Here’s a follow-up note to someone who continues to think me “comically simple minded on economics”:
Mr. T__:
Still displeased with my opposition to price ceilings, you write that you “feel chances are that the benefits to poor people who get groceries at the lower prices will be above the losses of those who can’t get all [the] groceries they want.”
I’m glad that you now admit that price ceilings cause shortages, but I disagree with your crude utilitarian calculus of their consequences. Do you really think that the relatively few units of groceries that will be supplied under Harris’s scheme will go first to the poor, with richer Americans bearing the brunt of the shortages?
You’re naïve to suppose that, when the inevitable grocery shortages emerge if Harris’s scheme is imposed, supermarket managers will not reserve stocks of groceries for themselves, their families, their friends, as well as for wealthier customers who’ll have no trouble expressing their gratitude to grocers who ensure that these well-heeled customers get all the groceries they want without having to wait in line. The poor will be the last to get groceries.
And the few groceries poor people do manage to buy at the price-controlled “low” prices will come to them at the very high cost of hours spent waiting in queues and reduced quality of whatever goods these unfortunate buyers manage to lay their hands on.
If you truly care about poor Americans, you should vigorously oppose all price controls.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
