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.
The Edict was probably issued from Antioch or Alexandria and was set up in inscriptions in Greek and Latin. 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. 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 for all practical purposes ignored. The Roman economy as a whole was not substantively stabilized until Constantine's coinage reforms in the 310s.
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During the Crisis of the Third Century, Roman coinage had been greatly debased 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.
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, 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 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. 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 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, imposed a price ceiling - 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, which was set at 150,000 denarii (the price of a lion was set at the same price).
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.
| Solidus (coin) | Argenteus | Nummus | Radiate (coin) | 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 |