There have been a number of news headlines over the course of the past year that I’ve personally found wildly disturbing.
However, it is this one in particular from CNN that I’ve found to be of particular note. It’s titled, “Should the government control the price of food and gas?”
Throughout the piece, author Charles Riley looks into the history of price controls both within the past 100 years and of more recent note as well. The basic question behind the article is this: because of rampant inflation “should governments consider setting the price of essential goods?”
While I (sometimes) believe that there is no such thing as a stupid question, the very idea that this notion is being presented to the public is something which I find concerning. I don’t think it’s any secret to regular readers of The Organic Prepper what the position of the mainstream media (MSM) is on these issues. Though a question is being asked, are we ignorant of what the hoped for answer is?
Riley’s article starts off by examining whether or not there is precedence for price fixing in history.
Is there precedence for price-fixing in history? Absolutely.
As Riley points out,
- “The German capital of Berlin, for example, has sought to limit how much rent landlords can charge tenants.”
- “In the United Kingdom, regulators limit how much consumers can be charged for energy and some types of rail fares.”
- “As elections approached late last year in Argentina and annual inflation topped 50%, the government froze the price of over 1000 household goods.”
- “Last week, Hungarian Prime Minister Viktor Orban said he would cut the price of flour, sugar, sunflower oil, milk, pork leg, and chicken breast ahead of a national election…”
Let’s look at each of these examples in turn, however.
- Aside from having a history of totalitarianism, Germany is once more demonstrating that this is where it is headed for in the future as well. Price controls are a part of this.
- The United Kingdom has never been friendly to freedom (read American history).
- Jose here at The Organic Prepper has vividly captured what it is like to live in South America right now, where weight loss due to hunger has become the norm.
- All Viktor Orban has done is demonstrate he’s willing to steal from others in order to win power for himself. Did you notice he did this right before an election?
Just because there is precedence for something, does not mean that it is a good idea. Consider slavery, cannibalism, human sacrifice, or the like. Have they all been practiced in the past? Yes. But does that mean they were good ideas?
Nope.
Precedence does not equal morality.
Price controls on the farmer (or anyone else) will not work.
Consider as well whether it is morally just to fix prices on items. I sell chicken eggs. I’ve been able to sell my eggs for $3/dozen for close to five years now. But this is no longer. What used to cost me roughly $24 for 100 pounds of chicken feed has risen to roughly $42/100 pounds of feed just within the past year. I have to mark my eggs up to at least $5/dozen or it no longer becomes profitable for me to raise chickens.
While I enjoy watching my chickens run around, like eating fresh eggs every day, and generally just enjoy farming, am I inclined to put up with trekking through poop, chasing loose chickens late into the night, and cleaning coops if there’s nothing in it for me?
Again, nope.
This rising cost of eggs on my end may prove to be an inconvenience for my customers. They may complain about the rising prices, say I’m being unfair, and that I’m gouging them. They may even lobby successfully for my prices to be pinned back down at $3/dozen – where they’d been for years prior to 2021.
(This rising price of food is one of the reasons you need to check out our free QUICKSTART Guide on getting your food storage in order.)
But is it the producer’s fault, or is it those who do not appreciate laissez-faire?
Riley doesn’t seem to understand this. He states that “meat and energy are both significant contributors to inflation.”
That’s not true in the slightest.
If I sell a cow, how am I the one responsible for inflation? What sort of mental gymnastics are necessary to decide that the man raising chickens to sell to his community is the reason your dollars aren’t worth as much today as they were six months ago? The farmer is not the cause of these monetary ills. Those printing money non-stop are.
This is basic economics.
An unhappy ending?
After interviewing several economists for the article, and being rebuffed for asking such a question, Riley walks away with the final statement “price controls, it seems, are still a bridge too far.”
Yes, price controls are too far. They always have been and always will be. There is no perception about it, that is just the way it is.
What am I supposed to derive from this final statement though?
And another unhappy ending.
I say all of this to bear two points to view.
