HURRICANE KATRINA, PROFESSOR TYLER, AND BREAD AND CIRCUSES: PART I

In the immediate aftermath of Hurricane Katrina, I had tuned into a panel discussion by a bevy of pundits seeking to explain the reason for the “debacle.” Most were mouthing the utterly predictable, accusing various branches of government of gross ineptitude, insensitivity, incompetence, et al. Their comments were neither memorable nor informative. I was about to switch channels, when one of them dropped a zinger. She wondered why anyone should be the least bit astounded by the fiasco; after all, she argued, we all had worked so hard to create precisely this, citizens who were incapable of taking care of themselves. That was the last of the interview I heard; the ensuing cacophony drowned out everything else and I tuned out – stunned.

Her comment was strangely reminiscent of something a professor of mine said more than thirty years previous. When discussing the Roman mob (the bread-and-circuses crowd), he accused the Roman government of having created a citizenry that was incapable of taking care of itself. “A path,” he proclaimed, “we ourselves are now strolling down.” That was spring 1970. Being a wise twenty-something, I pronounced the man a fool.

Leaving the panel and my venerable professor aside, we might ask ourselves a very fundamental question. And that question is not, “Are we strolling down this very same path?” But, more basically, “How does something like this happen?” Do we (our governments) deliberately create dependency classes? The operative word is “deliberately.” The more cynical amongst us might say, “Yes, it is how politicians create a power base.” The more charitable amongst us might say, “Nay, it is only a result of good intentions gone bad.” In fact, both responses are correct. A quick look at the evolution of the ancient Roman urban dependency class might shed some light upon the inquiry.

The phrase “bread and circuses” comes from the ancient Roman satirist Juvenal, who wrote, “… now the people have but two passions, bread and circus games …” He was referring the massive ancient Roman urban dependency class (aka, the mob) that produced nothing but demanded from the imperial government safety, food, and entertainment. But surely the creation of an unruly, parasitic mob was not a deliberate policy of the Roman government! Indeed, it was not. It was the result of two forces in ancient Roman society: one, a well-intended government policy of charity towards the down-trodden; and two, the tendency of the less fortunate of society to place themselves in a position of dependence on the well-to-do. These two currents flowed together in the first century BC and metastasized into an urban phenomenon that would come to drain the Empire of untold wealth and an inordinate amount of time and talent.

Charity, in early Roman history, was not an institutionalized function of the state. Wealthier families became patrons of the poor, who, in recompense, became clients beholden to the patrons. In exchange for sustenance, the clients were expected to support the political agenda of the patrons. At first, this entailed no more than voting the patron’s agenda in the assembly. Later, it involved arming oneself and furthering the patron’s agenda in the streets. The rent-a-mob became a formidable tool in the Roman political arsenal.

Likewise, the addiction to “bread and circuses” had an innocuous beginning. During a second century BC grain shortage, the poor of the city of Rome clamored for the government to do something (always a bad idea) to make grain more affordable. So, to stabilize the soaring price of grain in the city, the state subsidized the price of grain, ensuring every Roman citizen the right to buy grain at an artificially low price below true market value. It also demanded that grain growers who sold grain to the government do so at a fraction of the real market price. The results were predictable. Farmers, seeing no profit in such an endeavor, either sold their grain elsewhere, stopped farming, or switched to more lucrative crops. The state had to look further afield (to northern Africa) to find cheaper grain. And as they did so, the crowd’s demands increased.

When precisely grain was first distributed free to the urban proletariat is unknown. But by the time of Julius Caesar (died 44 BC) the dole roll in the city of Rome peaked at about 300,000 persons, according to ancient writers. Repeated attempts to pare back the list all eventually proved futile. Moreover, the demand morphed from free grain to free bread (grain already baked), resulting in additional state expenditures for subsidizing not just the grain but also the bakeries and bakers.

