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Sunday, February 23, 2014

Gold and the beast: a brief history the Roman conquest of Dacia



Roman soldiers bringing civilization to Dacia (from the Trajan column in Rome). The Roman empire invaded Dacia at the beginning of the 2nd century AD seeking the control of the Carpatian gold mines. 



The ascent of the Roman Empire is best understood if we think of it as a beast of prey. It grew on conquest, by gobbling its neighbors, one by one, and enlisting them as allies for more conquest. By the first century AD, the Roman Empire had conquered everything that could be conquered around the Mediterranean sea; that for good reasons the Romans called “Mare Nostrum”, “Our Sea.” But the beast was still hungry for prey.

And what a beast that was! Never before, the world had seen such a force as the Roman legions. Well organized, trained, disciplined, and equipped, they were the wonder weapon of their times. The great innovation that made the legions so powerful was not a special weapon or a special strategy. It had to do, rather, with a concept dear to the military: command and control. In the Roman system, command and control was based on gold (and silver). The Roman had not invented coinage, but they used systematically gold and silver coins to pay their soldiers. So, the size of the Roman army was not limited by the Roman population: almost anyone could enlist either as a legionnaire or as an auxiliary fighter; his reward was simply money. Gold was, in a sense, the secret weapon of the Roman Empire; it was the the blood, the lymph, and the nerves of the beast of prey.

Because of its command and control system, the Roman army could grow in size by means of a self-reinforcing mechanism. The more gold the Romans had, the larger their army could be. The larger their army, the more gold they could raid from their neighbors. Also, the more gold the Romans had, the more they could invest in extracting more gold from their Spanish gold mines. The beast kept growing bigger and, the more it grew, the more food it needed.

But even the mighty Roman legions had their limits. With the 1st century AD, the Spanish mines started showing signs of depletion. At the same time, the Empire had reached practical limits to its size and, with that, to the amount of gold it could loot from its neighbors. Already in 44 BC, the legions had been stopped at Carrhae in their attempt to expand in the rich East at the expense of the rival Parthian Empire. And in Teutoburg in 9 AD, a coalition of German tribes had inflicted a crushing defeat on the legions, stopping forever the attempt of the Romans to control Eastern Europe. There were no other places where the empire could expand: in the West, it faced the ocean; in the South, the dry Sahara desert. Confined in a closed space, the beast risked to starve.

Not only the Roman Empire couldn't get any more gold; it couldn't even keep the gold it had. The Roman economy was geared for war and it couldn't produce much more than grain and legions, neither of which could be exported at long distances. At the same time, the Romans had a taste for expensive goods that they could not produce: silk from China, pearls from the Persian gulf, perfumes from India, ivory from Africa, and much more. The Roman gold was used for pay for all of that and, slowly, it made its way to the East through the winding silk road in central Asia and from Africa to India by sea. It was a wound that was slowly bleeding the beast to death.

With less and less gold available, the legions' power could only decline. That the Empire was in deep trouble could be seen when, in 66 AD, the Jews of Palestine - then a Roman province - took arms against their masters. Rome reacted and crushed the rebellion in a campaign that ended in 70 AD with the conquest of Jerusalem and the burning of the Jewish Temple. It was a victory, but the campaign had been exceptionally harsh and the Empire had nearly gone to pieces in the effort. Nevertheless, the empire had managed to bring home a considerable amount of desperately needed gold and silver. The beast was eating itself but, for a while, it was satiated.

With the gold plundered in Palestine, the Roman Empire could gain some time, but the problem   remained: where to find more gold? It was at this point that the Romans turned their sight to a region just outside their borders: Dacia, an area at the North-East of the Empire that included Transylvania and the Carpatian mountains. The beast was smelling food.

We don't know much about Dacia before the Roman conquest. We know that it was a thriving society that was expanding and that, probably, had ambitions of conquest of its own; so much that the Roman empire had agreed to pay to the Dacian kings a tribute. We know that the Carpatian region had been producing gold already in very ancient times and there is evidence (Bogden et al.) that, at the time of the Roman conquest, the Dacians were mining gold veins in the mountains. It may well be that they had learned new mining techniques from the Romans themselves. So, Dacia was probably experiencing a gold mining boom. It was a prey in the making.

