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Politics : The Castle
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To: TimF who wrote (5571)9/3/2010 12:10:26 PM
From: TimF   of 7936
 
One thing that we have run a lot of experiments on, and that is at relevant to current policy in a minor way (and used to be to a greater extent) is price controls. They have failed just about every time they have tried. They either allow for market clearing prices (the market price is within the allowed limit, as it would be with say a minimum wage of a dollar a day in the US, or a maximum price for bread of $50/slice), in which case they do little of consequence, or they distort prices creating surpluses of unwanted items or (more often) shortages, and a less efficient allocation of resources. At best they might be better than freely set prices, if they only one who can freely set them is a government protected monopoly but most of the time the proper answer is to stop protecting the monopoly.
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