Home > Uncategorized > The real costs of making money (6). The Roman denarius.

The real costs of making money (6). The Roman denarius.

Render unto Caesar the things that are Caesar’s

Introduction. These posts loosely use the concept of the ‘life cycle analysis’ of a product and apply it to one of the stages of the product ‘silver or golden coins’, i.e. the mining of the silver/gold needed to produce these coins. And bitcoins. They depart from ‘normal’ life cycle analysis in the sense that they do not look at for instance the amount of energy used or carbon dioxide produced during this stage of production but at the labour market institutions which governed the division of labour in the silver mines was mined. This silver/gold which, turned into coins, was used to organize and expand empires was often mined by slaves, prisoners of war, convicts or ‘feudal labour’ (like the Inca mita system, which was used by the Habsburg empire to recruit labourers for its South American mines). Today: the Roman denarius. First, some iconic ‘Roman’ transactions will be discussed to give the reader an idea of the role of money in the Empire. After this, some remarks on the institutions governing the use of labour will be made. The posts are explicitly written with the aim to rebuke the ‘markets led to money’ myth which (often in the shape of ‘the classical dichotomy’) is still prevalent in many economic textbooks: looking at the entire life cycle of money depicts a harsher and much more state based reality. Earlier posts can be found here (the Athenian owl), here (the silver used to buy Josef)  here (the piece of eight), here (South African gold) and here (Bitcoin). Aside: the investigation below is based upon ancient Roman and Jewish texts, Greenland ice cores, Iberian slag heaps and much more which provides us with remarkable precise information about silver (lead) production and Roman money – but gives only a vague idea about ‘the life of the miners’. I did not encounter one estimate of the number of silver miners, for instance – but that might of course be due to me being an ignoramus when it comes to ancient economic history.

In the Roman empire, different kinds of money were used
On entering the house, they saw the child with Mary his mother; and they knelt down and paid him homage. Then, opening their treasure chests, they offered him gifts of gold, frankincense, and myrrh. And having been warned in a dream not to return to Herod, they left for their own country by another path.”
Matthew 2 11:12

Then one of the twelve, named Judas Iscariot, went to the chief priests and said, “What are you willing to give me to betray Him to you?” And they weighed out thirty pieces of silver to him. From then on he began looking for a good opportunity to betray Jesus
Matthew 26 14:15 (translations differ in the crucial translation of the word ‘weighed’. ‘Counted’, ‘Paid’, and ‘Gave’ are also used).
Are these, in western culture, the most iconic transactions ever? The first was a ‘gift exchange’ act, exchanges which are not about transferring wealth but among other things about transferring ‘prestige’ and which are based on or try to establish or recreate trust and social bonds and relations. The second is a ’market exchange’ transaction which, in this case and surely upon closer inspection, is all about treason. This closer inspection yields that in the Jewish temple priests were not allowed to use Roman money, which showed the emperor as a semi deity. These thirty pieces used to pay for betrayal were not Roman money but ‘kosher’, money. While, in the Old Testament, thirty pieces of silver is the price of a slave. And there is more to this: it was Jesus himself who cleansed the temple from money changers and traders, money changers who no doubt exchanged kosher money for Roman money? According to Jesus only ‘gift exchange’ could take place in the temple while he explicitly stated that not silver or copper but the context of the gift made it valuable… And this sacred money, tied to a trust based gift culture, was used to pay for – treason. The ‘Render unto Ceasar the things which are Ceasar’s and unto God the things that are God’s‘ which Jesus told to the Pharisees when they asked them if they had to pay taxes, and after Jesus had asked them to show a denarius, was, considering the information above, not meant to tell them to pay taxes but a way to reframe the discussion from a political one to a spiritual one and to chide the Pharisees that they even had such unholy money. But enough preaching. The denarius clearly was the official money which embodied the power of the Roman state. Our questions are where the silver used to make Roman and Jewish coins came from, who owned the mines, who produced it and how this was organized. The answer is: it came at least to a large extent from the Rio Tinto mines in southern Spain which were owned by the Roman state and while we do know how it was produced in a technical sense we do not really know how production was organized (but the ‘ad metallum’, working in the mines till death, was a standard Roman penalty for minor crimes…).

