Pandemics destroy capital permanently, just ask the Romans – and why Covid could do the same

The final impact of Covid-19 on the global economy has yet to emerge. But we could learn a great deal from research which shows how a series of pandemics set events in motion which led to the collapse of the Roman Empire.

The first pandemic was the Antonine Plague, named after emperor Marcus Aurelius, which raged between AD 165 and 180 when witnesses were reporting the death of 2,000 Roman citizens a day. 

The decline and fall of Rome after the reign of Marcus Aurelius illustrates the way in which the destruction of capital through pandemics, warfare and inflation are fatal, particularly when standards of living are high

According to Kyle Harper, author of The Fate of Rome: Climate, Disease and the End of an Empire, deaths across the empire were probably seven million. 

In the mid-third century, the Roman empire was hit again, between 250 and 262, by the Plague of Cyprian.  According to Pontius of Carthage: “All were shuddering, fleeing, shunning the contagion, impiously exposing their own friends, as if with the exclusion of the person who was sure to die of the plague, one could exclude death itself.”

The Justinian plague of 544 to 549 wrecked the attempts of emperor Justinian to reunite the Roman Empire following the sack of Rome. A predecessor to the Black Death of the Middle Ages, it wiped out half the population of Europe. 

Many other illnesses troubled Rome. Its clearing of ancient forests and their replacement with open fields and pools of water, led to the breeding of mosquitoes. Rome’s far-flung trading networks facilitated the spread of tuberculosis, leprosy and other fevers. Soldiers returning from the Near East brought the Antonine Plague to Europe: some say it first broke out in China. As we have found recently, globalisation can bring challenges, as well as opportunities.

According to Harper: “The ecology of the empire had built an infrastructure awaiting a pandemic.” And the ability of Romans to fight disease was reduced by a chance worsening of the climate.

Pandemics led to a rise in anxiety as people struggled to find ways to deal with uncertainty. It was a factor behind the growth of Christianity, as well as a cult of Apollo, as people turned to new gods for salvation.  

Disease, particularly the Antonine Plague, devastated the Roman army, and made it harder to defend Rome and keep its citizens in the style to which they had become accustomed. Barbarians were increasingly enlisted into the army after the Antonine Plague which also thinned the ranks of tradesmen and administrators.

Chaos contributed to the rise and fall of a stream of emperors, frequently slaughtered by their own officers. The lack of wisdom displayed by the majority of rulers made a bad situation worse. 

Heritage Foundation, a US conservative think tank, has also blamed a lack of civic virtue, arising from excessive centralisation of the administration.  It is certainly true that few people of ability applied for high office, given the attrition rate.

As the skies over Rome darkened, emperors levied higher taxes to pay their way and resorted to debasing their currency, the denarius. It was initially pure silver and paid a day’s wages for a skilled craftsman. By the time of Marcus Aurelius, it was only 75% silver. Under Emperor Gallienus (260 – 268), its silver content was minimal. Attempts by subsequent emperors to rebase the currency flopped.

Attempts by Gallienus to calm a civil war became futile as his armies demanded higher pay. Barbarian mercenaries added to his costs by requesting gold. By AD 265 prices were skyrocketing by 1,000% a year, as money lost its value and emperors levied exorbitant taxes, resented by the population, as well as higher-ranking members of society told to collect them or make good the deficit themselves.

All this, plus barbarian incursions, led to a final collapse in trade. By the end of the 3rd Century, it was only local in nature, using barter.  

Barbarian incursions in the 4thCentury completely undermined Rome’s military and trading networks. In 410, Alaric the Goth, content to be allied with Emperor Theodosius in better days, sacked the city. 

The decline and fall of Rome after the reign of Marcus Aurelius illustrates the way in which the destruction of capital through pandemics, warfare and inflation are fatal, particularly when standards of living are high. The undermining of authority is inevitable, as people compete for the resources which are left. 

It is a direction in which modern society may travel unless the current tech-driven economic rebound can rebuild the global loss of capital and supply a vaccine. Inflation remains low. But the clock is ticking. 

Economist John Cochrane of Stanford University reckons US debt could easily hit $27 trillion, or 150% of GDP, following this year’s money printing. If the economy rebounds and companies service the debts, the problem could go away. 

If the outlook deteriorates, the loss of capital will become permanent and the US is likely to be left with the kind of hole in its funding which Roman emperors struggled to fill for centuries.