Here's one price control I can agree with.

Price controls never control prices in the way the controllers wish.  Instead, they 'control' quantities demanded, either increasing demand (with a price cap) or diminishing it (with a floor), but in neither case can markets clear. Short-term net result is market chaos; longer-term result is withered markets.

This is generally a bad thing.

But there might be one exception. And the European Union may have just found it:

Any price cap increases demand while reducing producers' ability to meet the supply demanded. Short-term result is undersupplied markets, black markets, and reduced quality. 

But what about when it's only a notional market anyway?

Notes David Turver:

"Capping carbon prices is a small step in the right direction, but scrapping the ETS altogether would be better because paying carbon taxes to the Government won't change the weather."

FACT CHECK: "The United States is one of the only developed countries where health care is mostly left to the free market." ANSWER: FALSE

 

"Many critiques of US health care begin with the assumption that ... the United States is 'one of the only developed countries where health care is mostly left to the free market.' In truth, among wealthy nations, the United States may have one of the least-free health care markets—and it’s making health care less universal.

"In a free market, the government would control 0 percent of health spending. Yet the Organization for Economic Cooperation and Development (OECD) reports that in the United States, the government controls 84 percent of health spending. That’s a larger share than in 27 out of 38 OECD-member nations, including the United Kingdom (83 percent) and Canada (73 percent), each of which has an explicitly socialized health care system. When it comes to government control of health spending, the United States is closer to communist Cuba (89 percent) than the average OECD nation (75 percent).

"The idea that the US health sector has 'largely unregulated prices,' as the 'Los Angeles Times' has reported, is also incorrect. Direct government price-setting, price floors, and price ceilings determine prices for more than half of US health spending, including virtually all health insurance premiums.

"Many think that if prices are excessive, they must be market prices. But in the United States, government price-setting pushes health care prices higher than they would be in a free market. On top of that, the government pushes all medical prices and health insurance premiums upward through tax laws and regulations mandating excessive levels of health insurance. ...

"A few examples illustrate how frequently the government sets prices too high. ...

"US health care prices are excessive because the government intervenes. When health care operates under free-market principles, prices would fall like they do in other economic sectors, making health care increasingly more universal."

~ Michael F. Cannon from his article 'U.S. Health Care: The Free-market Myth'

End the Reserve Bank

New Zealand's Reserve Bank is a mess. Destroying the currency; clueless about the economy as it begins to circle the drain; chairman and governor gone, deservedly, amid shenanigans obscuring why; and a revolving door of management, two in temporary positions only, "one utterly unqualified for the role she holds, and one with serious ethical questions."

And this is the crowd supposedly protecting our money? Galt help us!

Walter Block's call to End the Fed (i.e, the US central bank) is just as apposite here. Only the numbers and names need changing:

Some 500 economists work for the Federal Reserve System. This is probably more than the entire dismal science faculty at all eight Ivy League Universities, perhaps with Chicago and Berkeley thrown in for good measure. If the Fed were disbanded, they would all have to seek other work, perhaps leading to prosperity. Under the present institutional arrangements, they undermine the economy. On the other hand, this is an empirical issue. Presumably, many of them would obtain faculty positions, on the basis of which they would be inculcating their charges with the same voodoo economics with which they ruin the economy.

Why? How so? That is because one of their present roles is to determine, among other things, the interest rate. ... The arguments [for this] have essentially been refuted centuries ago and are now regarded by the economics profession as beneath contempt.

Well, so it is for price controls, and, as interest rates are a price, just like that of imports, so too is controlling them via the Fed’s central planning “beneath contempt.”

Moreover, if there is anything we have learned both from theory and practice, it is that price controls create economic disarray.

Have we learned nothing from the almost perfectly controlled experiments of East and West Germany, North and South Korea, a true rarity not only in economics, but in all of social science? Presumably not, otherwise the Fed would never have lasted as long as it so far has.

Central planning never works and never will work. Prices, market prices, free market prices, are the eyes and ears of the economy. Without them, we would not know whether it is economically better to use platinum or steel for railroad lines. The former can do a better job. But its market price is so high we may do no such thing, if we want to allocated resources productively. Its relatively high price indicated that this metal should be used for more important purposes elsewhere in the economy, and lower-priced steel for this use.