Labour use in Roman mines: still a bit of an enigma
The Roman empire was quite late to start minting coins (third century BC). It might have been that until that time they lacked a dependable inflow of silver. I dare to disagree on this with the Wikipedia page on Roman currency, assessed 21-12-2015, which explains the rise of silver coins in the Roman empire after 226 BC, when the first silver denarius was struck, to cultural factors. Not long after the minting of this first denarius the Romans, during the second Punic war (218-201 BC) gained control over Iberia, i.e. Portugal and Spain (205 BC), which gave them access to the all-important and already ancient Rio Tinto mines in southern Spain. These mines were in ancient times mined by the indigenous population, later by the Carthagians and eventually, after 205 BC, by the Romans. The Romans had a knack for effectively applying existing technology to large scale projects. In this case ventilation shafts and drainage systems were built to enable deep vein mining (up to 200 meters) which enabled a considerable expansion of the Rio Tinto production of silver and lead (lead was a necessary as well as valued byproduct and also used in the process to extract silver, more about labor and the organization of the process below).
We know that Rio Tinto was the main source of silver in the Roman empire as (based on lead in Greenland ice cores): ‘Isotopic systematics point to the mining districts in southwest and southeast Spain as the dominant sources of this lead, giving quantitative evidence of the importance of these mining districts to the Carthaginian and Roman civilizations. Lead with a Rio Tinto-type signature represents ∼70% of the lead found in Greenland ice between ∼150 B.C. and 50 A.D.’ (Rosman e.a., 1997). According to this information, Roman production of metals was indeed impressive – it would take until about 1750 until its level of production of lead was surpassed.
Picture 3. World lead production


Source: this Wikipedia page assessed 18 December 2015, original source here.
According to Barry Yeoman: “The scale of mining at Rio tinto fundamentally altered the Roman economy… Rome used silver denarii to pay and feed its army, fund public building programs in its capital city, and subsidize the price of (and eventually allow free distribution of) grain to the city’s residents.” The discontinuation of silver production seems to have disrupted the monetary system. The decline of production of lead aligns with the decline of the silver content of Roman coins. At the end of the second century, the Roman empire lost access to the mines (because of an invasion by the North-African Mauri) and the silver content of the denarius which around 15 BC had been 97% dropped according to the precise estimates of Alan Pense after the year 170 from 80% to 60% while after about 250 it plunged to 2%.
The Rio Tinto mines were owned by the Roman state and managed by a ‘procurator’ (or sometimes a sub-procurator) who was directly appointed by the emperor and not responsible to the governor of Spain. We do not really know how labor in the Rio Tinto mines was organized. Roman writers were unanimous that work in the mines was grueling, look here. Tacitus even ranks it as one of the reasons for conquered people to revolt. Circumstances in the shafts (which could run up to 200 meters deep) must often have been appalling: cramped, hot, moist and pitch dark except for some oil lamps. We also do not really know who worked in the mines. I could not find any mention of the number of people working in or around the mines and A.J.M. Jones states on p. 838 of (Jones, 1964): ‘The organization of mining is most obscure’. Since Jones wrote some progress has been made but the picture still is as far as I could gauge far from clear. Evan Haley (1991) investigates all known tombstone inscriptions and the like in Spain which enable us to investigate where somebody who had deceased was born and finds (though he is not able to quantify this) that there was considerable interregional migration tied to mining locations, while it is also possible that entire villages were removed to mining sites by the romans and points to the possible existence of purely male villages near mines which probably housed seasonal workers. The archaeometallurgist Lorna Anguilano (2012) investigated the slag heaps of the Rio Tinto mines to investigate if these tell us something about the organization of work, her work contains a ‘state of the art’ overview of what we know about the organization of mining in Rio Tinto. The process was surely state led in the sense that the state granted concessions, took care of basic infrastructure and took its cut. Alfred Michael Hirt (2010) has published an exhaustive overview of all known literary sources about Roman mining (including tombstones and the like). He describes a process which, depending on geological and geographical circumstances, in the end was state led but which made extensive use of small and large subcontractors and, depending on circumstances, different kinds of free and coerced labour while occasionally army personal was used in the mines. As a rule, however, the soldiers did not have to work in the mines but to protect them. We have to keep in mind that the different stages of the process (digging, transporting the ore, crushing the ore, smelting) may have been organized in different ways and Anguilana suggests that the mines first were worked by slaves, later (when the wars of conquest came to a halt and new slaves became scarce) by families of miners and even later by the state who, using a simpler technology and less experienced workers, adapted to population declines caused by outbreaks of plagues as well as to dwindling resources of wood and charcoal. Also, as stated, the ad metallum, being sent to the mines, was a common sentence for petty criminals. The best original source we have about the organization of the trade are two bronze plaques who describe how concessions were granted and which are indeed quite enlightening and suggest extensive subcontracting. The plaques also state that miners had free access to the famous and important Roman baths. Which, for once, sounds good but these might have been (imo: were probably) the people who owned a concession, not the prisoners of war or the people convicted to ‘ad metallum’. My arguments: these concessionaires were able to raise quite a bit of money and to work five diggings at the same time, something which you can’t do as a single convict. See the excerpt below which, also considering what Hirt writes about these plaques, seems to be about the most important written source about the organisation of Roman mining (source):
“To Ulpianus Aelianus, greeting

