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DEWEY
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.M415
^^
Massachusetts Institute of Technology
Departnnent of Economics
Working Paper Series
MONEY AND PRICES IN
THE EARLY ROMAN EMPIRE
David Kessler
Peter
Temin
Working Paper 05-1
April 4, 2005
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LIBRARIES.
Money and Prices
in the Early
Roman Empire
David Kessler and Peter Temin*
Abstract
We examine monetization in the early Roman Empire by considering money as a unit of
account. Widespread use of prices indicates widespread monetization. A consistent set
monetization encouraged trade to grow across the
documented with a statistical test, preceded by a nontechnical introduction and followed by consideration of a range of possible objections.
of prices for wheat indicates that
Mediterranean. This argument
this
is
Keywords: money, monetization, intemational
trade, regression analysis,
Roman Empire
JEL Codes: N13, F14, CIO
Paper presented
at the
Conference on The Nature of Ancient Money, Columbia
To appear in The Nature ofAncient Money, edited by
University, 7-8 April, 2005.
William V. Harris (Oxford: Oxford University Press, forthcoming).
*Temin (corresponding
author).
Department of Economics, MIT: ptemin@mit.edu
Kessler: dkessler(5),fas.alumni.harvard.edu
.
.
Money and Prices
Money
serves as a
in the Early
medium of exchange and
debts can be expressed.'
Most research on
world has focused on the
first
famous
empire
article
to
pay taxes; Duncan- Jones
location of com hoards.
standard of value.
was
in
that
and
prices
Roman
medium of exchange. Hopkins'
inferred geographically limited coin usage
This paper examines the second fimction of money,
from the
its
role as a
We argue that monetization in the sense of using monetary measures
virtually universal in the early
less
which
money would be needed throughout the
Roman Empire.
view of recent compilations of Roman prices.
and
a standard unit in
the extent of monetization in the
fimction of money, a
on taxes and trade argued
Roman Empire
^
This assertion verges on the obvious
We go further to make the stronger
obvious claim that there was unified monetary integration across the whole
Mediterranean in the early
Roman Empire. We make this argument through
an
examination of wheat prices.
We approach the issue of monetization from a new angle, emphasizing the role of
money in
supplying a unit of account. This leads us to look for
hi other words,
view
is
we
look for
Roman prices
measured by the extent
activities.
This
to
may appear less
which people used prices
our index of monetization.
to
unit,
keep track of their
direct than analyzing coins, but
instead of asking
of this
instead of Roman coins. Monetization in this
interested in monetization as an aspect of Roman society,
Romans used money
Roman uses
and
it is
we
not.
We are
focus on
how the
how much money they had. The use of prices
is
We assume that money was used as money in the ancient world. Some historians
have seen coins as symbols of imperial power or as
art objects.
These characteristics may
be important for the question of which coins were used, but they do not approach the
question
spread
why the
Roman
ancients minted coins in the
first
place. Perhaps
Roman
came
coins widely to symbolize their suzerainty, but with coins
practice of using
money to
emperors
the
value commodities and services. Actually, this practice
preceded coins in the East and became more accurate and prevalent with coins. Uniform
—linked
sestertii
to earlier
drachmae
transactions. Consistent valuations
in the East
—encouraged
and ease of payment (the
the use of prices in
first
function of money)
encouraged the growth of trade."*
Prices
were used widely
in
Rome, and the
of references to them. Unhappily for the
letters
and accounts of the time are
modem scholar, the prices
goods or services that are unique, ranging fi-om dirmer parties
to
full
almost always are for
monuments. The
accounts reveal that people thought in terms of prices, but they do not provide a data set
with which
purpose.
to
examine
Wheat
is
prices. Prices for a
uniform commodity are needed for
the obvious candidate for such a price because wheat
uniform and universal. Rathbone used the price of wheat in
inflation.^
that
was both
Roman Egypt
to
measure
We compare wheat prices across space rather than through time to
demonstrate market integration around the Mediterranean. Market integration indicates
widespread monetization, which
Just as the euro
facilitated trade
by providing a standard
imit of account.
promotes European trade today, the wide use oi sestertii and drachmae
encouraged trade throughout the
Roman Mediterranean.
Despite the availability of Roman price evidence,
prices for
many
Rickman
in his account
prices, but
locations.
we think it is
literature for
good one
comparable
city
of Rome.
^
for three reasons. First,
This
is
a small sample of
Rickman searched
the
mentions of wheat prices in outlying areas. Second, he compared prices in
these outlying areas with prices in
comparison in our work. Third,
prices for a uniform
early
difficult to find
We take our sample to be a set of wheat prices hsted by
of its supply for the
a
it is
Rome, and we use
we
commodity
in
are not
many
this
roughly contemporaneous
aware of another attempt
different parts
of the
late
to
provide a set of
Roman Republic and
Roman Empire.
We proceed in three steps. We first explain this small data set and its
and weaknesses, construct a graph showing the relation of wheat prices in
strengths
Rome
to those
elsewhere around the Mediterranean, and present our hypothesis in the form of a graph.
Then we ask
if this
prices that in fact
graph could be a fluke, that
were not the
result
is,
a chance result of putting together
of an integrated market. If not, then the collection
of prices fi-om distant places would reveal nascent monetization (since prices were used)
but not comprehensive monetization (that would encourage trade). There would be no
relationship
between the various
statistics that tries to
prices. This test requires a short introduction to
be informative without being too technical. Finally,
variety of objections to this finding that might be raised,
our
results.
Data and Hypothesis
showing
we
that they
discuss a
do not
vitiate
We collected wheat prices from varied locations,
prices
come
but
to light all the time,
we
thought that
as reported
this familiar
way to examine monetary
integration at least provisionally.
pairs in outlying locations
and
pairs in almost
in
Rome
at
not an overwhelming amount of evidence, but
the data are
at
random or not. hi each case
the
late
it
is
We found
price
six price
Republic to the early Empire. This
enough
to test
Roman price was
the distant location to give a price differential.
sample would provide a
Our requirements were
roughly the same time.
two centuries ranging from the
by Rickman. More
Wheat
is
whether the patterns in
subtracted from the price
prices at
Rome were
subject to
slow inflation according to Rickman, a view that has been supported by Duncan-Jones.^
We describe the price observations in the order of their distance from Rome,
which we calculated
as straight-line distances
on a map. This of course
approximation to the actual distance that wheat traveled;
is
only an
we emphasize the
approximate
nature of our data since this randomness reduces the possibihty of finding evidence of
comprehensive monetization. The closest price was from Sicily and came from Cicero's
Verrine Orations.
