Before analysing the Italian legal framework on Real Estate Investment Trusts and their taxation, it is worth defining what is a Real Estate Investment Trust, which

Could Ancient Rome have prevented its own demise?


According to Walter Scheidel, author of The Great Leveler, great inequality in societies is only reduced by war, plagues, natural disasters, or communism. There is no historical precedent for a peaceful political resolution to radical inequality. Over time great inequality causes political instability. This leads to internal contradictions within the system that are unresolvable without extreme measures.

The Roman economy was based on continued expansion. It would also enslave the defeated people. Slavery reduced the incentives for technological innovation. The problem is that you cannot expand forever. Geography has its limits.

Other issues:

1. Invasions by Barbarian tribes

The most straightforward theory for Western Rome’s collapse pins the fall on a string of military losses sustained against outside forces. Rome had tangled with Germanic tribes for centuries, but by the 300s “barbarian” groups like the Goths had encroached beyond the Empire’s borders. The Romans weathered a Germanic uprising in the late fourth century, but in 410 the Visigoth King Alaric successfully sacked the city of Rome. The Empire spent the next several decades under constant threat before “the Eternal City” was raided again in 455, this time by the Vandals. Finally, in 476, the Germanic leader Odoacer staged a revolt and deposed the Emperor Romulus Augustulus. From then on, no Roman emperor would ever again rule from a post in Italy, leading many to cite 476 as the year the Western Empire suffered its deathblow.

2. Economic troubles and overreliance on slave labor

Even as Rome was under attack from outside forces, it was also crumbling from within thanks to a severe financial crisis. Constant wars and overspending had significantly lightened imperial coffers, and oppressive taxation and inflation had widened the gap between rich and poor. In the hope of avoiding the taxman, many members of the wealthy classes had even fled to the countryside and set up independent fiefdoms. At the same time, the empire was rocked by a labor deficit. Rome’s economy depended on slaves to till its fields and work as craftsmen, and its military might had traditionally provided a fresh influx of conquered peoples to put to work. But when expansion ground to a halt in the second century, Rome’s supply of slaves and other war treasures began to dry up. A further blow came in the fifth century, when the Vandals claimed North Africa and began disrupting the empire’s trade by prowling the Mediterranean as pirates. With its economy faltering and its commercial and agricultural production in decline, the Empire began to lose its grip on Europe.

3. The rise of the Eastern Empire

The fate of Western Rome was partially sealed in the late third century, when the Emperor Diocletian divided the Empire into two halves—the Western Empire seated in the city of Milan, and the Eastern Empire in Byzantium, later known as Constantinople. The division made the empire more easily governable in the short term, but over time the two halves drifted apart. East and West failed to adequately work together to combat outside threats, and the two often squabbled over resources and military aid. As the gulf widened, the largely Greek-speaking Eastern Empire grew in wealth while the Latin-speaking West descended into economic crisis. Most importantly, the strength of the Eastern Empire served to divert Barbarian invasions to the West. Emperors like Constantine ensured that the city of Constantinople was fortified and well guarded, but Italy and the city of Rome—which only had symbolic value for many in the East—were left vulnerable. The Western political structure would finally disintegrate in the fifth century, but the Eastern Empire endured in some form for another thousand years before being overwhelmed by the Ottoman Empire in the 1400s.

4. Overexpansion and military overspending

At its height, the Roman Empire stretched from the Atlantic Ocean all the way to the Euphrates River in the Middle East, but its grandeur may have also been its downfall. With such a vast territory to govern, the empire faced an administrative and logistical nightmare. Even with their excellent road systems, the Romans were unable to communicate quickly or effectively enough to manage their holdings. Rome struggled to marshal enough troops and resources to defend its frontiers from local rebellions and outside attacks, and by the second century the Emperor Hadrian was forced to build his famous wall in Britain just to keep the enemy at bay. As more and more funds were funneled into the military upkeep of the empire, technological advancement slowed and Rome’s civil infrastructure fell into disrepair.

5. Government corruption and political instability

If Rome’s sheer size made it difficult to govern, ineffective and inconsistent leadership only served to magnify the problem. Being the Roman emperor had always been a particularly dangerous job, but during the tumultuous second and third centuries it nearly became a death sentence. Civil war thrust the empire into chaos, and more than 20 men took the throne in the span of only 75 years, usually after the murder of their predecessor. The Praetorian Guard—the emperor’s personal bodyguards—assassinated and installed new sovereigns at will, and once even auctioned the spot off to the highest bidder. The political rot also extended to the Roman Senate, which failed to temper the excesses of the emperors due to its own widespread corruption and incompetence. As the situation worsened, civic pride waned and many Roman citizens lost trust in their leadership.

