I had to go to the site, Diocletian was mentioned for his price and wage controls. No one is advocating such controls (The last time they were tried was in the early 1970s under Nixon and failed). Somehow Keynes is painted as someone who supported wage and price controls, something Keynes NEVER supported (he did support currency controls, i.e how much money anyone or any corporation could take out of England during the 1940s, 1950s and into the 1960s, but people were free to set their own prices and wages).
Somehow Keynes support for currency controls, which have worked in the past, but hurts banks and international corporations more then individuals, have come to include something he expressly said NOT to do, wage and price controls. With that transformation Diocletian economic policies came up. No one mentions that Constantine, who ended up after several years of Civil Wars, to become the successor to Diocletian, kept most of Diocletian policies, EXCEPT for the rigid control on prices and wages (i.e. Constantine abolished the controls EXCEPT to those people involved with tax collection, and the thrush of Constantine's controls was to collect taxes NOT to control prices or wages).
In fact Constantine's conversion to Christianity can be explained in economic terms. By embracing Christianity, Constantine could stop the traditional emperor's support of all the Pagan Temples AND loot those temples for the gold in them (The Gold idols were hated by the Christians, but Constantine and his successors seems more worried about getting those golden idols to make gold coins then destroying temples, Temples without gold survived another 200 years till Justinian finally abolished the last of them).
With Gold Coins Constantine was minting, he was able to stabilize the currency of the Roman Empire. His coin would stay at a stable price for almost 800 years (i.e till the Battle fo Manzikert in 1071. Yes Gold coin was the coin of the realm during the final collapse of the Roman Empire in the West and the slow decade that followed in from of the Eastern Roman Empire called the "Byzantine Empire" since the 1700s.
More on the Battle of Manzikert:
http://www.thelatinlibrary.com/imperialism/notes/manzikert.html
Back to Diocletian. Diocletian was unwilling to loot Pagan Temples and thus had nothing to replace the Silver Rome had used as its primary currency since the Punic Wars, 500 years before (Gold had been used at times, Caesar's conquest of Gaul seems to be a conquest for control of the Gold Mines of Gaul). In the early to mid 200s the Silver Mines of Spain, the source of Roman Silver since the Punic Wars, water out i.e. Roman Engineers could no longer pump out the water to get at the Silver from the mines. This lead to massive shortage of coin, and to solve that problem a massive substitution of older Silver Coins with Coins with less and less Silver in them. Nero had been the first Emperor to debase Roman Coins, but his Successors also debased the coinage. Combined with the increase in silver form the Spanish mines, you had a slow, but steady increase in coins from the time of Nero till about 180 AD. The drop in Silver production forced the Roman Emperors of the 200s to resort to various ways to obtain Silver. Emperor Severus marched on Persia and looted its Capital, but that provided onl;y some of the coins he needed, most of the coins he needed was produced by reducing the Silver Content from 81.5% at the start of his reign to 54% at the end of this reign. His successors proceeded to debase the currency even more to come up with funds to run the Government.
More on Emperor Severus
http://en.wikipedia.org/wiki/Septimius_Severus
The situation became worse after Severus's death, the Roman Empire almost collapsed. Various Emperors fought to preserve the Empire, each one debasing the coins more and more so to pay for the troops. Emperor Carus even re-sacked the Persian Capital to raise revenue.
More on Carus:
http://en.wikipedia.org/wiki/Carus
The coin debasement was so bad that the Emperor Aurelian (270-275AD) had to introduced a new coin with HIGHER silver contents then had existed in years within the Empire, and it only had 5% silver.
More on Aurelian:
http://en.wikipedia.org/wiki/Aurelian
The reforms of Aurelian was NOT enough, by the rule of in 284 further reforms were needed. Diocletian was facing a bankrupt Empire with no source of Gold or Silver to make into coins (And linen paper was a closely guarded secret of the Chinese, and would remain so till the Mongol Invasions of the 1200s, paper currency was NOT a real option).
