Back to the Future: Progressives Imagine the Good Old Days of Price Controls
When the Bourbon dynasty was restored to power in France in the early 1800s after Napoleon’s abdication, the French statesman Charles-Maurice de Talleyrand famously said of that family: “They had learned nothing and forgotten nothing.” In modern economic parlance, one can say the same thing about progressives, who once again are demanding price controls to “fight inflation.”
Not surprisingly, Sen. Elizabeth Warren is leading the way. She recently introduced a bill that outlaws “price gouging,” which in her definition involves a seller increasing prices for reasons that Warren would consider to be unjustified. It declares:
It shall be unlawful for a person to sell or offer for sale a good or service at an unconscionably excessive price during an exceptional market shock, regardless of the person’s position in a supply chain or distribution network.
While at least Warren is not calling (yet) for criminal penalties, she would empower the Federal Trade Commission to investigate such price gouging and to levy fines of either $25,000 or 5 percent of revenues, whichever is higher. That there is no way, economically speaking, to coherently define something like price gouging is no deterrence to Warren, who for many years has tried to move to the left of Bernie Sanders on nearly all issues.
But Warren is not the only progressive to call for price controls. Harold Meyerson, the socialist who also is an editor for the American Prospect, is demanding price controls, declaring that levying them will help keep Democrats in power. He writes:
As if inflation on that scale weren’t bad enough, its electoral consequences are likely to shift control of Congress to racist, insurrectionist, conspiracy-addled nitwits in November’s elections.
How, then, can the Democrats forestall or at least mitigate this grim double whammy? Joe Biden appears to grasp the peril he’s in; it’s compelling him to make a pilgrimage to Saudi Arabia and its murderous crown prince in the hope that the prince will bring more of his nation’s oil to market, thereby driving down prices.
But there’s a less morally bankrupt, economically more effective, and far quicker way of achieving the same ends. It’s called price controls.
Before anyone rolls the eyes and reminds this socialist sage that price controls have a long history of failure, Meyerson has a ready answer:
Contrary to what economic orthodoxy would have us believe, such controls have been markedly successful at various times in our nation’s history. (Economic orthodoxy is often clueless about history in its preference for theory over
Article from Mises Wire