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41 sats \ 3 replies \ @denlillaapan 24 Nov \ parent \ on: Should the government just ban high prices? econ
no price controls on anything, ever.
Mises was always the most badass dude about this: Even in raging World War I, he went "uh-hu, better let prices work... allocate resources better to the war effort than central planning and price controls." (not a direct quote, lol)
Price controls are good in cases where there is total monopoly. Let's say, only one company providing connection to electricity grid. But not when there is competition. Government should incentivize competition instead.
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nope, not right.
Natural monopoly theory is bunk.
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Sometime it's monopoly by the law. For example, in Latvia power grid is monopoly of two 100% state owned companies, only power production and selling to end customers have competition. And it's ok that some regulatory board needs to review their pricings, not just their CEO / board decides whatever they want. And you pay specific fee each month for maximum connection capacity and spent kWh's to that state monopoly.
Then there is kinda not monopoly by the law, but it's practically impossible for anybody to enter the market. Say, railways tracks. It will be practically impossible to buy all the land necessary to build your own for bigger distances, even if you have shitton of money (government can do that - they just make a new law and force you to sell to them what they want).
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