Sunday, February 23, 2014





















  1. The Gold just represented the conquest. More Gold did not make the Romans more powerful, In the end it devalued relative to the energy the society was able to access. As long as the Roman society was in surplus, the Gold held value. When the society could no longer meet the needs of the population, the gold devalued.

    Gold is not energy, when used as Money it just represents what the society can access. Without available energy to feed and clothe and house the population, Gold and any other monetary instrument is basically worthless.

    That is how it goes. Everybody Knows.


    1. RE, this is a point on which I thought a lot. The point is, in my opinion, that the Romans never had an energy problem as we do. They were riding the agricultural wave that had been sweeping Europe starting with the first millennium BCE and they had a relative abundance of food. Indeed, you don't find records of famines in the Roman Empire, except during the very last period, after about 400 AD, when they had eroded a lot of territory. And the records say that they were surprised: they had no experience of such things.

      So, we don't have to look at the Roman crisis in terms of our present predicament. The Roman crisis, in my opinion, was not so much a crisis of resources (intended as primary resources, food) but a crisis of command and control. So, gold was the key element that allowed Romans to get the resources they needed. No gold, no resources. In a sense, the Roman crisis was more a financial crisis than our present one.

  2. Thanks Ugo for yet another quite interesting post about gold. Do you happen to know what sorts of grades and mineralization characteristics some of the Roman Empire gold had? (in Spain, Palestine, Dacia or wherever?) And how was pure gold extracted from the mined ores? (obviously not by cyanide leaching and probably also not by using mercury?)

    You mention lower and lower grades being mined over history from the Carpathian mountains. Recently I read about a gold mine named Bullabulling Gold near Coolgardie, Western Australia (just west of Kalgoorlie) which had produced a lot of gold earlier but then had stopped being mined; it soon may be restarted since although the grade of the the remaining resources/ reserves is low (about 1 gm. per ton) there are about 3 million ounces. (and cyanide leaching apparently will be used) Reopening old producing mines that had been shut in to get at the remaining lower or harder to get at or purify ores is very likely to be a general trend.

    Unsurprisingly, similar things seem to be happening to yellow gold as are happening to black gold. Big finds are becoming ever more rare, the easy stuff has already been taken out and costs to get at the lower qualities that are either harder to get at or to purify are going straight up. (naturally increasing energy costs also play an important role)

    The present price of gold and what happened to it in 2013 is / was affected by many factors but one important one is also the manipulation by Goldman Sachs together with similar birds of a feather. Maybe that's why it's called "Gold- Man"?...

    Gold Mining and its various aspects is nicely summarized in the following article : ;

    The Outlook for Gold in 2014 is instead discussed here:

    The particular role of Mr. Blankfein on behalf of his "impoverished" friends is covered in paragraph 5. And to the conspiratorial mind his role seems predominant with the other factors also influencing the price being used as convenient fig leafs to disguise the most important factor. (the manipulation)

    From what the article says it looks like 2014 may pit 1.25 billion Indians and 1.35 billion Chinese against Mr. Blankfein ! But given the world we live in, it's not at all clear who is going to win !

    1. Ancient mining technologies are a fascinating subject, but complex and not very well known. In any case, the ancient were facing the same problem we are facing today: depletion of high grade ores. So, initially they exploited the easy gold in the form of "placer" (or "alluvial") deposits. It took little or no effort to pan gold nuggets out of river gravel. But, in time, these resources ran out and so the ancient had to walk up to the "mother ore" on top of mountains, where they had to laboriously separate gold from a (typically) quartz matrix. I think it was done by hand picks or by grinding in hand operated mills. That was expensive in terms of human power needed and there was where the positive feedback kicked in. Those empires which could afford mines could use them to build armies that would conquer territories that would make them able to afford more mines. Until depletion set in.........

  3. Ugo
    I am inclined to agree with your 'command and control' analysis. The main inputs for the agrarian economy (labour and land) are primarily modular and self-supporting.

    But bulk 'trade' in goods arising from specialised production, e.g. pottery, metallurgy, will provide more than luxury. Market exchange makes use of wider geographical resources that can lower maintenance costs (labour) needed for physical structures such as dwellings, and on a wider scale in some areas, help critical infrastructure; for example that required for water-resource management. It is a commonplace also in agrarian societies that no individual grower or even community is entirely self sufficient. It is very telling, if as you suggest, famine was not known to the Romans. To maintain a 'craft economy', let alone 'insurance' in the form of grain storage, or the necessary management for example for large-scale water resource or military security, trading networks available over wide areas can help support what then become essential services.

