Rome vs. America in Economics

The current American Republic could die of the same disease that killed the Roman Republic.

The Rome Republic died because its leaders refused to acknowledge economic reality. The economic reality Roman leaders failed to accept was the death of their traditional agricultural society.

The Roman Republic based its fantasy economics on the assumption that the small independent farm was the ideal unit of production. The Romans believed that a Republic of small independent farmers was the ideal political system. Likewise, the Romans thought a nation of small independent farms was the ideal economic system.

The republic of yeoman farmers could have survived, had Rome remained a small city, or an Italian power. Unfortunately, Rome did not remain a small city state or an Italian power.

Rome’s Fantasy Economics

The Punic Wars gave Rome an overseas empire. Consequently, Rome needed professional armies and fleets to defend that empire.

Maintaining those armies and fleets necessitated a huge military industrial complex. To finance that military industrial complex, Rome needed far more money than small farmers could produce.

The problems the empire created for the Roman Republic were immense. For example, vast number of professional soldiers demanded regular pay and retirement benefits.

Rome’s industry boomed, creating a huge urban proletariat in Italy’s cities. That urban proletariat required a level of social services the Republic could not provide.

Family farms could not produce enough food for the urban proletariat or the armies. That necessitated food imports and industrial agriculture.

Family farmers could not compete with the factory farms and went bankrupt. Italy’s cities became filled with unemployed farmers. Wars made the situation worse because many farmers spent years away from their fields on foreign service.

The glamour of war made the situation worse. Service in the legions was more exciting, better-paying, and more interesting than growing grain.

The Roman Crash

However, the new economic reality did not penetrate the posh country club called the Roman Senate. The wealth the Senators made with their military industrial complex and slave-worked factory farms shielded them from the economic reality.

Until a Senator called Tiberius Gracchus took up the cause of impoverished plebeians, the urban poor. Tiberius’s plan was simple use the loot the Roman legions plundered to purchase small farms for the urban poor.

Essentially, Gracchus was a conservative who wanted to restore traditional Roman society. However, traditional Roman society was dead.

The Roman 1% fearing for its wealth hired thugs to murder Tiberius Gracchus, and a few years later his brother Gaius who took also up the cause of reform. The murders sparked decades of violence, political unrest, and civil war.

Traditional Roman Values

The Roman Republic collapsed because its ruling classes spent the 1st Century BCE trying to recreate the fantasy economy.

One leader after another tried to restore the small farmer, rebuild the traditional economy, and restore Traditional Roman Values. These leaders soaked the streets of Rome, the soil of Italy, and the floor of the Senate itself with blood in their efforts to restore the economic fantasy.

Ironically, the Senators sacrificed Traditional Roman Values of honor, integrity, bravery, loyalty, and unity to the economic fantasy. To impose their fantasy, Roman leaders such as Sulla, Marius, Pompey, and Julius Caesar hired thugs and mercenaries to murder their enemies and terrorize the streets.

In his efforts to recreate traditional Rome, Caesar pillaged Gaul and enslaved tens of thousands of people. Similarly, Pompey the Great plundered the Eastern Mediterranean and overthrew many historic states to finance the dream of a Republic of small farmers.

The plunder made the situation worse because the pillaging required bigger and bigger armies. Constant war destabilized both the state and the military by diverting all resources to the legions.

Augustus and the End of the Roman Economic Fantasy

Rome’s agony and the constant warfare only ended when a politician who rejected to the economic fantasy rose to power.

That politician was Octavian; or Gaius Octavius Thurinus, later Augustus Caesar. Octavian, Julius Caesar’s nephew and heir, succeeded by embracing the new economic reality but preserving Traditional Roman Values.

Octavian realized that professional armies, a large government, a military industrial complex, an urban proletariat, and a large welfare state were unavoidable realities. Instead of destroying the new institutions, or ignoring those realities, Octavian tried to reform the system to conform to traditional values.

For example, Augustus created a professional bureaucracy to administer the wealthiest Roman colony, Egypt directly. Controlling Egypt, the Mediterranean’s bread basket, allowed Augustus to give a Rome’s urban proletariat a steady food supply.

