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this post was submitted on 29 Sep 2023
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To be fair, we weren't importing as many finished goods then, therefore we weren't competing in a global marketplace. If prices stayed the same temporarily, it wasn't a big deal.
Price controls cause shortages and rationing.
Edit: It's a pretty well-known concept that price controls cause shortages. Look what happened to communism. They said there was no inflation and prices were fixed forever. If a liter of milk is set at 1 rubble, and farmers can't make money at that price, milk selection reduces, or could even disappear.
Everybody in the supply chain has to make money, otherwise the chain breaks.
Because toilet paper was price controlled during COVID, right?
No. Price controls don't cause shortages. Price controls redistribute the burden of an existing shortage. Without price controls, shortages mean only poor people go without; with price controls, everyone shares in the burden.
Imagine there's a shortage of toilet paper. In a capitalist market, if there's a shortage, the price of the good goes up. This means rich people still have all the toilet paper they want, middle class people have to budget and go without other things to avoid toilet paper, and poor people can't afford toilet paper at all.
There's no rationing in capitalist markets, either, so people with enough capital can buy extra toilet paper to sell at a higher price, making it even harder for the middle class and the poor to afford toilet paper.
In other words, without price control, the burden of the shortage falls on the poor and middle class and gives wealthy capitalists an opportunity to expand their wealth at the expense of the poor.
And if you doubt that this happens look at how many small businesses Amazon pushed out of business during the lockdowns.
That's what capitalism is. It's not magic, it doesn't create resources where none exist, it is a method of distributing scarce resources by prioritizing people who have the most resources already. Capitalism "solves" shortages by raising prices until enough poor people can't afford the item that everyone else has enough. Capitalism is hateful, elitist, and contemptuous of basic human rights.
So we impose price controls and rationing. Everybody has less toilet paper. But everybody has some toilet paper. Instead of one part of society being immune from the shortage and one part of society having nothing, everyone shares in the burden.
And this is why our political and capitalist classes hate price controls. They think they should be above economic hardship. If they can't get anything they want anytime they want, it means they're just like poor people. And they'll do anything to avoid that injury to their pride.
Thank you for coming to my TED talk.
Yeah price controls did sure work for the Romans and lately, Venezuela