2024 Letter
Quo Vadis?
December 23, 2024
The Year of the Azure Dragon
A few days ago, we just passed the winter solstice of 2024. In East Asian culture, the 24 solar terms define the winter solstice as the time of the greatest cold, marking the beginning of the new year. This seemingly quiet year, however, has an undercurrent of change. Profound changes are hidden beneath the surface, unnoticed by most. In the Chinese calendar, 2024 is known as the Year of the Azure Dragon, represented by the heavenly stem Jia (甲) and the earthly branch Chen (辰). Jia is associated with green, symbolizing the growth of a tree reaching into the clouds, and around this towering green trunk winds a massive dragon capable of rising to the heavens and breaking through the earth. This symbol strongly evokes a sense of "linking the past and the future."
Looking back, it links to the past thirty years—a time of low interest rates, low inflation, and globalization that thrived after the Cold War. Looking forward, it ushers in a future of high interest rates, high inflation, and the deepening trend of de-globalization and regional protectionism over the next thirty years. In the late summer of this pivotal year, my friend and I visited Italy, the most alluring country on the European continent. I crossed the Mediterranean from Abu Dhabi, while he came from Guangzhou, and we met at the famous city of Rome.
Ancient Rome
This was my second visit to Italy. My first was during my university graduation trip, a long time ago. Most of my memories of Rome are of the dry heat and delayed trains. Fourteen years later, I returned to Rome's Termini Train Station, and the chaos and disorder once again struck a deep chord in my memory. If you’ve visited train stations in other European cities, you’d probably understand the feeling. At one point, I even had the illusion that I had traveled back to the Guangzhou Station during the Chinese New Year rush...
They say “All roads lead to Rome” and “Rome wasn’t built in a day.” These well-known proverbs actually refer not to the present-day Rome, but to the vast empire sharing the same name, which existed over two thousand years ago: Ancient Rome. Today, I want to write about one of the most dramatic periods in Ancient Roman history: the Claudian Dynasty.
Although it was not the most prosperous time in Rome’s history, the Claudian Dynasty played a significant role in shaping history. The events during this period provided material far more dramatic than any other in Roman history. These highly charged events dominate the literary and cinematic representations of Rome today. Much like the chinese stem and branch system “JiaChen 甲辰”, the Claudian Dynasty played a pivotal role in the historical narrative of Rome, bridging the legacy of Augustus and the chaotic decline under Nero, which set the stage for the soldier-emperor Vespasian and the thereafter Five Good Emperors.
Augustus
The first emperor of the Claudian Dynasty was Augustus (Octavian), one of the most famous figures in history. Like most renowned historical figures, Augustus was highly controversial. On one hand, he transformed Rome from a republic into an empire, and during his 40-year reign, he brought about the Pax Romana. On the other hand, his relentless pursuit of dynastic succession and political marriages led to the rise of infamous tyrants since Tiberius. In Rome, you can see traces of Augustus everywhere. One of the most famous monuments he left behind is the Pantheon, a magnificent domed building originally commissioned by his close ally Agrippa. If the divine wisdom was Tacitus’ praise of Caesar, Augustus would certainly score full marks for execution. Under his rule, Rome transformed from a city of simple red bricks to one of noble marble.
Economically, Augustus implemented the first currency reform of the Roman Empire. He understood that for the economy to thrive, a stable, trustworthy currency was essential. He set simple and clear ratios for gold, silver, and copper (1:25:100), ensuring that the value of these metals remained consistent with their mining costs. This stability encouraged the flow of goods and kept prices stable, ensuring long-term prosperity as long as there were no wars or plagues. During his reign, despite some setbacks in the Germanic wars, inflation was never a problem for the flourishing empire.
