Diocletian and Harris on Inflation and Price-Gouging

The Grumpy Economist ^ | August 16, 2024 | John Cochrane

[karpov]

Kamala Harris is going to make a major economic speech on Friday. A centerpiece will be plans to blame inflation on “price-gouging” in food, medicine, housing, and more, and to go after said price gougers with all the tools of the regulatory state.

...

In 301 AD, the roman emperor Diocletian faced a large inflation. According to Mike Duncan’s history of Rome podcast which I’ve been listening to lately, that inflation, we now know, had a simple cause: The Empire didn’t have enough tax revenue to pay soldiers. Not paying soldiers was very bad for the longevity of emperors. So, the empire regularly devalued coins, minted them, and handed them out to soldiers. You don’t need a lot of fiscal theory of the price level to guess what happened next. (Diocletian did restore the value of the gold Aureus, shown above. However, that was too large for most of the population, who had to use still depreciating coins with small amounts of silver in them.)

Diocletian can be forgiven, as, according to Duncan, romans didn’t understand the connection between coinage and inflation and he was a pretty good administrator otherwise.

Diocletian responded by blaming greed and price-gouging, and promulgating a maximum price edict throughout the empire.

I found this lovely English translation of Diocletian’s edict. I didn’t realize the edict had such a lovely preamble. Romans sure had good rhetorical skills! The translation doesn’t quite capture what I can sense of the rhetoric of the original, but it’s still pretty good. Since VP Harris is often critcized for a bit of rhetorical weakness, perhaps she might be inspired. Executive orders could use preambles like this!

[Fai Mao]

Said on another thread.

We’ve not had this type of inflation since the Carter administration. So where did the greedy price gougers go when, Reagan, Bush 41, Clinton, Bush 43, Obama, and Trump were president? Are gougers a new phenomenon? No. The previous presidents pursue policies that weren’t inflationary? It isn’t price gouging it fiscal policy.

None of those 6 presidents had to impose draconian measures. In fact, not even Carter made this mistake. Neither did Ford. Hairass is proving she she is less competent in economics than any previous President since Nixon.

Her own program damns her as incompetent because she can’t control gouging and the previous 8 could.

[wardamneagle]

The central belief of Keynesian economics is that government intervention can stabilize the economy.

Many economists have criticized Keynes’ approach. They argue that businesses responding to economic incentives will tend to return the economy to a state of equilibrium unless the government prevents them from doing so by interfering with prices and wages, and making it appear as though the market is self-regulating.

[KarlInOhio]

Because of currency devaluation, the federal tax revenue is growing by leaps and bounds. Will cackling Commie-la keep the IRS from price gouging us?

[cpdiii]

The central belief of Keynesian economics is that government intervention can stabilize the economy. Many economists have criticized Keynes’ approach. They argue that businesses responding to economic incentives will tend to return the economy to a state of equilibrium unless the government prevents them from doing so by interfering with prices and wages, and making it appear as though the market is self-regulating.

Your post was very simple but accurate.

[linMcHlp]

Cost-gouging imposed by leftists’ artifice leads to increasing costs of energy.

Natural gas fuel for generating electricity, is much more stable than solar and wind “fuels.” Stability of fuel supply equates to having and maintaining lower costs.

First day in Executive Office, Biden was taking steps to increase the cost of energy - example: Upsetting plans for Keystone Pipeline (and thus natural gas flow) developments. By January 2022, the cost of fertilizer produced from natural gas, tripled (southern Illinois).

Kamala Harris solution-type: Socialists (California Energy Commission - “CEC”) propose to nationalize (state level) petroleum refineries in order to cap and control prices. The same socialists who demand “minimum wages” and unionized government employees who supposedly will maintain stable energy supplies.

[LittleBillyInfidel]

What’s her opinion about the price gouging that is mandatory $20/hour “minimum wage”?

[Justa]

C’mon man, that doesn’t bring money in to Big Gov.

But a Windfall profits tax does.

“That’ll fix those Hoarders and Speculators”