At the time of the Roman Empire, they were not under a gold standard. What you are saying doesn't make any sense. Furthermore, one of the causes for the fall of the Roman Empire was precisely the fact that they reduced the value of the coins to support military and public spending, which was extremely high, one of the causes that many historians believe was fundamental to the fall of Rome. .
In this case, an ordinary seller will have 5% more goods to sell at only 3% lower prices. Your sales revenue will increase by 2%. He will be able to earn progressively increasing revenues, despite the drop in prices, as the increase in the supply of goods and services that he can sell is greater than the drop in their selling prices. This occurred because the economy's output was greater than the increase in money supply (gold) and spending.
The modest increase in the rate of profit resulting from an increase in the quantity of gold is the opposite of what occurs in a depression. The same is true for the greater ease (not greater difficulty) in paying off debts.
So, the truth is that a 100% gold standard, with its falling prices, is as big an enemy of deflation as it is of inflation.
Finally, in relation to mass unemployment: if there is deflation -- in the correct sense of the term, that is, a reduction in the amount of money and the volume of spending -- then a fall in prices, far from being the cause of deflation/depression, will be the solution. In such circumstances, a reduction in wages and prices is exactly what is needed to allow a reduced amount of money and spending to buy everything that a previously larger amount of money and spending could buy. If, for example, as occurred in the United States in 1929, there was originally $50 billion in wage spending employing 50 million workers at an average annual wage of $1,000, and now, because of deflation, there is only $40 billion in spending on 40 million workers, full employment could be restored if the average wage fell from $1,000 to $800 per year. In that case, $40 billion could employ as many workers as $50 billion did.
Believing that a drop in wages and prices -- something necessary to recover from a deflation like -- is in itself a deflation and, therefore, wanting to prevent this drop, as occurred during the Hoover government and the entire New Deal in the USA , is an attitude that will only perpetuate unemployment and depression.
Confusing concepts result in catastrophic consequences.
You used the example of the USA and its economic cycles to support the argument, but that doesn't make any sense. For example, in the USA:
1) State governments allowed, in the event of a crisis, banks to operate, grant and collect loans without having to redeem them in kind. In other words, banks had the privilege of operating without having to pay their obligations in gold.
2) Interstate bank branches were prohibited, something that, together with a poor transportation system, prevented banks from readily demanding that other more distant banks redeem their notes in gold.
These two factors were responsible for several crises that occurred in the United States in the 19th century. Because banks could operate with fractional reserves -- there were no legal restrictions on this -- the money supply could be constantly expanded.
But there is a big difference between this system and the current one: today, a central bank can simply print money and save those banks that granted too many loans and that, because of this, became too leveraged; At that time, without a central bank and with gold being the currency, it was simply impossible to create gold out of thin air and in sufficient quantity for banks to honor their commitments.
Thus, precisely because of the impossibility of creating gold in abundance -- as today the central bank can do with banknotes --, banks were much more cautious in their loans. Consequently, the expansion of the money supply through fractional reserves was much more contained.
And the result was that, from 1815 to 1913, there was price deflation in the USA. In other words, prices fell year after year -- something unimaginable nowadays. Something that cost US$100 in 1815 only cost US$65 in 1913. Average price inflation during this period was -0.43%. That is, every year, things became 0.43% cheaper. When you look at the post-Civil War period -- from 1865 to 1914 --, the values become even more extraordinary. Something that cost $100 in 1865 only cost $60 in 1913, which means there was an average annual deflation of 1% -- every year, things got 1% cheaper.
And this was the period, it is worth remembering, of the greatest economic expansion in American history -- something that today's economists would have difficulty explaining, since, for them, economic growth is only possible if there is inflation. Real GDP grew at an average of 3.7% per year, with recession only occurring in the years 1884, 1893-1894, 1896, 1904 and 1908, all of them caused by the fractional reserve system.
In short: there was economic growth and the monetary base (backed by gold) grew at negligible rates. Just to emphasize, banks had been practicing fractional reserves since that time, but they couldn't get too excited precisely because the monetary base was quite rigid. If they got too excited, they could easily become insolvent.
However, after the Panic of 1907 -- caused by some banks that were unable to fulfill their obligations to their account holders, precisely as a result of the monetary expansion they had carried out via fractional reserves --, several bankers decided that it was time to put an end to this market insecurity. It was time to create a lender of last resort, a powerful agency that would cartelize the sector, protecting it from this insecurity.
Thus, in December 1913 the Federal Reserve was born, an entity created by powerful people such as J.P. Morgan, John D. Rockefeller, Frank A. Vanderlip (president of the National City Bank of New York, associated with the Rockefellers), Henry Davison (principal partner of J.P. Morgan Company), Charles D. Norton (president of the First National Bank of New York), Colonel Edward House (who would later be President Woodrow Wilson's advisor and found the world-powerful Council on Foreign Relations, an obligatory presence in all theories of the conspiracy) and Paul Warburg (of the investment bank Kuhn, Loeb, & Co.)
Interestingly, all history books and all macroeconomics textbooks say that the Fed was created precisely to protect the interests of the poorest sections of the population. In fact, whenever something is created to benefit the establishment, the trick is to say that it is being done in the name of the poor -- this applies to everything: from state-owned companies to central banks, especially when it is created by bankers aiming for their own interests. The trick is applied worldwide and works well to this day.
What was the result of the creation of the American central bank? What happened to the American economy after the government took control of the currency? Did the dollar remain with the same purchasing power?
In 1920, there was the first post-Fed crisis, generated by the acceleration of monetary expansion. This was the last crisis in which a government did almost nothing to try to mitigate it -- which is exactly why its duration was short.
During the remainder of the 1920s, the money supply grew more rapidly again, culminating in the 1929 crisis.
In 1933, Roosevelt prohibited American citizens from redeeming their dollars in gold. Americans were even prohibited from owning any amount of gold at home or abroad. The dollar was devalued and became redeemable in gold only for foreign governments and central banks. Still, a small connection with gold was maintained.
In 1945, with the Bretton Woods agreement, the dollar became the standard world currency, although still linked to gold. With one detail: the dollar could not be redeemed in gold by American citizens; it could be redeemed in gold only to foreign governments and their central banks. No American individual could exchange dollars for gold. Only governments had this privilege. This arrangement, albeit tortuously, restricted the Fed somewhat, because if it inflated the dollar, foreign governments could exercise their right to exchange dollars for gold, causing a huge flight of gold from the US.
In 1971, however, precisely as a result of a large volume of gold outflow from the USA, Richard Nixon put an end to everything and definitively removed the USA from what was still left of the gold standard, defaulting on foreign governments and creating the paper system. -floating currencies that we currently know.