The Dacians may have had plenty of gold at that time, but they were still building up their economy and their technology. The only gold coins that can be said to have a certain Dacian origin are a curious mix of Roman iconography and Greek characters spelling the term "Koson", whose meaning is uncertain. We don't know if these coins were actually minted in Dacia, although they were surely used there. It is possible that the Dacians had sent some of their  gold to Rome, to have it transformed into coins and brought back in Dacia – not unlike what oil producers are doing today when they send their oil to the United States to be transformed into dollar bills. The Romans were surely happy to work the Dacian gold, but they must have noticed that the Dacian mines were producing it. So, it was clear that a military conquest of Dacia could pay for itself. The beast had sighted its prey. 

In the year 101 AD, a young and aggressive Roman Emperor, Trajan, invaded Dacia. It was a bold attempt, given the difficult terrain and the strong resistance of the Dacians. Surely, the nightmare of the Teutoburg disaster of nearly a century before must have haunted the Romans but, this time, the legions overcame all obstacles. After two campaigns and five years of war, the gamble paid off and Dacia was transformed into a Roman province. The beast had made another kill.

We have no reliable data on how much gold and silver the Romans looted in Dacia, although it had to be a considerable booty. We also know that the Romans invested in the Dacian mines, probably bringing in their expert miners from Spain. However, the overall effect of this inflow of gold seems to have been small on the Roman economy. If we look at the data for the silver content of Roman coins (data from Joseph Tainter) there is no evident effect of the Dacian conquest. We see an increase in silver content at about 90 AD, but that's a decade before the Dacian campaign and we may attribute it, rather, to the inflow of precious metals deriving from the conquest of Palestine. The Dacian mines, apparently, couldn't match the wealth that the Spanish mines had been produced in their heydays. The beast had become too huge to be fed just with crumbles.

But the content of silver in coins doesn't depend only on the looting of foreign countries. It depends also on the policies of the government. So, if we look at the graph above, we see that both the Palestinian and the Dacian campaigns correspond to drops in the silver content of coins. That makes sense: of course the Roman government would see the advantage of debasing a little their currency when it was question of having to pay large numbers of troops. Trajan, indeed, didn't stand still after the conquest of Dacia and, in 113 AD, he attempted another bold project: that of expanding in the East, attacking once more the Parthian Empire after the failed attempt at Carrhae, in 44 BC. But the task was too much even for an expert commander as Trajan. After some initial successes, the Romans simply had to stop; possibly they understood that the campaign had become too expensive. Asia was just too big for them to conquer. The beast had found a prey too big to swallow.

With the death of Trajan in 117 AD, the new emperor, Hadrian, took the decision of stopping all attempts of the Empire to conquer new territories, a policy that was basically kept by all his successors. In a sense, it was a wise decision because it prevented the Empire from collapsing. But the final result was unavoidable as gold continued to bleed away from the Roman territory and could not be replaced. The Western Empire, which included the city of Rome, disappeared forever after a few centuries as an impoverished shade of its former self. The beast was to die of starvation, slowly.

And Dacia? Over nearly two centuries of Roman rule, it was "romanized", in the sense that it adopted Roman customs and the Latin language - at least in the cities. However, it was also one of the first Roman provinces to lose contact with the central government when, around 275 AD, the legions abandoned it (for comparison, Britannia was not abandoned before 383 AD). We have no data on gold production in Dacia during this period but the simple fact that the Romans decided to abandon the province means that the Dacian mines had been thoroughly depleted, just like the Spanish ones. There was no food left for the beast.

From then on, we have scant data. For sure, Dacia was exposed to all the invasions that were to sweep through Europe in the period we call “The Great Migrations”. Apparently, however, the region maintained its Roman roots better than Britannia. However, we have no records of a Dacian King who bravely fought the invaders, as King Arthur did in Britannia, and we don't have to think that Dacia always remained a Roman fortress. Indeed, the earliest records we have of the Romanian language go back only to the 16th century and we have no clear evidence that its origin went back all the way to the times of the Roman colonization. However, it is a fact that, still today, the region we call "Romania" - the land of the Romans - is a Latinized island in a Slavic sea. Were the gold mines still producing some gold during this period? We cannot say but, if they did, it may be possible that the wealth they generated, even though modest, helped to maintain the cultural and social unity of Dacia.

This brief survey tells us a lot of how important is gold in human history. For the region that we call Romania today, the gold mines located in Roșia Montană, in the Carpatian Mountains, have been a fundamental element. Exploited from remote times, these mines have periodically experienced new waves of exploitation as technological improvements made it possible to recover lower and lower grade gold ores. And with these cycles of boom and bust, there went invasions, migrations, kingdoms, and empires. The cycle is continuing today with a project to restart exploiting these ancient mines using the last technological wonder in gold mining: the cyanide leaching process. But getting more gold from the exhausted Carpatian mines is costly and the damage it could do to the land is tremendous. The drop in gold prices of the past few years may soon make these new gold mines too expensive even to be dreamed of. Even existing gold mines may have to be closed

So, it looks like the beast of prey that, today, we call "Globalization" is facing the same problem that the old Roman Empire was facing in its times: the disappearance of the vital minerals it is preying upon (and gold is just one of them). Since today there are no perspectives of conquering unexploited lands, it is an unsolvable problem. The globalized beast will have to die of starvation, or it will survive only if it will accept to change its diet. 









11 comments:

  1. The Gold just represented the conquest. More Gold did not make the Romans more powerful, In the end it devalued relative to the energy the society was able to access. As long as the Roman society was in surplus, the Gold held value. When the society could no longer meet the needs of the population, the gold devalued.

    Gold is not energy, when used as Money it just represents what the society can access. Without available energy to feed and clothe and house the population, Gold and any other monetary instrument is basically worthless.

    That is how it goes. Everybody Knows.

    RE

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    1. RE, this is a point on which I thought a lot. The point is, in my opinion, that the Romans never had an energy problem as we do. They were riding the agricultural wave that had been sweeping Europe starting with the first millennium BCE and they had a relative abundance of food. Indeed, you don't find records of famines in the Roman Empire, except during the very last period, after about 400 AD, when they had eroded a lot of territory. And the records say that they were surprised: they had no experience of such things.

      So, we don't have to look at the Roman crisis in terms of our present predicament. The Roman crisis, in my opinion, was not so much a crisis of resources (intended as primary resources, food) but a crisis of command and control. So, gold was the key element that allowed Romans to get the resources they needed. No gold, no resources. In a sense, the Roman crisis was more a financial crisis than our present one.

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  2. Thanks Ugo for yet another quite interesting post about gold. Do you happen to know what sorts of grades and mineralization characteristics some of the Roman Empire gold had? (in Spain, Palestine, Dacia or wherever?) And how was pure gold extracted from the mined ores? (obviously not by cyanide leaching and probably also not by using mercury?)

    You mention lower and lower grades being mined over history from the Carpathian mountains. Recently I read about a gold mine named Bullabulling Gold near Coolgardie, Western Australia (just west of Kalgoorlie) which had produced a lot of gold earlier but then had stopped being mined; it soon may be restarted since although the grade of the the remaining resources/ reserves is low (about 1 gm. per ton) there are about 3 million ounces. (and cyanide leaching apparently will be used) Reopening old producing mines that had been shut in to get at the remaining lower or harder to get at or purify ores is very likely to be a general trend.

    Unsurprisingly, similar things seem to be happening to yellow gold as are happening to black gold. Big finds are becoming ever more rare, the easy stuff has already been taken out and costs to get at the lower qualities that are either harder to get at or to purify are going straight up. (naturally increasing energy costs also play an important role)

    The present price of gold and what happened to it in 2013 is / was affected by many factors but one important one is also the manipulation by Goldman Sachs together with similar birds of a feather. Maybe that's why it's called "Gold- Man"?...

    Gold Mining and its various aspects is nicely summarized in the following article : http://www.bullionvault.com/guide/gold/Gold-mining ;

    The Outlook for Gold in 2014 is instead discussed here: http://goldinvestingnews.com/39414/will-gold-bounce-back-in-2014.html

    The particular role of Mr. Blankfein on behalf of his "impoverished" friends is covered in paragraph 5. And to the conspiratorial mind his role seems predominant with the other factors also influencing the price being used as convenient fig leafs to disguise the most important factor. (the manipulation)

    From what the article says it looks like 2014 may pit 1.25 billion Indians and 1.35 billion Chinese against Mr. Blankfein ! But given the world we live in, it's not at all clear who is going to win !

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    1. Ancient mining technologies are a fascinating subject, but complex and not very well known. In any case, the ancient were facing the same problem we are facing today: depletion of high grade ores. So, initially they exploited the easy gold in the form of "placer" (or "alluvial") deposits. It took little or no effort to pan gold nuggets out of river gravel. But, in time, these resources ran out and so the ancient had to walk up to the "mother ore" on top of mountains, where they had to laboriously separate gold from a (typically) quartz matrix. I think it was done by hand picks or by grinding in hand operated mills. That was expensive in terms of human power needed and there was where the positive feedback kicked in. Those empires which could afford mines could use them to build armies that would conquer territories that would make them able to afford more mines. Until depletion set in.........