One of his
accusations
was
market price, even though he acknowledged
that
its
Verres did not transact business
level in a letter (Cicero,
2 Verr.
at the
3. 189).
This observation, like most of the others, reports the prevailing local price in round
numbers. Since the observation
likely to
is
general rather than the record of any fransaction,
it is
be only approximate. This casual quality of the data militates against finding
any systematic relationship between
prices.
the prices being paid because of the
unknovm
and actual
prices.
It
introduces noise into any relationship of
difference between the reported averages
We analyze the effects of this noise on our test below.
The second
conditions in Lusitania.
While
it is
good
to
came from Polybius
price
As
before, this
is
(Polyb. 34.8.7) in his discussion of
a general statement about the prevaihng price.
have an average, the casual quality of the averaging process again
adds noise into any comparison of prices in different places.
The
third price
comes from
the
Po Valley
Polybius (Polyb. 2.15.1). While this observation
prices,
we have made
an exception to our general
Rome by rivers rather than sea.
in Italy;
is
it is
closer to
rule.
another observation by
Rome than the
first
two
The Po valley was linked
to
Diocletian's Price Edict fixed river transport prices at
five times the level of sea transport,
and
we
consider the cost of transport from the
valley to have been five times as expensive as
evidence however dates from over a century
its
later
actual distance if taken
than any of the prices
by
we
sea.
Po
This
observed.
We assumed the ratio of sea and river transport costs remained constant over time
which others have confirmed
the distance from
Rome by
—and we included
five.
the
Po
valley in our data
Despite our small sample,
by multiplying
we have enough data to
test
the usefulness of this assumption.
The
fourth price
comes from an
inscription records that the
126b).
The normal
price
official intervention in the local market.
wheat price was limited
was
in a time
An
of scarcity (AEPigr (1925),
eight or nine asses per modius; the acceptable limit price
was one denarius per modius.^ This
inscription reveals several important aspects of the
Mediterranean wheat market in addition to reporting the normal price. The need to
down famine prices
indicates that local markets
were subject
damp
to local scarcities; they
were
not so well linked that wheat from elsewhere would be brought in instantly in response to
a local shortage.
to
double
its
The apparent success of such
normal range, indicates
For Egypt,
we preserve the
Rathbone collected actual
that
spirit
interventions, in this case limiting the price
many famines were
not severe.
of Rickman's data but improve on his data since
sale prices that are superior to the observations
of average
We averaged seven Eg3q3tian prices from the "famine" of 45-47 CE to get a price
levels.
Rathbone argued
for Egypt.
suggests that they
that these prices
may not be
far
were unusual, but the previous discussion
from average. '°
We of course cannot know how
unusual these prices were, and any special conditions infroduce noise into our data. The
Egyptian prices also come from agricultural areas, not from a Mediterranean
The
port.
purported famine would have raised the price, but using country prices would have
depressed
it
compared
to those at a port.
These
the accuracy of this observation since there
offsets.
is
offsets introduce
no reason
them
to
be exact
The average of Rathbone' s seven prices was seven drachmae per artaba. These
prices in Egyptian currency and units
Duncan- Jones and dividing by
Our
final
were converted
it
too
is
is
Rome was between three
rising to five to six
HS
taken from Tenney Frank's
an average of a few actual transactions.''^ All of these prices
were compared with roughly contemporaneous prices
price of wheat at
HS per modius by following
to
4.5.^^
observation from distant Palestine,
Economic Survey;
level;
to expect
added uncertainty into
in the early Empire.
Rathbone confirmed the
and four
at
HS
Rome. Rickman argued
that the
per modius in the late Republic,
Duncan- Jones confirmed the general price
inflation, at least for
Egypt where the data are more
abundant. The order of observations turns out to be almost chronological even though
the order of exposition
was by
distance.
The
shown
in
Figure
1.
itself; all
It
prices and the differences
Table
It is
1
.
The
readily apparent that prices
the price differences are
all
ftirther
and the local prices are
were lower outside of Rome than
between various locales and
in
Rome in
Rome
been noted before.
^^
Rome became more
from Rome. In other words, wheat prices everywhere
were lower than in Rome and lowest
at the farthest
reaches of the Mediterranean, that
is,
Rome.
What could have produced such
We suggest that the whole
a pattern?
Mediterranean basin was monetized in the sense that
for
Rome
negative. This difference has
also looks as if the price differential
places farthest from
at
price differences are graphed against the distance from
negative as the locales were
at
between the prices
money provided
a standard of value
wheat and presumably other goods as well. This standardization of the monetary
unit,
taking into account the different currencies in the East, promoted the development of a
unified market for wheat, along the lines suggested
If there
had been a unified wheat market,
center of consumption
would have been
consumers lived and the
where the
in
Schaps.'"^
how would it have worked? The main
Rome, where
Roman government was
largest excess supplies
by
Rome was
and demands for wheat would have come together and
exporting regions in view of the transport costs to
supplies fluctuated due to harvests across the
set.
The
price
would be lower
Rome. They would vary over time
Roman world,
in
as
storms affected the cost of
and government actions altered the value of the currency. Normal
variations in supplies and
in
number of potential
located. In other words,
where the price of wheat consequently would have been
transportation,
the largest
Rome, although most
demands elsewhere
fluctuations
in the
empire would have affected the price
would have been small
relative to the total
production and the consumption
at
Rome. Most places
outside of Rome
an excess supply of wheat, and the price would have been set in
demand came
supplies and the largest excess
there could be excess local
demand
When
together.
would have had
Rome where the
were
isolated,
local
famines
local places
as well as excess local supply, that
is,
excess
as well as local gluts.
Under these circumstances, wheat outside of Rome would be valued by what
was worth
less than
in
Rome. Wheat
wheat
in
Palermo
Rome because
price of wheat in Sicily
wheat from Sicily
at
to
would be
it
it
was
to
be transported
the price of wheat in
Rome. This would be
were circumstances when
normally would be worth
in Sicily, for example,
would have
to
Rome to be
less the cost
in.
from the
level set
by
Roman price until new wheat
the price in
Roman price less
The market
Sicilian prices.
is
More
it is
would determine
a unified market. If the Sicilian price of wheat rose above the
well. If the Sicilian price
rise
would keep
Sicilian
misleading to say the market would determine
correctly, competition
amount of wheat demanded
would
If a
the fransportation cost.
an abstraction;
transportation costs, merchants
Rome.
supplies could be brought
In the absence of extreme events like these, a unified market
prices near the
of getting
prevented the shipment of grain to Rome,
harvest failure in Sicily created a local famine, the price of wheat in Sicily
above the level indicated by the
The
sold.
true almost always, but there undoubtedly
not. If storms
the Sicilian price might temporarily deviate
Rome
it
would not buy wheat
in Sicily
of wheat
would
fell
fall,
Sicilian prices if there
Roman
level
in Sicily to sell in
minus
Rome. The
and the price consequently would
below the Roman
level
were
fall
minus transportation
merchants would increase the amount of wheat they would try to buy in
as
costs,
Sicily, for they
could
make an unusually high profit by taking
would bid
further
it
there.
Merchants
would be worth
Palermo because
from Rome. The cost of transporting wheat from Spain
to
Rome was larger
it
from
But while each price
Sicily,
is
the Mediterranean
if there
therefore, the price
it
to that in
Rome,
the price in Spain
were a unified market. In
less than the price at
depending on the distance from Rome.
it
and the price of wheat in Spain correspondingly
compared
would be worth
are reasonably sure that
less than
exactly like that for Sicily, only the transport cost
is
lower relative to the price in Sicily
we
and selling
at
Lusitania in Spain
would be lower. The reasoning
but
Rome
wheat
at
than the cost of bringing
different.
to
against each other, raising the Sicilian price.
Wheat
was
it
Rome, with
fact,
the
is
would be
wheat around
amount
less
We do not know the transport cost in any detail,
rose with distance. If there
was
a unified
wheat market,
of wheat would have decreased as one moved farther and farther from
Rome.
All this presumes monetization throughout the Mediterranean.
The comparisons
assvime that there were monetary units in which prices could be compared. In fact, most
of the observations were in the same monetary
these units
by
a standard exchange rate.
The
units,
and the others were franslated to
anticipation of profits
from frade
presupposes that the value of the wheat could be compared with the value of other goods
and services and traded for them. Without monetization, there can be only the simplest
kind of trade because the opportunities are very hard to evaluate.
This hypothetical account of frade sounds impossibly
accurate picture of the
Roman world, we need to
Phrased differently, what
is
modem. But
if it is not
think of the relevant alternative.
the alternative to this view? If there
were not a unified
an
currency or market,
would not expect
local prices
move
were only independent
if there
to find
and markets, then
local currencies
any relationship between local and
Roman
we
prices. Prices in
and markets would be determined by local conditions. The prices might
together at
some
times, if storms around the Mediterranean caused simultaneous
harvest failures everywhere or currency debasements caused prices to rise everywhere,
but the prices would not in general be related one to another.
prices could be a coincidence, and
Egypt and Dacia were the
miners.'^ If we could
test
fmd
whether the pattern
The question
either that there
is
was a
result
we
it
single identity
impossible to say if similar miners' wages in
wheat prices
is
due
in different places,
to coincidence or
however,
monetary area and an
factors unifying separate local
moneys and
efficient
markets.
we
could
an underlying market process.
not whether one or the other of these ideal tj^es
single
of
of coincidence, government regulation, or a market for
several
find
is
Any
It is
was observed,
market or that there were no
rather whether the historical
experience hes closer to one end of a continuum than the other. There must have been
least occasional local shortages
state
and famines. The question then
is
whether the normal
of affairs was one of interconnected currencies and markets, so
different places typically
and markets. In the
were
related, or
latter case,
we
that prices in
one of separated and independent currencies
should not observe any systematic relationship
between the location and the price of grain.
monetized, of course,
at
we would not have
If the
economies in these places had not been
observed any prices
A Test of Market Integration
\.
10
at all.
It
story.
It
may
appear as
seems
Figure
if the picture in
like a tiny bit
1
could only be suggestive of such a
of evidence on which to hang such a grand story of
universal monetization and market integration. There
that
can be used
to evaluate
chance. In other words,
how
likely
it is
hov^ever a
we can test the probability that the
would have been determined by
technique
statistical
that a picture like Figure
Roman Empire were isolated and out of economic
monetization. There
is
1
could arise
by
separate areas of the early
connection with Rome. Their prices
local conditions, including perhaps the degree
would have been no connection between the
of
Rome and
distance to
the level of local prices.
This
we
statistical
technique
is
known
can evaluate the likelihood that there
distance from
between the
the line to
Rome.
it
a relation
is
between the
and the
Roman price to the
distance from
line.
distance to minimize the distance from points both above and
simplify the mathematics.) This process
Figure
Rome.
the best description of the data in the sense that
squared distance of the individual observations from the
least squares,
local price
of analysis
and the
We start by trying to draw a line that relates the price difference
local price
make
as regression analysis. In this type
is
knovm
and the resulting "least-squares"
it
We then adjust
minimizes the
(We use
the square of the
below the
line
and
as regression analysis or the
line is the regression line. It is
to
method of
shown in
2.
One of the values of regression
analysis
is that it
generates tests of the hypotheses
being tested.
We can ask if an apparent relationship between the price discount and the
distance from
Rome
result
is illusory,
a result of observing only a
of a systematic process. In order
to
draw
11
this line,
few
prices, rather than the
we assumed that there was
a
between the distance from
relationship
provides a
unlikely
is
we
gathered from
the price discount. Regression analysis
such an association in the data. This
for us to find a line like the
it is
the prices
whether there
test
Rome and
one shown
in Figure 2
this
same
actually have,
us
would have survived
Taking account of the random quality of the observations
distribution.
how unlikely is
certainty.
