An Ancient Experience with Price Control

Abstract

NE of the characteristic features of the present economic situation in the United States and in other countries at war is an increased effectual demand coupled with decreasing quantities of goods brought to market. Both factors have arisen out of the war situation. The market is becoming more and more an emergency market and the prices based on it are in part no longer normal The law of supply and demand, regulating the actual price of goods, is weakened in its function, not only because of the growing scarcity of goods, but also as a result of greater purchasing power. This increasing purchasing power as states the introduction to the Canadian Maximum Prices Regulations of November, 1941, will, if unchecked, create undesirable inflation of prices. As one means of checking inflation Great Britain, Canada, the United States, and other countries have resorted to price control, using predominantly the method of either uniform or individual maximum price fixing. Yet maximum prices are not new, as ancient economic history shows. In 301 A.D. the Roman Emperor Gaius Aurelius Valerius Diocletianus promulgated his famous edict De pretiis rerum venalium, which fixed a maximum price for more than one thousand items. The edict was published in the form of an imperial law. It was enacted Diocletian himself, his consort Maximianus, to whom Diocletian had transferred his authority over the Western Empire, and the two Caesars, Constantius and Galerius, whom the two emperors had adopted as their aids in the government and as their potential successors. The question has arisen whether the edict was published and enforced in the whole empire, or whether it applied to the East only, the part of the empire ruled Diocletian himself. The introduction (praefatio) to the edict provides that the maximum prices be held in observance throughout our whole domain (totius orbis nostri observantia contineri) and emphasizes in its last paragraph that by such a statute provision is manifestly made not only for the individual states (civitatibus singulis) and peoples and provinces but for the whole empire (universo orbi). This seems to indicate that the edict was not intended for the Eastern