In the Republic of Venice there was
a town called Vicenza that started to explore market and price regulation. They
did this through three methods, setting price floors which is a set price above
the normal price or equilibrium of a good, setting price ceilings which was a
set price below the equilibrium, and setting quotas on goods. Market and price
regulation was not set on all goods, the market was mostly free trade unless
certain goods were vital for the people’s day to day lives like bread or corn or
if a good was scarce it would be subjected to market and price regulation. The basis
of market and price regulation is focused around Christian age in the early
1300’s, which supposed ideas that would push towards helping the common good
not just the patricians of society.
This new way of market and price
regulation had its difficulties but in some cases, it worked out. An example of
an unsuccessful price fix was explained to us when we visited the Arsenale. The
Arsenale was and still is a navy base in Venice, which they also used to make
rope because they did not trust anyone else to make it and because they had
contracts with five families that were paid to grow and sell hemp to the navy.
The Navy then would make the hemp ropes that required long buildings like the
one below, after they would make the rope they would sell it for a very cheap
price, in doing this they were setting a price ceiling. This price ceiling did
not work out however because of the very cheap price of the rope. Successful market
and price regulation usually happened when a good was either scarce or too high
of a price; for example, if flour was a high price and well stocked municipalities
would lower the price for consumers to purchase it. In the lowering of the
price the common wealth would be able to afford a good that is essential to
their everyday life. Market and price regulation did not always work but when
it did, the common wealth was not taken advantage of.
The common good was at the center
of market and price regulation. This is because of the influence of Christianity
on the government. Venice was a wonderful place to learn how the economy of
ancient times works. The Arsenale gave examples of price fixing which was fun
to read about then to also see it. I have learned that market and price
regulations have always been controversial issues in present day U.S. and in 1300’s
Venice.
The Arsenale where the rope was
made
A flour mill converted to a Hilton
Hotel
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