The infamous games (gladiatorial combats, animal hunts, and chariot races, or circus games) had their remote origins in funeral rites in which blood was spilled in honor of the deceased. But in the fourth century BC, the ritual was opened to public attendance, changing a macabre funerary ritual into a gruesome form of entertainment. Within a short time the games were divorced from their funereal context and came to be offered free to the public as a display of generosity on the part of some well-heeled politician. By the time of Augustus (reg. 27 BC-14 AD), every aspiring magistrate was expected to sponsor free games. Augustus, in fact, boasts in his autobiography as much about the costly games he sponsored as about the victories he racked up. When Trajan (reg. 98-117) conquered Dacia (Romania), he felt compelled to entertain the mob with 123 days of free games. Of course, the state also had to construct venues for the entertainment: theaters, amphitheaters, and circuses (hippodromes).

Between the bread and the circuses, Rome’s masses were kept quiet and did lose their violent political inclinations, but at the expense of exhausting many valuable resources that could have been deployed more profitably elsewhere. Several entire legions that could have been defending the borders were tied down in northern Africa just to ensure an uninterrupted supply of grain to the city of Rome. The state explained away the dole as charity and excused the games as inculcating manly, warlike virtues in the men of Rome. But the truth was quite otherwise.

Few of the Roman urban dependency class ever enlisted in the legions and most just refused to work at anything legitimate. Occasional attempts were made to provide the unemployed with employment. Vespasian (reg. 79-81) drafted the able-bodied idle into the ranks of the grunt laborers who worked on the Colosseum. But such short-lived public works projects were hardly a means for providing the sort of skills that would keep people off the dole.

Symbolic of the utter uselessness of the Roman dependency class are three telling anecdotes from ancient authors. First, we are told that even in time of dire crisis, legionary recruiters rarely ever went into the cities to find potential soldiers amongst the men of the mob to defend the Empire. Second, after the Germans sacked the city of Trier in the fourth century AD, the city government repaired their amphitheater before they repaired the city walls. And third, during the grueling 14-month siege by the Vandals of Hippo in 429-430 AD, the citizens of that fine city still found time to watch and cheer at the games.

Rome had never intended to create a citizenry unable to fend for itself. It was just a matter of good intentions gone awry. But as the proverb says, “the road to hell is paved with good intentions.” Whether we are on this road or not is left to the next “Lessons in History.”

But who is Professor Tyler? He is not my professor of thirty years past. He is said to be the author of one of the most famous quotations regarding democracy, to wit,

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, which is always followed by a dictatorship.”

He then traces the course of great states, saying that they progress,

“… from bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance, from abundance to complacency, from complacency to apathy, from apathy to dependence, from dependence back to bondage.”

Next time we’ll approach the concept of state-facilitated dependency vis-à-vis the observation of the enigmatic Professor Tyler.

IN GOD WE TRUST: MONEY

The Roman Emperor Julian (reg. 361-363) once chided Christians for their childlike gullibility and simplistic faith. His implication was that a reasonable man should guide his actions by the dictates of logic, not faith. The criticism is unfair on two counts. First, all religion is a matter of faith; hence, the opening word of the Creed, credo, I believe, not scio, I know. Second, Julian should have been brought to task for inconsistency. Why ridicule the Christians for their faith in their God, while fully expecting them to have faith in something that is fundamental to all government concerns: money.

Money (in coin or print) has become such a commonplace in our lives that it is only rarely that we are reminded what a leap of faith is involved when handling these media of commerce. A society innocent of money has to rely on barter in the exchange of goods and services. The consequences are not difficult to fathom; trade is awkward and the valuation of wealth cumbersome, having to be measured, for instance, in units of land or ingots or cattle. In fact, some elements of the Indo-European monetary vocabulary (pecuniary, pecunia, pécunaire) have their root in the Latin word for cattle, pecus. But inconvenience is the mother of invention.

At some point in our remote past somewhere, someone made the decision that valuations should be standardized. So it came to be agreed that a standardized weight of metal would have a value equivalent to so many chickens, bolts of cloth, or bottles of wine. The standardized weight was the immediate forerunner of the coin. The shekel, for instance, was a weight unit long before it morphed into a coin.