It is
that
Rickman were randomly drawn from an underlying
it
for us to find the line in Figure 2
we
by chance?
Regression analysis acknowledges that the slope of the line in Figure 2
known with
how
by chance. Assume
distribution of price observations. In another world, different prices
from
test tells
is
not
the best line that can be drawTi with the data at hand, but
it is
subject to errors deriving from the incomplete sampling of the underlying distribution. In
the jargon of regression analysis, the slope of the line has a standard error. If all the
points in Figure
be
clear,
1
and 2 lay in a sfraight
line,
then the slope of the regression line would
and the standard error of the slope would be close
spread out as they are in the figures here, then the line
is
a chance that the line has no slope at
the distance from
The
Rome and the price
test is to
compare the
all,
that
unlikely that the line
even though the regression
is
line
known
that there is
is,
no
as clearly,
relationship
and there
between
size of the slope, the coefficient in the regression, with
was a random
other hand, if the coefficient
not
difference.
the size of its standard error. If the coefficient
it is
is
to zero. If the points are
is
large relative to the standard error, then
finding without support in the price data.
small relative to
its
has a slope, there
standard error, then
is
it is
On the
possible that
no underlying relationship between
the price and distance. Statisticians call this ratio a t-statistic, and they have calculated
tables that can franslate t-statistics into probabilities that the line is observed
12
by chance.
The
tables take account
of degrees of freedom,
minus the number of coefficients.
position (height in the figures).
takes
It
With
that
two variables
six observations
is,
the
number of observations
to define a line, its slope
and
its
and two variables, there are four
degrees of freedom. Omitting the observation with river transport reduces the
The
observations by one and the degrees of fireedom to three.
t-statistic
number of
has to be larger
with such few degrees of fi^eedom than with more degrees of freedom to show that a
given regression line
is
unlikely to be the result of chance.
One might think that the
—composed of only a few, badly observed values
data
are too poor for statistical analysis. Nothing could be flirther
are the best
there
that
is
a
way of distinguishing
lot
truth.
Statistics
signal fi"om noise; they are particularly usefiil
when
of noise in the system. They give us a precise sense of how unlikely
any putative pattern
processes, that
is,
value of statistics
we think we
how unlikely it
is
that
the Mediterranean Sea
we
can
is
test
were related
that
what looks
in a simple
often hypothesize a relationship between
—
^but
like a pattern actually is noise.
way to
those at
is true,
Rome.
have been studied, and
two variables
to
most of our prices. The
their effects are well
we have.
common problem in doing regressions. We
proxy such as the occasional price that happens
for
We also can
given the observations
—
like the price in
cannot observe one or the other of them precisely.
we have done here
The
a formal hypothesis, namely that wheat prices around
In particular, errors in variables are a
price in Egjqjt
it is
observe would have been generated by random
derive an explicit probability that this hypothesis
as
from the
be mentioned
Rome and the
We then use a
in a surviving
errors introduced
document,
by such a procedure
known. The extra uncertainty introduced by
using imperfect proxies reduces the explanatory power of regressions and tends to result
13
in coefficients
makes
the results look
is
noise.
The well-known
When
a pattern
price differentials are graphed against the distance to
differentials
all
more hke
is
scarcity
of Roman
found, however,
it
a strong relationship between the prices.
results are quite striking; prices
from
near zero; the addition of noise through imperfect
very hard to find a pattern in them.
it
indicates that there
The
t-statistics that are
makes
observations
prices
and
were lower
in places fiuther
Rome
in
Figure
over the Mediterranean and from various times in the
late
if there
come
Republic and early
were not a unified grain
market, there would be no reason to expect a pattern in-these^ricesr'Everrif there
unified market, our inability to find
more
prices or
more accurate
might have obscured any true relationship among the
prices.
The
.
from Rome, and the price
appear almost proportional to the distance from Rome. These prices
Empire. If there were not a unified monetary system or
1
was
a
fransportation costs
Yet Figure
1
reveals a clear
picture.
While the graph
is clear,
a statistical test
could be the result of chance. Accordingly
the distance from
Rome, with
the results
is
needed
to tell if the
we ran regressions of the price
shown
in Figure 2
and Table
separate regressions in the table. Since the transportation from the
rather than sea,
accurate, and
addition,
to
we
we were not
observed pattern
2.
differential
There are four
Po valley was by
sure that the correction for the relative cost of fransport
we tried the regressions both with
on
river
was
and without the Po valley data point, hi
expressed the distance in logarithms to measure the proportional change in
it
allow the relationship between price and distance to be non-linear. The dependent
variable
is
the
premium of the Roman
the local price from the
price over the local price instead of the discount of
Roman price.
14
Each row of Table 2 contains
the result of a separate regression.
columns identify the regression by whether
we
we used the
distance or
its
The
two
first
log and whether
included the Po valley. The next two columns give the coefficients resulting from the
regression with the relevant
because a straight line
column gives the
is
t-statistic
below
it
in parentheses.'^
There are two columns
defined by two parameters, a constant and a slope.
constant.
It
measures the difference between the price
The
first
Rome and
in
elsewhere that was not related to distance. The second column gives the slope of the line
in Figure 2.
It
distance fi^om
measures the speed
at
which the discount
below the
three.
discount increased with distance? The
coefficients indicate that
between the
relationship
local price
it is
highly unlikely that there
is
and the distance from Rome. They are
as
t-
no
all
larger than
A t-statistic above three indicates that there is less than one chance in twenty that
the observed relationship between distance and price differentials
other words,
that
Rome grew
Rome increased.
How can we be sure that the price
statistics
fi-om the price in
we
was due
to chance.'' In
confirm with very high probability that there was a unified wheat market
extended from one end to the other of the Mediterranean Sea, that transport costs
were roughly proportional
to distance,
and that the
effects
of distance were larger than the
idiosyncratic influences of particular markets, currencies and places. This level of
confidence
The
is
R
taken as conclusive in most economic and medical
shown
in the final
differentials that is explained
column measures
by these simple
tests
done today.
the share of the variance of the price
regressions.
