Academic journal article Independent Review

The Calculus of Conquests: The Decline and Fall of the Returns to Roman Expansion

Academic journal article Independent Review

The Calculus of Conquests: The Decline and Fall of the Returns to Roman Expansion

Article excerpt

During the Republican period, Rome expanded from a small city-state to a massive empire that circumscribed the Mediterranean. Upon achieving this dominance, civil wars erupted, ending with the establishment of an emperor, and the new emperor instituted sweeping changes that curtailed the incentives for additional conquests. Can public-choice economics help to explain the institutional evolution of Roman history? Perhaps the first to recognize the role that increasing costs and declining benefits played in shaping Roman history was Edward Gibbon ([1776] 1984). He, however, undoubtedly drew his analysis from the statements of Caesar Augustus himself, who likened conquests to fishing with a golden fishhook, where the expected payoff had to be measured against the risk (Starr 1982, 19).

In The Decline and Fall of the Roman Empire, Gibbon wrote:

The seven first centuries were filled with a rapid succession of triumphs; but it was reserved for Augustus to relinquish the ambitious design of subduing the whole earth, and to introduce a spirit of moderation into the public councils. Inclined to peace by his temper and situation, it was easy for him to discover that Rome, in her present exalted situation, had much less to hope than to fear from the chance of arms; and that, in the prosecution of remote wars, the undertaking became every day more difficult, the event more doubtful, and the possession more precarious, and less beneficial. ([1776] 1984, 1, emphasis added)

Gibbon presented a marginal economic analysis of territorial expansion, a theory of the "optimal" level of conquests, a century before the establishment of marginal analysis in economics.

Almost all necessary ingredients of a modern economic theory of conquests are included here in Gibbon's description, with rising marginal costs of conquests, falling marginal benefits, and even falling probabilities of success. (1) The rising marginal costs and the falling marginal benefits arose primarily from the world's natural heterogeneity and the logistical problems of conquest and control at greater distances from the home base. The potential conquests were at different distances from Rome, had different amounts and types of wealth to be taken, and had varying degrees of military capability. With wars fought for gain, the first countries to be invaded were those with great wealth, those nearby, and those that were relatively weak. Once these countries were defeated, the remaining countries were obviously less profitable.

Although Gibbon's calculus of conquests presents an excellent explanation of the end of Rome's expansion, he falls short in two important respects. He does not elaborate on the ways in which the costs and benefits were perceived within a single mind--that is, he does not elaborate in regard to who in particular reaped the benefits and bore the costs. He also does not mention how some losses and gains fell on innocent third parties to the decision and hence were not perceived within a single mind. As Ronald Wintrobe notes, the marginal payoff to political leaders may diverge substantially from that of the general population, with the political leaders in the position as a residual claimant who pays the citizen-soldier a sufficient sum to obtain the soldier's voluntary service (1998, 84).

Using more recent research and modern economic tools, we can fill the missing gaps in Gibbon's analysis. In this article, we analyze the institutional structure and describe the decision-making process and the assignment of benefits and costs from warfare. We show that during the republican period the costs and benefits of conquests for the politician-generals diverged from those of the general Roman citizens and those of the wider regional population. The familiar approach of analyzing social as opposed to private costs and benefits helps to explain Roman expansion and the very costly transitional civil wars.

After the gains from additional conquests declined during the first century B. …

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