Forty Centuries of Wage and Price Controls
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From Amazon: Economy theory suggests that price ceilings produce shortages and price floors produce surpluses. