Date Written: 11/3/2022
Assignment: Write 500 words on this topic: “Price controls are people controls.”
Many people may believe in price controls because politicians have told them that they aren’t people controls. However, the fact is that price controls are people controls and the politicians are lying to cover it up.
To start, let’s consider how prices are created. They come from the competing bids between buyers and sellers. In a free-market economy, buyers compete against buyers and seller compete against sellers. For example, imagine that there are two buyers who want a specific product. One buyer is willing to pay $50 and the other $40. Obviously, the seller will sell their product to the buyer who will pay more. So, there is competition between the buyers as to who will get the product.
The same thing goes for the sellers. Imagine one seller is willing to sell their product for $70 and the other for $60. Naturally, the buyer will buy from the seller who has priced the item lower. So, there is competition between sellers to get the buyers to buy their product. From this competition emerges standard bids that many people have agreed upon. If the government doesn’t intervene, then these will be the prices that we see.
How Price Controls are People Controls
With an understanding of prices, seeing how price controls are people controls will be much easier. Think about it, only people are concerned with the price of a product. For example, paper towels don’t care if they are priced at $1,000 or $1 they are an inanimate object. Only the person buying the paper towels cares about they’re price because that determines whether they can buy the product or not.
When the government controls prices they decide if people can buy and sell certain products. If government sets the price of a product too high, then many buyers will not buy the product because they can no longer afford it. If the government sets prices too low, then many sellers will not produce the product because it’s not profitable to do so. In both cases the government is controlling people by controlling the prices.
Effects of Price Controls
These government price controls are also bad for the economy. Whether the government sets prices too low or too high in both cases it create waste. When the prices are set too low it creates shortages because there are not enough producers making the product. Alternatively, when the prices are set too high it creates wasteful surpluses because not enough people are buying the product. I have already written an article on the negative effects of price controls, so if you’re interested in learning more click here to see my other article.
In conclusion, whenever someone recommends price controls what they really want is people controls. They want to interfere with people’s ability to freely choose what they want to buy. If anyone recommends price controls the least they can do is be honest about what they truly are and call them people controls.
Leave a Reply