In the West, the Lydians (inhabiting western Turkey) are credited with the invention of coinage in the seventh century BC. We moderns might be hard-pressed to recognize an ancient Lydian coin as a coin at all. It was a small lump of electrum with a stamped impression. The stamp was every bit as important as the metal. In fact, it was the stamp that validated the metal. It represented the promise of the Lydian government that said lump (the coin) contained a verified amount of verifiably pure electrum. The Lydians then placed their faith in their government that said government was dealing honestly with them. A tremendous leap of faith, that.

The Greeks turned coinage into an art form. Not satisfied with stamped lumps, the Greeks impressed their silver disks with beautiful images on obverse and reverse. The Athenian drachma was a work of art in itself. So long as Athens maintained the weight and purity of her silver, the drachma was the trusted medium of commerce across the Mediterranean world.

The Romans were slow learners when it came to coinage. Rome’s earliest coins were little more than bars of bronze with symbols on them (the aes signatum). For nearly three hundred years the Romans used what was essentially scrap metal for currency. Then, in the third century BC, they began minting coins remarkably like the Greek coins of southern Italy.

There were, of course, certain temptations regarding coin. An unscrupulous individual might shave slivers off the edges of gold or silver coins, eventually collecting a stash of shavings that in itself might be worth its weight in gold or silver. Hence serrated edges or raised rims on coins to prevent such shenanigans. Likewise, governments have been known to stoop to monetary mischief: debasement of coinage. The idea is simple: dilute the gold or silver with a baser metal and pass off the “gold” or “silver” coin on an unsuspecting citizenry. In effect, the government could mint more money to pay off debts or for needed expenditures, when not enough tax revenues were forthcoming or sources of gold and silver had dried up. The consequences were predictable. The citizenry, not that unsuspecting after all, refused the debased coin. In the third century AD Rome had so debased her silver coinage with bronze, that the silver coin was little more than a bronze disk with a wash of silver. Not only did the people, now reverting to barter, shun the coin, but imperial tax collectors refused to accept it as a legitimate payment on tax. A government refusing its own currency must have been an historical first!

Paper money, making its appearance in seventh century AD China, involved another leap of faith. The banknote essentially was a promise on the part of the government to pay the bearer, on demand, a certain weight of silver or gold. Paper currency made its debut in Europe in the sixteenth century. Again, it was the promise of the government that the banknote was really backed up by precious metal. American banknotes once boasted of this convertibility into specie. Alas, no longer. In 1933 FDR issued Presidential Executive Order 6102 forbidding the private ownership of gold in excess of $100. He justified the order by the “national emergency in banking.” The fear was that people would lose their faith in the greenback, and transfer it to hoarded gold. The redeemable Silver Certificate also met its demise in 1963.

The prevailing belief of modern government now came to be articulated, that legal tender does not have to be backed up by gold or silver bullion. The true backing behind legal tender is now said to be the value of the goods and services that money can buy. In one sense this is true, and in another sense it is not. In abandoning the gold standard, it was recognized that gold and silver, like any other commodities, exist in a world governed by supply and demand; they have no absolute intrinsic value. For example, Alexander the Great flooded the Mediterranean world with the gold of recently conquered Persia, sending the value of gold plummeting. Likewise, after the discovery of the New World, Spain swamped the Old World with galleons worth of silver and gold. The inflationary effect on Europe was catastrophic. But in another sense, money is definitively more than just the value of the goods and services it can buy, in that it is also the repository of our faith in our government. Money is now “fiat” money; it is issued and regulated by government. The unstated implication is still (as it always has been) that our government is dealing honestly with us to hold our trust.

The motto on our coins (since 1864) and notes (since 1957), “In God We Trust,” does not refer to a belief that Providence will make good on our currency. It is only a vague reference to American piety and belief in deity. Our faith lies in the belief that our government will not surreptitiously print reams of spurious bills to inflate its way out of debt, float its debt on to another generation, or finesse its way through a bailout or two.

