Economic Reasons for the Fall of Rome

Whether you prefer to say Rome fell (in A.D. 410 when Rome was sacked or in 476 when Odoacer deposed Romulus Augustulus) or simply morphed into the Byzantine Empire and medieval feudalism, economic policies of the emperors had a heavy impact on the lives of the citizens of Rome.

Inflation

• Especially luxurious emperors like Commodus depleted the imperial coffers. By the time of his assassination, the Empire had almost no money left.
  Money could be acquired by taxation or by finding new sources of wealth, like land, but the Empire had reached its furthest limits by the time of Trajan.

  Dates of the So-Called Good Emperors and Commodus

  96 - 98 Nerva >>
  98 - 117 Trajan >>
  117 - 138 Hadrian >>
  138 - 161 Antoninus Pius >>
  161 - 180 Marcus Aurelius >>
  177/180 - 192 Commodus

• Nero and other emperors debased the currency in order to supply a demand for more coins. By debasing the currency is meant that instead of a coin having its own intrinsic value, it became representative of the silver or gold it had once contained. By the time of Claudius II Gothicus (268-270 A.D.) the amount of silver in a supposedly silver denarius was only .02%.
  This led to or was severe inflation, depending on how you define inflation.

Land

Rome's wealth was originally in land, but this gave way to wealth through taxation.

The Cato Institute says that emperors deliberately overtaxed the senatorial (or ruling) class in order to render it powerless. To do this, the emperors needed a powerful set of enforcers -- the imperial guard.

Once the wealthy and powerful were no longer either rich or powerful, the poor had to pay the bills of the state. These bills included the payment of the imperial guard and the military troops at the empire's borders.

"Feudalism"

Since the military and the imperial guard were absolutely essential, taxpayers had to be compelled to produce their pay. Workers had to be tied to their land.

To escape the burden of tax, some small landowners sold themselves into slavery, since slaves didn't have to pay tax and freedom from taxes was more desirable than personal liberty. Since the Empire wasn't making money from the slaves, the Emperor Valens (368) declared it illegal to sell oneself into slavery.

The small landowner had become a feudal serf.

Sources:
How Excessive Government Killed Rome Bruce Bartlett, Cato Institute Volume 14 Number 2, Fall 1994.
"The Other Transition: From the Ancient World to Feudalism," Chris Wickham, Past and Present, No. 103. (May, 1984), pp. 3-36.

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