Edict on Maximum Prices
Encyclopedia
Latin
Latin is an Italic language originally spoken in Latium and Ancient Rome. It, along with most European languages, is a descendant of the ancient Proto-Indo-European language. Although it is considered a dead language, a number of scholars and members of the Christian clergy speak it fluently, and...
Edictum De Pretiis Rerum Venalium) was issued in 301 by Roman Emperor
Roman Emperor
The Roman emperor was the ruler of the Roman State during the imperial period . The Romans had no single term for the office although at any given time, a given title was associated with the emperor...
Diocletian
Diocletian
Diocletian |latinized]] upon his accession to Diocletian . c. 22 December 244 – 3 December 311), was a Roman Emperor from 284 to 305....
.
The Edict was probably issued from Antioch
Antioch
Antioch on the Orontes was an ancient city on the eastern side of the Orontes River. It is near the modern city of Antakya, Turkey.Founded near the end of the 4th century BC by Seleucus I Nicator, one of Alexander the Great's generals, Antioch eventually rivaled Alexandria as the chief city of the...
or Alexandria
Alexandria
Alexandria is the second-largest city of Egypt, with a population of 4.1 million, extending about along the coast of the Mediterranean Sea in the north central part of the country; it is also the largest city lying directly on the Mediterranean coast. It is Egypt's largest seaport, serving...
and was set up in inscriptions in Greek
Greek language
Greek is an independent branch of the Indo-European family of languages. Native to the southern Balkans, it has the longest documented history of any Indo-European language, spanning 34 centuries of written records. Its writing system has been the Greek alphabet for the majority of its history;...
and Latin
Latin
Latin is an Italic language originally spoken in Latium and Ancient Rome. It, along with most European languages, is a descendant of the ancient Proto-Indo-European language. Although it is considered a dead language, a number of scholars and members of the Christian clergy speak it fluently, and...
. The decree now exists only in fragments found mainly in the eastern part of the empire, where Diocletian ruled. However, the reconstructed fragments have been sufficient to estimate prices for goods and services for historical economists.
The Edict on Maximum Prices is still the longest surviving piece of legislation from the period of the Tetrarchy
Tetrarchy
The term Tetrarchy describes any system of government where power is divided among four individuals, but usually refers to the tetrarchy instituted by Roman Emperor Diocletian in 293, marking the end of the Crisis of the Third Century and the recovery of the Roman Empire...
. The Edict was criticized by Lactantius
Lactantius
Lucius Caecilius Firmianus Lactantius was an early Christian author who became an advisor to the first Christian Roman emperor, Constantine I, guiding his religious policy as it developed, and tutor to his son.-Biography:...
, a rhetoric
Rhetoric
Rhetoric is the art of discourse, an art that aims to improve the facility of speakers or writers who attempt to inform, persuade, or motivate particular audiences in specific situations. As a subject of formal study and a productive civic practice, rhetoric has played a central role in the Western...
ian from Nicomedia
Nicomedia
Nicomedia was an ancient city in what is now Turkey, founded in 712/11 BC as a Megarian colony and was originally known as Astacus . After being destroyed by Lysimachus, it was rebuilt by Nicomedes I of Bithynia in 264 BC under the name of Nicomedia, and has ever since been one of the most...
, 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 for all practical purposes ignored. The Roman economy as a whole was not substantivity stabilized until Constantine's coinage reforms in the 310s.
History
During the Crisis of the Third CenturyCrisis of the Third Century
The Crisis of the Third Century was a period in which the Roman Empire nearly collapsed under the combined pressures of invasion, civil war, plague, and economic depression...
, Roman coinage had been greatly debased
Debasement
Debasement is the practice of lowering the value of currency. It is particularly used in connection with commodity money such as gold or silver coins...
by the numerous emperors and usurpers who minted their own coins, using base metals to reduce the underlying metallic value of coins used to pay soldiers and public 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 or have been lost in the historical record. The Roman Empire was awash with other coins from outside of the Empire – especially in the Mediterranean. The implied coinage changeover time was at least a decade.
Although the decree was nominally successful after it was imposed, market forces led to more and more of the decree being disregarded and reinterpreted over time.
Mechanics
The full mechanics of the decree have been lost. No full decree has been found, as it exists only in fragments. However, enough of the decrees text is known so that the following is understood to be true.All coins in the Decrees and the Edict were valued according to the denarius
Denarius
In the Roman currency system, the denarius was a small silver coin first minted in 211 BC. It was the most common coin produced for circulation but was slowly debased until its replacement by the antoninianus...
