During the reign of Trajan, at the beginning of the 2nd century AD, the Roman Empire controlled all of western and southern Europe, the coast of North Africa, and much of the Middle East. Perhaps 100 million people lived under the rule of its emperors. Yet, by the middle of the 3rd century, it was very near to collapsing. The ‘Crisis of the Third Century’ (235–284 AD) is most notable for its political disorders, a period when the empire was ruled by well over twenty men over a fifty-year period. However, this steady decay of the Roman state could also be tracked by the condition of its coinage, not just its politics. Though steady monetary debasement was a common and perhaps unavoidable feature of the Roman economy, it destructively accelerated during that period of crisis.

Roman Public Finance

           The Roman state funded its expenditures with a combination of taxes, the most notable of which were a land-tax and a poll-tax. The land tax, the tributum soli, would have normally been set at around a tenth of a farm’s produce while the poll tax, the tributum capitis, was charged as a fixed sum per adult. In practice though, the poll-tax varied by province as emperors would usually set the tax at the provincial level, an aggregate sum to be demanded from each province. Depending on a region’s population, this sum might not be the same in each province in per capita terms.

           Regardless, two notable features of the Roman tax system which limited its effectiveness were that the city of Rome, and for a while all of Italy, were exempt from taxation and that the collection of taxes was outsourced. Tax farmers, called publicani,would bid for the right to collect a province’s tax revenue and would pay in advance; they would then collect the taxes from the populace themselves. The role of the publicani however would be diminished somewhat during the empire as compared with the period of the Roman Republic as the collection of most taxes eventually became a state responsibility.

           The land-tax and poll-tax were not the only levies collected by the Roman government. Taxes on inheritances and the sale of slaves, customs duties, and rents on public lands also generated some of the state’s revenues. The exact burden of taxation mostly depended on whether the empire was at peace or war; the cost of the latter being very great. It was not just the cost of war that would often strain the Roman treasury, or fiscus,but also the lack of proper deficit financing. There was no concept of a bond market in Rome where the state would borrow money against its future revenues. This meant that deficits often had to be funded by minting more money. Since Roman coins were struck from gold and silver, any fiscal excess led to the periodic debasement of the Roman coinage. 

           While the Empire was still growing in the 1st century AD, large scale debasement of the coinage was avoided thanks to the inflows of specie from both Roman mines and foreign conquests. Within the Empire, sources of gold and silver included mines in Spain, the Balkans, Dacia (Romania) and Anatolia (Turkey). Precious metals from these mines would be transported to state mints in cities like Lugdunum (Lyon) and Rome. Beyond this, a positive balance of trade supplied a little more gold and silver but never in any extraordinary amount. The other major source of precious metals was that acquired in foreign conquests. Rome’s first few emperors would bring home piles of treasure from their campaigns abroad, filling state coffers. In its first century, wars were a profitable venture for the Romans and stimulated the empire’s economy. 

“Moreover, upon his bringing the treasure belonging to the kings of Egypt into the city, in his Alexandrian triumph, he made money so plentiful, that interest fell, and the price of land rose considerably.” – Suetonius on Octavian Augustus


           The gradual debasement of the Roman coinage could be tracked through the composition of the denarius. The silver denarius was minted for common use during the first two centuries of the Roman Empire. During the reign of Octavian Augustus (27 BC to 14 AD), the denarius was a 4-gram coin comprised of over 95% silver. To give some sense of its purchasing power, consider that from the military reforms of Gaius Marius to the reign of Domitian, a typical Roman legionary was paid 225 denarii a year. In the time of Augustus, one denarius bought over six liters of wheat and was a common daily wage for an unskilled laborer. The most common gold coin of this period, the aureus was composed of 8.25 grams of gold and valued at 25 denarii. Despite the monetary standard, there was no shortage of money thanks to the abundant inflow of gold and silver from foreign conquests, most notably that of Egypt.

           The composition of the denarius did not change for most of the first century of the empire’s history. The first devaluation took place during the reign of Nero (54 – 68 AD). It was prompted by the expenses associated with foreign wars, such as in Armenia, and the rebuilding of Rome following the Great Fire of 64 AD. These projects created an urgent need for funds, so great that according to the later biographer Suetonius, Nero even “stripped many temples of their gifts and melted down the images of gold and silver”. Raiding the temples and raising taxes was not enough; Nero went on to be the first emperor to debase the denarius. Not only did he trim the purity to 94.5% silver but he also sharply reduced the size of the coin to 3.4 grams. The purity of the gold aurei was unadjusted but its size also shrank, cut down to 7.3 grams. While hardly hyperinflationary, the reduction in the buying power of Nero’s money was undeniable. The author Tacitus noted in his work Germania the preference of Germanic tribes for older, pre-Imperial Roman coins following this debasement.

           The shrinking metal content of the denarius would only go on from here. The emperor Trajan (98 – 117 AD) is best known for his building campaigns and his military campaigns against the Persians in the East. These initiatives came at a cost however and the integrity of the denarius paid the price. During his rule, the purity of the coin hit a low of 85% and he was not the last of the so-called ‘Five Good Emperors’ to devalue the coinage. Half a century later, Marcus Aurelius (161 – 180 AD) cut the denarius’s silver content to as little as 75%. Septimius Severus (193 – 211 AD), the first emperor of the Severan dynasty, then reduced the coin’s silver purity to under 60% by the end of his rule.

           Regardless, a reduction in the silver content of the denarius from 95% to 60% over two centuries hardly amounts to a large per annum devaluation. Consider the wages of foot-soldiers, which stood at 500 denarii under Septimius as compared to 225 when the Republic was overthrown; this change equates to a rate of wage inflation of under a half a percent per year. However, by now, the Empire’s precious metal accumulation had peaked so further expansion of the monetary base would have to come from minting less pure coins as well as some monetary innovations.   

           Take, for example, the reign of Caracalla (211 – 217 AD). He raised the pay of the army still further, to 750 denarii a year for a legionary. By now, the denarius was reduced to just 50% silver by composition. The gold aurei, while still essentially pure gold, was also shrunk still further, to 6.6 grams from 8.25 grams under Augustus, but perhaps his most bold monetary maneuver was the introduction of the antoninianus. This new coin had a denomination of two denarii but contained only 50% more silver than the single denarius. This was akin to reducing the purity of the old coins by another fourth on top of his earlier debasement. The new money drove out the old coins, as people hoarded the purer denarii. His six-year rule increased the pace of devaluation but the complete monetary collapse of the old standard was still in the future though rapidly approaching.

Chaos, Inflation, and Diocletian

           The assassination of Severus Alexander in 235 AD marked the end of the Severan dynasty and the beginning of the ‘Crisis of the Third Century’. During this period, the empire was ruled by ‘barracks emperors’, military commanders who seized power but usually failed to keep it for more than a couple of years. There would be well over twenty reigning emperors, among other claimants, in this period; almost all dying violent deaths. This crisis saw the near disintegration of the empire. In regards to the money supply, the disorders sharply reduced mine output. If left unmaintained, mines eventually flooded and bullion was unable to be safely transported amidst the chaos anyway.

           The period was also marked by massive fiscal largesse as vulnerable rulers sought to maintain order by buying the support of the army, usually through pay increases and donativa, bonuses paid out following the ascension of a new emperor. Without the revenues to pay out these bonuses and with no reprieve offered by an increase in the supply of precious metals, debasement of the coinage accelerated. By the 260s, the ratio of values between the gold aurei and the debased denarius was 1000-to-1, as compared to the original 25-to-1 in the days of Augustus. When Aurelian (270 – 275 AD) replaced the denarius with a reformed antoninianus in the 270s, the coin contained just 5% silver and would soon be minted in bronze. While precise measurements are nonexistent, inflation was severe during this era of crisis.

           Order finally came during the reign of Diocletian (284 – 305 AD). As a firmer ruler, he managed to end the political chaos but struggled with the empire’s economic travails. Diocletian greatly enlarged the Roman army, perhaps doubling its size, and paid for it with increased taxes and removed the exemptions Italy had previously enjoyed. He also reformed the coinage, introducing new coins such as the solidus, which took the place of the old aurei and consisted of 5.5 grams of pure gold. This failed to stop runaway inflation, leading the emperor to enact an ‘Edict on Maximum Prices’. The Edict, which capped the prices of over a thousand goods and services, including wages, was unsuccessful. The surviving text of the decree reveals just how high prices had risen. For example, the law set the maximum price of wheat at a hundred denarii per modius, a unit of measure amounting to roughly 8.75 liters. This was perhaps seventy times greater than where prices stood two centuries earlier and most of this inflation would have occurred in the immediately preceding decades.

           The fixed prices were abandoned within a few years of enactment, if they were ever followed to begin with, but wider problems persisted. Take for example, the fact that the expanded bureaucracy of Diocletian hardly improved the empire’s economic machinery. One sign of this dysfunction was that taxes were to be paid in bullion rather than the state’s own debased coinage. Decades of rule by different emperors minting their own currency meant the composition of the coinage varied so much to be useful as a currency. Though Diocletian’s rule marked a political stabilization, the economic wellbeing of the empire was perhaps already in interminable decline.


            Inflation is often recounted as among the more defining and persistent problems of the Roman Empire. Given the use of gold and silver coins as currency and sliding mine output, creating even a healthy dose of inflation would have certainly required some debasement of the coinage. This was the kind of monetary intervention undertaken by emperors during the two centuries following the reign of Augustus and it was almost certainly not particularly inflationary. However, steady devaluation gave way to a rapid destruction of the monetary standard in the mid-to-late 3rd century. This was the product of political dysfunction however and was not caused by any pressing economic need. Until the time of Diocletian, the decline and fall of the Roman coinage tracked its political disintegration and near collapse.

Further Reading

1.     Gill, N.S. “How Did Taxes Lead to the Fall of Rome?” ThoughtCo, 1 July 2019.

2.     Harl, Kenneth W. Coinage in the Roman Economy, 300 B.C. to A.D. 700. Johns Hopkins University Press, 1996.

3.     Kent, Roland G. “The Edict of Diocletian Fixing Maximum Prices.” University of Pennsylvania Law Review and American Law Register, vol. 69, no. 1, 1920, pp. 35–47.

4.     Lovano, Michael. All Things Julius Caesar: An Encyclopedia of Caesar’s World and Legacy. Greenwood, 2015.

5.     Temin, Peter. “Price Behavior in the Roman Empire.” The Roman Market Economy, 2012.

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