Decline And Fall Of The New Rome

First published on zerohedge.com April 2013

Rampant inflation, caused by debasement of the currency, government corruption and nanny state corrective action that makes matters worse. Declining trade, caused by wars to control the empire, massive military over-reach and ever increasing spending on the military – funded by increases in taxation on the citizens, especially those least in a position to pay.

Sounds familiar? The above, paragraph describes not our present day society but that of the Roman Empire from the 3rd century onwards. However, one could be forgiven for thinking I was describing the faltering western economies of America, Japan and Europe.

The similarities between the declining ancient Roman empire and current Western empire are quite striking. Not only are the same mistakes being made by our rulers, but the symbolism and structure of our governments differs remarkably little from that of Rome. Just take a look at the White House, the US Senate building, the Bank of England etc – it’s no coincidence that they are all built in the Roman style.

Just as we devalue Fiat currency, the Romans debased their silver denarius from 95% in the time of Augustus, by the end of the empire it was as low as 0.2% silver. Right now western governments are involved in a devaluation war, which ultimately will lead to hyper-inflation – just as it did throughout the Roman empire. Attempts to sure-up the economy of the empire all failed – e.g. reforms by Constantine and Diocletian failed, just as the inept efforts of our current political class are failing pitifully.

For those that could afford gold coins instead of dealing in token coinage (i.e. debased silver coins) they had real buying power and the ability to fulfil their imperial tax obligations. Unfortunately the poorer citizens were often unable to pay their taxes, due to rampant inflation, which meant they had to forfeit their property instead.

Of course as the costs of running a huge military to control a vast and unruly empire increased so too did the taxes. Over time huge numbers became delinquents or just simply disappeared and even the once wealthy classes became severely pressured.

Finally, only the genuinely rich and those employed by the government, such as soldiers and bureaucrats had any real spending power – the vast mass of the population became increasingly hard pressed and the fabric of the empire began to break apart.

Does that ring any bells? Of course, in this current climate of political indifference and incompetence it is the ordinary taxpaying citizens of Europe, Japan and America that are paying for big government, a corrupt and insulated financial sector and especially the imperial overreach of the (supposedly) ex-imperial powers within NATO.

Just as Rome did not collapse overnight, the American/Japanese/European axis is not collapsing overnight. However, what is clear is that history is repeating itself – the Western economies are doomed to fail if they are not radically reformed.

Just like in Rome, corruption in all of these governments is endemic and expecting reform is rather like expecting a judge to order his own execution for obstruction of justice. So what we can expect is a gradual and inexorable decline and fall; the only real matter for discussion is how long will it take this time around?