Octavian next set up a welfare state to distribute that food. In the process, Octavian became master of Rome because he controlled the food supply and the economy.

The New Roman Economy

Furthermore, Octavian tamed the out of control military by ending the policy of conquest. Ending conquests allowed Augustus to reduce the military to a manageable size and redeploy its forces for the Empire’s defense.

One way Augustus brought peace to the Empire was by making sure the Legions were on the frontier far away from the cities. This redeployment lessened the danger of civil war; and ended the constant barbarian invasions that disrupted Classical Civilization.

By concentrating on defense, Augustus could maintain a far smaller and more professional military. Additionally, Augustus could reduce the size and scope of the military industrial complex and redirect its resources to the welfare state.

At home, Augustus made the new economic order official. First, Octavian accepted the realities of factory farming, industry, and grain imports. Second, Octavian built a large bureaucracy and welfare state to tame the effects of the new economy.

As Emperor, Augustus dominated all economic activities. Augustus’s imperial system was successful and lasted for over two centuries. Augustus’s economy only collapsed when great plagues decimated the Empire’s population in the 2nd and 3rd Centuries AD.

By recognizing economic reality, Augustus preserved Traditional Roman Values at a terrible price. Any pretense of Roman democracy ended. Instead, Octavian became an absolute dictator. That office quickly evolved into the hereditary post of Emperor.

The Imperial Roman Economy

In less than 50 years, the mighty Senate of Rome became a rubber stamp. By the mid-1st Century Common Era, the emperor’s slaves had more power and influence than the Senators.

The Roman people accepted this arrangement because it met their needs. Romans had peace in the streets, food on the table, entertainment at the Colosseum and the Hippodrome, and no fear of barbarian invaders.

For all its faults, the new imperial economy worked while the Republic’s fantasy economics had failed. Importantly, the Emperors preserved Roman traditions.

The schools still taught a version of Traditional Roman Values to the upper classes. Those values served the Empire’s needs by emphasizing virtue, honor, and submission to authority. Popular culture and civic religion transmitted a bastardized version of those values to the illiterate masses.

Under a decent Emperor, the Empire could provide peace, stability, and economic security. One reason for this stability was that the Emperors kept the politicians and the intellectuals far way from the economy.

The End of Rome’s Imperial Economy

Rome’s Imperial System collapsed when the Plagues of Antonius and Cyprian killed much of the empire’s army and labor force. Rome lacked the technology to maintain the imperial economy and armies without an immense labor force.

 For example, the Plagues killed off many legionnaires, leaving the frontiers unguarded and vulnerable to barbarian invasion. At home, the plagues killed the slaves who provided the labor in the fields and workshops and industry ground to a halt.

As a result, the empire nearly collapsed. Efforts by the emperors Diocletian and Constantine to shore up the empire failed to reverse the decline. Diocletian tried to stabilize the economy by introducing a technocratic system similar to Communism.

For instance, Diocletian decried many citizens could not change jobs to ensure a labor supply. Meanwhile, Constantine hoped to revitalize the empire by introducing a new state religion, Christianity.

The End of the Empire

Both efforts failed because the empire lacked the technology and economic resources to implement them. Constantine, however, preserved a portion of the empire and Roman culture by building new easy to defend capitol Constantinople.

Constantinople was in a better location than Rome, on the Bosporus, so it was closer to the Empire’s economic centers and granaries in the east. Additionally, Constantinople had direct access to the sea, unlike Rome.

That meant invaders could not starve the city by cutting it off from shipping. Moreover, Constantinople could dominate trade between Europe and Asia because of its position in the Dardanelles. Thus Byzantium remained wealthy until the 12th Century CE and preserved a small portion of the empire.

America’s Fantasy Economics

Modern America is in a similar position to 1st Century Rome. America dominates the modern world as Rome dominated the Classical Mediterranean.

Likewise, a fantasy economy dominates modern American thinking and distorts its politics. America’s Economic Fantasy is that a hard-working white middle class can always support itself in prosperity by practicing traditional American values. Usually, those values comprise rugged individualism, self-sufficiency, and decency.

