By the end of the 3rd century AD, the finances of ancient Rome were in terminal crisis.
Years and years of debasing the currency had resulted in severe hyperinflation– a period of Roman history known as the Crisis of the Third Century (from AD 235 through AD 284).
During the time of Julius Caesar, for example, the Roman silver denarius coin was nearly 98% pure silver.
Two centuries later in the mid-100s AD, the silver content had fallen to 83.5%.
And by the late 200s AD, the silver content in the denarius was just 5%.
As the money continued to be devalued, prices across the Empire skyrocketed.
Wheat, for example, rose in price by over 4,000% during the first three decades of the third century.
Rome was on the brink of collapse. And when Emperor Diocletian came to power at the end of the third century, he tried to stabilize the economy with his ill-fated Edict on Wages and Prices.
Diocletian’s infamous decree fixed the price of everything in the Empire. Food. Lumber. Salaries. Everything.
And anyone caught violating the prices set forth in his edict would be put to death.
Another one of Diocletian’s major policies was reforming the Roman tax system.
He mandated widespread census reports to determine precisely how much wealth and property each citizen had.
They counted every parcel of land, every piece of livestock, every bushel of wheat, and demanded from the population increasing amounts of tribute.
And anyone found violating this debilitating tax policy was punished with– you guessed it– the death penalty.
Needless to say, Diocletian’s reforms didn’t work.
Every high school economics student knows that wage and price controls don’t work… and that excessive taxation bankrupts the population.
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