February 27, 2008


Hugo Control Problem: Does the U.S. want health-care shortages? (Thomas Sowell, 2/27/08, National Review)

Venezuela is currently giving us a lesson on the consequences of price controls. The government of leftist President Hugo Chavez has imposed price controls — and seems to be surprised that lower prices have lead to reduced supplies, even though price controls have led to reduced supplies in countries around the world and for thousands of years.

There were price controls back in the days of the Roman Empire, under the Pharaohs in Egypt, and in ancient Babylon. There is plenty of history to look at, if we bother.

Price controls under the Roman Emperor Diocletian led to a decline in the supply of goods. The same thing happened under President Richard Nixon’s price controls in the 1970s. It has happened in Zimbabwe within the past year.

Rent control laws led to housing shortages in Cairo — and in Berkeley, Hanoi, Paris, and other cities around the world.

When price controls in Venezuela led to food shortages, Hugo Chavez accused companies of “hoarding” food. The emperor Diocletian was similarly accusatory when his price controls reduced supplies, many centuries ago.

Political leaders always find someone else to blame for the bad consequences of their own policies.

...and mostly a waste of money, there's a reasonable argument to be made for imposing price controls and thereby demolishing the industry. But that's not the argument the Left is making, is it?

Posted by Orrin Judd at February 27, 2008 8:52 AM
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