How Not to Fight Inflation "In Pennsylvania, where the main force of Washington's army was quartered in ,. The theory was that this policy would reduce the expense of supplying the army and lighten the burden of the war upon the population. The prices of uncontrolled goods, mostly imported, rose to record heights. Most farmers kept back their produce, refusing to sell at what they regarded as an unfair price. Some who had large families to take care of even secretly sold their food to the British who paid in gold. By the fall of the army was fairly well provided for as a direct result of this change in policy.
How Not to Fight Inflation "A similar but even worse disaster, made more costly still by government bungling, occurred in the Indian province of Bengal in the eighteenth century. The rice crop in failed completely and fully a third of the population died.
Forty Centuries of Wage and Price Controls: How Not to Fight Inflation
A number of scholars attribute this disaster primarily to the rigid policy of the government which was determined to keep the price of grains down rather than allow it to rise to its natural level. A price rise, of course, would have been a natural rationing system permitting the available food to be stretched out until the next harvest. Without this rationing system, the reserve supplies were quickly consumed and millions died of hunger as a direct result.
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Ninety-six years later, the province of Bengal was again on the verge famine. This time the procedure was completely different, as William Hunter relates: In the earlier famine one could hardly engage in the grain trade without becoming amenable to the law. In respectable men in vast numbers went into the trade; for the Government, by publishing weekly returns of the rates in every district, rendered the traffic both easy and safe. Everyone knew where to buy grain cheapest and where to sell it dearest and food was accordingly bought from the districts which could best spare it and carried to those which most urgently needed it.
In the earlier case, price-fixing was enforced and a third of the people perished; in the latter case, the free market was allowed to function and the shortage was kept under control. How Not to Fight Inflation Economics taught through history. A lesson no country is interested in learning.
There must be a reason, a very powerful reason, why countries with so diverse types of government spanning from totalitarian to democratic have always and everywhere refused to accommodate to economic reality, preferring instead to accommodate -manipulate- economics into their utopian desires. This, rather philosophical aspect of the issue, is what interests me most.
The book, though, does not delve into the philosop Economics taught through history.
Forty Centuries Of Wage And Price Controls: How Not To Fight Inflation by Robert L. Schuettinger
The book, though, does not delve into the philosophical, nor does it look into the obtuseness or stubbornness of the human psyque. It stays within the realm of economics. There are plenty of examples to pick from all over the world till today to show how futile our governments' attempts to control prices and fight inflation have been. The stories picked from the older times are, to me, the most interesting and easy ones to follow, from a layman's perspective.
Funny and ironic that the moral from this many thousand year story was best summed up by Nazi Goering himself during his interrogations by American officials, warning America not to follow the same futile and counter-productive economic path they had tried, and foreseeing -correctly- that his advice would be lost. The day we can choose which country and system of government we want to live in, that day, perhaps, there will be a chance for the people to take "control", for good or bad, over their own lives and be free.
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Share your thoughts with other customers. Write a customer review. Read reviews that mention wage and price price controls price control war government economy prices governments failed caused wages wars wwii result ways. There was a problem filtering reviews right now. Please try again later. Kindle Edition Verified Purchase. Once you read this book you realize that history is not about wars and conquests but at it foundation history is about how a people use, or misuse, economics that contribute to their success and demise.
By the time you finish this book you will think you were listening to the evening news of today. The book is very interesting and clear in how it states the problems seen throughout history when the government tried to fabricate a parallel reality and solve problem by just saying they shouldn't exist.
Forty Centuries Of Wage And Price Controls: How Not To Fight Inflation
The book clearly states how wage and price control was applied in different parts of the world in different times in order to solve some sort of shortage or inflation problem. What the book lacks is a deeper review of the ways used to apply the controls and how exactly it under performed to solve the problems. In some cases it is due the lack of information from very old scenarios and in other cases I think the authors tried to keep it simple enough to be readable.
The book is old and if you are looking for recent information, you won't find it. In general, a very interesting and insightful book about a topic not yet understood by a lot of people and governments e. Economy theory suggests that price ceilings produce shortages and price floors produce surpluses. Good theories should have testable results.
This book describes examples in history where the government initiated price controls.
Forty Centuries of Wage and Price Controls: How Not to Fight Inflation (LvMI)
It then shows the ill effects such controls caused. The most insightful criticism comes from perceptive contemporary sources who cite the source of their misery. The book was written as a polemic against political pressure to freeze prices remember Nixon's price freeze , yet is still readable and valid today. Alan Dale Daniel Top Contributor: Forty Centuries of Wage and Price Controls: How Not to Fight Inflation by Schuettinger starts out with the basic premises laid out clearly.
A good way to kick yourself out of prosperity is to tell producers what prices they will charge and tell employers what wage they will pay. The author follows disaster after disaster through history showing how these steps managed to scrap good economies and rip people's lives apart. In each case the author demonstrates how the government was trying to act to make the economy better but instead made it much worse. His case is very tight in most instances not all. The problem is the author repeats the same ideas over and over. It might have been easier to list the problems caused by wage and price controls then list the civilizations that tried it.
Nonetheless, the specifics are important in several cases and well worth reading. His case for the evils of wage and price controls falls apart, somewhat, when he discusses modern war. He doesn't talk cogently about the difficulties of modern societies and inflation associated with war.
In war things are being constructed but not consumed by someone paying for them rendering a profit to the seller while lowering demand. They are paid for by the government with taxes or inflated money and then blown up on some battlefield.
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Lets face it, tanks and battleships are expensive. The author's own numbers appear to prove the point, but he uses those same numbers to argue the opposite. This is hard to understand and he has no ready remedy except to avoid printing money or using wage and price controls. The US Civil War offers a contrast in ways to handle money during a war North v South , but the management methods were complex and the South had no ability to acquire overseas resources at any price so the comparison is difficult. Steel is a good example. If the price is allowed to rise on its own the country would soon have to stop building battleships or whatever.
Losing the war doesn't seem to be a good substitute for inflation. The book is short and fun to read, with the exception of the repeats, and I recommend it. One person found this helpful. An excellent overview why devaluing currency, the resulting inflation, and govt's effort to control "runaway" prices result in horrible unintended consequences. Also explores why rulers are reluctant to break the cycle, once started. If you're interested in econ, this is a great topic, pretty easy read, well worth the time and money.
Excellent history of one of the most common ways governments and "leaders" damage our economy and society. This is a great book, because it give the history of price and wage controls for different times and countries.
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Good resource for failed government policies. History can not be ignored long without consequences. The folly of governments is amazingly clear; you can not regulate more value into money. See all 16 reviews. Most recent customer reviews. Published on August 26, Published on September 29, Published on August 8, Published on December 29, Published on August 29, Published on December 8, Published on October 31, Amazon Giveaway allows you to run promotional giveaways in order to create buzz, reward your audience, and attract new followers and customers.
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