Progress pill
The fall and rebirth of money

The Roman Empire

History of Coinage

The Roman Empire

  • Augustus' monetary reforms
Historical background:
The Principate was the form of imperial government in the Roman Empire from the beginning of Augustus' reign in 27 BC to the end of the third-century crisis in 284 AD.
27 BC: Beginning of the Pax Romana
Period of political stability and prosperity under the reign of Augustus, marking the beginning of the Roman Empire.
Augustus (30 BC to 14 AD) radically reformed the Roman monetary system, establishing a lasting and stable standard for imperial coinage.
Augustus was also one of the first recognized collectors of ancient coins and fossils.
54 AD - 68 AD: Nero
Controversial Roman emperor, known for his tyranny, persecutions and disastrous management after the burning of Rome.
64 AD: Great Fire of Rome
A major fire ravages much of the city; Nero is accused of being responsible.
69 AD: Year of the Four Emperors
A chaotic period with four emperors in quick succession (Galba, Otho, Vitellius, Vespasian).
79 AD: Vesuvius eruption
Volcano that destroyed the cities of Pompeii and Herculaneum, exceptionally preserving their remains under the ashes.
165 AD - 180 AD: Antonine plague
Devastating epidemic that weakened the Roman Empire under Marcus Aurelius and Commodus.
200 AD: Territorial apogee and gradual end of the Pax Romana
Rome reached its maximum extension, but began to suffer from internal instability and economic difficulties.
212 AD: Edict of Caracalla on citizenship
Emperor Caracalla granted Roman citizenship to almost all the empire's inhabitants, in order to broaden the tax base.
220 AD: Beginning of the great barbarian invasions
First significant incursions of Germanic peoples across Roman borders.
235 AD - 285 AD: Political and military crisis of the 3rd century
A period marked by political instability, with many short-lived emperors, civil wars, economic crises and continuous invasions.
Aurelian (270-275 AD) radically revalued the Roman currency, attempting to restore its nominal value despite high inflation.
301 AD: Diocletian's Price Edict
Emperor Diocletian tried in vain to halt rampant inflation by imposing strict price and wage controls throughout the empire.
312 AD: Constantine
First Christian emperor, founder of Constantinople, stabilized the currency by introducing the "solidus", a gold coin of great purity and stability.
476 AD: Fall of the Western Roman Empire
Rome is taken by various Germanic peoples (including the Ostrogoths), an event considered to mark the official end of the Western Roman Empire.

