last installment in this series
I argued that talk show host Glenn Beck
was raising legitimate concerns about the state of the nation, but that he had a history of predictions of imminent disasters which did not pan out. Why didn’t they? After all, the left really does have a strong totalitarian bent. No nation is guaranteed eternal life, let alone eternal prosperity and hegemony. And the United States is, indeed, aggressively moving in the wrong direction.
So why didn’t the dollar collapse? Why is it still the reserve currency of the world? Why don’t we have hyperinflation? Why did gold stall and then fall last summer? Was there a food shortage? Nope. Widespread urban violence? Nope. Depression, stock market collapse, bond market collapse? Nope, nope and nope. Why not?
Because that’s not how it works. Great nations do not suddenly lose reserve currency status or hyperinflate or collapse economically—not unless they lose a war or are destroyed by natural disasters. The archetypal decline and fall story is that of Rome
. It was the eternal city, supposedly, but nevertheless its gates came crashing down and its cities were trodden over by rude barbarian feet. And all of this happened just as the great classical philosophers had warned it would.
The Catos and Ciceros of Rome warned about the decline of Rome as it was first turning away from Republic and toward empire. But Rome didn’t actually ‘fall’ in a definitive sense until 498 years after the death of Cicero and 499 years until after the death of Cato. The process of lost freedoms, corruption, imperial overreach and decay, and final definitive collapse lasted almost as long as the rise of the Roman republic; the great age of political warning appeared as the midpoint of Rome’s history, not the end. The classical conservative statesmen were right, but premature. History, like Clouseau, declared, “Not now, Cato,” and delayed its judgment for half of a millennium.
And the currency markets followed the same pattern. Empire
, bread and circuses, all cost a lot of money, and were partially funded by currency debasement. However, the Roman Denarius did not collapse in value overnight. The long journey from a denarius composed of 6.8 grams of silver struck in 269 BC, through the first debasement down to 4.5 grams half a century later, then under Caeser Augustus down to 3.9, under the loathsome Nero 3.4 grams, under a long series of debasing emperors down to 3 grams and finally in the mid-2nd century AD phased out of existence and replaced by other currencies, all told took about half a millennium. This is a remarkable feat considering the way that Rome, and by extension her currency, was hated by the world she had enslaved. The famous passage in the synoptic Gospels in which the religious leaders ask Jesus whether they should pay taxes to Caesar turns partly on Rome’s status and as issuer of the known world’s reserve currency.“20
So they (the chief priests and the scribes inserted by J.B.) watched Him,
and sent spies who pretended to be righteous, that they might seize on His words, in order to deliver Him to the power and the authority of the governor.
21 Then they asked Him, saying, “Teacher, we know that You say and teach rightly, and You do not show personal favoritism, but teach the way of God in truth: 22 Is it lawful for us to pay taxes to Caesar or not?”
23 But He perceived their craftiness, and said to them, “Why do you test Me?24 Show Me a denarius. Whose image and inscription does it have?” They answered and said, “Caesar’s.”
25 And He said to them, “Render therefore to Caesar the things that are Caesar’s, and to God the things that are God’s.”
26 But they could not catch Him in His words in the presence of the people. And they marveled at His answer and kept silent.”
The story illustrates a great deal about currency relations between the nations. First, the premise of the story is that the Roman coinage was hated. The Roman Denarius was inscribed with an image of Caesar Tiberius and the title ‘Son of the Divine Augustus’, in other words, ‘Son of God.’ It was a reminder of both the political and the religious domination of Rome. This was the same coin used to pay the equally hated Roman poll tax. If Jesus said to pay, He would be associating himself with the unpopular Romans. If He said not to pay, He would be fostering rebellion and the Romans would execute Him.
Jesus skillfully turned the question around. He Cuba-Goodingly asks them to ‘Show me the money.’ and voila, there it is; they have the money. The religious leaders who have been railing against the evil Romans and their wicked idolatrous money, just happen to have some there in their pockets. Point made: The Roman Denarius was silver backed, stable (at least at that point in history) and accepted for trade purposes throughout the known world.
Rome maintained a pirate-suppressing free trading system across the known world and the Jews, along with every other group in the empire benefited from it. Jesus’ friend, Joseph of Arimathea had become wealthy (according to early church historians) as a tin import/export merchant between Jerusalem and Britain. Jesus’ hometown of Nazareth exported balsam around the world. His disciples were from Bethsaida and Capernaum, not so much fishing villages, but more fishing industrial hubs which sold not just salted fish, but also mass manufactured fishing equipment around the world. St. Paul traveled the Ancient world partly in tow to Lydia who was an international dyed clothing distributor. All of this was transacted with the Roman Denarius. It didn’t matter that it was hated. It mattered that it was universally accepted for commercial purposes and held its value better than the alternatives.
When the leaders of Jerusalem revolted against Rome the first time in 66 AD, they threw out the hated Roman silver coins and minted patriotic shekels, out of the baser bronze. The coinage, of course traded at much lower values against the Roman coins despite strong political pressure for its use. When Rome destroyed Jerusalem in 70 AD, they printed a special commemorative coin depicting a woman weeping next to an olive tree (a traditional symbol of Israel which sold olive products around the world in Roman denarius-denominated transactions), to symbolize the widows of Israel weeping for their departed husbands. When Israel Revolted again 63 years later under Bar Kochba (which translates as son of the star, a reference to the prophecy that the messiah would be born under a star) it rounded up the Roman coins and reminted them with Hebrew lettering and patriotic phrases.
As you can see, coins in the ancient world were spiritually, culturally and politically charged matters. But in the end, the value of the metal determined the value of the coin, a fact perhaps grudgingly learned between the first rebellion and its debased, bronze shekels and the second rebellion with its re-stamped silver denarii. Not being a numismatist, my observations on this matter may well be incorrect, but I feel confident that someone will be willing to step forward and offer any needed corrections.
Not all Jewish coinage was used for rebellion propaganda purposes; more often it was used for quisling propaganda purposes. The Rah-rah-Rome Herodian dynasty routinely minted coins with Latin or Greek lettering, honoring Caser and the various Herods. The cultural syncretism visible in the presence of images such as Roman eagles and Palestinian palm branches. Herod Agrippa, the ruler during Jesus adulthood, minted a coin which showed three ears of barley. This may well be the explanation for Jesus’ quizzical reference to Herod as “A reed shaken by the wind”, which may be more a matter of political satire aimed at Herod’s shaky alliance with Rome, then of some mystical spiritual metaphor.
The point of all of this is that as shaky as Rome’s coinage was and as much as it was hated by captive people of the empire, it would last another 200 years due chiefly to a lack of alternatives. Reserve currencies do not generally crash quickly, though they do crash. Great nations are generally granted many reprieves, many amnesties, many second chances. I’m not saying that we’ve got another 200 years, if we continue down our current path of debt and debasement. I don’t know how much time we have for course corrections.
All this amounts to the following: I’m not ready to give up on us yet, but I’m definitely read to hedge my bets.
Mr. Bowyer is the author of "The Free Market Capitalists Survival Guide," published by HarperCollins, and a columnist for Forbes.com.