrights, a veterinarian, and a few military police and couriers. The distance between mansiones was determined by how far a wagon could travel in a day. Mules were the animal most often used for pulling carts, travelling about 6.4 km/h. As an example of the pace of communication, it took a messenger a minimum of nine days to travel to Rome from Mainz in the province of Germania Superior, even on a matter of urgency. In addition to the mansiones, some taverns offered accommodations as well as [|food and drink]; one recorded tab for a stay showed charges for wine, bread, mule feed, and the services of a prostitute.
Trade and commodities
Roman provinces traded among themselves, but trade extended outside the frontiers to regions as far away as China and India. The main commodity was grain. Chinese trade was mostly conducted overland through middle men along the Silk Road; Indian trade, however, also occurred by sea from Egyptian ports on the Red Sea. Also traded were olive oil, various foodstuffs, garum, slaves, ore and manufactured metal objects, fibres and textiles, timber, pottery, glassware, marble, papyrus, spices and materia medica, ivory, pearls, and gemstones.Though most provinces were capable of producing wine, regional varietals were desirable and wine was a central item of trade. Shortages of vin ordinaire were rare. The major suppliers for the city of Rome were the west coast of Italy, southern Gaul, the Tarraconensis region of Spain, and Crete. Alexandria, the second-largest city, imported wine from Laodicea in Syria and the Aegean. At the retail level, taverns or specialty wine shops sold wine by the jug for carryout and by the drink on-premises, with price ranges reflecting quality.
Trade in the early Roman Empire allowed Rome to become as vast and great as it did. Emperor Augustus, despite his intense public and private spending, took control of trade from the government and expanded Roman influence by opening new trading markets in overseas areas such as Britain, Germany, and Africa. Rome dominated trade and influence over the world in the age of the Roman Empire but could not advance in their industrial and manufacturing processes. This ultimately threatened the expanding trading and commerce industries that Augustus brought about, as well as the strong standing of the Empire in the eyes of the Romans and the world.
Whereas the Roman economy was able to thrive in the first few centuries AD thanks to its advanced trade and commerce, the boom was tempered as their ways of conducting business changed drastically. Due to Augustus and the aristocracy holding the large majority of land and wealth in Rome, trade and commerce in the basic everyday commodities began to decline. Trade began to only take place for the more luxurious commodities, effectively excluding the majority of Romans due to their poverty. Foreign trade was also incredibly significant to the rise and complexity of the Roman economy, and the Romans traded commodities such as wine, oil, grain, salt, arms, and iron to countries primarily in the West. When those countries came under decline in around 2nd century AD, and respective trade between them and the Roman Empire had to cease as a result, this put a dent in the strength of the Roman economy as foreign trade was a major factor of economic growth for the superfluously resourced Empire. Compounded with their inability to make proper production advancements to keep up with their growing and evolving economy, these events hindered Roman trade, limited their array of commodities and harmed the economy.