During the 3rd century, the economy entered a depression, both at a local and at an empire-wide level, although its degree showed regional differences. Production and trade diminished, and the depreciation of the coinage and accompanying inflation mentioned above led to demonetization. Large-scale hoarding of precious metals, mentioned in written sources and confirmed by archaeological finds, was both a cause and a result of this development. The authorities did their best to maintain tax revenues at a sufficient level, because both the civil wars and the frontier wars had to be paid for. Nevertheless, the incomes of cities and the state fell steadily, because of the general reduction of economic activity and the tendency to evade taxes. Attempts to control developments, for instance by increasing the amount of currency through further depreciation, or by enlarging the relevant bureaucratic institutions, were counterproductive and deepened the crisis.
People of all classes tried to avoid falling into the hands of the money-hungry state. In the West of the empire, the elite turned its back on the cities and withdrew to its estates. A career in the imperial government also offered a way out. It was no longer attractive to be a member of the city council and to do good. Beneficence had become a heavy burden, as one was not only supposed to give but also to stand security for tax revenues. There was therefore a trend toward autarchy. This trend was characterized by large agricultural estates with fortified villae, where the landowner knew himself to be ensured of food and further basic products and could keep tax collectors at bay. De-urbanization was a logical
Consequence: without the elite, city life went into a decline. Because of fiscal pressure, many farmers and craftsmen were forced to give up their independence and seek refuge with a powerful lord. They were welcomed, but kept in a dependent position and forced to perform services for their master. In time, this late-antique form of exploitation made it hard to distinguish between coloni and slaves. On the other hand, it also happened that dissatisfied coloni ran away. A radical way of escaping dire circumstances for both farmers and city dwellers was banditry: from the 3rd century onward there were many, sometimes large, groups of drifters ransacking the countryside. In the 4th century, the Christian church began to offer a safe haven for those who wish to escape from society and its burdens, in the form of monastic life or a career among the clergy.
The state opted for coercion. The aim of this policy of coercion was to find sufficient means to pay for the large, and ever-growing, amount of unproductive elements in the army and the administration. Initiatives toward this policy can be found at an early stage, but it was fully developed under Diocletian and Constantine. The system of coercion was exemplified by the so-called price edict issued by Diocletian, which was an attempt to control the prices of goods, services, and transport. We also increasingly find that social groups were tied to their profession (initially this was limited to crucial professions such as bakers or skippers, but it gradually spread to other professions), to their position in the administration (members of city councils and officials), or to the soil (coloni). The exchange of goods between producers on the one hand and the army and bureaucracy on the other was no longer left to the free market but strictly regulated, as was the wheat supply of Rome, Constantinople, and some other major cities. Diocletian also introduced a new tax system, the annona, a direct levy based on the number of inhabitants and the surface area.
All of this was ineffective: the coercive measures only led to a further decline of the economic network, because people tried to find ways around the rules and regulations. This is also reflected by the formation of estates that were, in effect, small states within the state, where officials were no longer welcome. The economy of the Western part of the empire became regionalized and shrank because of the decline of production and trade; tax revenues fell accordingly. Although all of this contributed to the fall of the West, the Roman economy itself survived the collapse of the empire. In several places, people reverted to self-sufficiency or underdeveloped market systems; nevertheless, despite general decline and deterioration, the church and the Germanic states retained elements of antique economic life, for instance, the villa system and the monetary economy.
World History
