Roman Suez Canal - Was it Possible?

[DominusNovus]

Why couldn't they do the incredibly obvious thing of saying "Hey why don't all of us merchants running this same route get together and set a high price so we can make even more money. It's not like they can go anywhere else other than our group if we all cooperate."

Cartels are hard to enforce, especially under those circumstances. Why is this one group the only group capable if working the spice trade? Unless the suggestion is that this cartel encompasses all merchants in the Empire.

What keeps one merchant from deciding to undercut the others, just by a little? What keeps a completely different merchant or groups of merchants from deciding to get into the business and undercut them? What keeps the Roman state from getting so annoyed that they issue a maximum price or just raise the tolls?

 

[Wendell]

There was a pre-Islamic canal in Egypt that linked the Nile to the Red Sea.

 

[Lord_Vespasian]

Britain and the Dutch got quite rich off the trade with East Indies and China in the 16th and 17th century without the Opium trade.

Yes, just like Rome. And just like Rome, they, well at least the British, fell victim a massive trade imbalance that was sucking their money away. This was Victorian era Britain and they didn't have a large amount of goods that the Chinese desired, you think Rome will? And Britain had already adopted modern banking and monetary ideas compared to the archaic classical era.

Look at the tax revenue I posted. 27.5 % of Roman revenue was gained from taxing the trade from and to India.

Even with that massive amount of money made from taxing the Silk road, Rome still suffered a massive trade imbalance with the East. The amount of money made from taxing more goods is most likely offset by the cost incurred by an increase in Roman purchasing of Eastern goods. The problem isn't that trade with the East doesn't bring money, it's that more money goes out of Rome than goes in. Once again, what were the Opium Wars about?

 

[DominusNovus]

Yes, just like Rome. And just like Rome, they, well at least the British, fell victim a massive trade imbalance that was sucking their money away. This was Victorian era Britain and they didn't have a large amount of goods that the Chinese desired, you think Rome will? And Britain had already adopted modern banking and monetary ideas compared to the archaic classical era.



Even with that massive amount of money made from taxing the Silk road, Rome still suffered a massive trade imbalance with the East. The amount of money made from taxing more goods is most likely offset by the cost incurred by an increase in Roman purchasing of Eastern goods. The problem isn't that trade with the East doesn't bring money, it's that more money goes out of Rome than goes in. Once again, what were the Opium Wars about?

What were the industrial uses the Romans had for gold and silver?

 

[Lord_Vespasian]

What were the industrial uses the Romans had for gold and silver?

I'm not sure I understand your question. The Romans needed gold and silver for currency needs.

 

[oberdada]

What about Constantinople being built in Suez instead of Byzant?

 

[DominusNovus]

I'm not sure I understand your question. The Romans needed gold and silver for currency needs.

Then gold and silver were simply a convenient way for them to track wealth. Actual wealth, not the total mass of a particular metal. Which means the actual wealth is the same. If you burn your checkbook, that is not the same as emptying your bank account.

All this fretting about an imbalance of trade is just antiquated anti-trade moralism. Its inaccurate now and was even less accurate then.

 

[Inquisitor Tolkien]

Well, that depends. Unless Rome could develop new financial and economic systems and move away from hard metal currency (say, development of fractional reserve banking and paper/fiat money) then yes, a shortage of gold amd silver will affect the Roman money supply.

With Commodity Currency, without a consistent source/influx of said commodity, your economy becomes constrained by the amount of aforementioned commodity in terms of transactions you can make, in this case gold and silver, as the velocity of money can only go so fast without well-developed monetary institutions. A negative balance of trade exacerbates that. To my knowledge, Rome was not known for its financial and monetary innovation.

Part of how 16th-19th century global trade worked was that there were major sources of gold and silver in the New World that flowed from Potosi to Manilla to China, in order to fuel the Chinese economy and it's insatiable demand for silver (in order to fuel it's explosive delographic/economic expansion at home), in exchange for said Chinese luxury goods.

The Opium war was caused by the negative balance of trade was leaving Britain and the BEIC without sufficient silver to fund the tea craze, and thus the use of Opium to remedy that.


