Ancient Rome’s many social and economic achievements gave the Founding Fathers the confidence to set out a plan for building their new country in the Declaration of Independence.
As set out in my book Pugnare: Economic Success and Failure, how the empire informed the start of America is easy to see. As many of the Founding Fathers received a classical education, in Latin and Cicero, they would be well versed in how the structure of the Roman economy and society allowed it to spread its borders and increase trade.
A key lesson from the empire was about price stability. You could travel from Britannia in the far north-west to Judaea in the east and back to Africa Proconsularis in the south, and the prices of goods and the value of your coins would be the same. This was because of a fixed exchange rate, set by government decree, between gold (Aureus), silver (Denarius), and copper or brass coins (Sestertius and Dupondius).
A universally accepted currency and exchange rate across the Mediterranean basin and the provinces governed by Rome enormously facilitated commerce by removing the need for the physical transportation of physical coins. That was because traders could carry the Roman equivalent of a cheque which would be accepted as being worth as much as it would be in gold and silver coins. Very few coins have been found on Roman shipwrecks that happened before AD 250 as large transactions could be carried out without hard currency.
Enabling commerce at scale was an ambition of the Founding Fathers. “These United Colonies… have full power to… establish commerce, and to do all other acts and things which independent states may of right do,” they wrote in the Declaration of Independence.
People across the Roman empire prospered from free trade, with a large shipping fleet and ports and the willingness of landowners and traders, working together, to bring grain from areas which had produced bumper crops to those where crops had failed. Food shortages became a rarity as a direct result of the Roman free trade policy.
Trade also opened the way for those in the most disadvantaged positions in society to climb the social ladder, as can be seen in the fictional freed slave Trimalchio from Petronius’ novel, written during Nero’s reign. Trimalchio was despised as vulgar by the elite but earned extraordinary wealth from trade. Banks could advance loans to anyone they thought could repay, so newly freed slaves could accumulate great sums through trade financed by bank loans, a rags to riches story which exemplifies the American dream.
The Roman example taught the Founding Fathers about unlimited trade, but also warned them about unlimited power. After enriching his supporters and squandering resources – including by building a ‘Golden House’ on stolen land and packing it with exquisite paintings – emperor Nero was proclaimed by the Senate a public enemy and condemned to be beaten to death in 68 AD. He committed suicide before this could happen and The Golden House was levelled and replaced with a magnificent amphitheater, now known as the Colosseum.
The tyranny of rulers like Nero, a King George III of his time, was countered by the Declaration of Independence decreeing: “Whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute new government.”
The declaration also protested how the British “burnt our towns, and destroyed the lives of our people” and “refused to pass other laws for the accommodation of large districts of people,” showing the value the Founding Fathers placed on property rights.
Property was an essential part of the Roman way of life and a person’s rank in the world depended on how much they owned. Much like a secure monetary system, rights to property further enabled individuals to invest in trade and manufacturing and in farms.
Urbanization, accommodating the “large districts of people,” also came to be appreciated by the empire: The city of Rome reached a population of one million two thousand years before London, the UK’s capital city. The people who migrated in great numbers to the urban districts of the empire worked on construction projects or in the bakeries and were paid about the same as those who labored on the land. But others migrated to the towns and acquired new skills, and were paid more than laborers. Clean water was brought to the towns and cities via aqueducts carrying water through gravity from lakes or mountain rivers miles away.
As more people moved to the city, the productivity of the remaining agricultural workers increased with that of urban workers.
Building that economic advantage, within a free and fair society, shows how the Roman empire provided the blueprint for how the Founding Fathers could build a strong, independent America.
The post How the Roman Empire Provided the Founding Fathers a Blueprint for America’s Economy was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.