Indict me now by the laws against intrigue, degrade me from the Senate for keeping patient eyes on the promotion to which, after all, birth gives me claim, since my own sire and my wife's, my grandsire and his sire too before him were urban and praetorian prefects, or held high rank in court and army. If it comes to that, consider our friend Gaudentius, who but now of tribune's rank, towers in the dignity of the Vicariate above the un-enterprising sloth of our good citizens…. Sidonius, Letter III, Book 1, AD 467
….To win your dignities you did not parade your mother's income, or the largess of your ancestors, your wife's jewels, or your paternal inheritance…In place of this, it was your obvious sincerity, your proven zeal, your admitted social charm which won you favor in the imperial household. Sidonius, Letter IV, Book I to Gaudentius, AD 467
Senators like Sidonius, and his friend Gaudentius, gained wealth through inheritance, and power through wealth and charm, in other words through personal connections and the resources necessary to play the part of their class. The whole senatorial class, as we will see in the chapter on education, was taught how to be witty, appear learned and how to present themselves to those with greater powers to give. There are a number of instances in which Sidonius recounts gaining Imperial favor through his poetic rhetoric, and also at least one incident in which he foils an accusation against him through witty repartee with the reigning Emperor. Senators also paid for their offices, which required that they have the resources to do so and also to meet the obligation to spend large amounts of money ("the largess of your ancestors") on public entertainments celebrating their appointments.
The Senators were so wealthy that there was little they could do to squander their wealth; there was also little they could do beyond enjoying it, getting even wealthier by the year, and holding public office. Of course public office also gave them the means and the information necessary to gain even more wealth and to avoid paying most taxes. There was one tax, specifically levied on the senatorial class, which they did not avoid, since it confirmed their class status, but it was insignificant. Public office also gave them the means to take advantage of any government spending when possible. In fact it was the best investment they could make.
Are our contemporary would-be "Senators" at all similar?
In the United States we have a founding myth of the "self-made" man, but social mobility is actually declining rapidly,especially at the highest levels of our society. The top one percent of income earners, and even more, the top one-tenth of one percent of income earners are gaining wealth at a rapid rate, while the bottom 90% of Americans are losing wealth in relative terms. The creation of a senatorial class, that is a wealthy class based on inheritance, connections and the power that goes with it, is progressing rapidly.
Does the existence of a dominant selfish class increase society's wealth? Free market apologists would have you think so, but if you look at the example of the Senators in the Fifth Century, the answer would have to be a resounding "No!"
The Senators couldn't help but be wealthy by the accidents of their births. Unless they were intentionally improvident they couldn’t help but become wealthier, and yet their wealth did subtract from the wealth of society as a whole. How did this work? Wasn't it true that if you did business with a Senator that you would gain wealth and that you in turn would create additional wealth when you did business with others? Wouldn't it also be true that since Senators had large amounts of wealth, their wealth would create little (or large) industries to service them? Didn't that add to total wealth? So goes economic doctrine, but it didn't work that way in the Fifth Century, and it probably doesn't work that way now.
First of all, Senators invested in three things almost exclusively: land, gold and slaves or serfs. Senators surrounded themselves with gold. Their doorplates were solid gold, their coffered ceilings were lined with gold, they adorned themselves and their women--and servants--with gold, decorated their carriages with it, and even sometimes the shield bosses of their guards. Their income was reckoned in gold: 250,000 gold solidi a year, which came to several thousand pounds of gold.
They displayed so much gold because they didn't spend very much of it. This was because their vast land holdings, estates in Gaul, in Spain, in Italy, in North Africa, sometimes even as far afield as Egypt, Syria or Greece, were largely self-sufficient. Certainly, the Senators who owned the most diverse holdings needed to import little, either, since their different estates would produce almost anything they needed. They also, typically, owned townhouses in Rome, and in Ravenna where the Imperial government lodged itself for much of the fifth century.
The reason why they owned so much property, slaves and gold was that there was no estate tax, there were few expropriations after Diocletian, and Senators as a class failed to reproduce themselves. This is almost surely why so many of the most powerful Senators had two and three townhouses in Rome. At the same time, they were at the center of power, which is one of the reasons why their wealth generally increased, even while the society as a whole grew poorer.
When the wealthy hold onto gold, that wealth goes out of circulation: it subtracts from the money available to the rest of society. Common people never saw a gold coin, and rarely even saw a debased silver one. In fact the gold held by the Senators meant that the government had to continually debase its currency, because the value of currency was based on the amount of precious metal within each coin. Most silver coins of this period were only thinly coated with the metal, and turned black or dull brown after much use. Gold coins were rarely used except by the elite. The result was that much currency was nearly worthless, and even the government resorted to widespread barter, as in its collection of taxes and distribution of the proceeds to the army and the bureaucracy.
When the wealthy also own large tracts of land, and when land is the main source of wealth, as it was in the fifth century, they are also subtracting from the wealth available to society as a whole. This is because significant portions of the large holdings went unused; managers were unable or uninterested in producing more from them, because they had little incentive to do so.
The third kind of investment Senators made was in people, as in serfs and slaves, but neither had much incentive to produce more because of their servile status, so again the Senator's contribution was a net loss to society.
To illustrate what might have happened if Senatorial wealth had not depressed the economy: if free yeomen farmers worked on their own land, they would have been many times as productive. Dramatic increases in productivity have been demonstrated over and over again when land reform has given farmers their own land to work ; much of the vacant land could have been farmed by them. Further, if the Senators' gold had been taxed away from them, and if the government had spent it wisely (a condition that probably could not have been met, given the high level of corruption in the Imperial government, a result of its autocratic form), that gold would have energized markets, since it would have been spent as wages for more military and for road and harbor reconstruction, for example. The combination of a revived infrastructure and greater security, with more money in circulation, could have revived the Imperial economy.
But of course the modern selfish class gains their wealth through a broader array of sources. Didn't Bill Gates create the wealth of Microsoft; didn't the Waltons create the wealth of Walmart? They didn't subtract wealth from others, did they? The answers to these questions are at very least ambiguous.