To use your analogy, yes, it would be like burning their checkbooks and not the actual wealth of their economy, but if no one had checkbooks, no one can trade and things grind to a halt. Barter is not a great substitute for a real, reliable currency of exchange.

 

[Lord_Vespasian]

Well, that depends. Unless Rome could develop new financial and economic systems and move away from hard metal currency (say, development of fractional reserve banking and paper/fiat money then yes, a shortage of gold amd silver will affect the Roman money supply.

With Commodity Currency, without a consistent source/influx of said commodity, your economy becomes constrained by the amount of aforementioned commodity in terms of transactions you can make, in this case gold and silver, as the velocity of money can only go so fast without well-developed monetary institutions. A negative balance of trade exacerbates that. To my knowledge, Rome was not known for its financial and monetary innovation.

Part of how 16th-19th century global trade worked was that there were major sources of gold and silver in the New World that flowed from Potosi to Manilla to China, in order to fuel the Chinese economy and it's insatiable demand for silver (in order to fuel it's explosive delographic/economic expansion at home), in exchange for said Chinese luxury goods.

The Opium war was caused by the negative balance of trade was leaving Britain and the BEIC without sufficient silver to fund the tea craze, and thus the use of Opium to remedy that.


To use your analogy, yes, it would be like burning their checkbooks and not the actual wealth of their economy, but if no one had checkbooks, no one can trade and things grins to a halt. Barter is not a great substitute for a real, reliable currency of exchange.

Oh my God, thank you! You said everything I wanted to say and more better than I ever could. He's using the modern, around 500 years old at this point in form or another, monetary thinking. Precious metals were not a tracker of wealth, they were wealth.

 

[DominusNovus]

Oh my God, thank you! You said everything I wanted to say and more better than I ever could. He's using the modern, around 500 years old at this point in form or another, monetary thinking. Precious metals were not a tracker of wealth, they were wealth.

Even if they were regarded as wealth, they still weren’t, except insofar as they were valued as jewelry or art or some similr use. As coins, they were still just trackers of wealth (disregarding the aesthetic value of the coins). The fact that we only more recently have come to understand this does not mean it applies any less to those eras than Newtonian gravity did. We regard Smithian economics as superior to Mercantalist economics because it more accurately described how the economy actually functioned.

If specie was rarer in the Empire, it would cause changes and stresses in the economy, certainly. But the wealth of the Empire was in its agricultural output, not its silver mines and gold mines.

 

[Lord_Vespasian]

Even if they were regarded as wealth, they still weren’t, except insofar as they were valued as jewelry or art or some similr use. As coins, they were still just trackers of wealth (disregarding the aesthetic value of the coins). The fact that we only more recently have come to understand this does not mean it applies any less to those eras than Newtonian gravity did. We regard Smithian economics as superior to Mercantalist economics because it more accurately described how the economy actually functioned.

If specie was rarer in the Empire, it would cause changes and stresses in the economy, certainly. But the wealth of the Empire was in its agricultural output, not its silver mines and gold mines.

Smithian economics don't work if you lack the proper financial institutions, which Rome certainly did. You're confusing the terms intrinsic value and wealth. Food, water, land, and people have intrinsic value while precious metals don't. They are, however, both wealth

 

[DominusNovus]

Smithian economics don't work if you lack the proper financial institutions, which Rome certainly did. You're confusing the terms intrinsic value and wealth. Food, water, land, and people have intrinsic value while precious metals don't. They are, however, both wealth

I disagree. Gold and Silver are only wealth insofar as they are a) useful for artistic purposes or b) convenient measures of other forms of wealth. Yes, they are relatively convenient measures, and a shortage of either or both would be a strain, but, as measures, they are not wealth in and of themselves.

Consider, for example, the early 16th century? Who had more wealth: Montezuma or Ferdinand and Isabella?

 

[Timmy811]

Yes, just like Rome. And just like Rome, they, well at least the British, fell victim a massive trade imbalance that was sucking their money away. This was Victorian era Britain and they didn't have a large amount of goods that the Chinese desired, you think Rome will? And Britain had already adopted modern banking and monetary ideas compared to the archaic classical era.