Using the price
differentials
themselves, the regression explains almost four-fifths of the variation. Using logarithms
of distance, the regressions explain even more. This result confirms the impression in
15
Figure 2 that distance from
prices around the
Rome
is
wheat
a powerful explanatory factor in determining
Roman Mediterranean.
The constant terms
in these regressions
were negative
in the regressions for price
They were not estimated
discounts (and positive in the regressions for the logarithms).
precisely as the relationship between distance and the price differentials, so
as sure that they are not the result of chance (as indicated
constant terms suggest that there were
some
as
we cannot be
by smaller t-statistics). The
costs to bring
wheat
to
Rome that were
not
proportional to distance, albeit smaller and less well observed. These other costs could
have been physical
adminisfrative
effect
—
—
the costs of transshipping wheat to and
like port
from sea-going ships
—
or
charges or taxes. Their presence does not detract from the
of distance or the evidence in favor of a unified wheat market.
It
Without
does not
make
a big difference whether the Po valley
this observation, the
is
included or not.
standard error of the slope coefficient
The required
is slightly larger,
show
making the
t-statistic slightly smaller.
the slope
not zero also rises due to the fewer degrees of freedom. Nonetheless, the
is
probability that there
less than
one
in twenty.
that is explained
for the
Po
was no
relationship
t-statistic to
the probability that
between price and distance from
The slope of the hne and
Rome
is still
the percentage of the price variation
by distance do not change. As can be seen in Figure
valley Ues close to the regression line; removing
it
2, the
observation
does not change the
line.
This graph and these regressions provide powerftil evidence for the existence of
extensive monetization and unified wheat markets in the later
early
Roman Empire.
Roman Republic and the
Other authors have inferred the existence of such markets from
isolated observations, but
we have demonstrated the
16
existence of a relationship between
prices in far-flung places that almost certainly
is
not the result of chance. Such a
where the standard of value, money, was used throughout
relationship could only exist
the Mediterranean.
\
Possible Objections
We discuss in this section possible objections that can be raised to this test and
our conclusion. The
money was
first
objection
is that
prices
scarce, not because transport to
explain the prices in Table
1
.
Coins
were low outside
Rome was
may have been
Rome because
costly. This alternative
coined
cannot
scarce in Lusitania at the time of
Polybius, but coins were abundant in the eastern Mediterranean where the monetized
Greek economy preceded the Roman one. Wheat prices
Lusitania, as can be seen fi-om the figures. Distance
there
from
were lower than
Rome
is
a
in
much better
predictor of prices than coin scarcity.
A second objection is that the prices are unrepresentative because they are
notional, biased because the observers
price fluctuations.
had
political motives, or unrepresentative
due
to
We acknowledge that such errors in the price observations may have
been present, although Polybius was a very careful
evidence to make a rhetorical point.
As noted
historian, not liable to falsify his
already, such errors in recording the "true"
prices introduce noise into the relationship between the price differential and distance
from Rome.
If there
obscured. Since
we
was a
great deal of this distortion, any existing relationship might be
find such a relation,
it
means
that the relationship
between distance
and price was a sfrong one, visible even through the noise introduced by casual or
distorted price observations.
More
formally,
we
17
can
thirik
of the observed prices being
determined by the true prevailing prices, which
approximation. Then the dependent variable
distance plus an error. That error
a lower t-statistic
we
we
used in the regression
would add onto the
and R^. Given that they both are
assumption in fact
is
observe with an error due to our
the true
is
error of the regression
large,
we
conclude that
and
this
result in
rough
quite good, that the observed prices appear to represent prevailing
prices in a reasonable fashion.
Another, related objection
observations
is
that prices fluctuated during the year
may have come from different
and
seasons. Again, this source of noise
strengthens our results because the seasonal price variation introduces another source of
noise into the hypothesized relationship.
We suspect that the casual nature of the price
observations has helped us here. Travelers were told of the prevailing price, not
sometimes the extreme price
the
low price following the
Phrased differently,
quite random, but
that obtains just before the harvest
harvest.
it
it is
to
be a consistent
and sometimes
set
of prices.
we
find has to be spurious.
throw out evidence from the ancient world on the
must be random.
to the use
of these prices
is that
the argument
is circular:
data are sound because they support the hj'pothesis, but the test of the
hypothesis requires the data to be sound.
Not
at all.
We assume that the prices we
observe are dravm from a distribution of prices in the early
Republic).
in
survived for two millennia as
perverse to insist that any pattern
Yet another objection
we assume the
result appears to
we regard the few prices that have
There does not seem to be a reason
grounds that
The
comes
Roman Empire
(and
late
We do not assume they are accurate or come from a particular kind of
investigation or a particular time of year (as in the previous paragraph). In fact,
18
we only
assume
prices, the t-statistic tells us
There
Given
that they are prices.
is
no more
is
we
whether there
circularity here than in
Another objection
sample
that
is that
are sampling
a relationship between price and distance.
is
any
the sample
from the population of wheat
statistical test
is tiny,
of a hypothesis.
only six price pairs. This small
As we
unfortunate, but no barrier to the test of our hypothesis.
said above, the
standard errors and t-statistics are corrected for degrees of freedom. Having few
observations
test.
makes
it
easier to reject hypotheses, but
it
does not affect the validity of the
We would of course like to have many more prices, but there are not more to be
found
at this time.
to find
more
Perhaps our analysis of these few prices will stimulate other historians
price pairs
and
to provide
more evidence
for or against our hypothesis.
A little thought experiment might be usefiil here.
Imagine that
steady sfream of new wheat prices from various locations. If they
regression line in Figure 2, they provide
not
lie
more evidence
we discover
all lie
a
near the
for our hj^othesis. Prices that
near the regression line indicate that the locations in question were isolated from
the general Mediterranean wheat market or the
price observations. If we only find a
main currency area
few such observations,
historical record without vitiating the hypothesis
found a
lot
that
at the
times of the
would enrich the
of a generally unified market. If we
of such prices, that would suggest that conditions where markets were isolated
were more prevalent than times when they were
integrated.
The Roman world
in that
case would be monetized, but not composed of a unified monetary system.
