Thursday, February 28, 2008


Memo to Dems: Price controls don't work

Those Democrats who think implementing price controls will make any number of goods and services more widely available (pharmaceuticals, gasoline, daycare, etc.) need to consider this: Price controls never worked in the past, they're not working now, and they'll never work in the future. Dr. Thomas Sowell tells us so:

"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.

"Hugo Chavez has blamed foreign owned companies for Venezuela's food shortages and threatened to 'nationalize' them. This too is an old political game that seldom does the people of the country any good.

"What is remarkable is how little interest there is among the media and among the public in how often and how consistently this has happened in the wake of price controls.

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