Tiberius
Tiberius largely continued the policies of his stepfather Augustus, and in terms of frugality, he even surpassed him. Notably, towards the end of his reign, Rome faced a significant financial crisis. Provincial loans had no upper limit on interest rates, and as a result, capital naturally flowed to provinces with higher interest rates. The financial sector was required by law to invest a certain proportion back into Italy to prevent the capital from hollowing out. To address this, Tiberius enforced a temporary measure to require financial institutions to return funds to Rome. This decision led to a liquidity shortage, causing a steep drop in land prices in Rome and triggering a debt crisis. Tiberius’s response was to inject one hundred million sesterces into the market, requiring debtors to pledge land worth twice their loan amount, temporarily resolving the crisis. However, this merely provided liquidity without solving the root cause, which would eventually lead to a growing debt problem.
Caligula
The people of Rome were overjoyed to see Tiberius go, illustrating how unpopular a ruler who enforces austerity measures can be. Caligula, at just 24 years old, ascended to the throne. The bloodline theory espoused by Augustus was once again at play, as Caligula's father, Germanicus, was the grandson of Augustus’s sister and Mark Antony, Augustus's rival. Although he was welcomed with applause, his reign would later cement his reputation as one of the most infamous Roman tyrants, known for extravagance, indulgence, and grandeur. Economically, Caligula took the opposite approach to Tiberius: he distributed money, reduced taxes, and built a massive arena. Unlike his predecessor, who was remembered for his frugality, Caligula quickly squandered his family’s wealth, but the public loved the handouts and enjoyed the newly constructed arena.
Nero
In 41 AD, Caligula was assassinated by a praetorian guard, ending his theatrical reign. His successor, his uncle Claudius, was a history enthusiast, and during his 13-year reign, he governed Rome with moderation. The economy seemed surprisingly stable during this period, and Rome flourished on the strong foundation laid by Caesar and Augustus, without requiring much intervention. Since history books do not favor peaceful times, I’ll simply mention this period in passing.
After Claudius, Nero ascended to the throne. During my travels in Europe, I often see "Cafe Nero," which always remind me of this tragic artist-emperor. Nero’s 13-year reign was a sharp contrast to that of his predecessor. In 64 AD, a devastating fire nearly destroyed the entire city of Rome. Watching everything he cherished burn for nine days left a deep emotional scar on Nero. Following the fire, he embarked on an extravagant rebuilding project, importing vast quantities of precious metals and marble from Egypt, Greece, and Spain. His attempt to "reset" history came with enormous costs.
Nero was a deeply conflicted perfectionist, influenced by his controlling mother and his philosopher mentor Seneca. He loved art, theater, and music, and seemed to channel all his complex, unrealistic expectations into the grand rebuilding project, culminating in the extravagant Golden House, the Domus Aurea. The giant Laocoön sculpture, now in the Vatican Museum, was excavated from Nero’s palace. Despite his passion for the arts, Nero’s reign was disastrous for Rome. The costs of the rebuilding project led to severe inflation, and his method of financing it—by looting temples and melting down statues—only exacerbated the empire’s financial woes. From this point on, Rome began adding other metals to its coins to make up for the shortage of precious metals, a practice that continued under Nero’s rule.
Order, chaos, and order again; loosening, tightening, and further loosening; wise rulers, tyrants, and wise rulers again... This is the cycle of history. The Pantheon, destroyed in the great fire of 64 AD, was later rebuilt by Emperor Hadrian. In a nostalgic gesture, Hadrian had the name “M·AGRIPPA” carved above the Greek-style marble columns, commemorating Agrippa’s original construction.
The central dome of the Pantheon is made of a massive marble composite. Sunlight falls on the geometric surface of the dome's interior, slowly moving as time passes.
After Nero's suicide, the empire was divided by military generals, and eventually, Vespasian emerged victorious, founding the Flavian Dynasty. The largest surviving iconic arena in Rome was built during that time.
The Roman Forum, located between the Palatinus Hill and the Capitolinus Hill, features the tall white marble building on the left, which is the Arch of Septimius Severus. The reliefs vividly depict Rome's war against Parthia.
The first emperor of the Roman Empire, Augustus. He proudly said, "I inherited a city built of bricks and left a city of marble."
References: The Story of the Romans, by Nanami Shiono.
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