Knowledge of the effects of government interference with market prices makes us comprehend the economic causes of a momentous historical event, the decline of ancient civilization.
[…]
The Roman Empire in the second century, the age of the Antonines, the “good” emperors, had reached a high stage of the social division of labour and of interregional commerce. Several metropolitan centres, a considerable number of middle-sized towns, and many small towns were the seats of a refined civilisation […]. There was an extensive trade between the various regions of the vast empire. Not only in the processing industries, but also in agriculture there was a tendency toward further specialization. The various parts of the empire were no longer economically self-sufficient. They were interdependent.
What brought about the decline of the empire and the decay of its civilization was the disintegration of this economic interconnectedness, not the barbarian invasions. The alien aggressors merely took advantage of an opportunity which the internal weakness of the empire offered to them. From a military point of view the tribes which invaded the empire in the fourth and fifth centuries were not more formidable than the armies which the legions had easily defeated in earlier times. But the empire had changed. Its economic and social structure was already medieval […]
[I]n the political troubles of the third and fourth centuries the emperors resorted to currency debasement. With the system of maximum prices the practice of debasement completely paralysed both the production and the marketing of the vital foodstuffs and disintegrated society’s economic organisation. The more eagerness the authorities displayed in enforcing the maximum prices, the more desperate became the conditions of the urban masses dependent on the purchase of food. Commerce in grain and other necessities vanished altogether. To avoid starving, people deserted the cities, settled on the countryside, and tried to grow grain, oil, wine, and other necessities for themselves.
Ludwig von Mises, Human Action, 1949.
November 4, 2019
QotD: Ludwig von Mises explains the fall of the western Roman empire
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