We remarked earlier that imperial officials often intervened in the market for
wheat. If the government was administering prices, then the prices might not be the
result
do
of market forces
at all.
To check
this possibility,
19
we
searched for price
interventions in
price spikes
Rome. The government repeatedly attempted
when suppHes
offset the loss
BCE,
ran short. In 74
of wheat in Sicilian floods. In 57
the
to avoid the hardships
government sold grain cheaply
HS
merchants two
least
two
HS
1
9
CE Tiberius placed
HS per modhis,
a price ceiling
It
also is clear, even
intermittent. If we
summarized
wheat market from time
were
still
own in most years.
list,
set
another
It is
clear that
under
that these interventions
that these interventions are only half of the actual
clearly a minority.
The market
for
which there were
wheat was allowed
to
work on
In addition, if traders expected the government to interfere
famine loomed, they might have been discouraged from trying
adversity.
compensate
to time, particularly
from what must be a partial
assume
CE Nero
in Table 3.
actions, the others being unrecorded in our sources, the years in
interventions
to
HS per modius}^
interventions like these are
the government intervened in the
Augustus.
Augustus gave
was temporarily
on grain and offered
above the price he thought people could bear. In 64
Government
its
BCE
suggesting that the price before his intervention was at
price ceiling for wheat, this time at three
were
24
apiece to 250,000 people, allowing them to purchase wheat that
expensive. In
to
BCE Pompey negotiated extra purchases
himself, sailing from province to province in search of wheat. In
400
of
to
comer
when
the market in
Government intervention therefore may have damped speculation and made
the underlying pattern of prices easier to see.
The
largest
government
activity in the
government gave 60 modii per year
households receiving
to
wheat market was the annona. The
each male head of a household. The number of
this largess is unclear,
but
it
is
generally thought to be between
200,000 and 250,000 during the reign of Augustus.'^ If the population of Rome was
20
around one million people, the annona used between half and a quarter of the wheat
imported into Rome. More than half of the wheat imported to
Augustus therefore was imported
into
Rome
for the
Rome
at the
privately. Sirks argued that the share
annona was even
smaller, only around 15 percent,
time of
of grain imported
making
the private
share correspondingly larger.
The government
also obtained the
wheat
for the
annona
privately.
They
let
contracts to societates to provide wheat, and they offered inducements for private
merchants to participate in
their
own
this process.
Claudius rewarded private merchants
ships, carrying at least 10,000 modii, to
for five years. If the
merchant was a
Poppaea, which penalized the
citizenship.
male
tutor.
activity.
shippers
And if the merchant was not a citizen, he
who would
Rome
annona from compulsory
consequently was a mixture of public and private
to
provide work for
many merchants and
gather wheat from the far comers of the Mediterranean. But the
means
that the price
of wheat in Rome
We have discussed price variation already,
stabilized prices
in
to the
authorities.
There was enough private activity
public presence
annona.
in
more than they
destabilized them.
may have been distorted by the
and government actions probably
The presence of so much
Rome however may have decreased the price of wheat in that city at
price
annona
Hadrian extended these rewards by exempting any
imposed by municipal
The wheat market
for the
merchant was a woman, she could make a
merchant devoting the greater part of his resources
services
Rome
he would be exempt from the lex Papia
childless. If the
will without the intervention of a
would be granted
citizen,
import grain to
who used
was received by
all
free
wheat
times. If this
importers, then the graphs and regressions record the proper
21
between
relation
Roman and provincial
from the price paid
move
to importers, this
the line in Figure 2
If the price
prices.
would change
up or down.
It
would not
we observe was
the constant in the regression
wheat from different places
Coming back
Roman
to
for
monetary conditions, there
is
is
annona paid
no evidence
at all).
evidence of inflation in the early
We used the price difference between Roman and provincial
prices in order to avoid problems of inflation.
inflation in
Rome. While
in prices,
it is
more
As shown
the incomplete evidence
likely that they
were
Turning to the other variable, distance,
distance
is
on
in
Table
1,
we take
account of
inflation suggests there
drifting
any case, the use of a price difference insulates our
to
which there
2 or
Empire. The pay of soldiers was increased in infrequent large jumps, and wheat
prices in Egypt rose.
jumps
—
and
affect the relationship in Table
the slope of the line in Figure 2 (unless of course the officials of the
different prices for
different
test
upward more or
less steadily. In
from an inflationary
we acknowledge
were a few
bias.
that a straight-line
only a rough approximation to the actual distance traveled by wheat on
Rome. This
defect of the data
however
is
an advantage for our
test; it
its
way
biases our test
toward rejecting our hypothesis. The approximate nature of the distance estimate
introduces another kind of error in the variables. Since this
the effect
is slightly
different
from the
in observing distance has the effect
is large, as
can be seen in Figure
effect
voyage
our independent variable,
of an error in observing the
price.
Any
error
of reducing the size of the resulting coefficient. Since
2, straight-line distances
representation of the comparative distance from
specific
is
to the capital city.
22
Rome
appear to give a good
despite the
waywardness of any
Finally, this
is
a very simple
model of Roman monetization and
trade.
We have
argued that there was a single monetary system and a single wheat market across the
whole Mediterranean.
degrees of freedom.
test?
We tested this hypothesis with a simple regression and few
Why should any ancient historian believe such a simple model
and
We argue that the purpose of a model is to provide an overall view of money and
trade in
Rome.
It
does not explain every
detail; instead
it
provides an overview that can
help our thinking. There are only a few observations because that
studied
more
recent times,
ancient history.
As we
historians to search for
to see if this
we would have more
said above,
data, but
we hope that
added price observations.
simple model survives a
test
we do
is all
we have.
the best
we
If we
can with
our exploration will stimulate ancient
We will be as interested as any reader
with more data.
Conclusion
We have argued here that the early Roman Empire was thoroughly monetized.
We do not argue that people everywhere had adequate supplies of Roman coins, but
rather that people throughout the empire used a single
activities.
monetary standard
This single monetary standard was based on sestertii in the western empire
and on drachmae in the eastern empire, with a fixed exchange
result
was
to value their
to create a single currency area like the euro
rate
zone today. Whether or not
regions had adequate supplies of coin, the survival of prices from
empire indicate that the
between them. The
all
all
comers of the
Roman economy was thoroughly monetized.
