The strength of the nomisma contributed mightily to ensuring that Byzantium was the center of world trade for nearly a millennium. It promoted economic activity within the empire. As a currency of first and last resort, it globalized the medieval world economy. Even in times of economic weakness, the government strove to maintain the value of the nomisma, which redounded to Constantinople’s political influence in moments of crisis. However, as the great feudal lords began to deprive Constantinople of land, taxes, and citizens, the government’s finances began to collapse. By the 1040s, circumstances forced the empire to devalue the nomisma. Over succeeding decades, it increasingly added base metal.
The result was devastating to the economy. Byzantium’s currency quickly lost its value and international status. As inflation flared up throughout the empire, the government introduced new coins in an effort to stabilize the monetary system. Taxes steadily increased, in part to make up for the shortfall from reduced economic activity caused by the worthless money. Merchants and taxpayers alike were gradually impoverished. For the last several hundred years of its life, the Byzantine Empire lacked both a stable fisc and a growing trade sector, which in turn led to greater competition among its increasingly powerful interest groups.
These examples lead to a final political lesson for the United States. Despite the dismissive view of historians such as Edward Gibbon, Byzantine society remained vibrant and capable of reinvigorating itself even after centuries of disorder. What doomed it was decades of bad political decisions. Specific choices by emperors and feudal leaders weakened the economy, undercut the military, and sapped the empire’s cultural energy.
George Ostrogorsky in his magisterial History of the Byzantine State shows how the people of Byzantium rose time and again to create wealth, cultivate their intellectual capital, and achieve military success. Ultimately, though, they could not overcome the bad policy decisions that, made over the course of generations, ran counter to the proven path of political strength, cultural vigor, and economic growth. By the time Constantinople fell to the Ottoman Turks in 1453, the empire was but a shell of its former glory. For Orthodox Christians in Europe, it remained a symbol of the church, or religious commonwealth on earth, but the desolated city that greeted Sultan Mehmet II told a more sobering story of squandered wealth and misguided politics.
— Michael Auslin is a scholar at the American Enterprise Institute in Washington.