More of the crisis of the Third Century, Severus to Diocletian:
http://en.wikipedia.org/wiki/Crisis_of_the_third_century
Thus what was facing Diocletian was how to stabilize the economy. Not only the coinage of the Empire but its tax structure. The debasement of the previous 100 years had produced coins that were almost worthless and since taxes were collected in terms of those coins, tax revenue was almost nothing. Diocletian army was "paid" in the form of land after their time of service and food while in service.
Thus the first thing Diocletian had to solve was the Tax problem, but to do so he had to solve the coinage situation OR opt to continue the complex barter system his predecessors had resorted to during the Crisis of the Third century to raise the troops needed to stop the dissolution of the Empire.
Thus tax was addressed first, in the from of a Census that counted who owned what and based on those numbers how much each local government unit had to forward to the Emperor. Local leaders where held liable for any shortfalls. These tax reforms would last for centuries, the below site from Wikipedia says to the Arab conquest in 630 AD, but those same tax policies would last in parts of modern day Turkey till after WWI.
http://en.wikipedia.org/wiki/Diocletian#Currency_and_inflation
Tied in with tax reform was coinage reform. Diocletian introduced a new Silver Coin with 95% silver in it, something that had NOT existed in the Empire since the Reign of Nero 250 years before. The problem with these new Silver coins was that people kept them, and used the older coins for the older coins were worthless. Everyone wanted the new coins, but wanted to spend the old coins. This was complicated by Diocletian desire to keep Silver as the main coin of the Empire since it had been the traditional coin for almost 500 years. In many ways Diocletian was trying to restore the Empire of Augustus, down to the religious practices and coinage of Augustus. Diocletian did with with a weak understanding of HOW Augustus could rule (i.e. Diocletian was facing a powerful Persian Empire and a growing might of the Goths and Germans, Augustus faced a very weak Pathanian Empire ruling Persia and a very weak set of less then united German Tribes).
Thus Augustus could have a very small army (only 30 legions or about 150,000 men), that cost little to maintain Diocletian had to keep an army large enough to defeat a dual attack by the Goths and the Persians (Roman Army at the time of Diocletian was over a 580,000 men, including border units, with an Empire population much smaller then it had been under Augustus). In per capita basis, Diocletian had up to one man out of 15 freemen in the Army (This reflected the drop in overall population of the Empire since about 180 AD AND the increase number of people in the Empire who were slaves as compared to freemen).
To show you how high a number of solider this wass, France at the start of WWII, called up one out of every eight men for an ACTIVE WAR. France's peace time army was a faction of the one out of eight. Diocletian PEACETIME ARMY was one out of 15. Britain at the start of WWII called up one out of 48 men into the Army (This would increase throughout WWII but it shows you how LARGE a demand on the population was the size of Diocletian's PEACETIME army).
One of the problem with the later Roman Empire was Rome has so bankrupt its peasants (90% of the population) that they cared less who ruled them (And many had been force to become slaves just to eat). Thus a 20th century reserve army, or even a 18th century or Punic War era Militia Army could NOT be raised, for fears it would have to recruit from these Roman Citizens who were also slaves may turn on the ruling elite of the Empire if formed and trained into an army (Some of the revolts of the Crisis of the Second Century seems to indicate a massive support for anyone to overthrow the ruling elite of Rome, showing you how weak the power the Roman Empire had over its own people).
Diocletian could NOT even think of opting to a return to the pre-Maius army of armed peasant militia, on the grounds such a militia would turn against the Roman elite and demand land reform (Emperor Heraclius would do so in the 600s in response to the Arab invasion, this permitting Byzantine survival and its subsequent expansion after 700 AD but no where near what the Empire had been before the Persian and then Arab invasions of the early 600s). In many ways the reforms of Heraclius (Which is believed to have started even before his rule) became the foundation of Feudalism, that anyone who owned land, owned a military duty to his superior OR owned a duty to the person who would carry out that Military Duty. The main reason Heraclius could do such a reform was Greece, the Balkans and Asia Minor, what was left of the Roman Empire after the Arab Conquest, had been the area the old Roman elites would like to visit BUT not own property or live, Thus had the most small farmers that you could then convert the base for a Militia Army.
