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Currency and the Collapse of the Roman Empire



Currency and the Collapse of the Roman Empire

Currency and the Collapse of the Roman Empire

The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

At its peak, the Roman Empire held up to 130 million people over a span of 1.5 million square miles.

Rome had conquered much of the known world. The Empire built 50,000 miles of roads, as well as many aqueducts, amphitheatres, and other works that are still in use today.

Our alphabet, calendar, languages, literature, and architecture borrow much from the Romans. Even concepts of Roman justice still stand tall, such as being “innocent until proven guilty”.

How could such a powerful empire collapse?

The Roman Economy

Trade was vital to Rome. It was trade that allowed a wide variety of goods to be imported into its borders: beef, grains, glassware, iron, lead, leather, marble, olive oil, perfumes, purple dye, silk, silver, spices, timber, tin and wine.

Trade generated vast wealth for the citizens of Rome. However, the city of Rome itself had only 1 million people, and costs kept rising as the empire became larger.

Administrative, logistical, and military costs kept adding up, and the Empire found creative new ways to pay for things.

Along with other factors, this led to hyperinflation, a fractured economy, localization of trade, heavy taxes, and a financial crisis that crippled Rome.

Roman Debasement

The major silver coin used during the first 220 years of the empire was the denarius.

This coin, between the size of a modern nickel and dime, was worth approximately a day’s wages for a skilled laborer or craftsman. During the first days of the Empire, these coins were of high purity, holding about 4.5 grams of pure silver.

However, with a finite supply of silver and gold entering the empire, Roman spending was limited by the amount of denarii that could be minted.

This made financing the pet-projects of emperors challenging. How was the newest war, thermae, palace, or circus to be paid for?

Roman officials found a way to work around this. By decreasing the purity of their coinage, they were able to make more “silver” coins with the same face value. With more coins in circulation, the government could spend more. And so, the content of silver dropped over the years.

By the time of Marcus Aurelius, the denarius was only about 75% silver. Caracalla tried a different method of debasement. He introduced the “double denarius”, which was worth 2x the denarius in face value. However, it had only the weight of 1.5 denarii. By the time of Gallienus, the coins had barely 5% silver. Each coin was a bronze core with a thin coating of silver. The shine quickly wore off to reveal the poor quality underneath.

The Consequences

The real effects of debasement took time to materialize.

Adding more coins of poorer quality into circulation did not help increase prosperity – it just transferred wealth away from the people, and it meant that more coins were needed to pay for goods and services.

At times, there was runaway inflation in the empire. For example, soldiers demanded far higher wages as the quality of coins diminished.

“Nobody should have any money but I, so that I may bestow it upon the soldiers.” – Caracalla, who raised soldiers pay by 50% near 210 AD.

By 265 AD, when there was only 0.5% silver left in a denarius, prices skyrocketed 1,000% across the Roman Empire.
Only barbarian mercenaries were to be paid in gold.

The Effects

With soaring logistical and admin costs and no precious metals left to plunder from enemies, the Romans levied more and more taxes against the people to sustain the Empire.

Hyperinflation, soaring taxes, and worthless money created a trifecta that dissolved much of Rome’s trade.
The economy was paralyzed.

By the end of the 3rd century, any trade that was left was mostly local, using inefficient barter methods instead of any meaningful medium of exchange.

The Collapse

During the crisis of the 3rd century (235-284 A.D), there may have been more than 50 emperors. Most of these were murdered, assassinated, or killed in battle.

The empire was in a free-for-all, and it split into three separate states.

Constant civil wars meant the Empire’s borders were vulnerable. Trade networks were disintegrated and such activities became too dangerous.

Barbarian invasions came in from every direction. Plague was rampant.

And so the Western Roman Empire would cease to exist by 476 A.D.

About the Money Project

The Money Project aims to use intuitive visualizations to explore ideas around the very concept of money itself. Founded in 2015 by Visual Capitalist and Texas Precious Metals, the Money Project will look at the evolving nature of money, and will try to answer the difficult questions that prevent us from truly understanding the role that money plays in finance, investments, and accumulating wealth.

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Mapped: World’s Top 40 Largest Military Budgets

War in Europe has caused Ukraine’s military spend to jump up by 640%. How do the world’s largest military budgets compare?



A map of the top 40 largest military budgets in the world in 2022.

Mapped: World’s Top 40 Largest Military Budgets

In the final year of World War II, the U.S. spent about 38% of its GDP on its military. When adjusted for inflation, the military budget over those four years of war came to a staggering $4.1 trillion in 2020 dollars.

Almost 80 years later, modern day military spending isn’t much of a far cry from World War II budgets. The top spenders have continued to increase their military capabilities, while war in Ukraine has caused countries in the region to re-evaluate their budgets as well.

In 2022, global military budgets hit an all-time high of $2.2 trillion, according to data released by Stockholm International Peace Research Institute (SIPRI), the eighth consecutive year of increase. This post looks at the top 40 largest military budgets in the world.

The Largest Military Budgets in 2022

The United States accounts for almost 40% of global military expenditures, with its 2022 spend coming to $877 billion.

