The Roman economy was in danger of continuous secular stagnation

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com

Here is Mark Koyama, who sounds stupid while trying to sound smart:

For Brown’s thesis to hold, therefore, the Roman economy must have been in danger of continuous secular stagnation.

Of course, every single economy in the history of the world was in continuous secular stagnation before 5,000 BC, and nearly all economies were in continuous secular stagnation from 5,000 BC to 1,500 AD. Escape from continuous secular stagnation is rare. Continuous growth, for several decades, is extremely rare in human history. Less than 5% of human history has seen continuous growth. As Fernand Braudel liked to point out, continuous secular stagnation was the norm for most of human history. For that matter, it is the norm for every species that has ever existed, with one partial exception.

While modern economics offers a lot of useful tools for understanding the market economies that have come into existence since 1,500 AD, it offers very little for understanding non-market economies, barter economies, and the primitive types of trade that was the norm for 95% of human history. Mark Koyama seems to avoid the question of when, exactly, humans become economic animals, rather than just regular animals. He seems to avoid the question of when human survival and growth becomes a subject for economists, rather than a subject for biologists. He simply assumes that the tools he has for understanding modern economies can also be used to analyze the ancient past.

He summarizes Brown in this way:

Let us grant that Brown is correct to present this argument as the current consensus among historians of late antiquity. The problem with it is that it is at odds with what standard economics and with what economic historians know about other preindustrial societies. To see why it is so flawed, I’ve done my best to reconstruct the argument.

The first premise of Brown’s argument is that the Roman state was a sufficiently large player in Roman economy, in terms of the taxes it collected, and the money it spent on wages and armaments, that a reduction in state expenditure would have had a major impact on the rest of the Roman economy. And that any reduction in state spending would not have been compensated for by an increase in private spending.

The second critical premise in Brown’s argument is that, in the absence of the demands of the tax collector, peasants would not have participated in the market economy. When “the great engine of enrichment stalled and, eventually stopped,” Brown writes: “No longer disciplined by the tax collector, the peasantry slacked off. They returned to subsistence farming”. It is crucial for Brown’s thesis that, without the pressures of the state, peasants would have produced only for subsistence.

The third premise is that urban economy of the Roman empire served solely or predominantly to satisfy demands of Roman elites whose incomes were crucially dependent on the state. So when these state incomes declined so did Roman cities.

This doesn’t sound much different that Braudel.

Mark Koyama then makes this rather astounding error:

I think the first premise rests on a misunderstanding of textbook Keynesianism. Simply put, conventional Keynesian theory suggests that in a recession when resources are unemployed, an increase in government spending can in the short-run increase aggregate demand (either directly or via inflationary expectations). The details of this simple proposition have been endlessly critiqued and debated. But we will skip over this. What is important to note is that for standard textbook Keynesianism, this is a short-run effect. In the textbook models aggregate demand should eventually recover (via the real-balance effect). Government spending has the ability to speed up the recovery.

But the first premise does not rest on Keynesianism. Rather, it can easily rest on the vast work that has been done to show that modern economics do not apply to ancient societies. I have the impression that Koyama has missed that conversation, and is trying to force Brown’s thesis to fit into conversations that Koyama is comfortable with.

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