How the ancient Romans managed their wealth (it wasn’t just by hiding hoards)
“All I want is an income of 20,000 sesterces from safe investments,” proclaim a character in a poem Juvenal (first to second century AD), Roman poet.
Today, 20,000 sesterces would be equivalent to approximately [Australian] $300,000 interest from investments. Anyone would be very happy with this passive annual income.
A high house with hidden money
In Greek and Roman times, there was no stock market where one could buy and trade shares of a company.
If you wanted to invest your money, one of the most popular options was to get gold or silver.
People did this to protect themselves from currency fluctuations and inflation. They generally kept metals either in the form of ingots or in the form of objects like jewelry. Storing these items can be risky and prone to theft.
The Roman poet Virgil (70 to 19 BC) describe the estate of a wealthy person which included “a high house, where talents of silver are deeply hidden” alongside “weights of gold in bars and objects”.
Talent was the largest unit of monetary measurement in ancient Greece and Rome, equivalent to approximately 25 kg. [55 pounds] of silver weighed.
Usually, metals were stored in a special vault or security cabinet.
The Roman writer Cicero (106 to 43 BC) reminds how a rich lady named Clodia would take gold (maybe bars, ingots or plates) out of a security cabinet when she wanted to lend someone money. Gold could then be exchanged for currency.
The market is booming – and bustling
The price of these metals may, however, occasionally be subject to unpredictable fluctuations and price falls, although less frequently than currencies.
The Greek historian Polybius (c. 200 to 118 BC) said that when a new vein of gold was discovered in Aquileia, Italy, just two feet deep, it caused a gold rush. The new material flooded the market too quickly and “the price of gold throughout Italy immediately fell by a third” after just two months. To stabilize the price of gold, mining in the region was quickly monopolized and regulated.
When people wanted to trade precious metals, they sold them by weight. If the gold, silver, or bronze had been made into jewelry or other items, they could be melted down and made into ingots.
People must have been delighted to own these precious metals.
The Athenian writer Xenophon (c. 430 to 350 BC) give a clue on the mindset of old silver investors:
Money is not like furniture of which you never buy more once you have enough for your house. No one has ever had enough money to not want more; if a man finds himself in possession of an enormous quantity, he takes as much pleasure in burying the surplus as in using it.
A number of Roman wills reveal people leave silver and gold to their heirs in the form of bars, plates or ingots.
Raw materials that could not be “ruined by Jupiter”
Besides metals, agricultural products were also very popular, including grains, olive oil and wine.
To profit from agricultural products, people bought agricultural land and traded the products in the market.
The Roman statesman Cato believed that spending money on the production of essential goods was the safest investment. He said these things “could not be ruined by Jupiter” – in other words, they were resistant to unpredictable movements in the economy.
While precious metals were a store of wealth, they generated no income unless sold. But a diversified portfolio of agricultural commodities guaranteed a permanent income.
People also invested and traded valuable goods, such as works of art.
When the Romans sacked the city of Corinth in 146 BC, they stole the city’s collection of famous artworks and then sold the masterpieces for huge sums of money at auction to generate profits for the Roman state.
At this auction, the king of Pergamum, Attalus II (220 to 138 BC), bought one of the paintings of the master Aristeides of Thebes (4th century BC), for the incredible sum of 100 talents (approximately 2,500 kg [5,500 pounds] money).
Eccentric emperors
Political instability or uncertainty has sometimes driven up the price of these metals.
The Greek historian Appian (2nd century AD) recordings how during the Roman Civil War from 32 to 30 BC:
the price of all goods had increased, and the Romans attributed the cause to the quarrels of the chiefs whom they cursed.
Eccentric emperors might also impose new taxes or duties on commodities, or attempt to manipulate the market.
The Roman historian Suetonius (c. 69 to 122 AD) tells us Emperor Caligula (AD 12 to 41) “raised new and unprecedented taxes […] and there was no class of goods or men on which he did not impose some form of tariff.
Another emperor, Vespasian (AD 17 to 79), went so far as to “purchase certain goods with the sole aim of distributing them profitably”, said Suetonius.
Obviously, investing in commodities 2,000 years ago could help build personal wealth, but also carried some risks, just like today.
This edited article is republished from The conversation under Creative Commons license. Read the original article.
