What Brussels Can Learn From Ancient Rome
The Eurozone has so far lasted 13 years. But Rome's single currency lasted for 400 years, as Gilles Bransbourg, a researcher at New York University pointed out this week on the public radio show The World.
How was an ancient world power able to achieve this kind of economic unity over such a large and diverse area? According to Bransbourg, the Romans didn't demand uniformity: They let conquered peoples keep their local currencies in use alongside Roman denominations.
This was all part of a larger strategy of the Romans, who realized in keeping a far-flung empire together it helped to "leave as much as possible to local authorities." (This sounds like the modern principle of subsidiarity, to which EU officials have often payed lip service, but in practice ignored.)
Bransbourg speculates that "If the euro had been devised not as a monopolistic currency," but instead as an additional means of exchange, then Greece and other troubled economies would not have been given perverse incentives—low interest rates enabled by the European Central Bank—to borrow too much. Prior to the euro, many nations participated in an arrangement called the European Currency Unit (ECU), an artificial basket of currencies of member states. Bransbourg suggests that the EU might want to back away from a single currency and reestablish something like the ECU.
Economists may not find Bransbourg's proposal very persuasive, but his clever comparison with the ancient world is notable. It shows that once again, our contemporary predicaments are not as unprecedented as we imagine.