Why did Rome decline and ultimately fall? Many like to think that the Roman Empire collapsed suddenly, under the impact of barbarian invasions. However, the causes of the Roman Empire's collapse are to be found much earlier, in imperialism and economic and monetary dirigisme.

In 1734, in his Considerations on the Causes of the Greatness of the Romans and of Their Decline, Montesquieu developed an original and unified thesis to explain the rise and fall of Roman power: the freedom gained under the Republic and then lost under the Empire. From the moment Roman domination expanded, freedom was lost, and decadence set in.

The Roman Empire was a parasitic military regime that could only survive through a constant influx of plundered wealth from outside, prisoners reduced to slavery, and stolen lands.

Indeed, the enrichment of the Roman aristocracy came primarily from the spoils of invasions, rather than from the creation of new value. However, with the end of conquests and the diminishing returns from plunder, the administration had to resort increasingly to tax increases to satisfy its need for wealth, which led to a general impoverishment of the Empire's population.

Around 140, the Roman historian Fronto wrote:

Gladiator fights, chariot races, and theatrical performances, often free, attracted huge crowds and allowed the elites to win the favor of the people. The power provided games to its citizens, as well as wheat, bread, pork, and olive oil. This strategy served as a political strategy to ease social tensions, divert attention from economic problems, and strengthen the power of the emperors.

Under the reign of Emperor Antoninus Pius (138-161), the Roman bureaucracy reached enormous proportions. However, as tax revenues were insufficient to fund the administration and garrisons, emperors began to issue more and more currency by reducing the amount of silver in each coin. The Denarius, the main currency of Rome, saw its silver content drop from 100% to 0.5% between 235 and 284 AD. With the devaluation of the currency, prices increased uncontrollably, resulting in a decline in consumption, trade, and confidence.

The fall of the Roman Empire was a slow process, directly linked to the bankruptcy of a corrupt monetary system. The ensuing hyperinflation led to the collapse of the economy, resulting in widespread loss of confidence in the currency among the people.

Then, political instability was added to the economic instability, with more than 50 different emperors on the throne in a span of 50 years.

A classic example of interventionism emerged in Rome when Emperor Diocletian wanted to cap prices. Interventionism is defined as the action of a power that exceeds its role in maintaining order and protecting citizens. It is an attempt to control the market, aiming to modify prices, wages, interest rates, and profits.

The repeated monetary emissions by successive emperors to cope with the increase in military expenditures had caused a surge in prices. In 301, Diocletian proclaimed the Edict of Maximum in an attempt to cap them. It was a failure.

Ludwig von Mises describes this episode, which well illustrates the harmful effects of interventionism: Roman Emperor Diocletian is well-known for having been the last Roman emperor to persecute Christians. Roman emperors, in the latter part of the third century, had only one financial method: to debase the currency. In these primitive times, before the invention of the printing press, inflation itself was, so to speak, a primitive concept. It involved fraud in the minting of coins, especially silver, until the color of the alloy was changed and the weight was significantly reduced. The result of this debasement of the currencies, coupled with the corresponding increase in circulation, was a rise in prices, followed by a price control edict. And the Roman emperors did not hold back in enforcing the laws; they did not consider death too severe a penalty for a man who had asked for too high a price. They enforced price controls, but as a consequence, they brought down society. This eventually led to the disintegration of the Roman Empire and the breakdown of the division of labor. (Economic Policy, Reflections for Today and Tomorrow)

Following in the footsteps of Montesquieu, Philippe Fabry demonstrates that Rome experienced a trajectory from liberalism to socialism. Philippe Fabry is a historian of law, institutions, and political ideas. He has taught at the University of Toulouse 1 Capitole and is the author of several books, including Rome, from Liberalism to Socialism(2014).

Was Rome the greatest liberal power of the ancient world? Did it then fall into a form of socialism? Let's first define the terms:

Liberalism: trust in the action of individuals, producing a spontaneous order, just because it results from their voluntary interactions, through the free play of the market and the respect for their inalienable rights.

Socialism: the organization by the State of society considered as a whole, through the planning of production and consumption.

The thesis of Philippe Fabry's book is that "the fall of the Roman Empire is the consequence of the deadlock into which imperial socialism had led the ancient world." It was the dirigisme of the Roman imperial state that led to its collapse. The Roman Republic, the greatest liberal power of the ancient world, lasted from 510 BC to 27 BC, spanning over 500 years. However, gradually, the civic collegiality that characterized the Roman Republic gave way to personal power, embodied by emperors who adopted the style of government of the Oriental potentates of ancient Egypt and Persia. Breaking with a previously moderate foreign policy, Rome suddenly subdued vast populations through war, providing streams of slaves to wealthy Roman investors, and ruining the middle classes. In return, the Roman population demanded increasing subsidies.

In the early days of its greatness, each Roman considered himself the main source of his income. What he could voluntarily acquire in the market was the source of his livelihood. Rome's decline began when a large number of citizens discovered another source of income: the political process or the redistributive state.

Romans then abandoned freedom and personal responsibility in exchange for promises of privileges and wealth distributed directly by the government. Citizens adopted the idea that it was more advantageous to obtain income through political means rather than through labor.

Philippe Fabry summarizes:

And he adds: