Article Image

IPFS News Link • Sweden

Swedish Rent Control Exposes The Problem With Government Price Controls

• https://www.zerohedge.com, Via SchiffGold.com

With prices skyrocketing, you'll hear some people on the left argue that the US government should implement price controls. Meanwhile, President Biden's "Build Back Better" plan would impose various price controls on prescription drugs.

To the economically illiterate, price controls seem like a great idea. If greedy companies are charging too much money, pass a law to make them stop. But as Don Boudreaux explained in an essay published by the American Institute for Economic Research, price controls impose their own costs.

No government intervention into a market economy is as certain to do damage as price controls. Market prices make possible the successful, productive coordination of the efforts of countless specialized workers and firms spread around the world. Market prices also coordinate the resulting massive flows of economic outputs with the demands of consumers.

Every government-imposed control on prices reduces the effectiveness of this coordination.

This isn't just economic theorizing.

People have praised Sweden for its rent controls, but as economist James Murphy explains, the actual impacts of rent controls haven't been as great as advertised. In fact, they have created a mess in Sweden's rental market.


PurePatriot