The Edict of Prices of a.d. 301 was the most famous government decree enacted in the ancient world to override the economic laws that govern the value of money. At first glance inflation seems to be an upward drift in the prices of all goods on the market. Penetrating the subject more deeply brings one to the realization that the steadily upward trend in prices means that money buys less, that is, money is declining in value. The Edict of Prices of a.d. 301 was an effort to stop inflation with wage and price controls.
The last half of the third century a.d. saw the economy of the Roman Empire swept up in a spiraling updraft of inflationary momentum, triggered by debasement of the coinage. Coins that had 40 percent silver content in a.d. 250 dropped to 4 percent or less silver content by a.d. 270. The government also infused the money supply with a hefty helping of grossly inferior copper coinage.
Diocletian assumed the royal purple in a.d. 284 and ruled until a.d. 307. He first sought to meet the challenge of inflation by reforming the currency—issuing new coins full valued in precious metal. The inflationary surge continued to ravage the economy, robbing the soldiers of purchasing power, and pushing the poor further into poverty while the rich found ways to shield themselves from inflation. Something of the frustration the government felt over the stubborn persistence of the inflation shows through in the wording of the legislation:
If, indeed, any self-restraint might check the excesses with which limitless and furious avarice rages—avarice which with no thought for mankind hastens to its own gain. Since, however, it is the sole desire of unrestrained madness to have no thought for the common need and since it is considered among the unscrupulous almost the creed of avarice, selling and rising with fiery passions, since, as a guide, fear is always found the most influential preceptor in the performance of duty—it is our pleasure that anyone who shall have resisted the form of this statute shall for his daring be subject to a capital penalty. Nor is he exempt from the same penalty who believes that subsequent to this regulation he must withdraw them [commodities] from the general market, since the penalty should be even more severe for him who introduces poverty than for him who harasses it against the law.
(Frank, 1940, Vol. 5)
The edict set maximum prices for a detailed list of goods, and wages for a range of skills from architects to stonemasons. Those who sold goods above the maximum were subject to the death penalty. The same punishment awaited buyers who conspired with sellers to pay prices above the maximum, and sellers who hoarded goods to avoid selling them at legal prices.
The edict failed miserably. Sellers hoarded goods, and production fell off. Diocletian eased the restrictions of the edict, which Constantine revoked completely. The language of the edict sounds familiar tones that often are heard when government policy fails to tame inflation, and governments turn to wage and price controls out of frustration.