We argued also that this monetization set the conditions for market integration by
reducing the transactions cost of trading across large distances. This allowed a single
23
market for wheat
enormous
capital
the
Roman
emerge, whose existence
we could
verify
from surviving
of Rome also encouraged the growth of trade, since
size
needed
to
to eat.
conquest.
unified market.
Food must have
The
all
prices.
The
the residents of the
traveled around the Mediterranean for eons before
quantities shipped
were too
Only when the Romans imposed
small, however, to
a political settlement
make
a
on the area and
created a unified monetary system could trade expand enough to unify prices across the
Mediterranean.
24
Table
Distance and Prices for Grain
1:
Rome
Distance
(km) from
Region
Price
(HS)
Province
Distance-from-
Price (HS)
Rome
Rome
"Discount" (HS)
4.00
Sicily {Sicilia
'
HS'
-1.50
HS"*
1
1363
{Italia
77BCE
2.00-3.00
HS'
3.00-4.00
Spain {Lusitania
province)
Po valley
HS
427
province)
Year
150
BCE
150
BCE
-2.50
3.00-4.00
HS
5.00-6.00
HS'
0.5
HS
province), by
1510
river
Asia Minor
(city
-3.00
HS'
ofPisidian
1724
Antioch
Egypt (Region of
the
-3.13
5.00-6.00
Fayum)
4HS'
HS
1953
5.00-6.00
^
HS
2.00-2.50
HS^
Rickman Corn Supply, 53-4
(1925), 126b. ^P.
,
M ich. II
20
EC -
56
CE
-4.00
2298
Palestine
Sources:
80sCE
2.00-2.25
1271.1.8 -38
^
"
Polyb.
Frank,
2.
15
"
CE
Cicero, 2 Verr. 3. 189. 'Polyb. 34 .S.l.^Apigr.
ESAR iv,
25
15
-3.25
181 and 183.
Table
2:
Distance Discount Regression Results
a
B
R'
-1.10
-0.001
0.79
(2.2)
(3.9)
-1.16
-0.001
(2.0)
(3.4)
-6.14
-1.25
(2.8)
(4.1)
-6.04
-1.25
(2.7)
(4.1)
TV
6
Distance Discount
5
Distance Discount
(no
Po
0.79
valley)
6
Log Distance
0.81
Discount
5
Log Distance
0.85
Discount (no Po
valley)
Source: Table
1.
Absolute value of t-statistics below coefficients.
26
Table
3:
Selected
Date
138
BC
Government Interventions
Grain Market
in the
Type
Intervention
Source
Rising prices lead tribunes to seek extra grain
Obsequens22(142).
supplies.
100
BC
Feared shortage leads Senate to seek extra grain
stock.
M. H. Crawford, Roman Republican
Coinage: Volume 2 (Cambridge: CUP,
1974), 74 and 616.
75
BC
1
Vi
modii distributed free per
man
Cicero, Plane. 64. Cicero, 2 Veir, 3.215.
given
shortage.
BC
66 BC
74
Aedile distributes grain
Pompey tours
at
1
AS
Sicily, Africa,
nmy,Histnat.
per modius.
and Sardinia to
18.16.
Cicero, Imp. Pomp., 34.
secure extra grain in his capacity as grain
commissioner.
62
BC
Cato's Lex Porcia raises grain outlay to 30
million
HS
58-56
Cicero appoints
BC
falls.
49
BC
Plutarch,
much to the budget.
Pompey for grain supply, price
29
23
BC
BC
BC
BC
BC
11 BC
5BC
2BC
Caesar distributes grain
to starving
Romans
Augustus gives 400
Augustus gives 400
HS
HS
to
250,000 people.
many.
Augustus gives grain
to
Augustus gives grain
to at least 100,000.
19
AD
10-12, 14-18; ^«. 4.1; Cassius
Augustus gives 400
Augustus gives 240
Augustus gives 240
HS
HS
HS
Bell. civ. 2.48;
Res
gest., 15.
Res
gest., 15.
Res
gest., 5.
Resgest,
14.7.3;
250,000 people.
Resgest., 15.
to
320,000 people.
Resgest., 15.
to
200,000 people.
Resgest., 15.
Augustus gives grain to many. Also expels
some foreigners from the city to alleviate the
crisis. (Gamsey, 221)
Suetonius, Tib.
8.
18.
to
Tiberius imposes price ceiling, gives dealers
Fam.
Cassius Dio 41.16.1
Resgest., 15.
250,000 people.
Augustus give money and "12 rations" to
250,000 people. Tiberius also helps, and
Suetonius says he "skillfully regulated the
difficulties of the grain supply and relieved the
scarcity of grain at Ostia and in the city."
18
AD
Dom.
Cicero, Att. 7.9.2, 4; 9.9.4;
Appian,
to
22
6
Cicero,
Dio, 39.9.3, 24.1; Cicero, Q.fr. 2.5; Har.
resp. 31; Plutarch, Pomp, 49.4-50.2
during the civil war (Gamsey, 202).
24
Ca/o M/w. 26.1
or adds that
Cassius Dio 55.22.3.
+2
Tacitus,
y4/7«.,
2.87.
HS
51
64
AD
AD
AD
189
Claudius encourages merchants to
(Gamsey, 223)
Nero fixes price
Commodus
at 3
engages
sail in winter.
Tacitus, ^««., 12.43.
HS, annona suspended
Tacitus, Ann., 15.39.
in price-fixing.
Herodian 1.12.2-4; Cassius Dio 72.13.2.
27
Figure
1
Plot of Distance
:
and Roman Distance
Discount
n
U
-0.5
w
X
-1
Palermo
(Sicily)
;E-1.5
c
-2
i
Madrid (Lusitania)
Q
-2.5
-
-3
-
-3.5
-
-4
-
-4 R
~H.D
-
0)
c
Palestine
Po
valley
*
^
w
5
Turkey (Pisidian
Antioch)
Egypt
1
500
1
1000
Distance from
28
(the
Fayum)
1
1
f
1500
2000
2500
Rome
(in
km)
Figure 2: Relationship between Distance and
Roman
Distance Discount
-
-0.5
.
w
X
-
.
