Professor Robert Mundell is the godfather of the euro. He is the foremost theorist of currency unions. The euro was born as an electronic currency on January 1, 1999. The Royal Swedish Academy of Sciences awarded him the Bank of Sweden Prize in economic sciences in memory of Alfred Nobel on October 13, 1999. The euro came first, and then came the highest recognition to its godfather, within a few months. People celebrated practice and then celebrated the theory behind the practice. What a great year it was for this Nobel laureate. The euro then became legal currency a little later on January 1, 2002.
However, long before the euro became a common currency, the Romans had imposed a single coinage across the Roman Empire. All parts of the empire worked with one coinage. The modern euro's predecessors were the gold aureus , silver denarius and the brass sesterce .
THREE CONTINENTS
Rome's coinage was a bequest to Europe. Fifty countries of the modern realm had that coinage. The empire's citizens lived on a vast expanse of land that had an area of approximately 6.5 million square kilometres.
The Roman Empire included parts of the British Isles, the Iberian Peninsula, parts of Russia, parts of Germany, and Switzerland, Greece, France and Italy. The Roman Empire included some parts of North Africa, and many parts of West Asia. It would be difficult to believe that Israel, Egypt, Iraq, Iran and Palestine had that coinage. Yes, they had one coinage. This strange fact makes Rome's coinage a bequest to humanity.
Rome's coinage displaced the rest of the systems of money in the territories conquered by its armies. Rome had centralised the authority to mint precious metal coins. Rome alone could mint these coins. None of the cities and the constituents of the empire were allowed to have a separate coinage. Moreover, they had to follow Rome's system of weights and measures too.
TWO-HEADED STRATEGY
Rome's imposition of the single coinage on its territories had an important purpose. Rome had acquired these territorial possessions through conquest. It didn't want to give up these territorial possessions.
Rome chose to employ a two-headed method to hold its far-flung possessions. First, wherever Rome went, its warriors went. However, the Roman legions didn't go out in large numbers. Rome didn't have thousands of young men and hundreds of experienced officers required to hold the millions of square kilometres.
The senior officers — including the legatus legionis — and the centurions disarmed the overpowered armies of the conquered lands. The Roman generals then retrained and rearmed the vanquished under the badge of the Roman Emperor. This restored pride and morale among the demoralised men. Rome then left them there permanently in a state of vigil.
This is fiction in part, but illustrates the essence of Rome's strategy. Rome didn't have to transport Roman legions across thousands of kilometres. Rome built its defences and its armies along the way. It then co-opted the locals that came with the territory. Together, they ventured to expand some more, and then some more. So, Rome wasn't built in a day. The Roman Empire too, wasn't built in a day.
HORSES AND SOLDIERS
Napoleon Bonaparte of France, by contrast, was in a hurry. He failed in his bid to capture Russia approximately two millennia later. Napoleon chose to transport tens of thousands of men and horses. The men and the horses had to be fed. The men had to be clothed appropriately. They had to be shod to march and walk on the cold, damp paths.
Napoleon didn't have the foresight and the means to meet these requirements. The weak men and the weaker horses lost their balance and broke their legs. They starved and froze in the cold. Napoleon's defeat was inevitable.
But ancient Rome built its defences along the way. It found the right means to feed and clothe its armies. It found the right means to feed the horses. It found the right means to get them the right horseshoes to walk in the mud paths, damp soil and the moist slopes.
Rome had a strategy to re-hoop the wagon wheels. There were blacksmiths and carpenters all along the highways of the empire. There were wagon repair shops and harness-makers wherever the wagons went. The wagons could get new hubs, axles and spokes. The horses rested when the wagons were being restored, rebuilt or repaired. The coachmen and the centurions rested and recuperated, too.
COMMON COINAGE
Second, wherever Rome went, its money went too. Warriors, wagons and the horses required money to be in good shape. Rome came up with the brilliant idea of the common coinage. This was the second head of the two-headed strategy. Rome used the common coinage to build a volitional economy across its territorial possessions. This volitional economy comprising clothiers, armourers, innkeepers, blacksmiths, carpenters and veterinarians enabled Rome to keep its empire intact.
The governors, the generals and the warriors saw two benefits. They could compare costs all along the highways. They could choose the least cost sources of supplies and services. They didn't have to deal with the problems pertinent to the conversion of one coinage to another. They could carry one set of coins and transact anywhere in the empire.
Moreover, a single coinage permitted enterprise and labour mobility. It permitted the migration of labour. Mobility and migration don't have identical meanings. Labour could go out and work; earn and then save. They could return to their homes with their savings after short cycles of work. Or, they could also stay in the new locales and away from home forever. Rome's single coinage allowed them to hold their wealth and earn their incomes with one set of coins. This coinage remained permanently with them, regardless of where they lived. Rome needed the single coinage to build and then perpetuate the Roman Empire.