On the right this fantasy takes the form of small towns, Main Street, the Hollywood version of American history, a distorted Christianity, white supremacy, and glorification of rural life. Right-Wing intellectuals often add a dose of “traditional Western Civilization” to this toxic stew.

On the left, the fantasy involves unions, the people, charismatic leaders, and workers. Most American Left-Wing intellectuals add enormous chunks of crude Marxism, conspiracy theories about Big Business, and identity politics to their fantasy economics.

The American Economic Fantasies

Missing from both versions of the American Economic Fantasies are the roles played by technology, government, the welfare state, science, finance, luck, chance, war, the military, and coercion. In both versions of American history, brave individuals came together and solved all the world’s problems with their bare hands.

The danger from both American Economic Fantasies is that they assume ordinary people can solve all the nation’s on their own with no help from the state. The right thinks all ordinary Americans need to prosper is prayer, hard work, and family values. The left thinks all ordinary Americans require for prosperity is a union card, tolerance, and civil rights.

Consequently, both the American Left and Right oppose any effort to expand the welfare state; or apply science or technology to solve the nation’s problems. For instance, both left and right attack any proposal to create an efficient, centralized national health insurance system in America. Likewise, both sides try to sabotage any proposal to replace America’s clumsy welfare and unemployment systems with an effective dispersal of funds.

The American Welfare State

The cult of the rugged individual teaches that real Americans do not need health insurance, welfare, or help of any kind. As as a result, politicians designed much of America’s welfare state to punish any person who seeks help.

Unemployment insurance, for example, can end when the recipient turns down any job no matter how shitty. Meanwhile, Medicaid and welfare come with work or volunteering requirements.

The result is a welfare state with frightening similarities to the Roman Republic. Disgustingly, the same Congress that refuses to provide ordinary citizens rudimentary with health insurance or a modest basic income, doles out unlimited amounts of welfare to the rich and large corporations.

In modern America, Wall Street receives a bailout whenever it needs one, and defense contractors receive a growing share of the federal budget. Hence, in America we have “rugged individualism” for ordinary people and welfare for the rich.

In the Roman Republic, aristocratic senators could amass large illegal fortunes and vast numbers of slaves. Meanwhile, the ordinary legionnaire came home from war to find his farm lost to the debt collector. When the average Roman demanded relief from debt and a fair share of the army’s loot, they punished him.

Heresy American Style

In America, the billionaire who flies in a private jet can instantly receive tens of millions of dollars in bailout or stimulus welfare. Meanwhile, the working man has to fill out a pile of paperwork and grovel before a bureaucrat to receive a modest cash payment.

Likewise, our chattering classes punish anybody who suggests ordinary Americans need state help. In particular, the media brands U.S. Senator Bernie Sanders (I-Vermont) a dangerous nut for offering a mild program of proposals lifted from the platform of the British Conservative Party.

Similarly, the Romans murdered the Grachi brothers and Julius Caesar for offering mild programs of relief to the Republic’s poor. The actual crime of Caesar, Bernie, and the Gracchi was heresy.

America’s pundits brand Bernie a heretic for suggesting that ordinary Americans need help. Rome’s leaders killed Caesar for proposing economic support for ordinary Romans.

In modern America as in Republican Rome, intellectuals deny and attack any narrative that challenges the Economic Fantasy. When entrepreneur and failed presidential candidate Andrew Yang (D-New York) suggested that technological progress could lead to mass unemployment. Pundits called Yang a nut and mocked his claims.

No effort was made to examine Yang’s argument or the evidence he presents. Instead, critics cited faith in progress’s ability to create “good jobs” as ample reason to ignore Yang.

A more frightening strain of discourse dismissed Yang’s basic income proposal as damaging to the spirit. Much as Roman intellectuals attacked critics of their Republic as threats to the Roman Spirit.

The obvious rationale for this magical thinking is the fear that Yang could be right. Our intellectuals never contemplate the prospect that America’s economy cannot fulfil its promises to ordinary people. Instead, ordinary people are told to trust in fate, while government offers stimulus to large corporations.

The End of the American Economic Fantasy

The outcome of Republican Rome’s mindless faith in the economic fantasy was political and civil unrest, violence, civil war, and ultimately tyranny. When a tyrant; Octavian, who was pragmatic enough to reject the Economic Fantasy, arose. The people welcomed him with open arms.

Notably, the Roman people shed few tears when Augustus paid hit men to hunt down and murder intellectual critics, including the skilled orator Cicero. Cicero, a lawyer, was a paid mouthpiece for the ruling classes who was always willing to parrot their party line. Nor was there any outcry when Octavian stripped the useless Senate of its powers.

The fate of America’s economic fantasy and the elite that promotes it is still unwritten. However, the survival of American democracy could depend on our leaders’ ability to reject the economic fantasy.  

Will the USA Reject the American Economic Fantasy?

On the positive side, it is possible that America’s leaders could reject the fantasy and adopt a pragmatic outlook. Other nations’ leaders have taken that pragmatic course of action.

Notably, in the 1920s 1930s, and 1940s, British leaders rejected laissez faire capitalism and rugged individualism for protectionism and socialism. In the 1980s, China’s leaders rejected Communism and embraced technocratic capitalism.

However, both China and the United Kingdom’s ruling classes required profound shocks to change course. In China, it was the realization that their country was still a backwards third-world nation after 30 years of Maoist butchery. In the United Kingdom, it was the blood and mud of World War I, followed by the Russian Revolution, and the catastrophe of World War II that changed minds.

How will the American Economic Fantasy Die?

On the negative side, our leaders could follow the Roman example and wait until the rampaging mob is in the streets to change their minds.

It it will not surprise me if many of the geniuses at CNBC, CNN, Fox News, MSNBC, The Wall Street Journal, The New York Times, and the Heritage Foundation will still be pontificating on the joys of capitalism and the dangers of welfare as the bricks and bullets fly through the windows.  

I have to wonder what sort of of profound shock it will take for our ruling classes to reject the American Economic Fantasy. My suspicion is that it will require violence and dead bodies.

Why I fear for America’s Future

I fear for my country’s future because I think the restoration of reasonable levels of prosperity and income equality to ordinary Americans will require several policies that fly in the face of the American Economic Fantasy.

First, I think the government will need to make a regular cash payment to most Americans, in other words a basic income. This notion is not as radical or as far-fetched as the amateur economists on The New York Times editorial board claim.

Over 63 million Americans received a monthly cash payment from Uncle Sam in the form of Social Security in June 2019, the Center on Budget and Priorities estimates. In fact, the Center claims one in six Americans received Social Security last year.

Hence, extending that payment to the other 268 million Americans is neither radical nor far-fetched. Notably, the federal government will send most Americans a $1,200 cash stimulus payment to relieve the coronavirus depression.

Second, the government needs to pay for basic health insurance for all citizens. This notion is not far out because Statista estimates the federal government already provides health insurance to 74 million Americans on Medicaid or 17% of the US population.

Additionally, Statista estimates another 17.8% of Americans receive Medicare. If Statista’s numbers are correct 34.8% of the US population already receives federal health insurance.

Third, the government will need to provide for the basic needs of many Americans. For instance, government will need to provide some sort of decent housing for the homeless. Additionally, the government will need to ensure that food, information, and goods and services are available for many citizens.

Fourth, we need serious efforts to control the excesses of the wealthy and large corporations. In particular, we will have to reduce the political influence of the rich.

Fifth, America will need to reduce its international commitments and substantially reduce its military industrial complex. In particular, America needs to end the policy of intervention for ideological reasons. All this policy creates is an endless war that causes nothing but misery.

America can make these reforms the easy way by enacting them through laws. Or we can try the hard way and implement such reforms through violence, civil disobedience, or unrest.

In the final analysis, the Roman Republic’s fate has one lesson for America. Rejection of our national economic fantasy is necessary for the country’s survival. Only future history can teach us if America can learn that lesson.