Would Price Controls Work?

What exactly are price controls? Have they been tried before? Do they work? Are they a reasonable and even desired form of government oversight, or are they an ineffective and dangerous form of government meddling in the economy? We will answer those questions for you today AND equip you with everything you need to know to answer the question: Should the Government Impose Price Controls?

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[christophercatiller]

It's so simple to predict where price controls will lead it's painful.

[timgt]

The underlying problem is that there is no objective method of assigning value to any good or service. The USSR tasked economists to find a way to do an objective formula to hit the correct price point absent the free market mechanism of supply and demand, something a bureaucrat could arbitrarily assign from a chart. They failed completely and resorted to using the Sears catalogue to work out pricing. Price controls have always led to shortages, supply shocks and black markets, time and time again. As for anti-gouging laws, similar issues here. Let us say you have a small town with a few suppliers for good. So a big storm hits the town and only the Walmart remains in operation. The mayor and council tell Walmart that they cannot raise prices. Here is what happens in real life, the people that can most easily get to Walmart, panic buy, hoard goods and quickly clean out the store, leaving nothing available for anyone else. Allowing a price spike, while inconvenient and annoying does two things, 1) it rations goods, so people have less incentive to hoard and therefore making them more available for everyone else 2) It incentivizes other providers outside the area to brave the dangers to come in and provide the extra goods needed until the crisis passes. Pricing is just data in the end, profit is just a signal that you are doing something right, it means you have met your costs and provided yourself with funds to further reinvest in the expansion of the business. Businesses cannot develop new products and expand without making profit first.

[alexwrenchman]

3:16 price has gone up in bot sure about exponential

[matthewjohnson]

1:35:59 is more astronomically expensive.

When your example is a reality.

[chualarbill]

Interesting conversation. I think I fundamentally agree with where you are going, however I don't think y'all are on topic.

I think the consolidation of most large suppliers/retailers in the markets will lead to price fixing. (Price coordination)

Creation of monopoly leads to higher prices. (PG&E charging $0.50 per Kw/Hr for power) And with so may barriers to entry into the market, it's difficult for outsiders to compete.

US Antitrust protection for consumers has been a joke for a long time. I would like any future administration to work toward protecting consumers and not wall street.

If you want to sell a product on Amazon, you cannot sell it with another vendor at a lower price even if your costs are lower.

[joeespin]

could harris want price controls to control what what we eat and so she can only make things affordable for her donners and a select few who voted for her who voted for her.

for instance she would put an really high prices on any meat, cheese, anything that has sugar in it and sugar and salt. the ONLY things she would not have high price are the fruits a vegetables and she would give special dispensations to other progressives so only THEY can get everything they want to eat