Progressives Love Being on the Right Side of History but the Wrong Side of a Famine

In mediaeval times, if a person did not know how to write or speak Latin they would be considered ‘illiterate’. Today, if we were to consider people without a basic understanding of economics illiterate, then the illiteracy rate would likely be above 95 per cent. 

President Biden himself was recently accused of mocking the American people for their lack of basic understanding of the processes leading to the materialisation of products on their tables. The sad reality, however, was that he was not mocking them—he was right. 

It is not that Americans are stupid when it comes to their rates of economic literacy, of course. Those in the positions of power—and thus the helm of the education system—do not want the people to be informed about such matters. An informed population, remember, is dangerous for democracy.

As such, I will do my best to warn you of an economic concept that may soon appear in political discourse as the numerous government-induced crises plaguing our societies begin to bubble violently to the surface. That concept is called ‘price control’. 

Price controls are the absolute cancer of an economy and one with which all citizens of socialist and ex-socialist nations are familiar. Their implementation is the exact reason why the populations of almost every single socialist nation ended up in starvation. To explain to you in very simple terms as to why that is, what all socialist governments have in common is their tendency to make promises to their people for ‘free stuff’. “Fight for our revolution,” they say, “and you will get free stuff.” “Vote for our glorious leaders of the people, and you will be provided for.”

Unfortunately for those governments, one cannot create free stuff out of thin air, and the only option available to central banks when trying to appease a dependent populace is to print money. That money is then given to the people who, supposedly, are then able to go out and buy the stuff they otherwise wouldn’t have been able to afford before.

This injection of arbitrarily created currency into the economy is of course what causes inflation. Now, most people understand what inflation is. But what they might not understand is how it actually functions. Why do prices go up? How do store owners collectively decide to make stuff more expensive because there is more money in circulation?

The answer to this lies in the aforementioned fact. While the government may print more cash, it does not and can not print more stuff. As such, the populace and its newly printed money buy more products; often in quantities they don’t need. In line with the laws of market price determination, this sudden increase in the demand for commodities causes shortages, and thereby rising prices.

This is how the free market ‘rations’. In other words, people who don’t desperately need stuff are forced to tighten the belt. In an ideal world, if there was not enough food to go around, people would be forced to eat one meal a day rather than three, thus ensuring that there was enough food for everyone. 

This is the free market working as intended, and it is exactly why we see empty shelves and breadlines in socialist nations. Inflation and economic panic causes people to buy more than they need and prices go up; however, instead of waiting it out and tightening the belt, the populace becomes angry and demands its all-powerful, all-knowing, all omnipotent socialist government to fix the situation right away.

It is largely apparent across time that governments of all stripes will never directly claim responsibility for their inflationary activities. Instead, they are likely to blame someone else. Socialists, of course, will blame the greedy farmers for selling their produce at a higher price, and blame the greedy merchants for ripping the people off. Yes, greed is the problem, and the only solution is for the bureaucracy to implement ‘price controls’. The all-knowing all-powerful government knows what the ‘correct price’ for a product should be, and they will thus force everyone to abide by it. 

Let’s imagine a farmer in Soviet Russia. To plant the crops that will create his income, he has to pay the farmhand, feed the horse that ploughs the field, and buy fertiliser and seeds. These overheads cost him 10 rubles per kilogram of harvest. However, due to the government’s price controls, he can only sell his stock for five rubles per kilogram. Thus, for every kilogram of stock the farmer sells, he bears a net loss of five rubles.

In other words, the farmer is dealt a deal worse than slavery. A slave at least can work for free, but for the farmer in this progressive socialist system, he is forced to work for debt. For all his backbreaking efforts, he is literally mandated to become poorer as he slaves away.

As you can imagine, the farmer in his poverty might then be incentivised to hide his grain or farm, sell his produce on the black market, or attempt to smuggle and sell it across the border. Naturally, the socialist apparat would then blame the farmer for being greedy and guilty of undermining the nation’s economy and socialist vision.

In Soviet Russia, this condition usually ended up in the government’s ‘super cancelling’ of farmers, or the incitement of the proletariat to do violence against producers in a fashion not too dissimilar to that which we are seeing in some African countries.

In the end, of course, the people always realise that the farmers do in fact know how to farm, and the ‘new farmers’ appointed through government nepotism are perhaps not particularly capable of providing sustenance for the masses. Such is the story of most socialist nations under the directive of ‘price control’. 

For the uneducated folks supporting such edicts, they will always assure us that they are ‘on the right side of history’. They will, however, always be ‘on the wrong side of the famine, and it is up to us to educate these people on what price controls really mean. 

Over the coming months, if you have the time and ear of a friend when you’re at the pub or scrolling through an internet forum, try to explain to them in your own words why price controls can’t work. It is hopeful that most people will understand right away: indeed we should never support a politician that suggests such economic suicide.