Quantitative easing, 3rd century BC style

Posted on July 22, 2011


Dionysius the Elder was sort of a dick, really. It’s what you’d expect from the ruler of a city-state (Syracuse) that allied itself with Sparta and Corinth, both of whom prioritised the state over the people. They pretty much tortured male children in order to ensure that they became good soliders; huge numbers of female babies were thrown off a cliff.

Syracuse, of which Dionysius was tyrant (both in the old, non-judgemental, and the new, very much judgemental sense) was geographically remote  – being modern-day Sicily, it was actually in the wrong country given it was a Greek polis – but integral to Greece. It was one of the most powerful of all the city-states, and was far and away the most powerful of the non-Greek ones.

Dionysius started his public life as a clerk – so you’d think he’d know about his money. But it turns out that he created one of the concepts which imperils our economies today: two words which mean absolutely nothing to the general public but bullshit and lies: quantitative easing.

The soon-to-be-tyrant-but-currently-just-pen-pusher managed to make his name in a war against Carthage. On the back of an impressive show there, he was announced supreme military commander in 406BC. Dionysius wasn’t happy with just that, though. He wanted more. Like I said, he was a dick – essentially, he was the epitome of the caricatured City boy. He grabbed what he could, and didn’t care about the consequences. So in 406BC he was in charge of all the army of Syracuse.

If you’re somewhat dickish and you’re given control of a fighting force of thousands of men, there’s only really one way that’s going to end up. By 405BC, he was tyrant, having taken power in a coup. In pithy understatement, classical scholar Serge Yalichev writes that his rule was “unconstitutional and illegitimate and could not fail to provoke rebellions among the partisans of democratic government”. Of course he quashed them with his giant band of more than a thousand paid mercenaries, whose sole allegiance was to him and his protection.

A special place in Hell is reserved for Dionysius. In fact, it’s the seventh circle, as our favourite Syracusan despot pops up in Dante’s Inferno:

here is Alexander, and fierce Dionysius,
who wrought upon Sicily such woeful years.

Told you he was a dick. Of course, when you have overteeming hubris (often-misplaced pride), you tend to overstretch yourself. Dionysius did that. He wanted more than just Syracuse. He wanted everywhere. So he spent all of his city-state’s funds on jollies around the Mediterranean trying to expand his mini empire. He also made his inner circle more enormous and intricate and decorative than he really needed to. It’s the typical despot’s playbook: get power, entrench, expand and prettify. He built city walls that needed workers to move 300 tonnes of rock and stone every single day for five years.

(Here’s where I made a fun admission: the reason I’m writing about Dionysius is because I read a really good article by Matthew Lynn on the Greek economy, which I’m semi-summarising here in the hope that you’ll want to read on and look at his article. In it, he writes that Dionysius paid for “spectacles for the common people”, which I read as him buying reading glasses for everyone. That didn’t tally up with the dickish Dionysius I knew about. End of tangent.)

So Syracuse was poor. No problem, thinks Dionysius, and makes a decision which we’re all still paying for now. He rounds up every last drachma within his city-state and re-embosses them. The one-drachma coin which everybody had suddenly has a honking big ‘2’ writ large on it. Thank you Dionysius, for giving the world quantitiative easing. German hyperinflation was caused by you. Our current financial woes too. You’re unique, you know, in that you’re responsible in some small way for both Nazism and the fact that I have to pay stupid money for a loaf of bread nowadays.

You inspired generations of Greek powerholders to fiddle their books, and because of that you’ve brought a single European currency practically to its knees (though Britain wisely has shied away from contributing to the latest bailout package, we’re still on the hook for earlier loans we’ve given to Greece).

Three cheers for the tyrannical dick in the corner of Hell, chatting away to Alexander the Great.

Hip-hip, hooray!

Hip-hip, hooray.

Hip-hip. Hooray.

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