Even with that massive amount of money made from taxing the Silk road, Rome still suffered a massive trade imbalance with the East. The amount of money made from taxing more goods is most likely offset by the cost incurred by an increase in Roman purchasing of Eastern goods. The problem isn't that trade with the East doesn't bring money, it's that more money goes out of Rome than goes in. Once again, what were the Opium Wars about?

This is Trumpian trade logic. The west has the gold and silver mines in this relationship, and further expansion (fueled by increased taxes on the Indian trade) into nearby territories such as the Czech basin will net them more of them. As long as the mines continue to function, then economic growth is all to the good.

 

[Lord_Vespasian]

This is Trumpian trade logic. The west has the gold and silver mines in this relationship, and further expansion (fueled by increased taxes on the Indian trade) into nearby territories such as the Czech basin will net them more of them. As long as the mines continue to function, then economic growth is all to the good.

The mines did function, and yet the trade imbalance and inflation of Roman currency occurred. Do you not understand what I'm saying?

 

[DominusNovus]

The mines did function, and yet the trade imbalance and inflation of Roman currency occurred. Do you not understand what I'm saying?

A shortage of gold would cause deflation of the currency, with the gold in each coing being more valuable.

 

[Timmy811]

The mines did function, and yet the trade imbalance and inflation of Roman currency occurred. Do you not understand what I'm saying?

I'm saying that it wasn't actually a serious problem, and as long as the mines keep producing they'll be fine. Increase in trade flow can be counter acted by increase in mined material. Silver mines in Bohemia, Gold mines in Aethiopia, etc.

 

[Lord_Vespasian]

A shortage of gold would cause deflation of the currency, with the gold in each coing being more valuable.

I misspoke. Still, deflation is a problem. It can harm trade and thus the currency needs to be devalued.

 

[Lord_Vespasian]

I'm saying that it wasn't actually a serious problem, and as long as the mines keep producing they'll be fine. Increase in trade flow can be counter acted by increase in mined material. Silver mines in Bohemia, Gold mines in Aethiopia, etc.

If they increase metal production they'll just buy more goods from the East. They were losing currency to East consistently. Imagine you had a lake and every year it lowered by a significant amount due to leaking somewhere. What you're suggesting is like routing another river to the lake even though that won't solve the fact it's leaking, you're just adding more water to seep away.

The root of the problem is that Rome is at a disadvantage compared to the East when it comes to goods that people want. Until you fix that, or you completely overhaul how the classical world viewed money and wealth, or that canal will be a detriment to Rome

 

[Timmy811]

If they increase metal production they'll just buy more goods from the East. They were losing currency to East consistently. Imagine you had a lake and every year it lowered by a significant amount due to leaking somewhere. What you're suggesting is like routing another river to the lake even though that won't solve the fact it's leaking, you're just adding more water to seep away.

The root of the problem is that Rome is at a disadvantage compared to the East when it comes to goods that people want. Until you fix that, or you completely overhaul how the classical world viewed money and wealth, or that canal will be a detriment to Rome

Good, more trade and more tax revenue is for the better.

I don't really care how they thought how the economy worked, I care about about how the economy actually worked. Just because the Roman's believed in Galen's theory of the 4 humours, doesn't mean I should view the spread of the Antonine plague through that lens.

 

[Inquisitor Tolkien]

Even if they were regarded as wealth, they still weren’t, except insofar as they were valued as jewelry or art or some similr use. As coins, they were still just trackers of wealth (disregarding the aesthetic value of the coins). The fact that we only more recently have come to understand this does not mean it applies any less to those eras than Newtonian gravity did. We regard Smithian economics as superior to Mercantalist economics because it more accurately described how the economy actually functioned.

If specie was rarer in the Empire, it would cause changes and stresses in the economy, certainly. But the wealth of the Empire was in its agricultural output, not its silver mines and gold mines.

I fundamentally agree with you; however the basic question becomes whether or not Rome can develop the financial and monetary tools and systems, or even the (fairly radical) understanding of money/economics of gold/silver only having value inasmuch as a medium of exchange. Otherwise, a loss of specie will strain the economy if it gets dire enough simply due to limitations in how fast the velocity of money can flow in a classical era society without a solid system of banking, though it may prompt innovations like paper money.