Price Control

The free market is called “free” for a reason. When it comes to trade, it is the indicated one to take care of everything that occurs. For it promotes freedom, agreement, peace, and good, constant economic growth. However, the state is always trying hard to take over commerce and economy. Who should have the authority to set prices, the free market or the state? Why?

The free market needs to possess the authority for setting prices, for these simple reasons:

First, it allows the customer to decide what to buy and at what price. The customer has the economic authority and this creates good competition between businesses and businesses, employers and employers, employees and employees. If the state decides prices it would necessarily end up creating price floors or price ceilings. This can’t be because prices always fluctuate.

When there is a lot of demand you need to raise the price that it may let production maintain its good rate of supply. If the demand is low in a product, you need to lower the price that it may be sold. However, if the state takes control of prices, they will stay at one price without guiding themselves by the demand of the product. In this way causing the production and distribution to falter, by businesses both, producing and distributing gluts or shortages.

If gluts and shortages were to be found in the market, businesses would eventually end up in economic ruin and would have to close down. Economy would fall and taxes would rise up. The customer needs to decide the price, “How much is the product worth?” Not the state because it might set prices of good products to customers low, or prices of bad products to customers high.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: