{"id":35712,"date":"2018-06-03T01:00:43","date_gmt":"2018-06-03T05:00:43","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=35712"},"modified":"2024-06-02T11:35:23","modified_gmt":"2024-06-02T15:35:23","slug":"qotd-price-controls-just-make-things-more-expensive-in-real-terms","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2018\/06\/03\/qotd-price-controls-just-make-things-more-expensive-in-real-terms\/","title":{"rendered":"QotD: Price controls just make things more expensive in real terms"},"content":{"rendered":"<blockquote><p>One of the perennial, and pernicious, political ideas is that if things are \u201ctoo expensive\u201d then we can fix that by just passing a law to make them less expensive. We see this just about everywhere and its sadly not limited to the more idiot sector of the left. Although of course it thrives there. Venezuela is a complete and total mess because Hugo Chavez and Nicolas Maduro thought they would make life cheaper by limiting prices by law. Payday lending doesn\u2019t exist in certain states because people like Elizabeth Warren insist that interest rates should not go \u201ctoo high\u201d. Those usury laws mean that interest rates are infinite \u2013 as the lending simply isn\u2019t available at all. And yes, people over on the right have made the same sort of mistake \u2013 Nixon tried to fix gas prices after all.<\/p>\n<p>Price fixing just always leads to things getting more expensive. As David Friedman explains:<\/p>\n<ul>\n<p><em>The result \u2013 that price control results in a cost to the consumer, pecuniary plus nonpecuniary, higher than the uncontrolled price \u2013 does not depend on the details of the [supply and demand] diagram. Consumers cannot consume more gas than producers produce, so the nonpecuniary cost must be large enough to drive quantity demanded down to quantity supplied. Quantity supplied is lower than without price control, so cost to the consumer must be higher.<\/em><\/p>\n<\/ul>\n<p>Tim Worstall, <a href=\"http:\/\/www.forbes.com\/sites\/timworstall\/2016\/08\/16\/memo-for-would-be-price-fixers-price-controls-always-make-things-more-expensive\/#fee7cc8687a5\" target=\"_blank\" rel=\"noopener\">&#8220;Memo For Would Be Price Fixers &#8211; Price Controls Always Make Things More Expensive&#8221;, <em>Forbes.com<\/em><\/a>, 2016-08-16.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>One of the perennial, and pernicious, political ideas is that if things are \u201ctoo expensive\u201d then we can fix that by just passing a law to make them less expensive. We see this just about everywhere and its sadly not limited to the more idiot sector of the left. Although of course it thrives there. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,84,41],"tags":[712,1026,1549,398],"class_list":["post-35712","post","type-post","status-publish","format-standard","hentry","category-economics","category-government","category-quotations","tag-centralplanning","tag-microeconomics","tag-pricecontrols","tag-venezuela"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-9i0","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/35712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=35712"}],"version-history":[{"count":2,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/35712\/revisions"}],"predecessor-version":[{"id":89454,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/35712\/revisions\/89454"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=35712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=35712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=35712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}