Price Controls Control People
What is a price? It basically is whatever the benefits the seller but is still low enough to benefit the buyer. However, what happens when we get the government involved? First, the government puts a price floor, which benefits the seller, buy making it so that the buyer can’t get a better deal. Then, to benefit the buyer, they place a price ceiling, which means that, if the seller can’t make a profit while selling below the price ceiling, he goes out of business, which destroys small business but benefits large companies that are super efficient and receive loopholes and government subsidies. Plus, what makes it really convenient, is that such companies can hire workers overseas in places like India and China at a fraction of the minimum wage. Here is a quote from this blog had to say about wages in China, and I recommend you read the rest of the post. Its really enlightening as to what wages are in China as of when it was written (2011). Its surprising they make even as much as they do!
The students who headed to the big cities (Mostly Guangzhou, Shenzhen and Dongguan) didn’t fair much better over the summer. Even working in a mobile phone factory (placing the screen into the case) only paid 7rmb/hour (~$1), but at the end of the month the company took food and rent (for the tiny factory dorm) out of the paychecks, leaving students with only about 4rmb/hour (~$.47). After an entire summer of working 60 hours a week, one student had only saved a few hundred dollars.
Thus, price controls don’t benefit the people at large: they benefit the large corporations by destroying the small people, which then forces people to buy from them. Luckily, there is another way: return to a true free market! In a free market, there wouldn’t be a coercive power forcing this on people. Price controls ARE people controls. When bureaucrats say that, “We’re here to control prices, not people,” they’re lying through their teeth in a lot of cases, if they know anything about economics. Prices should be thrown to the mercy of the free market; they’ll receive the best treatment they ever had, and benefit both the seller and the buyer.