6. The arrival of the Huns and the migration of the Barbarian tribes

The Barbarian attacks on Rome partially stemmed from a mass migration caused by the Huns’ invasion of Europe in the late fourth century. When these Eurasian warriors rampaged through northern Europe, they drove many Germanic tribes to the borders of the Roman Empire. The Romans grudgingly allowed members of the Visigoth tribe to cross south of the Danube and into the safety of Roman territory, but they treated them with extreme cruelty. According to the historian Ammianus Marcellinus, Roman officials even forced the starving Goths to trade their children into slavery in exchange for dog meat. In brutalizing the Goths, the Romans created a dangerous enemy within their own borders. When the oppression became too much to bear, the Goths rose up in revolt and eventually routed a Roman army and killed the Eastern Emperor Valens during the Battle of Adrianople in A.D. 378. The shocked Romans negotiated a flimsy peace with the barbarians, but the truce unraveled in 410, when the Goth King Alaric moved west and sacked Rome. With the Western Empire weakened, Germanic tribes like the Vandals and the Saxons were able to surge across its borders and occupy Britain, Spain and North Africa.

7. Christianity and the loss of traditional values

The decline of Rome dovetailed with the spread of Christianity, and some have argued that the rise of a new faith helped contribute to the empire’s fall. The Edict of Milan legalized Christianity in 313, and it later became the state religion in 380. These decrees ended centuries of persecution, but they may have also eroded the traditional Roman values system. Christianity displaced the polytheistic Roman religion, which viewed the emperor as having a divine status, and also shifted focus away from the glory of the state and onto a sole deity. Meanwhile, popes and other church leaders took an increased role in political affairs, further complicating governance. The 18th-century historian Edward Gibbon was the most famous proponent of this theory, but his take has since been widely criticized. While the spread of Christianity may have played a small role in curbing Roman civic virtue, most scholars now argue that its influence paled in comparison to military, economic and administrative factors.

8. Weakening of the Roman legions

For most of its history, Rome’s military was the envy of the ancient world. But during the decline, the makeup of the once mighty legions began to change. Unable to recruit enough soldiers from the Roman citizenry, emperors like Diocletian and Constantine began hiring foreign mercenaries to prop up their armies. The ranks of the legions eventually swelled with Germanic Goths and other barbarians, so much so that Romans began using the Latin word “barbarus” in place of “soldier.” While these Germanic soldiers of fortune proved to be fierce warriors, they also had little or no loyalty to the empire, and their power-hungry officers often turned against their Roman employers. In fact, many of the barbarians who sacked the city of Rome and brought down the Western Empire had earned their military stripes while serving in the Roman legions.

Source: 8 Reasons Why Rome Fell

The introduction of Christianity as described above is a very weak argument. Forget about that one.

In ancient Rome as the level of inequality soared, so did the debts of the people as the patricians grew richer and richer.

A mounting crisis was on their hands, but they refused to acknowledge it. A leveling of of To say that Michael Hudson’s new book And Forgive Them Their Debts: Lending, Foreclosure, and Redemption from Bronze Age Finance to the Jubilee Year (ISLET 2018) is profound is an understatement on the order of saying that the Mariana Trench is deep. To grasp his central argument is so alien to our modern way of thinking about civilization and barbarism that Hudson quite matter-of-factly agreed with me that the book is, to the extent that it will be understood, “earth-shattering” in both intent and effect. Over the past three decades, gleaned (under the auspices of Harvard’s Peabody Museum) and then synthesized the scholarship of American and British and French and German and Soviet assyriologists (spelled with a lower-case a to denote collectively all who study the various civilizations of ancient Mesopotamia, which include Sumer, the Akkadian Empire, Ebla, Babylonia, et al., as well as Assyria with a capital A). Hudson demonstrates that we, twenty-first century globalists, have been morally blinded by a dark legacy of some twenty-eight centuries of decontextualized history. This has left us, for all practical purposes, utterly ignorant of the corrective civilizational model that is needed to save ourselves from tottering into bleak neo-feudal barbarism.