In accordance with the will of the liberal and most sacred Imperator Hadrian Augustus, he shall make immediate payment. If anyone does not do so and is convicted of having smelted ore before paying the price as specified above, his share as occupier shall be confiscated and the entire diggings shall be sold by the procurator of mines. Anyone who proves that the tenant has smelted ore before paying the price of the half share belonging to the fiscus shall receive one fourth. Silver diggings must be worked in accordance with the details contained in the regulations. Their prices will be kept in accordance with the liberality of the most sacred emperor Hadrian Augustus, whereby the ownership of the share belonging to the fiscus belongs to the first person to offer the price for the diggings and pay down to the fiscus the sum of 4,000 sesterces. If anyone strikes ore in one out of five diggings he shall, as stated above, carry out the work in the others without interruption. If he does not do so, another shall have a legal right to take possession. If anyone after the 25 days granted for raising working capital actually begins regular operations but then stops operations for ten consecutive days, another shall have the right to take possession. If the diggings sold by the fiscus is idle for 6 consecutive months, another shall have a legal right to take possession, on the condition that when the ore is extracted therefrom one half shall be, according to customary practice, reserved to the fiscus.”

Summary: the Roman empire owned the mines and seems to have subcontracted mining, after taking care of basic infrastructure while different kinds of coerced and ‘free’ labour were used in the mines, depending on circumstances. Production of considerable quantities of silver enabled the Roman monetary system (and the Roman empire) to persist for quite and made it possible expand and organize the empire as well as to impose a ‘colonial’ Roman tax system on the conquered regions. Mining led to at least local deforestation and human costs were as far as we know high but we have next to no quantitative information about this.


  1. graccibros
    December 27, 2015 at 3:25 pm

    Thanks for this MKJ. My pathway back to the ancient economies, especially the Roman and Greek, was started by my curiosity about what the American founding fathers had left out of their “mining” of Roman sources, and the current day’s Republican Right’s fascination with our American Constitutional framing period. Supplemented by the work of M.I. Finley, Karl Polanyi, and most recently, by several essays of Yanis Varoufakis, and my fascination with how contemporary ideological concerns get read back into questions of the character of these ancient economies. And for what it’s worth, I kept having flashbacks working at Target, the American retailer, flashbacks of Charleston Heston in the movie Ben Hur, rowing as a slave convicted of political crimes in Roman galleys Not quite the mines, but it will have to do at $8.50-$8.97 per hour.