-1
-
F^lermo
-1.5
^^^
^"*^«^^
4.J
c
3
o
u
(Sicily)
-
^^
-2
*»s^.^ Madrid (Lusitania)
(0
Q
^^*>^^^»
-2.5
^*"^>^_^_^
0)
u
-3
Po
valley
Palestine
*"^«>,,,^
ns
^
**«v^_^
w -3.5
-
Turkey (Rsidi^hs,,,^^
^*^*^
Antioch)
Q
-4
-4.5-
Egypt (the Fayi
'
1
500
1
1
1
1000
Distance from
29
1
1500
Rome
(in
2000
km)
2500
Endnotes
'
Sometimes a
third function, a store
of value,
is
added, but this
is
not relevant here.
Kevin Greene, The Archaeology of the Roman Economy (Berkeley, CA: University of
California Press, 1986), pp. 50-51. This assertion can be found in almost any elementary
economics
^
text.
Roman Empire
Keith Hopkins, "Taxes and Trade in the
(200 B.C.-A.D. 400)," Journal
of Roman Studies 70 (1980), 101-125; Richard Duncan- Jones, "The Denarii of Septimus
Severus and the Mobility of Roman Coin," Numismatic Chronicle, 161 (2001), 75-89.
^
Richard Duncan-Jones, The Economy of the
Roman Empire:
Second Edition (Cambridge: Cambridge University
Quantitative Studies
Press, 1982);
Hans-Joachim
Drexhage, Preise, Mieten/Pachten, Kosten und Lohne im romischen Agypten bis
Regierungsantritt Diokletians
(St.
Katharinen: Scripta Mercaturae, 1991); Dominic
Rathbone, "Prices and Price Formation in
formation des prix dans
les
zum
Roman
Egypt," Economic antique. Prix et
economies antiques (Saint-Bertrand-de-Comminges: Musee
archeologique departmental, 1997), 183-244.
David M. Schaps, The Invention of Coinage and the Monetization ofAncient Greece
(Ann Arbor, MI: University of Michigan
Press, 2004).
^
Rathbone, "Prices," pp. 191-92.
^
Geoffrey Rickman, The Corn Supply ofAncient
Rome
(Oxford: Oxford University
Press, 1980), pp. 143-55.
'
Duncan- Jones, The Economy of the Roman Empire.
^
Kevin Greene, The Archaeology of the Roman Empire (Berkeley: University of
Cahfomia
Press, 1986), p. 40.
30
^
William Mitchell Ramsay, "Studies in the 'Roman Province Galatia' VI
Inscriptions of Colonial Caesarea Antiochea," Journal
172-205,
— Some
of Roman Studies 14 (1924), pp.
at 180.
'°Rathbone, "Prices," 193.
'^
Duncan- Jones, Economy of the Roman Empire, 372. For information about transport
within Egypt, although not
its
cost, see
Adam Biilow-Jacobsen, "The Traffic
on the Road
and the Provisioning of the Station," in La route de Myos Hormos, edited by Helene
Cuvigny (Le Caire:
^^
Institute fran9aise
d'archeology orientale, 2003), Vol
2, pp.
399-426.
Tenney Frank, An Economic Survey ofAncient Rome (Paterson, NJ: Pageant Books,
1959), Vol. 4 (Heichelheim), 181-83.
'^
Gamsey,
that oil
for example, observed casually
and wine cost more
Food in
in
Rome
and without apparent need
for
documentation
than elsewhere. Peter Gamsey, Cities, Peasants
and
Classical Antiquity (Cambridge: Cambridge University Press, 1998), 241.
Schaps, Invention of Coinage.
^^
Helene Cuvigny, "The Amount of Wages Paid
to the
Quarry- Workers
at
Mons
Claudianus," Journal of Roman Studies, 86 (1996), 139-45.
The
sizes
number
of the coefficients
typically
coefficient, but
description
17
In the
when we use
logarithms since the logarithm of a
smaller than the number. T-statistics are the same sign as the
we have reversed the
more
more
is
rise
signs of the t-statistics in Table 2 to
make
the
intuitive.
precise language normally used for regressions, the probability of
observing the coefficients in the table
wheat and the distance from
Rome
is
if there
were no relationship between the price of
less than five percent in three out
31
of four
regressions and close to that probability in the fourth.
statistic for four
degrees of freedom (six observations)
The
is
five percent value of the
2.8; for three degrees
t-
of
fi"eedom (five observations), 3.2. Higher t-statistics indicate lower probabilities that the
observed relationship
'^
Peter
is
Gamsey, Famine and Food Supply
Cambridge University
'
a
in the
Press, 1988) 195-222;
Graeco-Roman World (Cambridge:
Rickman, Corn Supply, 150-54.
Catherine Virlouvet, Tessera frumentaria: les procedures de distribution du ble public
la fin de la Republic et
Gamsey,
^°
the result of chance.
Cities,
Boudewijn
that the
au debut de I 'Empire (Rome: Ecole Fran9aise de Rome, 1995);
Peasants and Food, 236.
Sirks,
Foodfor Rome (Amsterdam:
annona provided bare subsistence
less than half of total
Gieben, 1991), 21
.
Jongman argues
for half the free population
of Rome, that
wheat imports. Willem M. Jongman, "Consumption
Roman Empire," in Richard P.
Sailer, Ian
Morris and Walter Scheidel
is,
in the early
(eds.),
The
Cambridge Economic History of the Greco-Roman World (Cambridge: Cambridge
University Press, 2006).
^'
E. Badian, Publicans
and Food Supply, 234;
^^
and Sinners (Oxford:
Sirks,
Foodfor Rome,
George R. Watson, The Roman Soldier
Basil Blackwell, 1972);
Gamsey, Famine
63.
(Itahaca,
NY:
Cornell University Press, 1969),
89-92; Rathbone, "Prices."
^^
Peter Temin, "Mediterranean Trade in Biblical Times," in Eli F. Heckscher:
A
Celebratory Symposium, edited by Ronald Findlay and Mats Lindahl (Cambridge:
Press, forthcoming).
^^836
27
32
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