The Virus of Price Controls

by Don Boudreaux on February 25, 2016

in Prices, Reality Is Not Optional, Seen and Unseen

Here’s a letter to CNN Money:

In your report on the Puerto Rican government freezing the price of condoms, you write “Condom prices in Puerto Rico are cheap and aren’t going up anytime soon” (“Puerto Rico freezes condom prices,” Feb. 24).

Wrong.  The price freeze will prevent the Zika-inspired rise in the demand for condoms from calling forth an increase in the quantity of condoms supplied to satisfy that higher demand.  The resulting shortage of condoms will prompt some people to wait in queues to buy condoms, cause other people to turn to black-market suppliers, and cause yet other people simply to not use condoms during sex.  Each of these consequences reflects the reality that the price freeze, rather than keeping the cost of condoms “cheap,” will raise that cost inordinately – and, in the process, further promote the spread of Zika.

People are in dire need of a prophylactic against such forceful and harmful government intrusions.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

(I thank Jason Kolberg for the pointer to the CNN Money report.)


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