Sunday, November 04, 2012

Graphic of the Day: Price Ceiling Means Shortages

Laissez Faire Books publisher and executive editor Jeffrey A. Tucker lambasts price anti-price gouging laws
There is no real distinction between responding to economic conditions and so-called gouging. A law against gouging is a law against economic behavior. Merchants need to raise prices — not to reflect higher costs (though costs could rise), but to reflect changing conditions of supply and demand. A higher price would signal consumers to conserve. A higher price would also call forth greater supply — without having to have the government intervene with special shipments. A higher price would also settle the crowds down a bit and stop the insane attempt to stockpile as much as possible at the low price.

Price controls are causing human suffering — yet again. And this time, the toll is very high, even if it will always remain somewhat invisible.
Politicians barely have comprehended that despite four centuries of repeated attempts to subvert the law of economics, price controls have always failed. Yet such blatant failures has never been an obstacle for politicians aspiring to acquire or expand more power and control over society. Pretentious moralism results to economic decay.

No comments: