Statists look at desirable goods, decide what the price should be - often concluding it should be $0.00 - and work backward from there. Free markets try to meet demand by increasingly supply, and increase demand by reducing price. The statist approach is a train wreck.
Controlling prices by political fiat is like trying to steer a horse by yanking on its tail. Everything else in the economic chain malfunctions when the price output is controlled like that. You're about to get another demonstration thanks to Biden's illegal eviction moratorium.
Notice how interventions to fix the price of labor tend to increase unemployment and throw other aspects of the labor market out of whack. It happens every time politicians decide they know better than free people what the price of goods and services should be.
The healthiest response to observing high demand and limited supply is to figure out how supply can be increased. People want it, or need it? Let's make more!
Political tinkering with prices short-circuits that healthy impulse.
Political tinkering with prices short-circuits that healthy impulse.
Political price-fixing usually comes along with subsidies for private industries, to keep them from going bankrupt under those Ruling Class price edicts. This numbs the business sector to rational inputs and weakens its competitive muscles. It's systemic corruption.
Price-fixing usually ends up causing shortages or sharply reducing the value and quality of the politically ordained goods. Both happen routinely under rent control regimes. Obamacare's price controls created the garbage insurance policies we're forced to live with today.
Ask your grandparents what happened to the quality of meat when government decided what the prices should be. The examples go on and on. A consistent theme of price controls is that politicians ignore the costs they don't understand, or that don't fit with their ideology.
That's especially noticeable when it comes to risk, a factor statists are incapable of properly appreciating because their ideology says they control the entire universe through political will, so risk is a nonfactor. If they decree a thing is good, it happens, period.
In the real world, risk has an enormous dollar value, and it's factored into prices. For example, every landlord must account for the risk that renters will damage his property, or refuse to pay their rent. This risk is mitigated by the option of eviction and factored into rents.
If you tell landlords they can't evict tenants - that they will in fact be treated like criminals, fined, jailed, and perhaps killed for resisting arrest if they do - the risk becomes unlimited, and they'll compensate by charging higher rents, or refusing to rent at all.
Politicians will predictably respond by labeling the nervous landlords as evil villains and attempting to nationalize their property, painting themselves as saviors for taking bold action to ensure affordable rents are available to all - especially their favored constituents.
This is an implicit assertion that the value of risk is minimal and should have no effect on rental prices. Politicians will decide what the price should be, disregarding the costs they don't understand or dismiss as irrelevant. The result will be a predictable disaster
Socialists are always nattering on about socializing costs, but most of what they demand really boils down to fixing prices and expecting magic to take care of everything else. We're in a political war to decide who should set the price of everything. /end
• • •
Missing some Tweet in this thread? You can try to
force a refresh
