If you had $1 when Caesar was assassinated 2063 years ago and had saved it with 2 % real interest rate you would have 1,02^2063 = 5,5 x 10^17 dollars today.

Even if it is difficult to translate the value of $1 today to some basket of goods 2000 years ago, it is pretty obvious that even that long ago, having $1 was not something unique for kings or something. A chair or a pig is still a chair or a pig and worth significantly more than $1, both then and now. There were plenty of people that could have put aside something that corresponds to today's value of $1.

Furthermore, 2 % real interest rate is quite low compared to what you paid in interest anytime (?) during this period.

Obviously, this type of saving and compound interest has not happened.

What are the causes that prevented us from being infinitely richer today than we actually are?

(Not sure if this belongs to history or money or something else, or maybe it is on topic on both? Feel free to move it to a more suitable SE-site if you think it is OT here.)

  • Comments are not for extended discussion; this conversation has been moved to chat. Apr 18, 2019 at 23:58
  • I found a great answer to my own question. How can I add that when the question is closed?
    – d-b
    Apr 26, 2019 at 13:42

3 Answers 3


Where did all the money go? What are the causes that prevented us from being infinitely richer today than we actually are?

Short Answer

2% compounded growth over 2000 years is not a conservative number but rather an unreasonable and profoundly optimistic number. Average 2% growth for just the last 150 years was experienced by just 1 economy. That's spanning the most productive economic period in history, the industrial age. Before the last 200 years such growth was entirely unknown.

Still any fraction of 2% growth compounded over more than 100 years still leaves a lot of increased wealth, where is that Wealth?
It's in the factories and Universities and production facilities which enable the services produced for consumers. It's in the automobile, roads, medicine, other transportation(planes, trains, ships etc...). It's in the communications industry and any number of other industries which make all of our lives better.

As Adam Smith, the father of modern economics stated, the wealth of nations is not found in gold and silver, but in the services the nation produces. Our modern global economy is truly wealthier by thousands of orders of magnitude because not only do we produce more food and other commodities the ancients might recognize; we have entire industries of goods the ancients wouldn't recognize. All to produce even more goods and services to be sold, yielding even more wealth to be invested.

The wealth of Nations
The prevailing view (mercantilism) was that gold and silver was wealth, and that countries should boost exports and resist imports in order to maximize this metal wealth. Smith’s radical insight was that a nation’s wealth is really the stream of goods and services that it creates.

Smith also went on to say how a nation manages it's wealth, investing it in improved production is the only way a country can maintain it's wealth, not hoarding.

The wealth of Nations
Smith’s third theme is that a country’s future income depends upon this capital accumulation. The more that is invested in better productive processes, the more wealth will be created in the future.

Detailed Answer

enter image description here
The Facts of Economic Growth

Reliable increases in productivity and interest appreciation on the scale you describe are both factors only since the Industrial revolution (began mid 18th century in the UK, took hundreds of years to spread globally) and were not consistently associated with previous ages dating back to Caesar. So 2% compounded interest over 2,000 years is not a conservative estimate but a wild over estimate.

To isolate the Mediterranean in Europe and North Africa for example, its economy actually regressed significantly from the time of Caesar up through the high middle ages (1250 AD). That's 1200 year period where the economy saw no growth.

enter image description here
GDP of Western Europe
From: Historical Statistics of the World Economy.

That's not an uncommon pattern either. China and India had similar lost economic periods spanning centuries dating their high points: the Song Dynasty(1200AD) and the Mughal Empire (1700), respectively.

In fact since 1880 when the Industrial Revolution was in early stages in the United States to today, The United States Economy, arguable one of the most productive over that period only averaged 2% growth.

enter image description here The Facts of Economic Growth

People, measure their wealth in coin or money or even commodities. When discussing wealth of nations or global wealth it's less confusing to take a page out of Adam Smith's book on the topic, "Wealth of Nations". Smith "the Father of Economics", said the true measure of a country's wealth is not measured in possessions(gold or currency etc), but in production capabilities. More specifically how the country in question invests the money they have to increase their production. By this metric your question comes more into focus. Significant improvement to production methods aren't consistent over time, for most ages over the last 2000 years such improvement are entirely absent.

