Why Price Controls Don't Work - Shortages of Venezuelan Coffee

Discussion in 'Economy' started by Toro, Aug 1, 2009.

  1. Toro
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    Toro Diamond Member

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    If you put a cap on the price of something, and the cost of producing that something continues to rise, then people stop producing it and it leads to shortages.

    It is a very simple concept that people seem to fail to understand time and again.

    The most recent example is that first the first time ever, coffee in Venezuela - formerly one of the biggest producers of coffee in the world and where arguably the best Arabica beans were grown - is going to have to import coffee from abroad.

    Venezuela to Import Coffee 1st Time Ever - Food Industry News
     
  2. Oddball
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    Oddball BANNED Supporting Member

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    Someone better share this one with the imbeciles in congress, who think that they can control the price of medical services.
     
  3. Kevin_Kennedy
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    Kevin_Kennedy Defend Liberty

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    This is why we should be moving towards a freer market rather than towards a command economy.
     
  4. BaronVonBigmeat
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    BaronVonBigmeat Senior Member

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    Incidentally, the opposite of a price ceiling (maximum price) is a price floor (minimum price). Whereas a price ceiling yields shortages, a price floor yields gluts. For example, a minimum wage yields a glut of labor, ie unemployment. The higher it is above market rates, the more unemployment you get.
     
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  5. Big Black Dog
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    Big Black Dog Gold Member Supporting Member

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    I'm telling you now and I'm telling you very loudly. If anybody does anything to prevent me from getting a cup of coffee when I wake up in the mornings there is going to be some pure hell to pay around here... Take this as a warning!:evil:
     
  6. editec
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    editec Mr. Forgot-it-All

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    I agree.

    Price controls inevitably end in disaster.

    They cause shortages of whatever they seek to control.
     
  7. Paulie
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    Paulie Platinum Member

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    Unless of course it's the wife though, right?

    The wife: "Ah ah ah, nuh uh, HELL to tha no, you ain't gettin' outta bed for no mutha fuckin' coffee! You rubbin' my feet!"

    The dog: "you're right, honey."
     
  8. Big Black Dog
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    Big Black Dog Gold Member Supporting Member

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    Jesus Christ. Admit that you're PW and it seems like you never hear the end of it.... What a mistake that was.:lol:
     
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