Ancient Rome commanded a vast area of land, with tremendous
natural and human resources. As such, Rome's economy remained focused on farming
and trade. Agricultural free trade changed the Italian landscape, and by the
1st century BCE, vast grape and olive estates had supplanted the yeoman
farmers, who were unable to match the imported grain price. The annexation of Egypt,
Sicily and Tunisia in North Africa provided a continuous supply of grains. In
turn, olive oil and wine were Italy's main exports. Two-tier crop rotation was
practiced, but farm productivity was low, around 1 ton per hectare.
Industrial and manufacturing activities were smaller. The
largest such activities were the mining and quarrying of stones, which provided
basic construction materials for the buildings of that period. In
manufacturing, production was on a relatively small scale, and generally
consisted of workshops and small factories that employed at most dozens of
workers. However, some brick factories employed hundreds of workers.
The economy of the early Republic was largely based on
smallholding and paid labor. However, foreign wars and conquests made slaves
increasingly cheap and plentiful, and by the late Republic, the economy was
largely dependent on slave labor for both skilled and unskilled work. Slaves
are estimated to have constituted around 20% of the Roman Empire's population
at this time and 40% in the city of Rome. Only in the Roman Empire, when the
conquests stopped and the prices of slaves increased, did hired labor become
more economical than slave ownership.
Although barter was used in ancient Rome, and often used in
tax collection, Rome had a very developed coinage system, with brass, bronze,
and precious metal coins in circulation throughout the Empire and beyond—some have
even been discovered in India. Before the 3rd century BCE, copper was traded by
weight, measured in unmarked lumps, across central Italy. The original copper
coins (as) had a face value of one Roman pound of copper, but weighed
less. Thus, Roman money's utility as a unit of exchange consistently exceeded
its intrinsic value as metal. After Nero began debasing the silver denarius,
its legal value was an estimated one-third greater than its intrinsic value.
Horses were expensive and other pack animals were slower. Mass
trade on the Roman roads connected military posts, where Roman markets were
centered. These roads were designed for wheels. As a result, there was
transport of commodities between Roman regions, but increased with the rise of Roman
maritime trade in the 2nd century BCE. During that period, a trading vessel
took less than a month to complete a trip from Gades to Alexandria via Ostia,
spanning the entire length of the Mediterranean. Transport by sea was around 60
times cheaper than by land, so the volume for such trips was much larger.
economists consider the Roman Empire a market economy, similar in its degree of
capitalistic practices to 17th century Netherlands and 18th century England.