The integration of the provinces in the Roman economy is a characteristic of the imperial era. Although the provinces would continue to carry the heaviest burdens (which is not so strange in view of their economic potential), the dichotomy between Italy as the center of production and the provinces as the milch cow that was being milked for the welfare of Italy was on its way out. For Italy, provincial integration meant leveling out: from an economic (and also, as we shall see, from a political and social) point of view, Italy increasingly came to resemble other parts of the empire. Whether this indicates the decline of Italy is open to question: archaeological data seem to indicate a certain growth in the provinces and stagnation in Italy. If there was a decline, it took place during the 3rd century AD when cities (though not every city) all over the empire showed signs of crisis: Italy was no exception. Integration in the Roman economy meant that the provinces became part of an economic network that covered the whole of the empire. Paradoxically, this boost for the provincial economies (especially the ones in the West, which were extremely underdeveloped) spawned various processes of independent development, which affected this same network in a negative way. In the 3rd century and later, integration was therefore followed by disintegration, although in the meantime all economies had been raised to a higher level.
Integration of the provinces in the state economy also meant their entry into a monetary economy. This was stimulated by the use of money for collecting taxes and paying soldiers. The use of money spread both horizontally (all over the empire) and vertically (at all levels of society). Money was meant to be used in ordinary market transactions, but, apparently, it was not always available. Because of these temporary shortages of ready money, during the whole imperial period payments were just as likely to be made in kind. The extent to which every regional economic network was genuinely part of the monetary economy
Is therefore relative. These unintended shortages are an illustration of the lack of some form of monetary policy: one kept an eye on the circulation of coins, but there was no macroeconomic view of the flow of money. It seems that the Roman authorities saw money, with its evident propagandistic possibilities, as a political rather than an economic instrument. In general, however, monetizing tendencies had been so profound that even the deep recession of the 3rd century AD was only temporary.
This recession was partly the result of the depreciation of coins. During the first two centuries, imperial coinage had a very stable standard (which was changed only once, under Nero) with gold, silver, and bronze or copper coins in fixed relations. In many places, especially in the East, local coins were in use alongside those of the empire. The gold and silver coins, which were the prerogative of the emperor, had an intrinsic value. This meant that the amount of coins was directly related to the amount of gold and silver, a structural weakness of the Greco-Roman economies. During the 3rd century AD, when emperors were constantly short of money, there was a continuous depreciation of the coinage: at a certain point there was hardly any silver left in the “silver” coins. This is a fatal development for a monetary economy based on intrinsic value. In large parts of the empire, the monetary economy was abandoned. In addition, there was strong price inflation. There had been only little inflation during the first two centuries: a price rise of no more than 200% over 200 years. During the 3rd century, however, inflation rapidly increased. During the 4th century, the monetary system was reformed, which allowed a return to a monetary economy. The further history of the financial system is replete with uncertainties. For the emperors, it must have remained a matter of concern: we find that there were several reforms during the 4th century alone.
World History
