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    Thursday, November 15, 2018-3:09:25A.M.

     

     

     

     

     

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Variations: Over 4,000 years and counting

WE want to be paid more for what we sell, and we also want to pay less for what we buy.

As leftist demonstrators in Manila would put it: “Raise Wages, Cut Prices.” Throughout recorded human history, governments have attempted, and continue to attempt, to do just that.

In a book first published in 1979, “Forty Centuries of Wage and Price Controls: How Not to Fight Inflation,” authors Robert L. Scheuttinger and Eamonn F. Butler conceded that “the notion that there is a ‘just’ or ‘fair’ price for a certain commodity, a price which can and ought to be enforced by government, is apparently coterminous with civilization.”

And so “for the past forty-six centuries (at least) governments all over the world have tried to fix wages and prices from time to time. When their efforts failed, as they usually did, governments then put the blame on the wickedness and dishonesty of their subjects, rather than upon the ineffectiveness of the official policy. The same tendencies remain today.”

The rulers of ancient Egypt certainly gave it the old college try. “All prices were fixed by fiat at all levels. According to the French historian, Jean-Philippe Levy, ‘Control took on frightening proportions. There was a whole army of inspectors. There was nothing but inventories, censuses of men and animals…estimations of harvests to come.... In villages, when farmers who were disgusted with all these vexations ran away, those who remained were responsible for absentees’ production...[one of the first effects of harsh price controls on farm goods is the abandonment of farms and the consequent fall in the supplies of food]. The pressure [the inspectors] applied extended, in case of need, to cruelty and torture.’ ”

Then and now, the last recourse of many of those who want to save us from our wicked, stubborn selves: violence for the greater good.

What was the result of Egyptian price controls?

 “The Egyptian economy collapsed at the end of the third century B.C., as did her political stability. The financial crisis was a permanency. Money was devalued. Alexandria’s commerce declined. Workers, disgusted by the conditions imposed on them, left their lands and disappeared into the country….”

Babylon’s Code of Hammurabi, dating back to about 1754 BC, included a similarly rigid system of controls over wages and prices. The result was a decline in trade in the reign of Hammurabi and his successors. “It appears that the very people who were supposed to benefit from the Hammurabi wage and price restrictions were driven out of the market….”

Similar price controls were tried in ancient Sumeria, China, India, Greece and Rome.

In fourth century B.C., the Roman government implemented what today remains a popular measure: Every citizen was provided with free wheat. “The result, of course, came as a surprise to the government. Most of the farmers remaining in the countryside simply left to live in Rome without working.”

Today in the U.S., instead of free wheat there are food stamps. And you’re a heartless, racist, misogynist, fascist, climate-change denier evil person if you want to scrap them.

It was in the reign of Emperor Diocletian (244-311 A.D.) when the Roman government imposed extensive price and wage controls. Prices, he said, were too high. He blamed the “avarice of merchants and speculators.” But the emperor, like many absolute rulers and even democratic governments, was also an overspender. To pay for his grandiose plans, he imposed higher taxes based on the assumption — still widely popular today — that higher tax rates would result in higher revenue. Instead, “the tax base shrank and it became increasingly difficult to collect taxes….”

Diocletian’s zeal “exceeded his understanding of the economic forces at work in his empire.” But he said he had to do what he did so that “justice [could] step in as an arbiter…in order that the long-hoped-for result, which humanity could not achieve by itself, may by the remedies which our forethought suggests, be contributed toward the general alleviation of all.”

Now if you substitute the name “Diocletian” with “socialists” then, yes, you’re a heartless, racist, misogynist, etc. etc.

Still, Diocletian wasn’t a fool. He was reputedly “more intelligent than all but a few of the emperors.” He knew that price controls would result in hoarding and shortages. So he imposed the death penalty on hoarders. The result, according to a contemporary account: “There was much blood shed upon very slight and trifling accounts; and the people brought provisions no more to markets, since they could not get a reasonable price for them and this increased the dearth so much, that at last after many had died by it, the law itself was set aside.”

Another historian concluded: “The price limits set in the [Diocletian] Edict were not observed by the traders, in spite of the death penalty provided in the statute for its violation; would-be purchasers, finding that the prices were above the legal limit, formed mobs and wrecked the offending traders’ establishments, incidentally killing the traders, though the goods were after all of but trifling value; [they] hoarded their goods against the day when the restrictions should be removed, and the resulting scarcity of wares actually offered for sale caused an even greater increase in prices, so that what trading went on was at illegal prices, and therefore performed clandestinely.”

In short, Diocletian “had failed to suppress the ability of people to buy and sell as they saw fit.”

He, however, would not be the last enlightened ruler or government to believe in their ability to defy arithmetic.

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