This corrective model actually existed and flourished in the economic functioning of Mesopotamian societies during the third and second millennia B.C. It can be termed Clean Slate amnesty, a term Hudson uses to embrace the essential function of what was called amargi and níg-si-sá in Sumerian, andurārum and mīšarum in Akkadian (the language of Babylonia), šudūtu and kirenzi in Hurrian, para tarnumar in Hittite, and deror (דְּרוֹר) in Hebrew: It is the necessary and periodic erasure of the debts of small farmers — necessary because such farmers are, in any society in which interest on loans is calculated, inevitably subject to being impoverished, then stripped of their property, and finally reduced to servitude (including the sexual servitude of daughters and wives) by their creditors, creditors. The latter inevitably seek to effect the terminal polarization of society into an oligarchy of predatory creditors cannibalizing a sinking underclass mired in irreversible debt peonage. Hudson writes: “That is what creditors really wanted: Not merely the interest as such, but the collateral — whatever economic assets debtors possessed, from their labor to their property, ending up with their lives” (p. 50).

And such polarization is, by Hudson’s definition, barbarism. For what is the most basic condition of civilization, Hudson asks, other than societal organization that effects lasting “balance” by keeping “everybody above the break-even level”?

“Mesopotamian societies were not interested in equality,” he told me, “but they were civilized. And they possessed the financial sophistication to understand that, since interest on loans increases exponentially, while economic growth at best follows an S-curve. This means that debtors will, if not protected by a central authority, end up becoming permanent bondservants to their creditors. So Mesopotamian kings regularly rescued debtors who were getting crushed by their debts. They knew that they needed to do this. Again and again, century after century, they proclaimed Clean Slate Amnesties.”

Hudson also writes:

“By liberating distressed individuals who had fallen into debt bondage, and returning to cultivators the lands they had forfeited for debt or sold under economic duress, these royal acts maintained a free peasantry willing to fight for its land and work on public building projects and canals…. By clearing away the buildup of personal debts, rulers saved society from the social chaos that would have resulted from personal insolvency, debt bondage, and military defection” (p. 3).

Marx and Engels never made such an argument (nor did Adam Smith for that matter). Hudson points out that they knew nothing of these ancient Mesopotamian societies. No one did back then. Almost all of the various kinds of assyriologists completed their archaeological excavations and philological analyses during the twentieth century. In other words, this book could not have been written until someone digested the relevant parts of the vast body of this recent scholarship. And this someone is Michael Hudson.

So let us reconsider Hudson’s fundamental insight in more vivid terms. In ancient Mesopotamian societies it was understood that freedom was preserved by protecting debtors. In what we call Western Civilization, that is, in the plethora of societies that have followed the flowering of the Greek poleis beginning in the eighth century B.C., just the opposite, with only one major exception (Hudson describes the tenth-century A.D. Byzantine Empire of Romanos Lecapenus), has been the case: For us freedom has been understood to sanction the ability of creditors to demand payment from debtors without restraint or oversight. This is the freedom to cannibalize society. This is the freedom to enslave. This is, in the end, the freedom proclaimed by the Chicago School and the mainstream of American economists. And so Hudson emphasizes that our Western notion of freedom has been, for some twenty-eight centuries now, Orwellian in the most literal sense of the word: War is Peace • Freedom is Slavery • Ignorance is Strength. He writes:

“A constant dynamic of history has been the drive by financial elites to centralize control in their own hands and manage the economy in predatory, extractive ways. Their ostensible freedom is at the expense of the governing authority and the economy at large. As such, it is the opposite of liberty as conceived in Sumerian times” (p. 266).

And our Orwellian, our neoliberal notion of unrestricted freedom for the creditor dooms us at the very outset of any quest we undertake for a just economic order. Any and every revolution that we wage, no matter how righteous in its conception, is destined to fail.

And we are so doomed, Hudson says, because we have been morally blinded by twenty-eight centuries of deracinated, or as he says, decontextualized history. The true roots of Western Civilization lie not in the Greek poleis that lacked royal oversight to cancel debts, but in the Bronze Age Mesopotamian societies that understood how life, liberty and land would be cyclically restored to debtors again and again. But, in the eighth century B.C., along with the alphabet coming from the Near East to the Greeks, so came the concept of calculating interest on loans. This concept of exponentially-increasing interest was adopted by the Greeks — and subsequently by the Romans — without the balancing concept of Clean Slate amnesty.

So it was inevitable that, over the centuries of Greek and Roman history, increasing numbers of small farmers became irredeemably indebted and lost their land. It likewise was inevitable that their creditors amassed huge land holdings and established themselves in parasitic oligarchies. This innate tendency to social polarization arising from debt unforgiveness is the original and incurable curse on our post-eighth-century-B.C. Western Civilization, the lurid birthmark that cannot be washed away or excised. In this context Hudson quotes the classicist Moses Finley to great effect: “…. debt was a deliberate device on the part of the creditor to obtain more dependent labor rather than a device for enrichment through interest.” Likewise he quotes Tim Cornell: “The purpose of the ‘loan,’ which was secured on the person of the debtor, was precisely to create a state of bondage” (p. 52 — Hudson earlier made this point in two colloquium volumes he edited as part of his Harvard project: Debt and Economic Renewal in the Ancient Near East, and Labor in the Ancient World).

Hudson is able to explain that the long decline and fall of Rome begins not, as Gibbon had it, with the death of Marcus Aurelius, the last of the five good emperors, in A.D. 180, but four centuries earlier, following Hannibal’s devastation of the Italian countryside during the Second Punic War (218-201 B.C.). After that war the small farmers of Italy never recovered their land, which was systematically swallowed up by the prædia (note the etymological connection with predatory), the latifundia, the great oligarchic estates: latifundia perdidere Italiam (“the great estates destroyed Italy”), as Pliny the Elder observed. But among modern scholars, as Hudson points out, “Arnold Toynbee is almost alone in emphasizing the role of debt in concentrating Roman wealth and property ownership” (p. xviii) — and thus in explaining the decline of the Roman Empire.

“Arnold Toynbee,” Hudson writes, “described Rome’s patrician idea of ‘freedom’ or ‘liberty’ as limited to oligarchic freedom from kings or civic bodies powerful enough to check creditor power to indebt and impoverish the citizenry at large. ‘The patrician aristocracy’s monopoly of office after the eclipse of the monarchy [Hudson quotes from Toynbee’s book Hannibal’s Legacy] had been used by the patricians as a weapon for maintaining their hold on the lion’s share of the country’s economic assets; and the plebeian majority of the Roman citizen-body had striven to gain access to public office as a means to securing more equitable distribution of property and a restraint on the oppression of debtors by creditors.’ The latter attempt failed,” Hudson observes, “and European and Western civilization is still living with the aftermath” (p. 262).

Because Hudson brings into focus the big picture, the pulsing sweep of Western history over millennia, he is able to describe the economic chasm between ancient Mesopotamian civilization and the later Western societies that begins with Greece and Rome: “Early in this century [i.e. the scholarly consensus until the 1970s] Mesopotamia’s debt cancellations were understood to be like Solon’s seisachtheia of 594 B.C. freeing the Athenian citizens from debt bondage. But Near Eastern royal proclamations were grounded in a different social-philosophical context from Greek reforms aiming to replace landed creditor aristocracies with democracy. The demands of the Greek and Roman populace for debt cancellation can rightly be called revolutionary [italics mine], but Sumerian and Babylonian demands were based on a conservative tradition grounded in rituals of renewing the calendrical cosmos and its periodicities in good order. The Mesopotamian idea of reform had ‘no notion [Hudson is quoting Dominique Charpin’s book Hammurabi of Babylon here] of what we would call social progress. Instead, the measures the king instituted under his mīšarum were measures to bring back the original order [italics mine]. The rules of the game had not been changed, but everyone had been dealt a new hand of cards’” (p. 133).

Contrast the Greeks and Romans: “Classical Antiquity,” Hudson writes, “replaced the cyclical idea of time and social renewal with that of linear time. Economic polarization became irreversible, not merely temporary” (p. xxv). In other words: “The idea of linear progress, in the form of irreversible debt and property transfers, has replaced the Bronze Age tradition of cyclical renewal” (p. 7).

After all these centuries, we remain ignorant of the fact that deep in the roots of our civilization is contained the corrective model of cyclical return – what Dominique Charpin calls the “restoration of order” (p. xix). We continue to inundate ourselves with a billion variations of the sales pitch to borrow and borrow, the exhortation to put more and more on credit, because, you know, the future’s so bright I gotta wear shades.

