SPLIT ( CROATIA ): In AD 301, Emperor Diocletian made a bold but ultimately unsuccessful bid to address the inflation that was rampaging across the eastern half of the divided Roman Empire. Prices of everything from colored thread and birds to animals were dictated by his Edict on Maximum Rates. Offenders faced the death sentence. Diocletian gave up energy about four times after issuing his proclamation, watching his measure neglect from his sprawling retirement house in the spirit of what became the city of Split in Croatia.
Then Croatia’s administration is trying a similar instrument to rein in costs, which have soared in recent years and have sparked demonstrations and financial strikes by the country’s besieged consumers. The administration introduced rate controls for retailers last quarter, targeting retailer items such as breads, pork and shampoo. The sanctions are less severe than those decreed by Diocletian, mandating a fine of up to €30, 000, for merchants breaking the rules. It is questionable whether the fresh proclamation will be any more effective than Diocletian’s, which economists say ended up being counterproductive by causing scarcity, fuelling a black market and enabling financiers. For the time, buyers are still figuring out how to manage the new program, which caps the price of 70 typical grocery store items.
Anita Kargotic, 62, went shopping recently at a Spar supermarket, where two signs were posted outside listing the maximum prices allowed for a range of goods. She tied her American Akita, named Maja, to a post outside, and later emerged from the store with a haul of kaiser rolls, popcorn kernels, soy flakes and crackers. Most were store-brand gene rics, already less expensive than more recognisable labels.
Flea collars and dry dog food? Those are necessities. Grapes? No, too expensive. Staples like rice and pasta? Pass. ” Those prices have become completely unreasonable”, she said.
The new rules are the govt’s third attempt at controlling prices by fiat since Sept 2022. The first two efforts were largely ineffective, with retailers simply refusing to stock most pricecontrolled goods. The govt says it is serious this time, and it has promised regular inspections and fines for violators.
Under the new rules brought in by PM Andrej Plenkovic, shop entrances must display a list of all 70 items that fall under the govt’s pricing regulations. Centuries ago, Diocleti an’s edict accused some citizens of price gouging and said their greed needed to be reined in. In Jan, Plenkovic struck a similar tone. ” We support companies that work well and make a profit, but within realistic frames. That can’t be at the expense of the little guy”, he said.
Many people say price controls are not the answer. John H. Cochrane, an economist, pointed to the role Diocletian’s edict played in causing shortages and fuelling a black market. ” It’s like trying to stem the symptoms rather than treating the underlying disease”, Cochrane said of price controls.