POROUS BORDERS, OR DOING JOBS ROMANS WON’T DO

When a government fortifies its borders, it does so usually for one of three reasons. To keep people out, as with the Great Wall of China. Or to keep people in, like the Berlin Wall. In rare circumstances a government might close and fortify its borders both to keep its citizens in and foreigners out. Perhaps the most bizarre example of the last is the (quite successful) program of the late Communist dictator, Enver Hoxha. To isolate Albania he planted more than 700,000 concrete pillbox bunkers at strategic points throughout the country. A ruthless secret police and a string of concentration camps undoubtedly added to the plan’s efficacy.

Ancient Rome’s most famous fortified frontier was Hadrian’s Wall, a barrier more than eighty miles long separating and protecting Roman Britannia from the barbarians of the Scottish highlands. The wall-and-ditch defense was studded at regular intervals with Roman army camps. Despite such formidable defensive works, savage tribesmen breached the Wall at least three times, as far as extant records indicate, before it was finally abandoned in the 5th century AD.

An interesting aspect of this stretch of Rome’s northern border is that it was what we might call selectively porous. Again at regular intervals, provision was made for the supervised passage of man and beast to and from Britannia, basically for economic reasons. Goods were exchanged between the Romans and Picts; shepherds transhumanced their flocks back and forth; seasonal workers came and went.

Rome’s other borders were essentially great natural barriers: the Rhine and Danube Rivers, the Sahara, and the Great Syrian Desert. Not trusting Mother Nature to protect her Empire, Rome fortified and patrolled these frontiers as well. Again, these borders were porous, once more for economic reasons. Rome conducted a thriving trade with sub-Saharan Africa, Persia, and Germanic Europe. Great caravan cities in Tunisia, Syria, and Jordan were mercantile depots where African ivory, Chinese silk, and Arabian myrrh entered the Empire. Along the Rhine and Danube Romans established market towns where Germans came to trade: Roman luxury goods for slaves, amber, and furs.

The Romans did not regard any of their borders as necessarily ordained by either the gods or Nature. Rome settled upon them as a result of losing military or political steam. The deserts of Arabia proved too formidable for Augustus and he had to content himself with control of the Red Sea lanes. Roman expeditions into the Sahara met with a striking lack of success. Persia blocked Rome in the east. Rome only briefly held control of some territory north of Hadrian’s Wall. And Roman legions were soundly defeated a number of times in their attempts to conquer Germanic Europe.

Neither has God nor Nature ordained America’s borders. Our border with Canada ultimately came down to a matter of political compromise. Our southern border was established as a consequence of war, purchase, and real estate deals. William Seward negotiated the purchase of Alaska in a czarist fire sale. And islands scattered about the world came primarily as a result of wars and colonial ventures gone awry. Our most contentious border is that which we share with Mexico. And America’s relationship with Mexico shares a few intriguing similarities with Rome’s dealings with the Germans, similarities worth reflecting upon.

Rome’s attitude towards the Germanic tribes was never a simple matter of posting signs at the borders proclaiming, “Germans Not Welcomed Here.” Since the beginning of the Empire, Rome actively recruited Germans into her army. Individuals and even entire clans would serve as auxiliary troops alongside the legions. The reward: good pay, occasional loot, and, upon retirement, Roman citizenship. The army served admirably as a vehicle of assimilation into the Roman polity.

As the imperial government became more repressive towards its own citizens, fewer Romans could be enticed into military service. Rome made up the shortfall with Germans. Tribes that politely petitioned the Empire to live within her confines were required to obey imperial law and were settled with the aim of defending the frontiers. Theodosius I recruited into the army entire German tribes, who served under their own commanders. In the much-vaunted Roman victory over Attila in 451 AD, Aetius’ “Roman” army probably boasted more Germans than Romans. The last great Roman army fielded in Italy in the fifth century was commanded by Odoacer (a German) and consisted entirely of German foederati (allies). And when the emperor in Constantinople wanted Odoacer brought to heel, he commissioned Theodoric and his Ostrogoths (also Germans) to do the deed. Roman soldiering clearly had become a predominantly German occupation. Under such conditions, legionary service ceased to be an effective medium of assimilation.

