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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 purple thread and feathers to cattle were dictated by his Edict on Maximum Prices. Violators faced the death penalty. Diocletian gave up power about four years after issuing his edict, watching his measure fail from his sprawling retirement palace in the heart of what became the city of Split in Croatia.
Now Croatia’s govt is trying a similar tactic to rein in prices, which have soared in recent years and have sparked protests and retail boycotts by the country’s beleaguered consumers. The govt introduced price controls for retailers last month, targeting supermarket items such as bread, pork and shampoo. The penalties are less drastic than those decreed by Diocletian, mandating a fine of up to €30,000, for retailers breaking the rules. It is unclear whether the new edict will be any more successful than Diocletian’s, which economists say ended up being counterproductive by causing shortages, fuelling a black market and enabling profiteers. For the moment, consumers are still figuring out how to navigate the new system, which caps the price of 70 common grocery store products.
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.
