Diocletian was a Roman
Emperor who ruled from 284-305. He is perhaps most famous for his "Edict
on Maximum Prices", which was issued in 301. The Edict attempted to set
maximum prices for all goods and services in the Empire, in order to curb
inflation. The Edict was largely unsuccessful, and was eventually abandoned.
Nevertheless, Diocletian's efforts to control prices through government
intervention were unprecedented, and paved the way for later emperors to
attempt similar measures. Discuss the reasons why Diocletian set maximum prices
on goods and services. There are several possible reasons why Diocletian set
maximum prices on goods and services. One reason may have been to prevent
inflation and stabilize the economy. Another reason may have been to prevent
exploitation by businesses and to ensure that everyone had access to essential
goods and services. Describe the effects of Diocletian's decision to set
maximum prices on goods and services. The purpose of Diocletian's price
controls was to prevent merchants from unfairly raising prices and to keep the
cost of living stable. Prices were pegged at their level in 301 AD, and anyone
caught charging more faced harsh penalties. The controls had mixed results; in
some cases, they were successful in keeping prices stable, but in others,
merchants found ways to get around the controls, and prices continued to rise.
Overall, the price controls caused more problems than they solved, and they
were eventually abandoned. Summarize the overall impact of Diocletian's
decision to set maximum prices on goods and services. The overall impact of
Diocletian's decision to set maximum prices on goods and services was
inflationary. By setting prices artificially high, Diocletian's edict created a
situation in which merchants were reluctant to sell goods and services, leading
to shortages. In addition, the edict led to increased corruption as merchants
sought ways to circumvent the price controls.