Price Controls: Impractical and Immoral (Free Enterprise Vol. 1 No. 1 2010)
By: Joshua Lipana
Against overwhelming evidence, price-control proponents still think price controls are necessary and moral to help people who cant buy their food, yet time and time again its been seen that price controls bring nothing but catastrophe for everyone in nations who implement it. If the goal is to make food more available to people than this is precisely the kind of thing which should not be done; Price controls cause shortages of goods because of two simple reasons: supply and demand, people will not supply as much at a lower price as they will at a higher price, some businessmen that will repay their costs and earn a profit when the price of a certain product is 100 Pesos will not cover their costs when the price is 60 Pesos. If you force them to work at a loss, they will simply stop supplying the goods; which is the only rational and proper thing to do. Price controls do the exact opposite of what they are intended to do if the intent is to give more people access to goods.
More importantly price controls violate the individual rights of businessmen to sell their products at the price that they want. People have no right to enslave the producers of goods regardless of any need or consideration. Need is not and cannot be a claim on what someone else has produced, anything less would mean slavery or socialism.
The history of price controls goes way back, from the time of thieving monarchies, to the time of thieving Communists, to the very present where the so called “21st century Socialists” in 3rd world countries are now giving price controls another try. Not discouraged at all by the past calamities brought about by this most unjust policy, Hugo Chaves declared price controls in Venezuela. The results? Nearly its entire farming industry went out of business. How Mr. Chavez expected farmers to work at a loss or work with a gun pointed to their heads would baffle the mind, that is, had he not been a self-avowed Socialist, which then makes his economic stupidity quite understandable. Price controls have brought nothing but catastrophes to any nation or state that has tried it, short term or long term they are bad for the economy, they cause shortages of products most needed, and most importantly they violate the individual rights of man.