So I try to stay on top on economic news, and one thing that is confusing me is why government enforced price caps on products wouldn’t work? All I hear is about how strong the economy still is, record profits for corporations, and increasing wealth of the country’s most affluent people. Wouldn’t price caps cause: 1) more wealth for the average consumer 2) still profitable corporations (albeit not the record profits that they continue to reach) 3) more equitable wealth distribution?
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Price controls have a multi-thousand year history of failure, including playing a part in the fall of the Roman Empire.
No one anywhere can ever have enough information to properly balance the myriad influences that lead to a perfect supply-and-demand situation. Free markets usually produce the best possible exchanges for the most people. Controlled markets fail quickly in both regards because they offer no flexibility.
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