Ditto for interest rate prices. Should we build a tunnel through the solid rock mountain, or a far longer road all around it? The former will cost far more right now and will take many years to come online, maybe decades. But it will save money for centuries, most likely in terms of reduced travel outlays. The circular road will cost less and will be available for motorists much sooner. It will last longer, and be in less need of repair, given that the danger of cave-ins will be comparatively minimal. If the interest rate is high, we will veer in the direction of the road. We will heavily discount the roundabout process of the tunnel. If low, the shortcut in terms of vehicle mileage will be more attractive. But this assumes a market rate of interest, not one concocted out of whole cloth by a bunch of central planners scattered all around the country, who pay no price, none at all, for being wrong.

We have not yet said anything about the second job of the Fed: maintaining the value of the dollar. It has lost some 97% of its value from the time of its inception in 1913 to the present time. On that ground alone, it ought to be disbanded, forthwith, and salt sowed where it once stood.

New Zealand did fine for decades without a Reserve Bank to issue banknotes and dictate interest rates. Let's do it again.

"This is one of the largest tax hikes in American history, and it will be enacted by presidential decree without so much as a single vote of Congress." [UPDATED]

"Peter Navarro [a Trump 'economics' advisor] is promising a $600 billion/year tax hike (hence $6 trillion in a decade) from the April 2nd tariff package.
    "This is one of the largest tax hikes in American history, and it will be enacted by presidential decree without so much as a single vote of Congress.
    "That is because Congress has allowed the executive branch to usurp its tax power from Article I, Section 8 through a blatantly unconstitutional delegation with no intelligible principle beyond the personal whims of the current president.
    "This is a clear cut case where the judiciary needs to step in restore constitutional order."

~ Phil Magness

UPDATE: And then there are the threats on Taxation Day to attempt to stop some of the most obvious consequences, like price rises:

 

The Myth of Finite Resources

"Intellectuals, politicians, and journalists treat the idea that capitalism inevitably leads to ecological disaster as an unquestionable truth — ... that free markets cause the destruction of Mother Earth and that we must enact socialist policies to prevent an ecological doomsday scenario. But, what if I told you that economic facts do not buttress this hypothesis at all? And what if I added that an ingenious economist already proved the compatibility of capitalism and environmentalism as early as 1981? ...
    "One of the charges most frequently levelled against capitalism is that this social system must necessarily lead to ecological disaster. After all, the earth’s resources, the eco-socialist argument goes, are finite. Evil capitalists and greedy businessmen will gradually exploit non-renewables until we are doomed because we are out of natural resources. Karl Marx proposed this hypothesis as early as 1867 ...

"Inspired by Jean-Jacques Rousseau, Marx believed that the cause for ecological disaster is to be found in the introduction of private property rights. ... Rousseau and Marx’s solution to this alleged problem was the abolition of capitalism and property rights, a solution which has presently been voiced as vociferously as never before by the eco-socialists. ... While reading fairy tales and fables can certainly be an entertaining pastime activity, it is by now about time to return to reality ...

"In a free-market economy, the price of a resource is determined by its scarcity. If a resource becomes more abundant due to an increase in supply and/or a decrease in demand, its price will typically drop. If a given resource, vice versa, becomes more scarce due to a decrease in supply and/or an increase in demand, its price will usually rise. This change in scarcity and price, in turn, affects the behaviour of any rational market participant with an entrepreneurial mindset, producer and consumer alike. In his groundbreaking monograph, 'The Ultimate Resource,' American economist Julian L. Simon observes, 'Heightened scarcity causes prices to rise. The higher prices present opportunity and prompt inventors and entrepreneurs to search for solutions.' In a capitalist society, the depletion of a nonrenewable resource is prevented by three emerging patterns of behaviour, all of them caused by the increase in the resource’s price.
    "[Between them, rising prices and] the profit motive offer an incentive to the rational businessman to obtain and store more units of the nonrenewable resource in question. ... and to start developing substitutes for the nonrenewable resource in question ... [Meanwhile] the desire to economise motivates rational buyers to become less dependent on the nonrenewable resource in question. ...