Nowhere, Hudson shows, is it more evident that we are blinded by a deracinated, by a decontextualized understanding of our history than in our ignorance of the career of Jesus. Hence the title of the book: And Forgive Them Their Debts and the cover illustration of Jesus flogging the moneylenders — the creditors who do not forgive debts — in the Temple. For centuries English-speakers have recited the Lord’s Prayer with the assumption that they were merely asking for the forgiveness of their trespasses, their theological sins: “… and forgive us our trespasses, as we forgive those who trespass against us….” is the translation presented in the Revised Standard Version of the Bible. What is lost in translation is the fact that Jesus came “to preach the gospel to the poor … to preach the acceptable Year of the Lord”: He came, that is, to proclaim a Jubilee Year, a restoration of deror for debtors: He came to institute a Clean Slate Amnesty (which is what Hebrew דְּרוֹר connotes in this context).

So consider the passage from the Lord’s Prayer literally: … καὶ ἄφες ἡμῖν τὰ ὀφειλήματα ἡμῶν: “… and send away (ἄφες) for us our debts (ὀφειλήματα).” The Latin translation is not only grammatically identical to the Greek, but also shows the Greek word ὀφειλήματα revealingly translated as debita: … et dimitte nobis debita nostra: “… and discharge (dimitte) for us our debts (debita).” There was consequently, on the part of the creditor class, a most pressing and practical reason to have Jesus put to death: He was demanding that they restore the property they had rapaciously taken from their debtors. And after His death there was likewise a most pressing and practical reason to have His Jubilee proclamation of a Clean Slate Amnesty made toothless, that is to say, made merely theological: So the rich could continue to oppress the poor, forever and ever. Amen.

Just as this is a profound book, it is so densely written that it is profoundly difficult to read. I took six days, which included six or so hours of delightful and enlightening conversation with the author himself, to get through it. I often availed myself of David Graeber’s book Debt: The First 5,000 Years when I struggled to follow some of Hudson’s arguments. (Graeber and Hudson have been friends, Hudson told me, for ten years, and Graeber, when writing Debt; The First 5,000 Years, relied on Hudson’s scholarship for his account of ancient Mesopotamian economics, cf. p. xxiii). I have written this review as synopsis of the book in order to provide some help to other readers: I cannot emphasize too much that this book is indeed earth-shattering, but much intellectual labor is required to digest it.

ADDENDUM: Moral Hazard
When I sent a draft of my review to a friend last night, he emailed me back with this question:
— Wouldn’t debt cancellations just take away any incentive for people to pay back loans and, thus, take away the incentive to give loans? People who haven’t heard the argument before and then read your review will probably be skeptical at first.

Here is Michael Hudson’s response:
— Creditors argue that if you forgive debts for a class of debtors – say, student loans – that there will be some “free riders,” and that people will expect to have bad loans written off. This is called a “moral hazard,” as if debt writedowns are a hazard to the economy, and hence, immoral.

This is a typical example of Orwellian doublespeak engineered by public relations factotums for bondholders and banks. The real hazard to every economy is the tendency for debts to grow beyond the ability of debtors to pay. The first defaulters are victims of junk mortgages and student debtors, but by far the largest victims are countries borrowing from the IMF in currency “stabilization” (that is economic destabilization) programs.

It is moral for creditors to have to bear the risk (“hazard”) of making bad loans, defined as those that the debtor cannot pay without losing property, status or becoming insolvent. A bad international loan to a government is one that the government cannot pay except by imposing austerity on the economy to a degree that output falls, labor is obliged to emigrate to find employment, capital investment declines, and governments are forced to pay creditors by privatizing and selling off the public domain to monopolists.

The analogy in Bronze Age Babylonia was a flight of debtors from the land. Today from Greece to Ukraine, it is a flight of skilled labor and young labor to find work abroad.

No debtor – whether a class of debtors such as students or victims of predatory junk mortgages, or an entire government and national economy – should be obliged to go on the road to and economic suicide and self-destruction in order to pay creditors. The definition of statehood – and hence, international law – should be to put one’s national solvency and self-determination above foreign financial attacks. Ceding financial control should be viewed as a form of warfare, which countries have a legal right to resist as “odious debt” under moral international law.

The basic moral financial principal should be that creditors should bear the hazard for making bad loans that the debtor couldn’t pay — like the IMF loans to Argentina and Greece. The moral hazard is their putting creditor demands over the economy’s survival.


So, combining the inability to reduce inequality with the resulting massive debts and greed of the patricians meant a formula for disaster that weakened the Roman Empire. The later invasions by barbarians had the effect of demoralizing the public and causing a loss of faith in the system itself. In the midst of economic misery, a government that cannot even keep you safe is one that has failed. Ultimately the feudal system would develop, which was based upon maintaining order and providing security against barbarians. Castles, walled monasteries, and security became the prevailing system.

Other factors

As civilizations fall into decline for economic reasons the implied social contract begins to lose its meaning. The overarching narrative that holds the society together unravels, and with it so does the fundamental faith in the system by the people. People essentially start going through the motions, and pretending the system is fine, even though everyone knows it is not. This is when corruption really starts to take off, especially when there is no Middle Class to pressure the government to maintain accountability. In Rome the emperors became terribly corrupt, and the Senate was equally so. This is similar to what happened during the fall of the Soviet Union. As the government abandoned Stalinism and stopped rotating cadres corruption set in. Stagnation was the result until the Gorbachev period. His series of rushed and ill considered reforms led to the unraveling of the economy. Shortages and long lines demoralized the public. Propaganda from dissidents on TV criticized the Soviet system and destroyed the belief in the system, as the “atrocities” of the past were uncovered. False promises of a capitalist abundance was peddled to the people. This would never materialize. All lies. Solzhenitsyn’s fictional work about the gulag was portrayed as factual. This was a one-two punch that put the system on life support. With the assistance of the West Boris Yeltsin was able to pull the plug. The former officials who had pulled the levers of power had achieved their wish—to plunder the public assets and seize the means of production. 30 years later, Russia has never recovered fully.

Or consider the United States. After WWII there was a consensus among labor and the corporations that the benefits of the capitalist system would be shared to those who built it. Labor unions helped create a thriving Middle Class. Banks were regulated to avoid abuses. Social programs to benefit the people and reduce poverty were introduced. The mixed model economy leaning center left helped create one of the strongest economies in human history. And then something happened—the invention of greater means of electronic communication gave rise to modern logistics technologies. Products could be manufactured across the globe using cheap labor costs, and without unions. The Chinese government cooperated with U.S. manufacturers to prevent independent unions and there were less environmental regulations. The elites saw the opportunity to make massive profits. It didn’t take long to buy off the politicians to enact a new model of capitalism, capitalism on steroids—neoliberalism. Deregulation, privatization, globalization, Right to Work, financialization of the economy, and “free” trade. From 1980 onward the neoliberal model has caused massive inequality as manufacturing has left the U.S. The Middle Class is in decline. Consumer debt and student loan debt has soared. The decimation of social programs has resulted in a greater supply of unskilled workers, keeping minimum wage jobs from even keeping up with inflation. Tax cuts for the rich was sold as a job stimulus for the “job creators.” In reality the slashing of taxes led to revenue shortfalls, leading to the collapse of the infrastructure of the U.S. Flying over it you see a developing country, not the world’s largest economy. Atomization and individualism have taken over. Gated communities with security for the rich are the result. Faith in almost all institutions is at a record low. The only one left held in high esteem is the military. But this won’t last forever. The U.S. funds its military by relying on cheap borrowing of money, because the U.S. is the world’s reserve currency. The military is used to protect corporate financial interests around the globe, ensure access to cheap natural resources, sources of oil, and labor markets. As soon as China and Russia and Iran gain more power and can supplant the dollar as the world’s reserve currency, the easy borrowing will be over, and so will the U.S. global military empire. At home the Millennials and Generation Z are like the dispirited Russians, having lost faith in capitalism. America never worked for them. Largely in debt, demoralized, and having nothing to look forward to, they are not too unlike the people of the Soviet Union during the Gorbachev period, or the ancient Romans. They want to survive and live a decent life. Given the rampant corruption in the U.S. government, which is based on who can finance the politicians the most, the likelihood of legislation which would turn the U.S. back into a social democracy is nearly impossible. As we speak the social democratic candidate, Sanders, is trailing the neoliberal empty suit Biden by a large margin. And even if Sanders were to somehow get to the general election against Trump he would lose, as the U.S. has become a very far right nation. The electoral college is skewed toward states which would endorse Trump over Sanders anyway. Further, the U.S. is not a democracy. It is an oligarchy, so the will of the people has no impact on policy decisions.

It’s the income inequality, stupid

In 2013 a consensus developed among American liberals that the problem of income inequality should be a top priority. President Obama stated that income inequality was the ‘defining challenge of our time’.

Income inequality was also a major issue when ancient Rome was at the height of its power. Political struggles over income inequality destabilized the Roman system, and lead to irreversible political changes that fatally undermined Roman civilization.

The Roman city state was founded in the eighth century BC as a kingdom. After a particularly obnoxious king, the monarch was overthrown in 509 BC. Instead of replacing him with another king, the citizens of Rome did something revolutionary. They swore an oath that no one man would ever again be allowed to rule Rome. They set up a system where no man had absolute power and where the government was accountable to the people. It was similar in many ways to our modern American system. They called it a Republic.

The Republic seems to have been very good for business. Modern science has given us some insight into Roman economic activity through the study of shipwrecks and ice cores. What is really interesting is that both unrelated datasets tell the same story. The Roman economy grew for about 500 years from 500 BC to a peak at 1AD, and then shrank away to nothing by 500 AD.

The data on lead production comes from Greenland ice cores. Lead smelting released pollution, which found its way to the Greenland icecap. The Romans were mining lead so they could use that lead to extract silver from its ore. The Romans needed silver because their monetary system was based on silver coins.

The growth in the Roman economy roughly coincides with the existence of the Roman Republic, which started with the overthrow of the king in 509 BC and came to an end in 27 BC when the Republic was overthrown. Good institutions are vital to economic growth in the third world today, and the Republic was likely key to the success of Rome.

Much has been written about why Rome fell. What the modern data reveals, is that the economy had been shrinking for centuries before the final collapse of the Roman state. When the last Roman emperor was overthrown in 476 AD, the economy had withered away. The data also shows that the economy peaked around 1 AD, so the cause of the eventual collapse of Rome dates to that era. The replacement of the Republic with emperors seems to be the most likely reason. Kings and emperors are very common in history, while republics are rare.

Why did the Republic fall?

What seems to have destabilized the Republic was growing income inequality. By the middle of the second century, the economic situation for the average Roman was declining. The backbone of Rome was small farmers who owned their own land. These small farms started going bankrupt, and they sold their land to aristocrats who set up large estates worked by imported slave labor. The displaced farmers went to the cities looking for work, but they didn’t find many jobs, and ended up dependent on government welfare.

In 133 BC these unemployed people elected a populist called Tiberius Gracchus who promised them land reform. The wealthy elite resisted the reforms, and Tiberius was assassinated. This started a series of political assassinations and military coups which lead to the dismantling of the Republic by 27AD. The whole process took over a hundred years.

Source: Did income inequality lead to the collapse of ancient Rome?

Moral decay parallels between the U.S. and Rome

If you want to understand why Rome declined, look no further than the moral decay of ruling Elites.

There are many reasons why Imperial Rome declined, but two primary causes that get relatively little attention are moral decay and soaring wealth inequality. The two are of course intimately connected: once the morals of the ruling Elites degrade, what’s mine is mine and what’s yours is mine, too.

I’ve previously covered two other key characteristics of an empire in terminal decline: complacency and intellectual sclerosis, what I have termed a failure of imagination.

Michael Grant described these causes of decline in his excellent account The Fall of the Roman Empire, a short book I have been recommending since 2009:

There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. (The Status Quo) attitude is a complacent acceptance of things as they are, without a single new idea.

This acceptance was accompanied by greatly excessive optimism about the present and future. Even when the end was only sixty years away, and the Empire was already crumbling fast, Rutilius continued to address the spirit of Rome with the same supreme assurance.

This blind adherence to the ideas of the past ranks high among the principal causes of the downfall of Rome. If you were sufficiently lulled by these traditional fictions, there was no call to take any practical first-aid measures at all.

A lengthier book by Adrian Goldsworthy How Rome Fell: Death of a Superpoweraddresses the same issues from a slightly different perspective.

Glenn Stehle, commenting on 9/16/15 on a thread in the excellent (operated by the estimable Ron Patterson) made a number of excellent points that I am taking the liberty of excerpting: (with thanks to correspondent Paul S.)

The set of values developed by the early Romans called mos maiorum, Peter Turchin explains in War and Peace and War: The Rise and Fall of Empires, was gradually replaced by one of personal greed and pursuit of self-interest.

“Probably the most important value was virtus (virtue), which derived from the word vir (man) and embodied all the qualities of a true man as a member of society,” explains Turchin.

“Virtus included the ability to distinguish between good and evil and to act in ways that promoted good, and especially the common good. Unlike Greeks, Romans did not stress individual prowess, as exhibited by Homeric heroes or Olympic champions. The ideal of hero was one whose courage, wisdom, and self-sacrifice saved his country in time of peril,” Turchin adds.

And as Turchin goes on to explain:

“Unlike the selfish elites of the later periods, the aristocracy of the early Republic did not spare its blood or treasure in the service of the common interest. When 50,000 Romans, a staggering one fifth of Rome’s total manpower, perished in the battle of Cannae, as mentioned previously, the senate lost almost one third of its membership. This suggests that the senatorial aristocracy was more likely to be killed in wars than the average citizen….

The wealthy classes were also the first to volunteer extra taxes when they were needed… A graduated scale was used in which the senators paid the most, followed by the knights, and then other citizens. In addition, officers and centurions (but not common soldiers!) served without pay, saving the state 20 percent of the legion’s payroll….

The richest 1 percent of the Romans during the early Republic was only 10 to 20 times as wealthy as an average Roman citizen.”

Now compare that to the situation in Late Antiquity when

“an average Roman noble of senatorial class had property valued in the neighborhood of 20,000 Roman pounds of gold. There was no “middle class” comparable to the small landholders of the third century B.C.; the huge majority of the population was made up of landless peasants working land that belonged to nobles. These peasants had hardly any property at all, but if we estimate it (very generously) at one tenth of a pound of gold, the wealth differential would be 200,000! Inequality grew both as a result of the rich getting richer (late imperial senators were 100 times wealthier than their Republican predecessors) and those of the middling wealth becoming poor.”

Do you see any similarities with the present-day realities depicted in these charts?

And how many congresspeople served in combat in Iraq or Afghanistan?

Source: Following in Ancient Rome’s Footsteps: Moral Decay, Rising Wealth Inequality


Could the Roman Empire be saved? No.

  1. The levels of inequality and debt were not subject to political resolution because short of communism, the elites were never going to give up their power and privilege voluntarily. Rampant corruption was endemic. The government served the rich, as it does in the U.S.
  2. The conquering and taxation model of the Roman Empire was limited by geography itself, and the cost of maintaining infrastructure to mobilize troops to defend the conquered territories.
  3. Slavery stifled innovation. Without innovation there could be no advancement beyond a slave economy.
  4. The barbarians saw the decay of the Empire and used it to their advantage by attacking and plundering. This led to a huge loss of morale in the people, who would rather live in a feudal system that maintained protection than the corrupt and weakened Romans.
  5. As the Eastern Empire became more powerful and well guarded the barbarians focused on the Western Empire, which led to even more attacks.
  6. The decadence of the Roman Empire was best exemplified by the bread and circus games in the Colosseum, which became more and more violent and grotesque.
  7. The problems of the Roman Empire were too great for it to be saved. They would have had to abandon the slave economy, develop more technology, reduce government corruption, develop a Middle Class that could fight against the patricians who were pushing higher and higher the levels of inequality and personal debt.
  8. Sadly, the U.S. is following a similar model. Personal debt, inequality, loss of the Middle Class, loss of morale, addiction, atomization, and hopelessness are endemic. Because the U.S. is an oligarchy which is corrupt there is no hope for a political resolution. Therefore, the inequality and other problems will continue. The rise of China will eventually lead to the U.S. no longer being the world’s reserve currency. This will end the cheap borrowing of the U.S. government, and the military will no longer be affordable. Like the Romans, the system will implode, and we will see the rise of a new Eastern Empire—China. Observing these things is like watching a train wreck. You are utterly powerless to do anything about it, even though you know it is going to be catastrophic. In the U.S. the continued loss of power and prestige, combined with economic crisis will lead to the rise of more right wing demagogues. The U.S. is a very far right nation. There will be a conflict between the socialists and the fascists for control. There is a risk that if a fascist takes over, he or she will start a war with China and Russia or both, in a pathetic attempt to maintain its power and hegemonic domination. But this will be futile. If it results in a nuclear exchange millions will die. Further, the U.S. will not prevail because its people are not willing to make those kinds of sacrifices for a government that doesn’t care about them and has nothing to do with them. As Britain wound down from its empire it did so with a level of grace and dignity. But the U.S. is not Britain. It is paranoid, violent, and right wing. More economic turmoil will lead to greater internal conflicts, which will be ugly. Add to this the effects of climate change, which are going to become very serious in another 15 years or so.
  9. One way that could have really helped reduce the inequality was to redistribute the land of the patricians to reduce the wealth inequality. But again, the patricians who ran the government would never permit it. So the people would have needed to have a revolution, but all attempts at revolutions in the past were brutally suppressed by the Roman Army.

The U.S. has soaring income inequality