If there is one single belief that unites most political thinking throughout the history of mankind it is that prices for goods and services cannot simply reflect supply and demand but should be manipulated to achieve more grandiose goals. Although mankind has gone through numerous cycles of fixing prices, discovering the unintended consequences, and reluctantly abandoning these policies, the temptation for each generation to improve upon something as “crude” as supply and demand remains too much of a temptation. The Ludwig von Mises Institute has resuscitated a book that documents this seemingly never ending quest to distort the price mechanism.
Centralized planning regularly appears in every generation, and is just as readily discarded after several years of fruitless experimentation, only to rise again on a subsequent occasion. Grandiose plans for regulating investment, wages, prices, and production are usually unveiled with great fanfare and high hopes. As reality forces its way in, however, the plans are modified in the initial stages, then modified a little more, then drastically altered, then finally allowed to vanish quietly and unmourned. Human nature being what it is, every other decade or so the same old plans are dusted off, perhaps given a new name, and the process is begun anew.
It is not an exageration to state that generating arguments why the laws of supplies and demand require enlightened assistance by philosophers, economists, and politicians has always been in high demand by such diverse institutions as kingdoms, labor unions and central bankers. Realizing how widespread this mindset has been thoughout history may provide some stoic relief to those who are frightened by contemporary developments. Robert L. Schuettinger & Eamonn F. Butler’s Forty Centuries of Wage and Price Controls: How Not to Fight Inflation is available here.
Tags: Intellectuals, Ludwig von Mises Institute, Price Mechanism, Robert L. Schuettinger, Supply and Demand