Politicians love to intervene in markets, trying to impose their preferred solution to “problems” like high prices. But markets don’t work the way politicians think they do:
Price ceilings don’t manage markets, they destroy them. In 1946 the US meat market collapsed because of it.
The Office of Price Administration set beef ceiling prices during World War II. Ranchers and meatpackers adapted: some held cattle rather than sell at a loss, others shifted product to black markets, and slaughter volumes dropped. The OPA briefly lifted controls in mid-1946 under pressure. Beef flooded back into stores almost immediately.
Then Congress, drowning in constituent complaints about inflation, reimposed ceilings in August 1946. Slaughter collapsed within weeks. By October 1946, beef virtually disappeared from American grocery store shelves. You could walk into a butcher shop in Chicago or New York and find nothing. Scarcity was manufactured entirely by Washington bureaucrats setting prices below what producers needed to cover costs.
Mises explained the mechanism precisely: a price ceiling creates a shortage, which produces political pressure for rationing and further controls, spiraling into comprehensive economic disorganization. The OPA ran that experiment in real time on the American food supply.
President Truman ended meat controls on November 9, 1946. Beef returned within days. The supply existed the entire time. Ranchers and packers simply refused to sell at confiscatory prices, and they were correct to refuse. Coercive price suppression causes economic destruction, and 1946 proved it at the grocery counter.
