Comments on: Zimbabwe: Price Controls Object Lesson http://www.leftist.org/haightspeech/archives/390.html Kyle and Anne Haight: Annoying People In Stereo Since 1971 Sat, 02 Jan 2010 04:20:52 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Kyle Haight http://www.leftist.org/haightspeech/archives/390.html/comment-page-1#comment-2699 Kyle Haight Sun, 15 Jul 2007 04:12:34 +0000 http://www2.leftist.org/haightspeech/?p=390#comment-2699 FYI, I think the best short reference for understanding the full function and operation of the free market price system (and the consequences of its destruction via price controls) is George Reisman's book <i>The Government Against The Economy</i>. The material in there is also in his magnum opus, <i>Capitalism</i>, along with a bunch of other good stuff, but <i>Capitalism</i> is around a thousand pages long and costs around a hundred bucks if memory serves me correctly. I would also note, in your counterargument, that there is the theoretical possibility of the government imposing a comprehensive system of price controls on *all* the producers in the economy. In this case, the supplier's monetary costs would also be forcibly reduced, and the process can continue until all the costs are subject to price control. This is functionally equivalent to complete socialization of the entire economy, and leads to total economic breakdown through systematic misallocation of resources due to the inability to perform economic calculations. So it still doesn't work, but the reason for it is more subtle than the simple question of cash flow into and out of the businesses in question. FYI, I think the best short reference for understanding the full function and operation of the free market price system (and the consequences of its destruction via price controls) is George Reisman’s book The Government Against The Economy. The material in there is also in his magnum opus, Capitalism, along with a bunch of other good stuff, but Capitalism is around a thousand pages long and costs around a hundred bucks if memory serves me correctly.

I would also note, in your counterargument, that there is the theoretical possibility of the government imposing a comprehensive system of price controls on *all* the producers in the economy. In this case, the supplier’s monetary costs would also be forcibly reduced, and the process can continue until all the costs are subject to price control.

This is functionally equivalent to complete socialization of the entire economy, and leads to total economic breakdown through systematic misallocation of resources due to the inability to perform economic calculations. So it still doesn’t work, but the reason for it is more subtle than the simple question of cash flow into and out of the businesses in question.

]]>