Where is all the missing wealth? It's been invested in new production for the most part as economists have recommended for centuries (since Adam Smith in 1776 ) in order to improve production, yield more and better products and ultimately grow more wealth.


  • 1
    @d-b, to your point, noting we aren't literally "moved out of the solar system" today; I would argue that compared to an average human 2000 years ago many have moved standard of living wise into a different universe figuratively in many ways. (economic, productivity, life expectancy, standard of living, education etc ). All indicators of our vastly improved global wealth.
    – user27618
    Apr 18, 2019 at 18:50
  • 2
    @d-b lastly I would argue the global economy has never hit on all cylinders as we have witnessed over the last 50 years. This can be demonstrated by certain civilization dominating percentages of the global economy over different periods. Roman Empire, 100 AD: 25 to 30%; Same for Song Dynasty in China, circa 1200 AD, Mughal Empire in India, circa 1700 AD: 25%; British Empire, circa 1870: 21%; USA*, circa 1950: 50% of global output.
    – user27618
    Apr 18, 2019 at 19:06
  • 1
    @d-b For most of the period under discussion Usery or charging interests on loans was considered sinful in the Christian and Moslem world. Catholics had prohibitions on it from the first church council 325. There were times (1311 Pope Clemond V, equated usery with Heresy and burned folks at the stake over it.. Likewise Martin Luther gave a major sermon on "trading and usery". The catholic church lifted their final provisions against usery as recently as 1917 Cannon Law. Other world religions who's texts include condemnation of Usery include Judaism and Buddhism.
    – user27618
    Apr 19, 2019 at 0:04
  • 1
    You do not "always get paid for your risk". You charge interest in hopes that the amount extra you charge will exceed all the loans you make where you never get paid back. If you screw it up, you lose money, not gain it. Banks screw that up even today, with modern monetary systems. In the time periods you're talking about, "risk" includes "The Goths show up, take all your gold, and all the gold of all the people you lent gold to, then burn down your town and haul you off to work in the salt mines". Apr 19, 2019 at 4:08
  • 1
    @d-b, I suggest a class in economics because your excellent questions and nimble mind would be well served with some academic understanding of the subject. It's not always intuitive how markets and interest works based upon empirical evidence. When Interest rates for home loans in the United States hit 18.45% in October of 1981 and stayed in double digits for six years. it wasn't a metric for economic growth or a reflection for the increasing wealth of the nation. It was rather a reflection of inflation and how much interest was needed just to preserve the lenders buying power.
    – user27618
    Aug 7, 2019 at 15:21
  1. Money is an asset like any other (tomatoes, gold, iron, wood). It only has value if we all believe in that value. Often, economic crisis turn money into a piece of paper. Because people no longer believed in that piece of paper or that piece of metal actually had any value. This is important in the context that money is not something special, is just a object that we all agree that has a fixed value to simplify trade. If money does not exist, we'll be bartering items.

  2. If money multiplies infinitely, its value will decrease compared to other assets, because other assets are limited. That's called inflation. Hence, you can't have more money than assets.

  3. In the past, money was reduced to valuable minerals like gold and silver, so you can't infinitely increase that mass of money if the mass of metals does not increase as well. Gold is valuable because is scarce. Actually, gold price increases whenever there is an economic crisis.

  4. A bank will only give you a positive interest rate if there is another client that actually is going to borrow that money from the bank.

Now, let's return to your original question, imagine you give that $1 in metal to a bank (or a merchant that worked as a bank) in Rome. What might happen later.

A. The bank gave that money to other person. That person failed to return that money, so the bank later can't give your money back, because that money was wasted. That is a financial crisis, that often kills banks and their assets. When you give your money to a bank, there is a risk of lose that money.

B. Goverment decided to print more money (or take a piece of each coin), this in inflation. If the bank returns you the money plus 2%, but the inflation was 20%, then you actually lost 18% of money.