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  3. Ugo
    I am inclined to agree with your 'command and control' analysis. The main inputs for the agrarian economy (labour and land) are primarily modular and self-supporting.

    But bulk 'trade' in goods arising from specialised production, e.g. pottery, metallurgy, will provide more than luxury. Market exchange makes use of wider geographical resources that can lower maintenance costs (labour) needed for physical structures such as dwellings, and on a wider scale in some areas, help critical infrastructure; for example that required for water-resource management. It is a commonplace also in agrarian societies that no individual grower or even community is entirely self sufficient. It is very telling, if as you suggest, famine was not known to the Romans. To maintain a 'craft economy', let alone 'insurance' in the form of grain storage, or the necessary management for example for large-scale water resource or military security, trading networks available over wide areas can help support what then become essential services.

    Britannia at least in the south before the Roman conquest was a surplus grain exporter with long-standing sustainable production - which was remarkable in itself. During the Roman period, despite an increase in population close to the then agricultural technology’s carrying capacity (perhaps 6M in England) the province could still support its population and the infrastructure for trading and (small) urban concentrations. Profitable trading in metals, as well as grain, presumably helped 'balance of payment' issues. After Roman military security and trading was lost, the population crashed, not to recover for nearly a 1000 years.

    best
    Phil

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  4. Very interesting comment, Phil, thanks. I think you have spotted a fundamental point. The Economy, in general, works best when it is interconnected and in Roman times this interconnection was assured by metal currency which made trade, security, and services possible. Without currency, the economy may have reverted to local and that was less efficient. (despite the currently fashionable theories!)

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  5. Although I like the "beast" metaphor very much, I can't follow you completely along your "starving of gold" - argument.

    The reason is, that the real wealth and basis of power of a society is productivity and thing we could call "societal intelligence". AFAIK, the roman productivity was comparatively high, wasn't it? Or did it fall significantly in the later stages?

    The romans needed gold to pay the legionaries, and goods to be bought with this gold. Gold and silver were, as any currency, only a medium. When the medium gets scarce, either prices rise, or it will be replaced by some other medium, or both. The legionaries could well have been payed with other things as gold. Is it really true, that the lack of precious metals hampered roman economy significantly?

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    1. I received several comments in this sense. I understand that this point is hard to grasp, but to me it is clear and it is becoming clearer and clearer as the discussion progresses.

      You are perfectly correct in using the term "Societal Intelligence" - indeed this is the key concept. I think it can be stated with saying that a running economy is not just a question of having resources, but controlling (or perhaps "managing") them. This is what made globalization so successful and so comparable to the ancient Roman Empire. Both the Romans and our Globalized managers used money to control the flow of resources within their respective empires and this gave them a tremendous capability of control. Money has this incredible capability of carrying information from one node to another of the network and hence controlling the flow of resources. This is what you called "societal intelligence" In a sense, the economy is comparable to a brain; money is the axons and the synapses.

      So, when there was no more gold, couldn't legionnaires be paid with something else? Surely they could, but "fiat currency" is something that wouldn't appear before almost two millennia. So, there are reports of soldiers being paid with pottery and with land. The first was not so good, I figure, would you fight for pottery? The second is what created the feudal system of Middle Ages - it was control as well, but of a completely different kind; you just couldn't run an economy by exchanging pieces of land. Finally, at the very end of the empire, soldiers started to be called "bucellarii", which means "biscuit eaters" - evidently they were paid simply in food! Good enough to survive, but not the same thing as gold.

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    2. Another possibility to define the role of money is that of a catalyst: it facilitates re- or trans-actions, without beeing used up itself. So if it lacks, the the whole process may well become much slower, though never completely stalled.

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  6. Philip and Alexander were from around Macedonia, and Graeber in 'Debt: The first 5000 years' mentions that it required Alexander on the order of half ton a day of sliver to pay his 120 kilosoldiers.

    But the whole book is fascinating, and i am afraid it has many counterexamples to your statement :

    " ... "fiat currency" is something that wouldn't appear before almost two millennia."

    I highly recommend Graeber. Whether you agree or disagree with him, the man is fascinating, encyclopaedic, and challenges the reader at every turn.

    Thanks for your blog

    sidd

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  7. "... these mines have periodically experienced new waves of exploitation as technological improvements made it possible to recover lower and lower grade gold ores."

    Simon Michaux has an interesting take on "peak mining" that carries this trend to its ultimate end.

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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)