  2. Peretz
    December 27, 2015 at 4:01 pm

    Suspect Money
    About 2800 years ago a tool-system in the form of coins was invented, metal money, in order that Man might exchange his own surplus production more easily for other products, in remoter markets, by attributing a conventional value to the goods exchanged; one which had been determined quantitatively in advance. This system was accordingly more precise than barter. The money used as a tool of control and evaluation in relation to these exchanged goods flowed from the private individual into the collectivity and vice versa. Operating as a tool of comparison, acting almost like a set of scales, money had no stable value despite the fact that it had initially been linked to the notion of weight. This objective symbol, conventionally established on a wider scale on the basis of a unitary figure pertinent for all currency, was projected and imposed as a standard measure by the government or authority presiding over the territory concerned. This information was then orientated toward the private individual with confidence. In this way money became inscribed as a concrete system of evaluation, neatly labelled, and pertaining to the hidden value of the product entering into its nexus; this value being determined by the producer in accordance with criteria that remained peculiar to him.
    The evaluation of such goods also depends upon subjective criteria on the part of the buyer; these are likely to reflect his own wealth and spending power. Indeed, each private consumer is likely to consider a given item as being implicitly more or less expensive in relation to these criteria. In essence, each act of evaluation on the part of the private consumer will be carried out in relation to the yardstick furnished by previous evaluations made of previous acquisitions of a similar nature, recorded in memory with a greater or lesser degree of efficiency and thus more or less approximate in nature. Indeed, although the actual weight of the money thrown upon the scales might be considered to confer upon it some kind of stable measure, there is no real guarantee that the sum total of this mass would correspond to that determined by a separate act of weighing on the part of the producer.
    All of these considerations do not in any way take into account the modifications carried out by intermediaries who, within the production chain, in turn establish their own price in accordance with criteria established by their own activity. Principal among these criteria are the quality and the rarity of the product concerned; all of which opens the door to various disparities and abuses in different markets, each one of which uses their own set of scales, these scales representing a symbolic tool of measurement pertaining to both the individual and the collectivity, and yet freely acknowledged by both parties as the sole and exclusive tool of exchange. Nevertheless, one might well ask: where are the administrators of these goods, the auctioneers, as it were, the referees who would apply this tool in order to attribute an exact value to a given item which might be universally accepted by all? At the end of the day, money remains an unreliable tool of comparison; although it can be used to attribute a particular value to a given item, it has no intrinsic value in itself. This attribution might thus be judged of suspect validity.
    Like any instrument of measurement, it functions by changing an elementary memorized unit into a symbol in order to obtain other values of an equally symbolic order, albeit displaced, as occurred with the abacus, which was the first instrument used in primitive societies to confer a different signification upon material values. In this way, quantity accruing through the accumulation of different figures (symbols) becomes inscribed within space. This operation, involving as it does the displacement of one value into another, is nothing more or less than a form of word processing. The abacus used in this way as a means of evaluating a given item, a function which is in no way gratuitous, thus becomes the fundamental formula governing the act of labor : labor = force applied over time and in space resulting in the production of a given item. This calculation is a way of determining these quantities, offering variable results in relation to the desired objective; more or less work carried out generating a greater or lesser degree of value according to the case. The same considerations hold for writing, the latter displacing a referent into symbolic space: the letter, completed within the unity of the word, and then within that of the sentence, and thereafter recursively within the body of the text, finally acquiring a sense within the systemic logic of the latter. The same system of symbolic value obtains in the economic sphere, words and numbers being used to evaluate human activity, processed in such a way that these units of information acquire signification only after being displaced.
    We have seen that the system of scales was not able to confer any certainty upon these comparative results at the end of the day. The symbol represented by money is only an approximation, which goes some way to explaining the kinds of distortion which it generates. Particularly as one cannot consider this first measure as stable, nor those which ensued in the markets. Indeed, how can one reasonably admit the possibility of a variation of variation? How might this constant volatility be controlled? The money-system, sensitive to outside movements, cannot avoid generating accidents along the way as it evolves and develops. Moreover, monetary-exchange flows serve to accentuate the distortions incurred within exchange values by virtue of their movement alone.