Herein lay Rome’s (and America’s) quandary regarding immigrants: absorption versus assimilation. The two words, now used interchangeably, originally had different meanings. To absorb meant to take (literally, to suck) in. To assimilate meant to make similar or alike. The Roman Empire was able to take in entire Germanic nations without inconvenience; the Empire was decidedly depopulated, entire provinces lay largely unfarmed, and Rome badly needed soldiers, the job Romans no longer wanted. But as Germanic migration turned from a trickle into a torrent and then into a full-scale invasion, Rome could absorb but no longer assimilate the Germans. For a variety of reasons, there was no longer the cultural means or the political will to “Romanize” them. Consequently, the Empire harbored within her borders an alien - and alienated - minority, indifferent to the allurements of Roman citizenship, hostile to imperial needs, and waiting for the first opportunity to prey upon Rome’s weakness.

Likewise, America can absorb many more immigrants than we take in now. Our birthrate is, after all, at the cusp of the replacement rate, if not declining. And there are many jobs that Americans, given their druthers, choose not to do (at a certain wage, anyway). But we seem to have lost the ability or will to assimilate new arrivals (legal or illegal). For Rome and America, assimilation never entailed the obliteration of one’s ancestry, but, rather, a new dedication to a set of common ideals (Rome and her laws, symbolized by the emperor; America and her Constitution, symbolized by the flag). Currently, however, a policy of multi-culturalism has metastasized from a celebration of our diverse ancestries into an obsession with what divides us, rather than a thanksgiving for what unites us. It behooves us to recall Lincoln’s admonition about a house divided.

FOR READERS IN THE HOUSTON AREA: I will offer a 6-lecture adult education series, "The Decline and Fall of the Roman Empire," in Houston beginning January 26, 2009. In this series I will examine the events, personalities, and causes of the decline and fall of Rome, and assess the validity of comparisons to the modern West. Information on this series and registration forms can be found at http://www.tfahr.org/DFRome.html .

THE AMERICAN DREAM AND ANCIENT ROME: AN EERIE PARALLEL

Home ownership is, by common consensus, an integral part of the American dream. When precisely that became so, is open to dispute. Some might argue that it was part and parcel of the founding of the country: to immigrate, go west, and carve out a homestead on the frontier. Others, with a shorter historical horizon, maintain that this dream developed only after World War II: the prosperity of the 1950s, Levittown, the growth of suburbia.

Whatever one’s belief about the pedigree of the American ideal of home ownership, there is little argument that the government became thoroughly involved in that dream with the Community Re-Investment Act of 1977, with subsequent refinements to home ownership possibilities in 1989, 1992, 1994, 1995, and 1999. Banks were encouraged to expand credit opportunities to their entire communities, including offering home loans to those who normally would not be considered good credit risks. For the sake of argument, let’s attribute the motive behind all this to the best of intentions on Congress’ part – to expand the dream. Some have suggested more sinister motives, but we’ll leave that discovery to upcoming Congressional investigations. At any rate, now we are suffering the consequences of these best of intentions: liar loans, ninja loans (no income, no job, no assets), rapid unloading of questionable and unfathomable “assets,” bank failures, and bailouts.

Eerily enough, something quite similar happened in ancient Rome. In the first century BC Julius Caesar decided that members of the upper classes should hold part of their assets in Italian land. Admittedly, the ideal of the citizen-soldier-farmer had always been part and parcel of the Roman dream: the ideal was the involved citizen, who spoke in the Forum, fought in the ranks, and then retired to the farm to till his fields. The embodiment of this ideal was the fifth century BC hero, Cincinnatus: politician, warrior, and, duty done, farmer.