"Ultimately, there is only one resource which is necessary to replenish all others, namely the human mind. It is for this reason that Julian Simon chose to name his groundbreaking study 'The Ultimate Resource.' 'The main fuel to speed the world’s progress,' he explains, 'is our stock of knowledge, and the brake is our lack of imagination. The ultimate resource is people—skilled, spirited, hopeful people—who will exert their wills and imaginations for their own benefit.' ...

"The eco-socialists are undoubtedly right in pointing out that the earth contains only a certain amount of nonrenewable resources in a fixed quantity. ...  More importantly, though, the eco-socialist errs in concluding that natural resources must be finite because the earth contains them in a limited quantity. Rather, in a free-market economy, as the resource becomes more scarce the price of the natural resource increases. Changes in producer and consumer patterns, in turn, prevent its depletion. In Simon’s words, 'Population growth and increase of income expand demand, forcing up prices of natural resources. The increased prices trigger the search for new supplies [or substitutes, and provides more human capital for the search and investigation.] Eventually new sources and substitutes are found.' ...

"The key economic problem of a socialist economy [however] is that the price of a resource will not rise if it becomes more scarce. Price ceilings effectively prevent an increase in price, thereby demotivating businessmen from increasing their production of non-renewables, and/or developing substitutes for them. The result, as can be witnessed in socialist countries all over the globe, are shortages and famines.
    "Thus, if people are truly concerned with the potential depletion of finite resources, they should start questioning their political convictions. The solution to preventing the exhaustion of the earth’s resources are not government controls but free markets and free minds. To paraphrase Ayn Rand, 'If concern with [the environment] and human suffering were the [eco-socialists]’ motive, they would have become champions of capitalism long ago; they would have discovered that it is the only political system capable of producing abundance'.”

~ Martin Hooss from his post 'The Myth of Nonrenewable Resources'

RELATED POSTS

• Why We Need Private Property to Deal with Scarce Resources - Patrick Barron, NOT PC
• Environmentalism Refuted - George Reisman, MISES DAILY 
• Some propositions on property rights – and IP - NOT PC

"When governments prevent price hikes, they unwittingly ... make it harder for people to recover from disasters or, today, to protect themselves from the coronavirus." Bonus #QotD

"Government officials (and pundits) never seem to learn (or remember) that in times of crisis, naturally rising prices are necessary to guarantee that goods, services and inputs are used to maximum social advantage. When governments prevent price hikes, they unwittingly create shortages of vital supplies. Unfortunately, such government intervention makes it harder for people to recover from disasters or, today, to protect themselves from the coronavirus."

~ Veronique de Rugy. from her post 'Supply and Demand, Hoarding, Price Gouging -- and the Coronavirus'

[Hat tip Cafe Hayek]

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"This is a race to the bottom. Companies that can’t effectively price and promote the advantages of their products sometimes decide not to make them in the first place. The drug they don’t develop and the drug you aren’t administered might have been the one that got you out of the hospital a day earlier or even saved your life." #QotD

"When Americans [and those who rely upon American pharmaceutical research] talk about drug prices, the conversation is dominated by the eye-popping sticker prices of certain new drugs. We’re all aware of how sky-high prices can make it hard for some patients to afford the drugs they need. Yet few appreciate how patients also lose access to treatments when prices are too low.
    "The U.S. federal government’s attempts to keep prices low have created a chain of unintended consequences...
    "Because both the 340B program and the Medicaid best price law keep prices low, drug companies underinvest in the next generation of hospital outpatient drugs.
    "Another set of regulations further discourages hospitals from offering some drugs. For drugs administered in a hospital setting ... hospitals’ retail price remains pegged to the industrywide average, potentially forcing them to sell the drug at a loss...
    "In the drug arena, government is an 800-pound gorilla. Health-care providers and pharmaceutical companies are paying attention. The drug they don’t develop and the drug you aren’t administered might have been the one that got you out of the hospital a day earlier or even saved your life...
    "This is a race to the bottom. Companies that can’t effectively price and promote the advantages of their products sometimes decide not to make them in the first place. Americans [and the rest of the world] are being denied needed drugs because some prices are too low."
~ David R. Henderson and Charles L. Hooper from their post 'Henderson and Hooper on Why Some Drug Prices Are Too Low'
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