November 10, 2011


All Roads Lead to (Ancient) Rome:  The old empire could teach us a thing or two about the euro and its flaws. (Gilles Bransbourg, 11/06/11, Daily Beast)

Europe's fundamental sin is actually simple. The Maastricht Treaty of 1992, in creating a single legal tender and monopolistic currency for the countries that ratified it, fundamentally undermined the very founding principle it ostensibly enshrined: that of "subsidiarity," or the principle that holds it is always better for a matter to be handled at a local level than by a centralized authority.

The peculiarity of the Roman political system was indeed its taste for subsidiarity. The imperial government was usually quite happy to restrict itself to the essentials--mainly military defense and the rule of law--while devolving to local civic authorities most of the burden of managing their own issues. As such, the cities and regions, notably in the Greek or Syriac-speaking East, struck their own lower-value bronze coins as a complement to the usually higher-value imperial coins, leading to specific monetary zones.

As a result, the issuance of local money was to a large extent a local matter. Gaius, the second-century jurist, wrote that "money, although it should enjoy the same power of purchasing everywhere, is easier to obtain in some locations and interest rates are lower, while it is harder to find in other locations and interest rates are higher." (Would that he were available today for a powwow with Mario Draghi, president of the European Central Bank.)

Posted by at November 10, 2011 6:13 AM

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