But by Caesar’s time the days of Cincinnatus were gone. Most of the urban upper class did not fight and did not farm. More importantly, many couldn’t afford an estate in the Italian countryside. So, why did Caesar pass a law requiring that 1/3 of a wealthy individual’s assets be invested in Italian real estate? We could attribute the motive behind this act to the best of intentions on Caesar’s part – to revive the Roman dream and all the ideals that went along with it. But ancient authors suggest more sinister motives; Caesar wanted the “hoarders and speculators” to disgorge their hoarded cash. In ancient Rome it was traditional to impute every financial crisis to the clandestine activities of “hoarders and speculators.” (Like our hedge fund managers today, in antiquity “hoarders and speculators” were, with religious regularity, denounced as the agents behind every financial calamity.) But the ancient Romans did not immediately suffer the consequences of Caesar’s best of intentions. Caesar was assassinated and Rome came to have other things on her mind.

But in 33 AD the emperor Tiberius revived Caesar’s legislation, once again, to shake out the hoarders and speculators. The results were predictable. Families that couldn’t afford it found themselves with Italian rural real estate on their hands. There was an immediate real estate boom (a bubble?), followed quickly by a cataclysmic real estate crash. Land wouldn’t sell even at rock bottom prices. Panic ensued. Loans were recalled post haste. Fortunes disappeared. But the government would not let the Italian real estate market crash or people be dispossessed of their land. Tiberius floated a 100,000,000 sesterces loan to select “land banks.” Other banks and moneylenders were allowed to fail. Sound financial institutions refused to make loans. Some landowners just walked away (fled) from their lands. When the dust settled, the hoarders and speculators finally moved in and purchased Italian land at fire sale prices.

The full consequences of Tiberius’ follies are not known. Our two ancient sources both moved on to juicier tales of treason, incest, and court scandal. Many modern historians, however, see the beginning of the decline of ancient Italian agriculture in the government’s attempt to force land upon those unable to afford it and unknowledgeable about how to tend it.

The obvious difference between what happened in Rome and what is happening to us concerns the matter of compulsion. Ancient aristocrats were forced by the government to invest in Italian farmland; our government hasn’t forced anyone to purchase a home via liar and ninja loans. Many bankers, however, have yet to weigh in on this matter of government coercion and loan making.

The lesson for us, however, is not just the obvious historic parallel of the folly of government trying to manipulate real estate markets. The true lesson to be learned is that when governments try to manipulate economic policy to achieve even plausibly laudable ends, there can be some fairly catastrophic economic consequences, consequences that were not then and are not now even that hard to predict. We do not know if anyone had warned Tiberius of the consequences his actions might have. We do know that later emperors (Julian, for example) were warned not to try to manipulate the market. Again, Julian was trying to help the poor by undermining the hoarders and speculators who were driving up the price of grain. He ignored the advice and sent the grain market of Syria into a tailspin. Likewise, our Congress was warned in 2004 and 2005 about the impending calamity awaiting Freddie and Fannie. But, as Sophocles said, nobody loves the messenger bearing bad news. He might have added that people usually ignore the message.

FOR READERS IN THE HOUSTON AREA: I will offer a 6-lecture adult education series, "The Decline and Fall of the Roman Empire," in Houston beginning January 26, 2009. In this series I will examine the events, personalities, and causes of the decline and fall of Rome, and assess the validity of comparisons to the modern West. Information on this series and registration forms can be found at http://www.tfahr.org/DFRome.html .

NEW LECTURE SERIES BY WILLIAM NEIDINGER

I will start a new 6-lecture adult education series on Monday, January 26, "The Decline and Fall of the Roman Empire," in Houston. In this series I will examine the events, personalities, and causes of the decline and fall of Rome, and assess the validity of comparisons to the modern West.

Information and a registration form can be found at http://www.tfahr.org/DFRome.html .