Price controls and feeding the poor

For some of the poor, higher food prices doesn’t hurt them, because they work at producing it or selling it, but that even oversimplifies it.

That said, over the long run, the free market has proven to be a much better manager of the production, distribution, marketing and consumption of every kind of good and service.

And, Over bot the long and the short term, with every government intervention into anything, it is an intervention that determines the winners and the losers.

Price controls on food to keep the prices down begets artificial shortages, because there is more demand than supply at the police-enforced prices. Stocks diminish or disappear before new stock arrives. Producers say “so what?” it’s not worth it to produce more. It encourages stockpiling at the earliest point of legality (like leaving crops to mature later than normal), or hoarding, which is usually made illegal by the same decree that establishes the price fixing.

BUT If food prices go up, in a free market, so does production, because now there is more profit and incentive to produce. The higher they go up, the faster the suppliers rush to get in on the profits before things stabilize again.

In the U.S. price controls are more indirect, with the exception of Nixon’s brief experiment with it. They are done through subsidies to reduce the cost to producers and the supply chain, and through regulations and taxes to increase the cost of targeted majority-decreed (51% of legislative vote or executive orders) “bad thing”.

Both eventually make things harder for the poor. Oil and gas and coal anywhere would be cheaper if rulers and regimes around the world allowed the free market to open up fields that are now banned from exploration. It even applies to coal vs. oil, as the artificial additional cost in the US of each unit of unionized labor in the mines and supply chain unions adds artificial cost and propels energy use to oil. Artificial because there are people willing to work the mines for less. (If not then what “good” is the union for the miners?)

While I was a missionary in the Dominican Republic, after a few years of seeing how prolific an environment there was for vegetation and crops almost everywhere, I was astounded that there were any people at all that didn’t have enough to eat.

That’s an oversimplification, but it summarizes a lot of it. Selfishness, people who do not consider themselves bound by the Golden Rule, results in artificial barriers in normal times and in abnormal times.

–trutherator

Matthew 7:12 ¶Therefore all things whatsoever ye would that men should do to you, do ye even so to them: for this is the law and the prophets.


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