    The process of evaluating a given item through money, on the one hand, and ensuring its transmission, on the other, by virtue of the same tool serves to create two different systems which, according to the role that one attributes to them, can generate interferences, complicating them to the extent that their reciprocal functions are rendered incoherent. Effectively, the evaluation of any given item which seems to follow the laws of supply and demand has a certain subjective element to it, whereas the transactional process is orientated in terms of destination, conceived of as a simple means of impersonal transport.
    It is precisely for this reason that one has to put the traditional law of supply and demand to one side, which, operating in accordance with the presumption of freedom of evaluation, is supposed to be equitable. Moreover, laws are executed in order to regulate excesses and errors, in order to countervail the ‘dictatorship’ of the law of supply and demand, of money circulating within markets.
    One can perhaps summarize the workings of this paradoxical system in the following way: on the one hand, one transmits a given item measured in terms of value by the weight of a metal, ‘one’ buys another item elsewhere which is supposedly possessed of an identical value, measured in the same way by weights recognized as equivalent; however, what is not transmitted is the set of scales that has weighed out these values. The assignment of monetary value providing both intrinsic and extrinsic measurement thus generates results which are, at one and the same time, both true and false. And from this bivalence emerges the paradox that no single guarantee can correct.
    Within the monetary system which translates human activity and establishes a system of exchange within diverse kinds of markets, Man is capable of changing roles within this system, becoming either producer and consumer in accordance with his role in society. As within the feudal system, he determines given levels of production and purchasing on the basis of a system which is fundamentally flawed.
    It will thus always be somewhat fallacious to deduce the real economic value of a given piece of productive activity from the mere calculation of its quantified value, given that the instrument which manipulates these symbols is itself flawed. As a consequence, the assessments offered by the majority of orthodox economists are themselves to be treated with caution as nothing can be adduced to prove that the figures which they are using are accurate in any given case, nor indeed the words which they are using to interpret these figures. A human economy quantified on the basis of the money-system is thus only capable of generating suspect results; all the more so given that another distorting factor intervenes within the system operating as an instrument of exchange.
    Let us return to the first method employed by Man to exchange goods: that of barter. In this system, the attribution of value took place in relation to the amount of work necessary for the production of both sets of goods, these being set up in direct confrontation with one another in the here and now. These exchanges were carried out between two parties that were directly present to one another: one single buyer and one single producer. As a result, the scope of these exchanges, although entirely suited to the two parties concerned, could never expand. However, thanks to the advent of money (which we will call B), exchanges could then take place between people who were not physically present to one another. The handicap of distance was thus eradicated. Accordingly, if A and C are items possessed in principle of the same value, and have been evaluated as equal by the arbitrage of B employed as a measuring instrument, equal value can then be attributed to them both with confidence, despite the anonymous nature of the whole transaction.
    Nevertheless, this exchange remains suspect for another reason: the theory of systems postulates that the result of a given transfer will change the initial value of a product in the time that it takes to complete the action. There is in effect a time of transit between A and C which corresponds to the transport carried out by B, this deferral in turn serving to skew the original values. A certain period of latency is thus added to each monetary evaluation, accruing as a result of B which serves as a vehicle for this passage between one and the other state. Accordingly, the intermediary value B attributed to given items through equational transposition does not in reality respect the integral value of these measured items. This is not only due to the difficulties entailed by the act of evaluation that we have just seen, but also due to the inconstancy of the value in the transfer. Indeed, this parameter, which seemed to have been ensured by the existence of coins, was at the end of the day only guaranteed by their physical weight. However, in the living realm, and in the physical world upon which this depends, there cannot be any degree of exactitude; the present moment only exists in the abstract ergo the time calculated in relation to the reality of a particular movement can only be calculated relatively, but not in absolute terms. Accordingly, calculation in these conditions remains necessarily approximate. If the system of evaluation only involves a very short period of development, the time lost in the transformation induced by the monetary transit from the original item to its goal remains negligible. Nevertheless, the system is capable of transporting highly significant values in relation to monetary volume in the long term; in this case, the results are, accordingly, likely to become more significantly skewed. In addition to this initial distortion, we might also take into account that contributed by the time taken to physically transport the item itself. That said, the latter is, in the final analysis, determinable given that it is visibly factored into the calculation of value by the producer himself.
