All together now: price controls cause shortages!
Zimbabwe is the latest nation to experiment with price controls as a method to make food affordable. It is an unspeakable tragedy that Zimbabwe's people should end up being a object lesson in what happens when someone tries to wish away the laws of human action. And yet, when it comes to price controls, everything old is new again. I learned about the magic of price controls in a class where we were discussing Allende's Chile. The teacher spoke of the government prosecuting merchants who did not "cooperate" with the regime's price control laws, as though it was a simple matter of whacking the uncooperative over the head until they got with the program, and then prices would go down. Unfortunately for people in Allende's Chile, Mugabe's Zimbabwe, and countless people for the 30 years in between, leaders have ever failed to learn that the laws of human action do not change just because the state decrees that it should be so. Perhaps they never learn this lesson because although no one can escape the laws of human action, leaders can easily escape the laws they impose on others.