For starters, you’re going to see more of this narrative pushed to the American sheep throughout the near future. Eventually, you may even see the idea of price controls be pushed through to everything. Meat and energy won’t be the only sectors blamed for inflationary ills. Mattresses, books, skilled trades, pipes – everything will be blamed for inflation. And the only touted means to stop this “transitory” devaluation of the dollar will be to pin prices to where they were previously.
This policy has been used before to “fix” inflation, and it’ll happen again.
The second point is this: when price controls do make it so that I have to operate at a loss, this farmer is going to stop selling food.
What are your thoughts on price-fixing?
Do you think price-fixing is the solution for inflation? How do you think it will affect the economy if it happens? Share your thoughts in the comments.
About Aden
Aden Tate is a regular contributor to TheOrganicPrepper.com and TheFrugalite.com. Aden runs a micro-farm where he raises dairy goats, a pig, honeybees, meat chickens, laying chickens, tomatoes, mushrooms, and greens. Aden has two published books, The Faithful Prepper and Zombie Choices. You can find his podcast The Last American on Preppers’ Broadcasting Network.
Great description with good examples. After your example on the cost of eggs, it may help to circle back (apologies to Jen Psaki) on the previous examples.
Like Germany, a lot of US cities have price controls on housing, which have caused a shortage in housing.
The UK has price controls on energy, which is causing a shortage of energy (with China buying up natual gas at any price, the UK can’t afford it within their price controls).
Love the reference to Basic Economics, one of my favorite books by Thomas Sowell. He gives an extensive explanation of how price controls have failed, and how government regulation in general tends to fail.
Anyone old enough to remember Smokey and the Bandit? The reason they were getting chased by cops for carrying beer was… they didn’t have the correct government permit to transport beer. Most of those rules have been pulled back, but the attempted regulation to make things “fair” actually raised prices and caused shortages. If there had also been price controls to the point that it wasn’t profitable, there’d be no movement at all.
Price controls have always ended in disaster.
At the time the movie was made, Coors did not sell their beer East of the Mississippi river. They were moving the stolen beer to Atlanta.
Eastbound and downnnn… loaded up and truckin’!
I loved that movie. Drove around my ’69 Marquis like a Trans Am (it wasn’t!!).
That may be the case for the movie. My company helps trucking companies with federal compliance like drug tests and trip permits. Some guys came from the business.
Years ago, truckers needed permits to haul. If taking a load from Atlanta to Boston, but no permit for a return haul, the driver came back empty. Even if the trucker had a client with something to move. It was simply illegal. They also talked about carrying a few cases of beer that wasn’t sold in othet states. Freedom Outlaws!
That was apparently one gigantic mess of government oversight. Would not be surprised if some socialist idiot proposes it again as a “solution.” Bad ideas nevet seem to die.
Yep the gates are closing on those who refuse to become one with this beast as the covenant was made at this summit for us to own nothing by 2030:
https://www.g20.org/rome-summit.html
It looks like we entered the last 8 years at the close of that summit on 10/31/21:
https://sumofthyword.com/2016/10/04/the-rapture-of-the-church-is-after-the-tribulation/
As the mandates to bring the whole world under the beast by 2030 commenced at that summit:
https://sumofthyword.com/2021/01/07/mystery-babylon-the-great-and-her-beast/
Your first link doesn’t work. Can you save and upload it directly?
https://www.governo.it/sites/governo.it/files/G20ROMELEADERSDECLARATION.pdf
Our farm liquidated at an on farm auction all our equipment and 90% of our open brood cows springing, open and yearling heifers and cow/calf pairs. We also culled down by 90% our ewe, 2yo, and yearling flock.
We sold at premium high of the markets for everything concerned. We are reloading around simple easy to fix hay equipment to sell to other farmers still optimistic enough to continue.
We are centering the livestock operation around premium blood for sire bulls, rams and replacement yearlings. There is no money in meat production. At least not for the next 2 years. If things change, we will be positioned nicely to jump back in, but with operating costs already having risen 30% YtY and parts acquisition nightmares… it’d have to be a really attractive deal for us to go back to production ag.
Everything is relative. Just like the authors chicken example. And this farm ain’t the only farm slowing or stopping.
How about a 40-century history of the failure of price and wage controls … for $2.99 (at least the Kindle edition):
Forty Centuries of Wage and Price Controls: How Not to Fight Inflation
by Robert L. Schuettinger and Eamonn F. Butler | Apr 6, 2011
Kindle edition $2.99, Paperback edition $12.95, Hardback $28.99
https://www.amazon.com/Forty-Centuries-Wage-Price-Controls-ebook/dp/B004VHIIUC/ref=sr_1_1?crid=3RV1P5BOW6R6M&keywords=price+controls+books&qid=1642692748&s=books&sprefix=price+controls+books%2Cstripbooks%2C93&sr=1-1
the Mises Institute is thrilled to bring back this popular guide to ridiculous economic policy from the ancient world to modern times. This outstanding history illustrates the utter futility of fighting the market process through legislation, which always uses despotic measures to yield socially catastrophic results.
The book covers the ancient world, the Roman Republic and Empire, Medieval Europe, the first centuries of the United States and Canada, the French Revolution, the 19th century, World Wars I and II, the Nazis, the Soviets, postwar rent control, and the 1970s. It also includes a very helpful conclusion spelling out the theory of wage and price controls.
ALSO see the very useful reviews.
–Lewis
SOCIALISM! plain and simple. Best thing to do is be prepared.
… how does one prepare against socialism? socialism is a bullet-train to communism and the killing fields – “prepping” doesn’t seem to be an adequate response.
It didn’t work when Nixon tried it and it won’t work now.
with price controls, the price of your chicken feed would not go up.
Really, are you that simple minded? If you price control chicken feed the producers of chicken feed will stop producing for the same reason. It will be the case for everything. You can bet the elite will exempt themselves and not have a shortage of anything ( see black market).
With price controls row croppers would stop drilling seed.
I guess you could eat chicken feed, then?
if you can find any.
Canada had wage and price controls in the 1970s and they did not work. Inflation at this time, and throughout history, has been a result of increases in the money supply. The US has seen massive money supply increases since the Great Recession and now is seeing the resulting inflation.
Price Controls: The Government’s “New” Solution to Inflation?
https://www.theorganicprepper.com/price-controls/
Nixon tried price controls in 1972… it was the worst possible solution.
I had an old VW… 10 gallon tank. It cost me $2 to fill the tank at $.21 a gallon. Over night, the price doubled and now cost me $5 to fill-up and this was on VA student money of $265 per month, that DID NOT GO UP.
At first, a pound of ground beef and a whole fryer chicken cost $.29 cents. Over night it rose to $.69 a pound.
People started taking trucks into fields and stealing herds of cattle. Some went in, killed a cow and stole meat from the body. They got what they could put into their trunk… rancher lost the value of a whole cow.
Theft has been on the rise for a long time (catalytic converters being high on the list). Shoplifting and other theft is increasing and even allowed.
This will make it even worse.
It’s interesting to see the democrats following the old (and broken) playbooks of communists, fascists and Republicans
“It’s interesting to see the democrats following the old (and broken) playbooks”
“broken”? the old playbooks work great for them. always have.
ever wonder who these people are? who enact exactly precisely the same “mistakes” in every generation?
“People started taking trucks into fields and stealing herds of cattle”
reminds me of “when money dies”‘s description of german burghers riding bikes into the countryside to loot the farms and villages.
ant7 – I agree. “When Money Dies” by Adam Fergusson is a must read for anyone wanting to understand a hyperinflationary event and how it impacts on everyday people (and a society as a whole). Many chilling excerpts from diary entries. Many parallels to Venezuela today. To the general community – Ignore their stories at your peril.
I well remember Nixon’s price controls of the 70’s. All those empty shelves, especially the meat department.
But do NOT go into fear about all the craziness. The deep state filth are being flushed like sh* down the commode. The process of waking up includes learning some lessons. Like the GREED of the poor via price controls, etc. Lotta nonsense.
But we are going to WIN big time through all this.
ANYTHING the government puts its grubby, filthy hands on self destructs.
anything? notice how the “government” itself doesn’t.
so. why is that?
