Edictum de Pretiis (Edict on Maximum prices)

Edictum de Pretiis

(Edict on Maximum prices)

The price edict was a decree by which the Roman emperor Diocletian fixed the prices of a large number of products. The details and precise data of those times have been lost, but the little information that was left gives a good idea of ​​what the edict was about.

Crisis of the 3rd century

Military crisis

In the third century there was a great crisis in the Roman Empire, since the multiple foreign peoples began the invasion. All this took place after the death of Alejandro Severo in the year 235, because once he died, the borders that were attacked by the Goths, Visigoths and Alemanni were neglected.

Only in the year 274 the Empire was unified and the borders became stronger.

Economic crisis

Under this period there was also an economic crisis that greatly affected the Empire. Hyperinflation occurred due to the devaluation of the currency (denarius) that was the result of the payment to the military in those years.

The emperors prior to Diocletian inflated their own currency (revaluation) to pay these soldiers, who also had a bonus for being loyal to the emperor. The denarius had already collapsed its value for the reign of Diocletian, so other measures had to be taken.

Price fixing

The creation of coins

As the denarius had no value, Diocletian created another coin called Argenteus, and removed the denary from circulation. The argenteus would be valued at 100 denarii, while the golden aureus would be replaced by the solidus valued at 1,000 denarii.

The Edict of Prices

However, these currencies did nothing but produce great inflation. In this context, Diocletian wanted to give a solution to this problem promulgating the Edict on Maximum Prices in the year 301.

This norm would establish a pricing in the products (more than a thousand), and condemned those merchants who wanted to sell their products to other markets where they could sell them at higher prices. In other words, anyone who sold at a price greater or less than that stipulated by the Emperor would be punished with the death penalty.

However, inflation did not stop and demand could not be satisfied, which gave rise to a black market, where many merchants were killed by the government. The shortage of products occurred immediately with a greater and greater demand.

Finally, the Price Edict persisted until the monetary reform of Constantine I, which could somewhat relieve inflation. Some say that the Edict of Diocletian was one of the reasons why the Roman Empire broke down.

Conclusion

Why talk about an economic measure in a philosophy blog? because this measure gave one of the first guidelines of economic thought, which we will soon see in the pages of this blog. It is a rule that to this day occupies rulers to somehow heal the economy, while others take advantage of it in any way possible. A measure that has even come to serve the most corrupt in our society, forming alliances to then sell the products and create monopolies.