4 ms·

Almost anything is better. Wealth tax, regulations, minimum wage, anti trust laws, land tax, whatever. Just don't do price controls unless you're correcting for

• wolverine876 3y ago
  Why do you think that? Give us reason to believe! Also, don't many of the solutions you name exist to 'correct for market failure'? Why are price controls different?
  • hackerlight 3y ago
    Because it means the market can't find equilibrium which leads to deadweight loss and problems like shortages. Allocation becomes inefficient and it's a matter of who can stand in line the longest to buy the bananas that are mispriced. Better to have correct prices so you don't get shortages, and rely on welfare or UBI to fill the same need. Minimum wage is a form of price control but it's one that's quite well studied empirically to have not super negative consequences as would be predicted by basic theory, perhaps because monopsony leads to mispricing of labor so minimum wage is fixing a market failure. Regarding wealth and land tax. Whatever your view on taxation it's a necessary evil so may as well pick the least bad taxes. Regulations can be a positive because they correct market failure. For example tragedy of the commons. Price controls that don't correct specific well defined market failure will add dead weight loss for no benefit. My view on this isn't fringe. It's mainstream among Keynesian economists that price controls are uniquely bad as a general rule.