Emeritus Prof Christopher May1d ago

Economists will tell you that price caps stop markets working properly... which is all very well, but when we can see that market society is not working well for the majority of the population, some focussed policy of price caps looks increasingly politically expedient (not least of all as there are all sorts of examples of prices caps not causing the economic sky to fall in).

Markets can be modified, have been modified and should be!

#economics #PriceControls

https://www.theguardian.com/commentisfree/2026/mar/27/governments-controlling-prices-inevitable-mexico-spain-cost-of-living

Governments controlling prices? It has long been unthinkable – but may now be inevitable

In Mexico and Spain, leaders who have capped public costs have been rewarded at the ballot box. As another cost of living surge arrives, it may be a policy our leaders are unable to resist, says Guardian columnist Andy Beckett

The Guardian
Show threadTerryB
@ChrisMayLA6 The definition of “markets working well” seems somewhat nebulous. Which to my naive mind seems inevitable. The point about an auction is that one party is under pressure to pay more than they want and the other to accept less. In theory that should lead to compromise, but in reality things are different. One party may not be acting rationally or have different leverage.
Mar 28 at 1:06pmWeb
Show threadTerryB22h ago
@ChrisMayLA6 I just remembered. A number of companies, including one my dad worked for, the bosses refused to reduce margin on the product, to potentially achieve massively greater sales and total profits. Because they believed that selling 10000 items with £1 margin rather than 1000 with £2 was being robbed. (“That coat is worth £14 I’m not selling it for £13”) Also, in the 70s US computer industry subsidised sales to UK to kickstart sales but UK sellers pocketed the $ and kept prices high.