C. People in mass go to the bank to retire their money. But since the bank actually has lend that money, it does not have cash to return the money of savers. The bank fails to return the money back, this is a liquidity crisis. You can't get your money in this case.

D. Your money simply was stoled from the bank.

E. During 2000 years everything went fine, all people is millionare, but money is so abundant as water in the sea. Its real value is nothing.

  • 4
    Beat me to it. Care to expand? This is an interesting if under-researched Q that deserves quite a comprehensive answer. Apr 18, 2019 at 14:54
  • 5
    Bank loaned your money, but the borrower just refused to return it. Turns out that in the interim, the borrower married the daughter of the local king, and the bank can't enforce a contract against the king's relative, so the loan is lost. And your local government has been replaced by a branch of another royal family and they don't like the people who run your bank so they don't want to enforce the contract. Money is gone.
    – MCW
    Apr 18, 2019 at 15:56
  • 3
    And don't forget when Diocletian decided that aristocrats would use different money than plebians - depending on which you are, your money could have been rendered worthless then. Or when Napoleon nationalized all loans, or .... Loans take place in a context of a contract law enforced by a government. For the vast majority of that time, personality was more important than law; in such cases, "money" and "debt" are limited to how persuasive, charismatic and well armed you are.
    – MCW
    Apr 18, 2019 at 15:58
  • 1
    Perhaps worth also mentioning that assets like pigs & chairs (since they're mentioned in the question) only have value until they die of disease, or break, or are stolen / burned by a band of marauding Saxons/Vikings/Huns/Mongol horde ... (insert name of alternate marauders / pillaging army as appropriate), at which point their value to you is approximately zero. Apr 18, 2019 at 17:33
  • 1
    -1. Paper money wasn't widely circulated until much, much later than the Roman Empire. Which basically throw your points 1-3 out the window. And your point 4 stems from a complete misunderstanding of how monetary creation works. Also, there were no banks to speak of until the late Middle Ages/Early Renaissance. And I'll stop here because most of your answer is wrong or misleading. You're taking debunked 20th century talking points by libertarian gold bugs as fact, and trying to spin an argument about how they apply centuries before they could have. Apr 18, 2019 at 19:01

One thing you're missing is that we ARE, in many ways, almost infinitely richer than someone in Caesar's day. If Julius wanted to listen to music, he'd have to assemble a bunch of musicians - around 120 if he happened to want something like Beethoven's 9th Symphony, each skilled in their particular instrument. Then he'd have to support them while they rehearsed each piece - players in a top orchestra might earn $150K/year: https://work.chron.com/much-money-orchestra-musicians-make-15161.html So that's about $15 million a year for music. Today I can buy a recording for $10 or so (or download free versions), put it on a $15 thumb(nail) drive with ~100 hours of other audio, and play it on a device that cost me less than $100. So my music dollar goes about 100,000 times as far as Caesar's did.

Repeat that over and over, for everything that was either expensive in Caesar's time, if it was available at all.

  • +1, however OP is more or less explicitly asking about why compound interest hasn't been ongoing since the Roman Empire. Apr 18, 2019 at 19:03
  • 1
    This is completely right, but IMHO has nothing to do with compounding interest. Its rather a really good argument that knowledge (aka: information) is humanity's true wealth.
    – T.E.D.
    Apr 18, 2019 at 22:06
  • @Denis de Bernardy: The compound interest thing seems trivially obvious. Nobody left their money invested for 2000 years :-) But see for instance Ben Franklin's legacies to Boston & Philadedphia. Another example of an institution that has been compounding part of its income for close to 2000 years is the Catholic Church. It's quite secretive about its actual net worth, but just investments alone would seem to be in the $1 trillion ballpark. Then there's the value of artwork, real estate, buildings, and so on accumulated over that time.
    – jamesqf
    Apr 19, 2019 at 4:02
  • 1
    @jamesqf, the Catholic Church is actually a very good example of where the money went: by many measures, its net worth is way down from its peak, when it owned a sizeable fraction of Europe.
    – Mark
    Apr 23, 2019 at 0:13

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