He proceeded with Caesarian energy to remake every branch of the government. He transformed the aristocracy by raising to it many civil or military officials, and making it a hereditary caste with an Oriental gradation of dignities, profusion of titles, and complexity of etiquette. He and his colleagues redivided the Empire into ninety-six provinces grouped into seventy-two dioceses and four prefectures, and appointed civil and military rulers for each division. It was a frankly centralized state, which considered local autonomy, like democracy, a luxury of security and peace, and excused its dictatorship by the needs of actual or imminent war. Wars were waged, and with brilliant success; Constantius recovered revolted Britain, and Galerius defeated the Persians so decisively that they surrendered Mesopotamia and five provinces beyond the Tigris. For a generation Rome’s enemies were held at bay. In years of peace Diocletian, with his aides, faced the problems of economic decay. To overcome depression and prevent revolution he substituted a managed economy for the law of supply and demand. He established a sound currency by guaranteeing to the gold coinage a fixed weight and purity which it retained in the Eastern Empire till 1453. He distributed food to the poor at half the market price or free, and undertook extensive public works to appease the unemployed. To ensure the supply of necessaries for the cities and the armies, he brought many branches of industry under complete state control, beginning with the import of grain; he persuaded the shipowners, merchants, and crews engaged in this trade to accept such control in return for governmental guarantee of security in employment and returns. The state had long since owned most quarries, salt deposits, and mines; now it forbade the export of salt, iron, gold, wine, grain, or oil from Italy, and strictly regulated the importation of these articles. It went on to control establishments producing for the army, the bureaucracy, or the court. In munition factories, textile mills, and bakeries the government required a minimum product, bought this at its own price, and made the associations of manufacturers responsible for carrying out orders and specifications. If this procedure proved inadequate, it completely nationalized these factories, and manned them with labor bound to the job. Gradually, under Aurelian and Diocletian, the majority of industrial establishments and guilds in Italy were brought under the control of the corporate state. Butchers, bakers, masons, builders, glass blowers, ironworkers, engravers, were ruled by detailed governmental regulations. The “various corporations,” says Rostovtzeff, “were more like minor supervisors of their own concerns on behalf of the state than their owners; they were themselves in bondage to the officials of the various departments, and to the commanders of the various military units.” The associations of tradesmen and artisans received various privileges from the government, and often exerted pressure upon its policies; in return they served as organs of national administration, helped to regiment labor, and collected taxes for the state from their membership. Similar methods of governmental control were extended, in the late third and early fourth centuries, to provincial armament, food, and clothing industries. “In every province,” says Paul-Louis, “special procuratores superintended industrial activities. In every large town the state became a powerful employer… standing head and shoulders above the private industrialists, who were in any case crushed by taxation.”

Such a system could not work without price control. In 301 Diocletian and his colleagues issued an Edictum de pretiis, dictating maximum legal prices or wages for all important articles or services in the Empire. Its preamble attacks monopolists who, in an “economy of scarcity,” had kept goods from the market to raise prices: