Price Controls: Still a Bad Idea | Intellections 

I always get a deep hearty laugh when I read a government has instituted price controls. The Panamanian government implemented price controls on 72 basic food items recently, and a week later imposed price controls on 150 basic needed medicines. This leads to selling the current stock at the current max set prices at a profit, but no new orders will be made so the goods will run out. The Panamanian farmers who produce ingredients or produce the basic food item such as milk and eggs, will stop producing these goods within a growing season or within the life-cycle of the cattle. This will lead to drastic shortages. A few of the farmers will stick to what they know and sell at a loss, thinking the government can't actually be this stupid right??? They have a harsh lesson to learn. Eventually they'll sell most of their produce on the black market and claim to the government that yields have been terrible. Buying new stocks becomes impossible when the entrepreneur figures out they have to sell the product at a loss, therefor they stop offering the product and thus you get an artificially manufactured by the government shortage. If the Panamanian government actually cared about reducing food cost, it would empower local farmers, it would make some areas of it's national parks allowed to be turned into agriculture to grow basic foods like grains, beans, rice, or even animal farms. It would punish land owners whom are not productive and offer land owners to do agricultural tenancy for farmers who wish to farm on the none productive empty land. In order to attract these entrepreneurial farmers they could give them special tax free status for the first few years of operating the farm. These entrepreneurial farmers would put some of their own capital at risk in investing in building the new farms. This within 1 growing season of 3-6 months or so would rapidly create abundance in local produced food, that would actually run down costs for the consumer. Government can not fix this problem by demanding things, government can offer a solution to the problem of rising costs of living and inflation by adopting solutions that actually empower their citizenry to do stuff, e,g: to do actual physical hard work or to risk some of their own saved private capital to produce benefits for society and profit for the investor. Price controls lead to shortages of the goods it attempts to fix the price off and it creates a robust underground black market selling above the price control. This black market also rapidly fuels crime making society far less safe. Ripping off and stealing from other black market vendors becomes a thing. Bribing police with basic necessity goods becomes a thing, intimidating customers of the other black markets becomes a thing. This normalizes corruption at the very fundamental levels of society. Fixing price has worked exactly ZERO times in history. In Zimbabwe it was the event that lead to mass hyperinflation of the currency and it become worthless. The socialist dictatorship of Venezuela had to remove it's price controls on 50 basic food items because it caused massive shortages and the black market after a few years had realized they cornered the market and had begun rapidly increasing the price to make as much money as they could. When the controls were removed the prices of the underground market were higher then what was available again in the store, the black market for those goods went away within less then a month. Panama also uses the US dollar and tied their currency too it, yet did not massively print and hand out money like the US gov did. That was the moment the Panamanian government should have re-valued the Panamanian currency to be more valuable then the US dollar, but they did not, because vassal state. A nation needs it's own money supply and control of it's sovereign currency in order to control inflation. But if you have far left socialist in power they just keep printing for spending sprees and then crash the currency. In an inflationary environment, price controls are even more detrimental. If your basic input costs go up such as seeds, fertilizer, feed, labor, but you are capped at a government enforced selling point, why bother selling to the official guy offering you a loss in the sale, when you can sell it at a profit to the random guy on the corner operating a underground market? A business at it's very minimum needs to break even! If that's the case the entrepreneur needs to believe that in the future it can become profitable or the entrepreneur is driven by moral or community sense to offer the service at break-even to the people they serve. Most business want a minimum of 15 to 30% profit on each sale in order for the entrepreneur to be willing to waste their time on this. Price fixing has the exact opposite effect of what the stated intended goal is. So... when you elect stupid people who promise free you things and whom have no understanding of basic economics, you get a failed country.

Short and to the point. Nice.

fundamentally government has no right telling private businesses what price they can sell their stuff for. That is a violation of property laws. Whatever they produce is their property and they can sell or not sell it at any price they want. If government start telling people what their property is worth and how much they can sell it for, then that is essentially confiscation of property which is illegal. Politicians that push for price controls should be immediately fired because they are criminals

except inflation wasn't caused because of shortages since companies produced more than ever before and bragged about increase in profits. Add in that in most cases, inflation DOESN'T go down, where when something rises in price, it tends to stay at that price, even as the economy recovers, and yeah, inflation is bs. Let's take food for example, if "shortages" were real, then the US wouldn't have to throw out 12 THOUSANDS tons of food a year. Gas for example was not experiencing a shortage as gas companies had DOUBLE the oil they had before they implemented inflation. Housing will never experience a shortage because they're permanent things that can never decrease in numbers unless the government decides to destroy them, in turn creating false shortages. Cars and electronics are the same way. Going back to food, we won't ever experience actual shortages because most people can only buy a certain amount of food and store it, and only for a short time, so overbuying food with short shelf lives never makes sense, and food with long shelf lives can take up far too much space.

A:very nice reading my heart will always have some space in it for you a nice reading thank you

Price control would increase sales, so producers and sellers would just have to do more to make profit. The more there is the cheaper it should be. Price control would lock prices for about 5 years, so the people will continue to spend as they dont feel the crunch or crush of price increases. Price control just says a product or service can not increase its prices no matter the deman or supply. This would actually be win for everyone.

Simple minded