    Britannia at least in the south before the Roman conquest was a surplus grain exporter with long-standing sustainable production - which was remarkable in itself. During the Roman period, despite an increase in population close to the then agricultural technology’s carrying capacity (perhaps 6M in England) the province could still support its population and the infrastructure for trading and (small) urban concentrations. Profitable trading in metals, as well as grain, presumably helped 'balance of payment' issues. After Roman military security and trading was lost, the population crashed, not to recover for nearly a 1000 years.


  4. Very interesting comment, Phil, thanks. I think you have spotted a fundamental point. The Economy, in general, works best when it is interconnected and in Roman times this interconnection was assured by metal currency which made trade, security, and services possible. Without currency, the economy may have reverted to local and that was less efficient. (despite the currently fashionable theories!)

  5. Although I like the "beast" metaphor very much, I can't follow you completely along your "starving of gold" - argument.

    The reason is, that the real wealth and basis of power of a society is productivity and thing we could call "societal intelligence". AFAIK, the roman productivity was comparatively high, wasn't it? Or did it fall significantly in the later stages?

    The romans needed gold to pay the legionaries, and goods to be bought with this gold. Gold and silver were, as any currency, only a medium. When the medium gets scarce, either prices rise, or it will be replaced by some other medium, or both. The legionaries could well have been payed with other things as gold. Is it really true, that the lack of precious metals hampered roman economy significantly?

    1. I received several comments in this sense. I understand that this point is hard to grasp, but to me it is clear and it is becoming clearer and clearer as the discussion progresses.

      You are perfectly correct in using the term "Societal Intelligence" - indeed this is the key concept. I think it can be stated with saying that a running economy is not just a question of having resources, but controlling (or perhaps "managing") them. This is what made globalization so successful and so comparable to the ancient Roman Empire. Both the Romans and our Globalized managers used money to control the flow of resources within their respective empires and this gave them a tremendous capability of control. Money has this incredible capability of carrying information from one node to another of the network and hence controlling the flow of resources. This is what you called "societal intelligence" In a sense, the economy is comparable to a brain; money is the axons and the synapses.

      So, when there was no more gold, couldn't legionnaires be paid with something else? Surely they could, but "fiat currency" is something that wouldn't appear before almost two millennia. So, there are reports of soldiers being paid with pottery and with land. The first was not so good, I figure, would you fight for pottery? The second is what created the feudal system of Middle Ages - it was control as well, but of a completely different kind; you just couldn't run an economy by exchanging pieces of land. Finally, at the very end of the empire, soldiers started to be called "bucellarii", which means "biscuit eaters" - evidently they were paid simply in food! Good enough to survive, but not the same thing as gold.

    2. Another possibility to define the role of money is that of a catalyst: it facilitates re- or trans-actions, without beeing used up itself. So if it lacks, the the whole process may well become much slower, though never completely stalled.

    3. If all their money had stayed within the borders and only circulated there, the Romans would have been far better off. But their problem, as an importer and not exporter, was that a sizeable part of their gold and silver coins left the empire to foreign suppliers each year, most of them never to return. Maybe the Romans could have managed to supply their own needs, but not those of the world outside.

  6. Philip and Alexander were from around Macedonia, and Graeber in 'Debt: The first 5000 years' mentions that it required Alexander on the order of half ton a day of sliver to pay his 120 kilosoldiers.

    But the whole book is fascinating, and i am afraid it has many counterexamples to your statement :

    " ... "fiat currency" is something that wouldn't appear before almost two millennia."

    I highly recommend Graeber. Whether you agree or disagree with him, the man is fascinating, encyclopaedic, and challenges the reader at every turn.

    Thanks for your blog


  7. "... these mines have periodically experienced new waves of exploitation as technological improvements made it possible to recover lower and lower grade gold ores."

    Simon Michaux has an interesting take on "peak mining" that carries this trend to its ultimate end.

  8. Related research,
    "Resource depletion, peak minerals and the implications
    for sustainable resource management"
    Prior, T., et al.

  9. So the Romans never had Dacia under their rules. The Romans had won through wor only a small part of Dacia which is closer to Danube river. Dacia was big and powerful at the time and wealthy , and the Dacians also spoke Latin with a different dialect . But the history has been stolen and by who! ? Some will say was the chatolic church to have influenced the hysterical truth.


