Steve on Nostr: Price controls on food was a huge problem in the past. I'm all for lower prices, but ...
Price controls on food was a huge problem in the past. I'm all for lower prices, but we have to let the market settle that on it's own, and begin accepting that lower prices requires deflation.
https://www.cnbc.com/2024/08/15/harris-corporate-price-gouging-ban-food-election.html
1. Ancient Rome - Emperor Diocletian's Edict on Maximum Prices led to severe shortages and black markets.
2. France (French Revolution) - The Law of the Maximum set price limits on food, leading to shortages and black markets.
3. Soviet Union - Price controls were a central feature of the planned economy, often leading to shortages and long lines for basic goods.
4. Zimbabwe - Price controls under the Mugabe regime led to severe shortages and a thriving black market.
5. Venezuela - Price controls have resulted in significant shortages of basic goods, with many items being available only on the black market
Why?
Shortages: When prices are set below the market equilibrium, demand often exceeds supply, leading to shortages.
Black Markets: Price controls often create black markets where goods are sold at higher prices.
Reduced Incentive to Produce: Producers may cut back on production if they can’t cover their costs, worsening shortages.
Quality Decline: In some cases, producers may lower the quality of goods to maintain profitability under price controls.
https://www.cnbc.com/2024/08/15/harris-corporate-price-gouging-ban-food-election.html
1. Ancient Rome - Emperor Diocletian's Edict on Maximum Prices led to severe shortages and black markets.
2. France (French Revolution) - The Law of the Maximum set price limits on food, leading to shortages and black markets.
3. Soviet Union - Price controls were a central feature of the planned economy, often leading to shortages and long lines for basic goods.
4. Zimbabwe - Price controls under the Mugabe regime led to severe shortages and a thriving black market.
5. Venezuela - Price controls have resulted in significant shortages of basic goods, with many items being available only on the black market
Why?
Shortages: When prices are set below the market equilibrium, demand often exceeds supply, leading to shortages.
Black Markets: Price controls often create black markets where goods are sold at higher prices.
Reduced Incentive to Produce: Producers may cut back on production if they can’t cover their costs, worsening shortages.
Quality Decline: In some cases, producers may lower the quality of goods to maintain profitability under price controls.