More on the Emperor Heraclius:
http://en.wikipedia.org/wiki/Heraclius
Anyway back to Diocletian. Diocletian do to the continued crisis involving Silver coins, issued a Price and Wage Control law. The extent of this law is disputed. The sole source of it reported its failure, but close reading of that author's writing indicate the law may ONLY have applied to the lands owned by Diocletian himself NOT anyone else. This is in dispute, but what is not is that the law did not work and was either ignored or withdrawn within a year. The writer of the source of the extent and problem with the wage and price law is Lucius Caecilius Firmianus Lactantius, a Christian author best known for his report on Diocletian persecution of Christian, and thus NOT considered an unbiased source on Diocletian (And among early Church scholars not held in high esteem, despite his report of Constantine seeing a Cross before the Battle of the Milvian Bridge in 312 AD).
More on Lucius Caecilius Firmianus Lactantius
http://www.newadvent.org/cathen/08736a.htm
http://en.wikipedia.org/wiki/Lactantius
Before we go to far on Diocletian's economic regulations, lets remember he ruled for 21 years AND THEN RETIRED. The only Emperor to ever retire voluntary. We know that for when his four successors meet at a peace conference when they had entered into a Civil War against each other, they all agreed to give up their position if Diocletian would return to power, Diocletian refused and continued to raise vegetable in what is now Spits Croatia. Thus his wage and price controls (and their reported failure) had no effect on the length of this rule nor his retirement. In simple terms they appear to have had no long term effect.
Thus why bring Diocletian's wage and price control up? It is always used as the classic example of what NOT to do, but it is unclear if Diocletian even tried them for any length of time (i.e. when they failed Diocletian took other options). Constantine economic policies were almost the same as Diocletian's but Constantine was successful. Why were they successful? First Constantine did NOT try any Wage or price controls, Second he permitted Christians to take over the larger Pagan temples, on the condition he obtain the Gold and Silver from those temples. This gave Constantine to issue a stable coin, this time in Gold. Over the next 100 years, Constantine and his successors used these temples as his new mines, this time for Gold and that lead to a slow rate of inflation as more and more gold were made into gold coins. i.e. controlled inflation. The Roman Empire did NOT re-enter its problem years till most of these temples were long looted, then you had a return of deflation and the economic collapse of the Empire in the West (The Eastern Empire survived, but there is strong evidence the Eastern Empire Survived do to the fact gold from the Western Empire went east with the decline of the City of Rome itself and its subsequent replacement as the largest city in the Empire by Constantinople. Thus the East survived because the West fell (Roman elites in the West moved East to escape the Collapse and brought much of their gold with them, thus enriching the east at the cost of losing everything in the Western Empire by 450 AD).
Just some comment that Diocletian's wage and price control were a minor event in the death of the Roman Empire, the bigger problem was the switch from the low inflation period of the Punic wars to the Crisis of the Third Century (this was an overall boom period, with inflation constant but low), to a high inflation period do to the need to raise revenue quickly without being able to raise taxes (the Crisis of the Third Century) to the attempts by Diocletian's to control inflation (and the debate on the length and extent of that inflation, given that the wage and price controls were rapidly repealed or ignored). The return of low inflation under Constantine and his looting of the Temples, to the return of deflation once that source of gold was depleted The economic situation before and after those attempted controls of Diocletian are more interesting AND the inflation everyone says was occurring may NOT have been, thus why the attempt was short lived.
Thus the argument is over something that was at best short lived and at worse ineffective. Given that Keynes even opposed wage and price controls why bring it up? The only answer is that the acts of Diocletian is the best known attempt at wage and price controls and was attacked by an author of the time period. Given the level of that attack, readers who do NOT know who the author of the attack was, assume it is an unbiased report (and it is not). Thus the report fulfills an agenda, that wage and price controls do not work. But that gets us to who is advocating wage and price controls? and the answer is no one. Diocletian's big reforms was not his wage and price controls but his tax reform AND his attempt at coinage reform. Attacking Diocletian permits people to ignore what happened in the 100 years before and after his rule. Both were times of huge economic disruption that was the result of wild inflation (pre Diocletian) and deflation (post 400) with two periods of moderate but stable growth, the period before 180 AD and the period between 312 and 400, both where you had moderate inflation.
= new reply since forum marked as read
