Ancient Rome’s Explanation Of Why Groceries Are So Expensive Today
A coin that used to be silver, inflation, and the dollar
You can feel it. You don’t need an ivy league educated economist or a government official to tell you. Everything suddenly got more expensive, and your money can buy less than it previously could.
But the most startling incarnation of this is the ritualistic trip to the grocery store. Alina Selyukh at NPR reveals prices have increased at grocery stores by 25.6% during the period from February 2020 to July 2024 in the United States.
Her first instinct is to try and link this to price gouging. However, despite NPR’s best efforts, they admit it’s not that, some other mysterious phenomenon is going on. Another NPR article by Greg Rosalsky points out 2024 is the year “the music festival died.”
He lists examples in the United States, England, Australia, and Europe where well-known music festivals have been canceled. Increasing costs are the main issue, and people can only spend so much of their income on higher priced tickets to cover the expense. According to Rosalsky:
“We have to name the most obvious culprit: rising costs in this era of inflation. Porta potties, security, equipment, energy, food, concessions, merch, insurance, artist pay — expenses for producing these festivals have climbed faster than a drug-addled singer up the scaffolding of a soundstage.”
So, you just can’t link it to evil food producers jacking up prices. Inflation has gone up everywhere, and so fast, we’ve all noticed it. Sarah Foster at Bankrate explains the magnitude of inflation’s rise over the past four years in the United States. Foster notes:
“Consumers…feel the pinch of inflation. Since February 2020, consumer prices have increased 21.2 percent, a Bankrate analysis of Bureau of Labor Statistics data shows. That’s well above the historic average for a four-year period. For comparison, inflation rose 18.9 percent in the 2010s, 28.4 percent in the 2000s and 32.4 percent in the 1990s. The post-pandemic price burst means Americans would need about $1,212 to buy the same goods and services that cost $1,000 when the coronavirus-induced recession occurred.”
Therefore, over the four-year period, we’ve experienced inflation rates comparable to a ten-year period — on just about everything.
I’m sure you’re wondering: what’s the mystery? What evil villain is doing this, and who can we point the finger at? Well, ourselves. The magic villain is our lack of understanding on how money works.
But there’s a simple lesson that can enlighten us, and — believe it or not — it comes from ancient Rome’s coin called the Denarius. Once you understand their drama with this coin, you gain a much better understanding of our problem today. So, let’s take a little trip through time to Imperium Romanum.
The Very Recognizable Fall Of The Denarius
Numismatist and historian Ursula Kampmann at the Money Museum says the denarius was first minted around 211 BC during the Roman Republic. The coin weighed 4.2 grams and was 98% silver. The soldiers from the expanding nation brought these coins with them. Soon the denarius spread far and wide, along with Roman power.
As Roman armies captured more territory and mines, the government acquired enough silver to mint ten times as many denarii. The coin became so omnipresent, the minters removed “Roma” or Rome from the denarius because everyone knew where it came from without the marker.
But as Rome got bigger, so did its expenses.
Kampmann says the military was the biggest, which could draw 100 to 120 million denarii per year, during peace time. War increased this.
Administration was also expensive. As Rome became an empire, Emperor Augustus’ administrative costs were about 13 million denarii per year, and these increased to about 19 million within a hundred years or so.
Infrastructure, government giveaways, and public games sucked down anywhere from 5 to 15 million denarii. Speaking of subsidies, the Roman emperors gave away so many rations of olive oil to citizens so substantial, the government created a mountain out of the empty oil jars.
The state could manage to cover this amount usually, but it led to problems when unexpected costs came along. See, emperors couldn’t borrow. Their only choice was to sell off imperial assets or raise special taxes. Each was painful, but there was one more option that flew under the radar.
Kampmann says the denarius was minted “al marco.” This means each coin didn’t have a defined weight. A certain amount of silver produced a certain number of coins, so individual weights could vary. So, if I purposefully mint 100 denarii that weigh less, no one notices. Then, I can mint more coins with less silver.
This practice continued over the next couple hundred years, by 212AD, a denarius was made of 1.5 grams of silver. Although weight wasn’t Rome’s only tool for debasement and to expand the money supply.
Michael Wiescher, a nuclear physicist at the University of Notre Dame, says the Roman mint administrators became experts at mixing cheaper metals into the coin. But you can only go so far with this. Merchants could test the content of the coin by biting into it to prove it was still mainly silver.
Wiescher studied the coins with special X-ray machines. He says instead of fixing their budget, Roman emperors developed technology to coat the surface of the denarii with pure silver over a cheap copper core, thereby stretching their money and fooling the merchants.
Slowly, the silver content of the denarius diminished, along with its value.
By 295 AD, the coins were about 5% silver, eventually even the imperial government wouldn’t accept tax payments in the coin (because it wasn’t silver.) Roman wealth diminished, and the economy destabilized due to inflation.
Now, keep the denarius in mind, and we’ll look at the dollar.
Recent Debasement Of Our Currency
Previously, we’ve established that between 2020 and 2024 inflation rose equivalent to what you’d generally see over a 10-year span. While NPR struggles to figure out the magical culprit responsible, the government’s own numbers point to one.
The chart above is from the St. Luis Federal Reserve showing the M1 money supply, or dollars printed. Look what happened in 2020 during the COVID-19 pandemic. If you’ll remember, the federal government was paying people to stay home, paying for medicine, on top of countless other things without thinking about the future.
The chart was already sloping up starting in 2010 and 2020 took us to an era of money printing eclipsing anything we’ve known in recent history. The Federal Reserve has tried to smooth this over with terms like “transitory inflation,” as in — it’s here now, but will go away fast. Well, think again.
News organizations are also proclaiming the FED has achieved a “triumph over inflation,” because the rate has decreased. But your wallet can tell you that’s garbage. If you gain 100lbs, then stop the weight gain, you’re still 100lbs overweight.
We’re currently on a journey an ancient Roman could easily recognize. Except we’re swapping the dollar for the denarius. Also, in our age, it’s much easier to debase our currency because we’re not dealing with coins, but a piece of paper backed by nothing.
You want to know why groceries are so expensive? Why music festivals are being canceled. Why your insurance costs are going through the roof? Why a single bitcoin is worth over $70,000? The chart above explains it.
We were lied to by our governments, and wanted to be deceived. When the monetary wizards at our central banks told us they could print money out of thin air to pay for things without consequence, we accepted their made- up terms for the process. We deferred logic to technobabble.
There’s also one other thing the Romans could tell you about the fall of the denarius, it led to strife and civil war. Eventually people won’t be able to afford the things keeping them sedate presently: entertainment and video games, food, internet, alcohol, and drugs. Then, things get real.
It would be much easier to fix our denarius now, instead of playing with the silver mixture to kick the can down the road to a later date like the Romans did previously.
-Originally posted on Medium 9/24/24