Hail, Caesar: Rome marks birth of emperor who built the Colosseum

His name is immortalised in modern Italian as the word for a public urinal, but tomorrow that humiliation will be forgotten as Rome sets about throwing a massive party for the Emperor Vespasian's 2,000th birthday. Naturally enough, the celebratory bash – which takes the form of a 10-month exhibition – is focused on the building for which he is most famous, the Colosseum.

By far the largest amphitheatre the ancient Romans built, it is capable of holding at least 50,000 and perhaps as many as 70,000 screaming plebs. When it was inaugurated, in the reign of Vespasian's son and heir Titus, 5,000 wild animals were put to the sword over 100 days for the amusement of the punters, and despite the halt called by Constantine, the emperor who converted to Christianity, bloody gladiatorial combat remained standard fare until it was banned early in the fifth century.

As the crowning monument of a civilisation, the Colosseum has always had its detractors. Some scholars of the ancient world regard it as hideous, without architectural merit. On its own terms, however, the mega-structure known originally as the Flavian Amphitheatre, after Vespasian's family name, Flavius, was a great advance on what it replaced. It was located close to the heart of the grounds of Domus Aurea, the "House of Gold" built for the Emperor Nero, the great monument to his vanity and greed. Vespasian expropriated those grounds and, in place of Nero's self-indulgence, provided the greatest forum ever built for the self-indulgence of the multitude: aesthetically crude perhaps, lacking in delicacy and taste, but stunningly bold. And an appropriate monument to an extraordinary man.

Look at the surviving marble busts of Vespasian and the centuries fall away. You can see his descendants in any Roman street. He was burly and thick-set with a bald, bull-like head, steely eyes and a tense, frowning mouth, teeth clenched in determination. One of his contemporaries remarked that he looked as if he was sitting on the lavatory, and having a hard time of it. Above all it is a common face. There was nothing aristocratic about this emperor. He was Roman social mobility incarnate.

His full name was Titus Flavius Sabinus Vespasianus and after his death, like all deceased emperors, he was worshipped as a god. He started out his life in an altogether different key, born the grandson of a centurion and the son of a tax collector in the rustic district of Sabina, north of Rome. He had only a mediocre education; in later life they made fun of him for his poor grasp of Latin. But you can read Vespasian's ticket to glory in his simple, powerful face: he became a first-rate soldier, and beloved of the men he commanded.

He was in his early thirties when he made his mark, participating in the second invasion of Britain, seizing the Isle of Wight for Rome, and developing tactics for overcoming the Britons' formidable defensive earthworks. Back in the Eternal City in furlough, he was ill at ease among the corrupt ruling class. AD66 he went to Greece as a member of Nero's entourage but made the serious error of falling asleep during one of the megalomaniac emperor's singing recitals. He saved his skin by fleeing to a remote province.

The following year the faux pas was forgiven when Nero realised that he had need of this man. Rebellion had broken out among the Jews in Judaea and the Roman forces were having a frustrating time trying to oust them from their walled cities. Vespasian's success in winkling out the walled-up Britons was remembered and he was sent to Judaea with orders to suppress the rebellion and bring the Jews to heel. He did exactly that, and although many Jewish towns were destroyed and thousands of people killed, he was remembered as a fair and honest administrator. The defeat of the Jewish rebellion was the making of Vespasian. He was the hero of his army, and the loot he amassed would later go into the building of the Colosseum.

Rome descended into chaos and civil war after Nero's suicide, getting through four emperors in a single year. All this time, Vespasian was plotting his path to power. With his devoted army at his back, and with two grown sons offering the promise of dynastic continuity, he was acclaimed emperor twice, first by his army in July AD69, then nearly six months later by the Senate. Vespasian would always be respectful and attentive to the Senate but he never had any doubt about the source of his power, and dated his accession from the first acclamation, not the second.

In the judgement of one contemporary historian, Vespasian was the first emperor whose character actually improved after he attained the throne. He took drastic measures to restore sanity to the Roman Empire's finances, which had been emptied by Nero's extravagance.

He raised taxes steeply, making himself instantly unpopular, and famously introduced a tax on public urinals, which is why in Italy they are associated with him to this day. When his son Titus remonstrated with him over this measure, the emperor held out a handful of coins for him to sniff. These come from the urinal tax, he said, " Pecunia non olet" (money has no smell). It was his most famous aphorism.

Vespasian retained his simple martial tastes despite all the temptations of his position; when a youth to whom he had given an important promotion came to him reeking of perfume, he sent him away in disgust, saying "I'd rather you stank of garlic", and cancelled the new position.

Yet in his achievements he succeeded in transcending his humble origins and the brutalising years of military service: he created schools for grammar and oratory – thus laying the foundations for classical education all over Europe. He recruited a new class of administrators from the business class to run the empire on more professional lines.

And he set in train the greatest building boom of the century. When he came to power, Rome was full of ruins and abandoned sites, the result of the civil war that had preceded his coronation. To bring the city back to its former glory, Vespasian gave anyone with the desire and the necessary funds the right to build on those sites. The result was many of the breathtaking buildings in and around the Roman Forum that tourists still admire to this day. They include the Temple of Peace, the Domus Flavia and the Temple of Divo Vespasiano, his own cult.

To mark Vespasian's big day, Rome is breathing new life into the ancient city he did so much to change. Busts, bas-reliefs, weapons, coins and paintings are among the 110 archaeological treasures that will be exhibited from today until next January in the Colosseum, the Curia in the centre of the Forum and the Criptoportico, a building on the Palatine Hill that has never before been open to the public. There will also be a new guided route through the Forum, with explanatory panels shedding light on the buildings for which the emperor was responsible.

Filippo Coarelli, the curator of the extravaganza, commented: "The element of chance in Vespasian's success cannot hide the profound manner in which that success resonates with the whole history of Rome: the mobility which was intrinsic to that society, which allowed it to access the energy of emerging classes."

Despite these achievements, and despite the Colosseum, which was still under construction when Vespasian died in 79, it was his determination to tax Romans to the hilt for which they most remembered him, the image of the stingy, money-grubbing son of a tax-collector that stuck.

During his elaborate funeral, the procession was led by a popular clown called Favor who mimicked the dead emperor. "How much did this funeral cost?" he demanded of the organisers at one point, according to Suetonius. "A hundred thousand sestertii," came the reply. To which the Emperor's caricature retorted: "Give me a hundred and chuck my body in the Tiber!"