Control is the Goal
Folks, before we all get our collective panties in a wad… this is a piece from CNN. It did not come from anyone who works in government. Don’t panic over this. They’re morons. This is some commie wannabe’s wet dream.
On the other hand, if thise story came from comments from the HHS secretary or Secretary of the Treasury THEN I’D be on the alert.
I was a fifth grader back in 1971. I lived price and wage controls, WIN buttons, and all of that. I do remember.
“They’re morons”
they’re mouthpieces. the ones behind them (and all this) know exactly what they’re doing and how to do it.
Don’t forget to vote and drain the swamp! Congressional elections coming up this year!
price controls work.
against you.
Inflation is the result of a falling dollar in value. This causes prices to rise. A falling dollar means it costs a consumer more dollars to buy the same item than they did last year. Too many cheaper dollars chasing too few goods also results in inflation. We are now in a situation that we have too few goods (you all know that from shopping). The Fed is continuing to create more dollars and hand them out. Hence, more dollars chasing too few goods. Price inflation.
The producer/manufacturer has to pay more for raw materials to make widgets or chicken eggs. The costs (of chicken feed to make eggs) must be passed on (to the consumer) or the producer/manufacturer goes out of business. THEN, the products left in the market will COST EVEN MORE.
Price controls or freezing consumer prices will just make things worse. It restrains the free market. The answer is to open the markets to free and fair trade. That includes creating a friendly economic environment for business startups and competition. Thus, the free market decides the price of goods and services, not the government. This government is doing just the opposite and it’s doing it on purpose. Why? It’s Corporatism where the huge multi-national corporations own everything and control manufacturing (or lack of) which controls prices (higher).
“The answer is to open the markets to free and fair trade”
first have to replace the privately-owned fiat debt dollar.
good luck.
This is going to be so wrong in so many levels that it is not even fun.
I never thought that could happen there. I hope you´re ready for a new era of scarcity and black market, unless you can make it without many products that are going to disappear in a blink.
That is my experience in Venezuela.
Price controls will always remove items from the market place, People will not produce a product or a good only to sell it at a loss. Price controls are also one of the main drivers behind black markets.
“Price controls are also one of the main drivers behind black markets”
start now, get ahead of the game.
Price controls…seems like a solution…BUT…it doesn’t work. Nixon tried it. Carter tried it. It didn’t work. Once the controls are released, prices skyrocket. Producers stop producing because they can’t recoup their costs and because they are paying more for supplies…Ask a citizen of the former USSR. Shortages were rampant. They ate a lot of Borscht because it was cheap, and they couldn’t afford much of anything else.
You forgot Nixon’s price freeze. Prices of some goods should have been raised a long time ago. Instead, package/portion size was decreased. Now that is not an option.
Interest rates have been too low for too long – cheap money benefiting the few and little to no benefit for the rest. Lest not forget during raygun era, minimum 5% interest on savings accounts went away.
Manipulation always has and always will happen and it is not always government.
Price controls will stop production of goods. If someone doesn’t make money producing something they are not going to produce it. Price controls will produce scarcity of goods. I’d love to pay less for things, but I realize that price controls are not the answer. I’d rather pay more for something than not have anything available at all! I just hope that inflation doesn’t get so great that I can’t afford the things my family and I need.
The government already controls the dairyman’s price they get for their milk. And it is different prices for different areas of the country, it is not consistent nationwide.
—If they want to boost milk production in one area, they raise the price/100 pounds of milk they give the dairies, which gives them the money to expand their herds and facilities or to start new dairies. If they think that an area is producing to much milk, then they keep the price low. And it doesn’t matter if the price for their fuel, feed, labor, power, etc. goes up, they only get what the government gives them.
—For example, before my husband retired, the dairy we worked at here in Arizona was receiving around $9/100 pounds (12 gal.) of milk. This was barely enough to cover the cost of operating. Meanwhile, in South Dakota, a dairyman we knew was $22/100 pounds of milk, which was allowing them to expand their operations. And no one had any control of what they received for their product.
—You do not want to see price controls instituted by the government.