Here are the top 40 largest military budgets in the world for 2022 in U.S. dollars:

RankCountryMilitary Budget (Billions)% of World
Military Spend
1🇺🇸 U.S.$876.939.0%
2🇨🇳 China$292.013.0%
3🇷🇺 Russia$86.43.9%
4🇮🇳 India$81.43.6%
5🇸🇦 Saudi Arabia$75.03.3%
6🇬🇧 UK$68.53.1%
7🇩🇪 Germany$55.82.5%
8🇫🇷 France$53.62.4%
9🇰🇷 South Korea$46.42.1%
10🇯🇵 Japan$46.02.1%
11🇺🇦 Ukraine$44.02.0%
12🇮🇹 Italy$33.51.5%
13🇦🇺 Australia$32.31.4%
14🇨🇦 Canada$26.91.2%
15🇮🇱 Israel$23.41.0%
16🇪🇸 Spain$20.30.9%
17🇧🇷 Brazil$20.20.9%
18🇵🇱 Poland$16.60.7%
19🇳🇱 Netherlands$15.60.7%
20🇶🇦 Qatar$15.40.7%
21🇹🇼 Taiwan$12.50.6%
22🇸🇬 Singapore$11.70.5%
23🇹🇷 Türkiye$10.60.5%
24🇵🇰 Pakistan$10.30.5%
25🇨🇴 Colombia$9.90.4%
26🇩🇿 Algeria$9.10.4%
27🇮🇩 Indonesia$9.00.4%
28🇲🇽 Mexico$8.50.4%
29🇳🇴 Norway$8.40.4%
30🇰🇼 Kuwait$8.20.4%
31🇬🇷 Greece$8.10.4%
32🇸🇪 Sweden$7.70.3%
33🇧🇪 Belgium$6.90.3%
34🇮🇷 Iran$6.80.3%
35🇨🇭 Switzerland$6.10.3%
36🇴🇲 Oman$5.80.3%
37🇹🇭 Thailand$5.70.3%
38🇨🇱 Chile$5.60.2%
39🇩🇰 Denmark$5.50.2%
40🇷🇴 Romania$5.20.2%

China, ranked second in absolute terms, accounts for another 13% of world military expenditure at $292 billion.

Russia, India and Saudi Arabia round out the top five biggest military budgets in 2022. Add in the UK to the mix (#6 rank), and these countries all had military expenditures that made up at least 3% of global spend.

Comparatively, the lowest budgets on the top 40 ranged include Romania at $5.2 billion, Denmark at $5.5 billion, and Chile at $5.6 billion. They each account for just 0.2% of the world’s military budgets in 2022, and of course there are many countries with even smaller spends.

Largest Military Budget Increases in 2022

Russia’s position as the third-largest military spender is a recent development, as the country’s military spend had a 9% increase between 2021 and 2022, according to SIPRI estimates.

On the other side of Russia’s invasion, Ukraine was the top 40 military budget with the largest annual increase in 2022, surging nearly six and a half times above its 2021 expenditures.

Country% Change
Rank Change
🇺🇦 Ukraine640%+25
🇶🇦 Qatar27%+2
🇸🇦 Saudi Arabia16%+3
🇧🇪 Belgium13%0
🇳🇱 Netherlands12%0
🇸🇪 Sweden12%-1
🇵🇱 Poland11%0
🇷🇺 Russia9.2%+2
🇩🇰 Denmark8.8%+3
🇪🇸 Spain7.3%-1
🇳🇴 Norway6.2%0
🇮🇳 India6.0%-1
🇯🇵 Japan5.9%-1
🇮🇷 Iran4.6%+5
🇨🇳 China4.2%0
🇬🇧 UK3.7%-2
🇨🇦 Canada3.0%-1
🇸🇬 Singapore2.8%+1
🇩🇪 Germany2.3%0
🇮🇩 Indonesia1.3%0
🇨🇴 Colombia1.1%-1
🇺🇸 U.S.0.7%0
🇫🇷 France0.6%-2
🇬🇷 Greece0.6%-1
🇨🇭 Switzerland0.4%-1
🇹🇼 Taiwan0.4%-1
🇦🇺 Australia0.3%-1
🇵🇰 Pakistan-2.0%-3
🇰🇷 South Korea-2.5%+1
🇷🇴 Romania-2.6%+1
🇴🇲 Oman-3.0%+1
🇩🇿 Algeria-3.7%-1
🇮🇱 Israel-4.2%-1
🇮🇹 Italy-4.5%-1
🇨🇱 Chile-6.2%-3
🇧🇷 Brazil-7.9%-1
🇲🇽 Mexico-9.7%0
🇰🇼 Kuwait-11%-4
🇹🇭 Thailand-11%-5
🇹🇷 Türkiye-26%-6

Ukraine’s dramatic increase represents the highest single-year jump ever recorded by SIPRI, painting a vivid before-and-after picture of a nation engaged in conflict.

Although no other country comes close in matching Ukraine’s surge in defense spending, Qatar saw a substantial increase of 27% over the last year, marking a continuing trend over the last decade of significantly bolstering its military.

Additionally, Saudi Arabia, along with four European nations (Belgium, the Netherlands, Sweden, and Poland), have registered year-over-year changes of over 10%.

On the flipside, 13 of the nations with the largest military budgets decreased spend from 2021, including top 15 spenders such as South Korea, Italy, and Israel.

The largest drop was seen by Türkiye, with an estimated 26% reduction in military budget. This drop may be linked to Türkiye’s inflation problem, which saw prices rise 72.3% in 2022—effectively decreasing the purchasing power of their currency in relative terms to other nations.

The Specter of War in Europe

With an ongoing conflict in the region and large financial powerhouses, its no surprise that eight of the top 10 countries with the most significant increases in military spending are located in Europe.

Consequently, European military budgets have reached levels not witnessed since the end of the Cold War.

And amid escalating geopolitical concerns, countries in Asia such as India, Japan, and China have also ramped up their defense spending. This is an indication of simmering global flashpoints such as India and China’s border skirmishes, the longstanding South China Sea territorial conflict, and concerns surrounding Taiwan’s sovereignty.

Source: Stockholm International Peace Research Institute (SIPRI).

Data note: SIPRI’s military expenditure data collection began in 1949, thus its records do not account for all expenditure that occurred during both World Wars.

Please see SIPRI’s methodologies page for more details on how they collect their data and create estimates.

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