    Everyone knows that money loses its value over time (time is money!). Indeed, any good company manager knows that the volume of current stock should be limited as much as possible because the money that it represents will lose its value over time. Moreover, this erosion of monetary value, a natural side effect of the system itself, has been repeatedly confirmed by historical statistics4. Ultimately, we can deduce from this that the money which makes each value imperceptibly but surely drop is nothing more or less than a form of deception.
    The law of systems serves to elucidate both a tangible advantage (in this case, that of economic development by the markets) and a pervasive drawback (i.e. the loss of value, a side effect generated by the item in transit operating in accordance with the law of systems).
    This loss of residual value is not uniquely incumbent upon the owners of given items that might ultimately be dispensed with, but also upon anyone who might possess liquid assets over a given period of time.
    Money, functioning as an instrument of transport, thus adds a negative parameter, diminishing the overall value of the surplus values accruing from production: eo ipso this results in the loss of its own value. This underground evaluation, operating independently of the initial value of the transported goods, induces a loss which is entirely intrinsic to the monetary system itself. Moreover, this loss occurs from the moment the currency has been freshly minted, albeit less than tangibly as a result of the slowness of the process of exchange.
    Following each act of purchase, given that the purchased items have been poorly evaluated, owner-producers, financiers, the possessors of monetary power, in addition to that of the State, will overestimate the value of given items by way of compensation in order to re-establish a certain general equilibrium, the latter having been slightly diminished by this monetary circulation. These compensations are, moreover, sufficiently light to be practically invisible if the rotational speed of this circulation is low. Although minimal in the case of each transaction, these compensations are multiplied by the enormous quantity exponentially accruing from the sum total of transactions which occur at every minute within all of the markets involving the exchange of value in each country. Of course, the masters of pricing will often pre-empt such losses through nominal rises instigated beforehand; in other words, by extracting more surplus value at a rate which should, at the very least, correspond to the value of the rate of interest prevailing in the credit markets. The latter, dictated by financial institutions, will thus participate in the operation of a perpetual adjustment mechanism compensating for the endemic loss in the value of money induced by the passage of time.
    In the beginning, the existence of money enabled Man to respond to the need to extricate himself from the straitjacket of the bartering system, which only permitted the exchange of two items in the here and now. Indeed, no-one would be likely to feel themselves badly done to in transactions of such nature as long as they remained local in scope, entailing only degrees of variation which were barely perceptible. However, the emerging possibility of transmitting items in progressively less constrained environments, within a progressively wider scope of operation, meant, as we have seen, that initial values could only be maintained in an increasingly problematic way, as a function of the multiple compounding of indirect exchanges. The problem with all this, unfortunately, was that this system of quantification, although conventional, and thus guaranteed by obligation through the offices of a public institution, remained potentially nefarious; its usage , although serving to liberate the forces of production, also remained at the exclusive disposition of those who owned the land, the site of productive labor; moreover, this land was essentially transmitted through inheritance, as in feudal times, as well as generally having been initially acquired by force. In this way, the exploitative system of surplus extraction imposed by the feudal lords upon the peasants was effectively extended and refined, this time in a form mediated through monetary exchange. Thus, as we can clearly see, the exploitation of the peasant and the worker for the benefit of the boss has an eminently historical origin; this process of exploitation having been inscribed within the system inaugurated by money.
    Louis Peretz (Extract from “Money, how to flip the table off” (Amazon)

    • December 27, 2015 at 10:29 pm

      Yes, though it is amazing how many words have been used to say it …

      “Although minimal in the case of each transaction, these compensations are multiplied by the enormous quantity exponentially accruing from the sum total of transactions which occur at every minute within all of the markets involving the exchange of value in each country.”

      The “exponential” suggests units of compensation should be binary logarithmic, as has been found to be appropriate with other forms of information capacity. A billionaire doesn’t “earn” 100,000 times what a $10,000 earner gets, but perhaps c.22 times as much?

  3. Peter T
    December 29, 2015 at 11:44 am

    fwiw, ancient galleys were not rowed by slaves. Oarsmen were not just free, but well-paid (it was a skilled job).

    The history of mining and metallic coinage is fascinating, but the relationship to “money” as used in economics is complex. Standard units of value came first, then transferable credit backed by personal or state guarantee, then (much later) coinage as an impersonal guarantee of credit. Each form persists alongside the others, so most large transactions today do not involve cash but only some standard unit plus a guarantee (personal, corporate or state). And the metal content of coins could and did vary widely without much affecting their value: they were more often a token of state power than of independent value.

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