Economic conditions
The conditions of internal peace and security that prevailed during the early imperial era promoted economic development and led to high levels of prosperity throughout the empire.
This prosperity was based largely on agriculture and stock-raising (the principal sources of wealth in Italy and the western provinces). Next to agriculture in importance were industry and commerce. International trade was facilitated by the expansion of the Roman road network, the security of transport, the establishment of a currency system for a whole empire and the opening up of new markets in Italy and the provinces. In the second century AD regular commercial contacts had been established with lands as distant as India, China, Arabia, central and southern Africa and the Scandinavian regions. These lands supplied articles of luxury, such as gold, ivory, precious stones, silk, amber and spices. But by far more important was the trade conducted within the empire itself, between different provinces and cities. Grain and other agricultural products made up the bulk of the trade, but manufactured articles played an increasing part, as did the necessary raw materials for every kind of industry. In the West, Italy was the chief centre of industry, supplying manufactured goods (such as pottery, metal and glass articles and clothes) to markets from Britain to the Danube regions. In the East many cities, such as Alexandria, Ephesus, Corinth and Antioch, remained thriving industrial and commercial centres.[909]However, already from the second century AD, the first signs of economic decline appeared, first in Italy and later in other parts of the empire. The Italian economy was based on the export of agricultural products (such as wine and olive oil) and manufactured goods to the provinces.
But as more and more Italians migrated to Spain, Gaul and the eastern provinces and these provinces began to produce and export such goods in large quantities, export markets were lost, trade declined and agriculture and industry in Italy ceased to develop. A further factor that precipitated economic decline was the re-emergence of the large-scale ownership of land and the gradual disappearance of the small independent farmers, both in Italy and the provinces. As fewer countries were now conquered, the supply of cheap slave labour dwindled and the great landlords began to give up large-scale farming preferring instead to let their lands to tenants. A tenant would be given a piece of land, usually for a period of five years, and would pay the rent on an annual basis. Many small farmers, unable or unwilling to run the risks which small-scale farming involved, were glad to give up their lands and become tenants. The spread of the tenant system and the change from systematic farming to the more primitive methods practised by the small tenants resulted in the gradual decline of agriculture. As the population of the cities and towns depended upon the produce of land, the fall in agricultural production led to a deterioration of living conditions in the urban centres. At the same time, as the cities became more and more dependent upon the land workers, the rift between city and country widened and the peasantry became more and more oppressed. Besides the usual peasant complaint about their economic exploitation by the land-holding nobility, the peasantry felt totally alienated from the culture and society of the urban centres and a smouldering resentment of the city was added by the peasants to the lengthening list of tensions within the empire.Economic conditions deteriorated further as a result of the everincreasing taxation imposed on the population by the imperial government. The situation became critical in the third century AD when, under the threat of internal unrest and external invasion, the government raised its demands to new heights.
The emperors sought to meet the cost of government in part by imposing more taxes on the urban population of the provinces and in part by introducing a system of compulsory public labour and extraordinary contributions of money or supplies. In the cities the wealthier classes from which the holders of municipal offices were drawn were made responsible for the payment to the state of the taxes and, if they were unable to collect the amount that was demanded, they had to pay it out of their own fortune. As a result, the holding of public office came to be regarded as a burden, rather than as a privilege, and service in the municipal administration became compulsory for those with the requisite property qualifications. At the same time, as the revenues of the state dwindled, the emperors resorted to the continuous debasement of the coinage in order to meet the cost of government. Those most affected by the resulting high inflation were the members of the urban middle class and the municipal councils in the provinces whose income was all but wiped out.
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