Edict on Maximum Prices

The Edict on Maximum Prices (also known as the Edict on Prices or the Edict of Diocletian; in Latin "Edictum De Pretiis Rerum Venalium") was issued in 301 by Roman Emperor Diocletian.

During the Crisis of the Third Century, Roman coinage had been greatly debased by the numerous emperors and usurpers minting their own coins to bribe soldiers and officials. Earlier in his reign, as well as in 301 around the same time as the Edict on Prices, Diocletian issued Currency Decrees, which attempted to reform the system of taxation and to stabilize the coinage. It is difficult to know exactly how the coinage was changed, as the values and even the names of coins are often unknown.

All coins in the Decrees and the Edict were valued according to the "denarius", which Diocletian hoped to replace with a new system based on the silver "argenteus" and its fractions. The "argenteus" seems to have been set at 100 "denarii", the silver-washed "nummus" at 25 "denarii", and the bronze radiate at 4 or 5 denarii. The copper laureate was raised from 1 "denarius" to 2 "denarii". The gold "aureus", which by this time had risen to 833 "denarii", was replaced with a "solidus", worth 1000 "denarii" (this was different from the "solidus" introduced by Constantine a few years later). These coins held their value during Diocletian's reign, but aside from the bronze and copper coins, which were mass produced, they were minted only very rarely and had little effect on the economy.

These new coins actually added to the inflation, and in an attempt to combat this he issued his Edict on Maximum Prices in 301. The first two-thirds of the Edict doubled the value of the copper and bronze coins, and set the death penalty for profiteers and speculators, who were blamed for the inflation and who were compared to the barbarian tribes attacking the empire. Merchants were forbidden to take their goods elsewhere and charge a higher price, and transport costs could not be used as an excuse to raise prices.

The last third of the Edict, divided into 32 sections, set a limit on prices for over a thousand products. It did not fix prices, but instead set "maxima", prices over which certain goods could not be sold. These goods included various food items (beef, grain, wine, beer, sausages, etc), clothing (shoes, cloaks, etc), freight charges for sea travel, and weekly wages. The highest limit was on one pound of purple-dyed silk, which was set at 150 000 "denarii" (the price of a lion was set at the same price).

However, the Edict did not solve the problem, as Diocletian's mass minting of coins continued to increase inflation, and the maximum prices in the Edict were apparently too low. Merchants either stopped producing goods, sold their goods illegally, or used barter. The Edict tended to disrupt trade and commerce, especially among merchants. Sometimes entire towns could no longer afford to produce trade goods. Because the Edict also set limits on wages, those who had fixed salaries (especially soldiers) found that their money was increasingly worthless as the artificial prices did not reflect actual costs.

The Edict was probably issued from Antioch or Alexandria and was set up in inscriptions in Greek and Latin. It now exists only in fragments found mainly in the eastern part of the empire, where Diocletian ruled, although it is still the longest surviving piece of legislation from the period of the Tetrarchy. The Edict was criticized by Lactantius, a rhetorician from Nicomedia, who blamed the emperors for the inflation and told of fighting and bloodshed that erupted from price tampering. By the end of Diocletian's reign in 305, the Edict was virtually ignored, and the economy was not stabilized until Constantine's coinage reform.

ee also

*List of treaties

References

*cite book
last = Corcoran
first = Simon
authorlink=Simon Corcoran
title = The Empire of the Tetrarchs, Imperial Pronouncements and Government AD 284-324
publisher = Oxford University Press
date = 2000
pages =440 pages
url = http://www.oup.com/uk/catalogue/?ci=9780198153047
id = ISBN 0-19-815304-X

*

* [http://www.mises.org/story/1962 4000 Years of Price Controls] . Ludwig von Mises Institute