Monday, July 25, 2011

Weak hypothesis on a great empire

History is an open subject; every historian has hisstory or herstory. In fact, you also can posit your own theory of the rise and fall of past societies. Now a new one has been made by a historian, Elin Whitney-Smith. Essentially, she hypothesises that great economic shifts have been precipitated by changes in the way information is managed. By her assertion, she has reduced the underlying pattern to a single cause, going too far in the direction of simplicity. This violates Einstein's dictum that "Everything should be made as simple as possible, but not simpler." Anyway, her website contains nuggets of interesting facts and her in-progress book would appeal to any history buff.

We can use her take on the collapse of Ancient Rome, specifically its western half, to test the tenability of her contention that information is key to understanding momentous changes in human history. She argues that the collapse of Ancient Rome was prompted by information overload. Rome was too big to be effectively governed, so it had to split into two: the Western and Eastern Roman empires. To reduce the overload, both Emperors Diocletian (reigned 284-305) and Constantinople (r. 313-324) turned to autocracy and mandated one state religion, the former promoting paganism and the latter Christianity.

As usual, Whitney-Smith has fallen into the single lever trap. The proponents of this approach try to discover one single overarching theme that can explain all monumental shifts in history. Then they tailor their findings to suit their hypothesis, ignoring all evidence that contradicts it. With enough materials assembled, voila, a new theory has been discovered. As history is subjective, everybody is entitled to his opinion. So their new theory is accepted as one of the many causes of great historical shifts. What history ends up is a mass of erroneous inferences which no one has taken the trouble to contradict, correct and reassemble. To do so, we need to bring up the big picture for which the various inferences can be fitted in so that the real story can emerge.

As a rule, history can never be reduced to a single lever theme. It takes several major causes, at its simplest not less than four, to explain great transformations. The four are encompassed in the 4C framework or model comprising Capacity, Communication, Consumption and Capacity. Whitney-Smith's information theme is only one aspect, i.e., the communication, of the 4C. That means she has missed out on more than three quarters of the causes. With the 4C as a reference, picking holes in any historian's arguments is a cinch.

Let's look back at the narrative on Ancient Rome so that we can fully understand why it collapsed. It will provide lessons on the coming collapse of nation-states. Ancient Rome reached its greatest territorial extent under Emperor Trajan (r. 98-117). Administering it was very costly because Trajan had overextended. However his successor, Emperor Hadrian (r. 117-138) undid his mistake by withdrawing from Mesopotamia and Armenia.

Land transport in those days was 60 times more expensive than water transport. As a result the Roman territories could not extend more than 75 miles from the coasts or navigable rivers. The map below, taken from the companion website of the Civilization in the West textbook, shows that the dominion of Ancient Rome was limited to accessible waterways, comprising maritime and riverine routes. Even now rail movement, the cheapest land transport, costs four times the cost of moving goods on a large ship.
The beginning of the split between West and East occurred around the time of Emperor Diocletian (r. AD 284-305). That's more than 165 years after Trajan's death. Mind you, the age of the US in its largely present form is less than that. California and New Mexico were annexed into the US only in 1848. Alaska was purchased in 1867 and Hawaii, the last state, added in 1898. Certainly information overload wouldn't have been an issue for the Romans. If it had been, the empire wouldn't have extended that far in the first place. In fact, communication between the two halves of the empire was cheap. Look at the map and immediately you'll notice the Mediterranean Sea, the main communication artery that fused the empire together. But extending beyond the 75-mile coastal and riverine limits was not possible as costs would have exceeded benefits.

In terms of capacity, the Roman empire's fortune moved downhill the moment it couldn't extend its land acquisition. In contrast to the modern-day superpower which must keep on acquiring new technologies to remain dominant, ancient Rome must keep on acquiring territories. New territories furnished Rome with new slaves and economic goods especially agricultural produce. Once Rome stopped expanding, economic growth stagnated though eventual downfall in those days took some time since events moved at a glacial pace.

Rome itself initially was a centre for the production of wine and olive oil. However other Italian regions began eroding Rome's competitive advantage. Eventually its colonies, Spain and Gaul (modern France), cornered this production leaving Rome a hollow core economically. Meanwhile, gold and silver flowed out to China and India to balance the trade deficits arising from silk and spice imports. The only economic activity left in Rome was building works as this could not be traded across borders. It also served to provide jobs for the unemployed. Sounds familiar?