, which Diocletian hoped to replace with a new system based on the silver argenteus
Argenteus
The argenteus was a silver coin produced by the Roman Empire from the time of Diocletian's coinage reform in AD 294 to ca. AD 310. It was of similar weight and fineness as the denarius of the time of Nero...
and its fractions. The argenteus seems to have been set at 100 denarii, the silver-washed nummus
Nummus
Nummus , plural nummi is a Latin term meaning "coin", but used technically for a range of low-value copper coins issued by the Roman and Byzantine empires during late Antiquity....
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
Aureus
The aureus was a gold coin of ancient Rome valued at 25 silver denarii. The aureus was regularly issued from the 1st century BC to the beginning of the 4th century, when it was replaced by the solidus...
, which by this time had risen to 833 denarii, was replaced with a solidus
Solidus (coin)
The solidus was originally a gold coin issued by the Romans, and a weight measure for gold more generally, corresponding to 4.5 grams.-Roman and Byzantine coinage:...
, worth 1,000 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 newly issued coins added to inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
. This inflation is understood to be the reason the decree was issued. Issues of economic system feedback were not well understood at the time.
The first two-thirds of the Edict doubled the value of the copper and bronze coins, and set the death penalty for profiteers
Profiteering
Profiteering may relate to:* Profiteering * War profiteering...
and speculators
Speculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...
, who were blamed for the inflation and who were compared to the barbarian
Barbarian
Barbarian and savage are terms used to refer to a person who is perceived to be uncivilized. The word is often used either in a general reference to a member of a nation or ethnos, typically a tribal society as seen by an urban civilization either viewed as inferior, or admired as a noble savage...
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, imposed a price ceiling
Price ceiling
A price ceiling is a government-imposed limit on the price charged for a product. Governments intend price ceilings to protect consumers from conditions that could make necessary commodities unattainable. However, a price ceiling can cause problems if imposed for a long period without controlled...
- a maxima - for over a thousand products. These products 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
Silk
Silk is a natural protein fiber, some forms of which can be woven into textiles. The best-known type of silk is obtained from the cocoons of the larvae of the mulberry silkworm Bombyx mori reared in captivity...
, which was set at 150,000 denarii (the price of a lion
Lion
The lion is one of the four big cats in the genus Panthera, and a member of the family Felidae. With some males exceeding 250 kg in weight, it is the second-largest living cat after the tiger...
was set at the same price).
Outcome
The Edict did not solve all of the problems in the economy. Diocletian's mass minting of coins of low metallic value 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. It is safe to assume that a gray market economy evolved out of the edict at least between 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 long term impact for Western European economics has been that price decrees are viewed as only being effective for less than one generation. Most price decrees since AD 1000 have been issued with the understanding that the fixed prices would only last for 5 or 10 years. Since the 1930s (with the exception of WWII), price decrees have only been issued for durations of typically less than a year.
Coinage
| Solidus (coin) Solidus (coin) The solidus was originally a gold coin issued by the Romans, and a weight measure for gold more generally, corresponding to 4.5 grams.-Roman and Byzantine coinage:... | Argenteus Argenteus The argenteus was a silver coin produced by the Roman Empire from the time of Diocletian's coinage reform in AD 294 to ca. AD 310. It was of similar weight and fineness as the denarius of the time of Nero... | Nummus Nummus Nummus , plural nummi is a Latin term meaning "coin", but used technically for a range of low-value copper coins issued by the Roman and Byzantine empires during late Antiquity.... | Radiate (coin) Radiate (coin) The radiate or Post-reform radiate , was introduced by Diocletian during his reforms. It looked very similar to an Antoninianus even with a radiated crown like Sol Invictus, except it misses the XXI that numismatists believe was to represent 20 parts bronze to 1 part silver... | Laureate (coin) | Denarius | |
|---|---|---|---|---|---|---|
| Solidus | 1 | 10 | 40 | 200 | 500 | 1,000 |
| Argentus | 1/10 | 1 | 4 | 20 | 50 | 100 |
| Nummus | 1/40 | 1/4 | 1 | 5 | 12 1/2 | 25 |
| Radiate | 1/200 | 1/20 | 1/5 | 1 | 2 1/2 | 5 |
| Laureate | 1/500 | 1/50 | 2/25 | 2/5 | 1 | 2 |
| Denarius | 1/1,000 | 1/100 | 1/25 | 1/5 | 1/2 | 1 |