Augustus' monetary reforms

In this section on Antiquity, we have now arrived to the Roman Empire. The monetary history of the Roman Empire is characterized by the intensive use of metallic currency, notably gold, silver, and bronze, but also by multiple currency crises, closely linked to political and military unrest. At the end of the Republic, under Julius Caesar, Rome introduced the gold aureus in 46 BC, a coin weighing around 8 grams that was widely accepted throughout Europe and the Mediterranean basin. Caesar standardized these gold coins and minted the first coins bearing the portrait of a living man, thus overturning an ancient republican tradition that favored anonymous, collective symbols. This development accompanied a period of major political transformation, with personal power gradually replacing republican institutions.
After Caesar's assassination in 44 BC, Octavian (Augustus) took control of Rome, establishing the Empire in 27 BC. His reign saw a complete reform of the monetary system, bringing lasting stability to the Roman economy. At the time of Augustus, one gold aureus was equivalent to 25 silver denarii, itself worth 4 bronze sestertii. This monetary stability continued throughout the first century AD, a period often described as an economic golden age for Rome.
However, from Nero onwards (AD 54-68), Rome began a slow devaluation of its coins, progressively reducing their weight and purity to finance growing imperial expenditure, particularly after the great fire of Rome in AD 64. These devaluations had notable effects: purer coins were withdrawn from circulation through hoarding or export, in accordance with Gresham's law, while devalued coins proliferated, causing a gradual rise in prices.
The third century marks a dramatic turning point, with a spectacular acceleration in devaluations under the emperors Septimius Severus, Caracalla, and Gallienus. The main silver coin, the denarius and then the antoninianus, saw its silver content drop to just 2%. At the same time, the gold weight of the aureus dropped by half. This monetary crisis was accompanied by unprecedented political instability, barbarian invasions and recurrent civil wars.
The antoninianus provides a key example of this decay. The original name of this coin is unknown, but it is referred to as an antoninianus today. It was valued at two denarii despite being only 1.5 times larger. Over time, these coins became billon coins—alloys of silver and base, often merely silver-coated—serving as a notable example of monetary decay.
Faced with this situation, Emperor Aurelian (270-275 AD) attempted to stabilize the system by nominally revaluing currencies, but this reform actually introduced an inflationary mechanism by artificially fixing the value of existing currencies at a higher level.
Aurelian's reform marked a significant departure from previous methods of devaluation. Instead of gradually reducing the precious metal content of newly minted coins, he recalled existing, lower-purity coins and stamped them with a new mark (XXI), indicating a higher face value. This revaluation triggered an exponential increase in inflation, with rates reaching approximately 20% per year, a stark contrast to the pre-reform average of around 3-4%.
This extreme devaluation is visually illustrated by the Egyptian tetradrachm. Under Roman occupation in the 3rd century, this coin, which was equivalent to a denarius, was debased to a billon or bronze composition. This stands in stark contrast to the high-purity Greek tetradrachm from centuries prior. The physical decay of the coin mirrors the economic decay, with the price of grain in Egypt increasing a million-fold over this 300-year period.
His successor Diocletian (284-305 AD) attempted even more radical reforms: he issued new currencies (notably the argenteus, purer but too limited in quantity), imposed drastic price controls (Price Edict of 301 AD) and established a tax system based on payments in kind. Despite these efforts, Diocletian's reforms failed to curb rampant inflation.
Faced with the refusal of the populace to supply goods and services in exchange for devalued currency, Diocletian instituted a hereditary caste system to bind peasants and their descendants to their land.
The core of the crisis was a breakdown in trust: peasants refused to deliver their produce for money they knew was worthless. Diocletian's response was radical and coercive. He effectively created hereditary castes, decreeing a peasant could not leave his land, nor could his children. The same logic was applied to soldiers, who were now obligated to accept payment in the state's debased currency. To make this more palatable, the state often resorted to paying in kind—with meat, food, and grain—rather than cash. This system was designed to shacklepeople to be attached to their professions, preventing them from abandoning their jobs in protest against the worthless money.
This policy is described in the book "Monetary Regime and Inflation":
As people were unwilling to work and deliver goods against a devalued currency, whose face value was higher than its intrinsic or market value, they had to be forced to work by imposing taxes in kind. [...] It became illegal for peasants to leave their registered homes. The farming population thus became hereditarily attached to the land.
This hereditary caste system gradually spread: Diocletian forced soldiers' sons to serve in the army, while workers in the money workshops, as well as in the weaving and dyeing factories Diocletian had created, became state slaves, with hereditary service. Gold miners also later became a hereditary caste. Other hereditary classes probably already existed in Diocletian's time, notably the guilds of bakers and butchers [...] in Rome, as well as the diocesan guilds of ship captains who transported grain and other public cargoes to Rome.
It was Constantine (306-337 AD) who finally succeeded in stabilizing the monetary system by introducing the solidus in 312, a pure gold coin whose quality and weight he strictly guaranteed. An entire system for verifying the purity and weight of the solidus was established. This stability, however, only affected a wealthy elite and the imperial administration, while the majority of the population continued to suffer from low-quality currency and persistent inflation. The solidus remained stable in the Eastern Empire (Byzantium), where it lasted for more than a millennium, while in the West, coinage fragmented into small, low-value coins, accompanying the final economic and political disintegration of the Roman Empire, which fell definitively in 476 AD.
To conclude, this quote from Glyn Davies' A History of Money: From Ancient Times to the Present Day masterfully encapsulates the factors precipitating Rome's downfall:
"Taxes were consistently inadequate, and the difficulties associated with these increasingly inadequate, belatedly adjusted, and highly visible taxes drove Rome to rely more on an easy, immediate and hidden form of taxation: currency devaluation. Short-lived, ad hoc reforms failed to reverse this age-old trend of decline. Financial pressures caused by the wear and tear of coins, shipwrecks, money leaks due to the purchase of luxury goods from the East, gifts offered to Germanic barbarians, the growth of urban populations, the decline of agricultural production, the gradual exhaustion of the richest mines, and above all the "bread and circuses" policies deemed essential to maintain a minimum of order in urban life - all these cumulative pressures led Rome to constant monetary devaluation, interspersed with occasional reforms doomed to failure."
In addition to free or cheap bread and wine, imperial liberalities ("congiaria") in the form of monetary allocations were distributed from time to time, particularly under Trajan (98-117 AD) and even more so under Hadrian (117-138 AD) and his successors. What the emperor and citizens had initially regarded as an exceptional privilege had, by the early 2nd century, become a customary expectation. These distributions "constituted a heavy burden on the public treasury and contributed in their own way to the bankruptcy of the state".