The troubled times with chronic usurpations of power occurred around the 50 years after the death of Severus Alexander (r. 222-235). This chaotic period was characterised by rapid inflation, the combined result of decreased food production and coin debasement. Coin debasement took two forms: reduction of silver content and when this had reached its limit, changing the denominations to higher amounts.

As the western half of Ancient Rome was subjected to constant harassment by the barbarians on its borders, maintaining it cost more than the benefits it generated. It was therefore inevitable that for the empire to survive, it had to size itself down. This move began under the rule of Diocletian (r. 284-305) who divided the rule into two halves by nominating Maximian as the western co-emperor. He also appointed two junior caesars, in the process of which the two senior emperors were elevated to augusti. This Tetrarchy system secured his rule from the chronic usurpations of power as powerful army commanders now had more opportunities to be emperors. In actual fact, it solved the problem in his time but the problem reappeared later because more openings led to more contenders for power. The root cause had always been economics, not politics.

Diocletian managed to bring back some stability to the empire. But in an empire that had been on a natural decline, it was a temporary fix and the cost was immense. Inflation was rampant and this could be attributed to the fall in agricultural production as a result of his ruthless taxation. When the monetary system had broken down following hyperinflation, Diocletian instituted taxation-in-kind. As powerful landowners received exemptions from taxation, the burden of taxation fell on the small landowners. To avoid the oppressive tax, the small landowners left their farms deserted to become tenants or slaves to the big landowners. Notice that even now, the big corporations and the rich know how to find tax loopholes in order to avoid paying tax. This deceit would in turn hasten the breakdown of society.

The increased tax revenue allowed Diocletian to increase the hitherto declining Roman army by one third to 435,000 thus providing the needed stability. Bureaucracy was also expanded. He tried to reform the currency by issuing non-debased full-weight coins but his fixing of the new coin denominations at the same value as the debased ones resulted in the new coins being hoarded and taken out of circulation. Bad money drove out good money. Though politically astute, till his retirement economic issues proved elusive to him.

Emperor Constantine (r. 306-337) was able to consolidate the emperorship into one in 324 after spending the early part of his rule usurping power from fellow emperors and contenders. His rule was the last in which Rome regained its supremacy prior to its official split into east and west. Again the price was costly and it was just a short spurt in a secular decline. Constantine increased slightly the size of the Roman army to 450,000. Also like Diocletian, he used religion to strengthen the state but whereas Diocletian embraced paganism and turned against Christianity, Constantine was intensely sympathetic to the Christians. Turning to religion provides a ruler an alternative instrument of control when the economics crutch can no longer be relied upon.

Constantine initially ruled the western half of the Roman empire. However after uniting the two halves, he moved the capital to Byzantium, which he renamed Constantinople. It was a strategic location as it sat astride the east-west trade route. It could live off trade. This move marked the end of Rome. Sucked hollow economically and besieged by the barbarians militarily, Rome would permanently lose its preeminence. The official split between east and west took place in 395. Long before the western half collapsed in 476, its capital had moved from Rome to Ravenna in 402.

Constantine raised his funds in other ways aside from taxation. The pagan temples that he destroyed yielded a lot of gold and treasures. In addition he regularly received gifts, which were actually tributes, from Roman cities and provinces in the form of gold and silver on the many special occasions. With his new found sources of wealth, Constantine was able to issue a new type of gold coins known as the solidus. The solidus which eventually became the tribute objects, was to be produced over the next 700 years, the longest time any currency was ever used. Of course, Constantine relied on wealth transfer to mint his solidus but subsequent eastern Roman emperors assiduously cultivated its current account to ensure that it always generated surpluses.

After the split, Justinian (r. 527-565), the eastern emperor attempted to resurrect the old Roman empire by invading the Italian peninsula. He succeeded in 554 (see map below) but it was an expensive affair, costing him 300,000 pounds of gold with no significant economic returns. By 568, three years after his death, the new territories had to be relinquished. As usual the defining yardstick has always been the 4C, this time the conquest not yielding any new capacity that would have compensated for the cost of the expedition. Using information as the sole criterion does not do justice to the events surrounding the downfall of the Roman empire.

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