Diocletian (244-311CE) was Emperor of Rome from 284-305, which was a difficult time for Rome. Traditionally, Rome had taken what it needed by force, but as the region became larger and more stable, and more Roman, the contributions possible by this means became more difficult. So Diocletian levied taxes. It worked for a little while, but economic factors beyond Diocletian and his adviser's understanding led to these becoming inadequate. Today we have a name for it: inflation. But it was a total mystery to third century Romans. All they knew is that a levy which had been adequate a few years ago to pay costs was not sufficient now, even though more money was coming in.
The first attack on inflation was to coin more money, and when that proved inadequate, to declare that the money that was out there was now worth double. Today, economists understand that these are ultimately both the same thing, and it didn't work either, in fact, it made the problem worse. Value in the economy is goods and services. The value of currency is simply the relationship between the amount of currency in circulation and the goods and services in the market. Currency-denominated tax levies are necessarily unsustainable, because currency is not connected to the amount of goods and services. Increasing the amount of currency in circulation makes it worth less. It also increases liquidity (the flexibility with which people can trade with each other), which, other things being equal, also increases inflation.
Finally, in 301, Diocletian instituted price controls. Price controls can work to solve a short term, isolated problem, but they fundamentally undermine the working of the market. The problem was that various shortages around the empire were increasing demand differentially, and trying to naively block inflation undermines the opportunity to fix the underlying problem. So the problem became worse, and in its ultimate manifestation, Diocletian's mandate prevented workers from changing jobs for any reason, including salary, non-payment, and other abuse. The system that grew out of this innovation was called serfdom. It's not quite slavery, but it's very close. Workers are required by the full force of the law to fulfill their commitments, regardless of how unfair they may be, even if they themselves had no role in making the commitment in the first place.
Over time, serfdom morphed into a related system, called wage-slavery. The worker is technically free to change jobs, but the economics of their life make this impossible. A worker comes to a company town, where they get a job at the mill, or mine, or company store. They pay rent for a home and buy food and clothing from the company store. Pay and costs are such that they very quickly get deeply into debt. As long as the worker is working for the company, these debts are tolerated. Many company towns provided reasonable benefits: free or cheap medical care, pensions, etc., and it was possible to lead a happy, if impoverished life in a company town. But if the worker agitates, in any way, or if they try to run
away, the full force of government enforcement is used to punish
them or bring them back.
If the free market is to work, workers need to be able to change jobs for any reason: a better salary, disgruntlement, etc., and they must be free to shop where they like. There's ultimately only one way this can happen: wages need to match the real economy; to be high enough that they don't need to go into debt for any normal circumstance, like getting sick, adding family members, changing jobs, etc. The mechanism that evolved in the 19th century to achieve this was the trade union. Workers banded together and bargained with management. Even workers who did not necessarily have a grievance would potentially strike in solidarity with their peers who did. This kept wages adequate and improved worker safety immensely.
And to the surprise of almost everybody, it actually improved the economy. A whole bunch of new enterprises sprang up, to serve the needs of the new, far wealthier workers, now called middle class, and they bought and provided goods and services too. The only people who lost were the worst of the exploiters: the robber barons who had not been paying an adequate wage, or providing a safe work environment, etc. Even they didn't lose much--they were still very, very rich--just not quite as rich as they had been relative to their employees. A new form of corruption sprang up--the corrupt union official. This is not really new, it's just a different group doing the same old thing.
Today, we have many executives who would like to bring back wage slavery or serfdom. They generally don't admit it or realize it, but when they want to set wages and services so that their workers are increasingly trapped and their only solution is to go heavily into debt, and when they undermine unions to prevent them from fighting back, that's what they're doing.
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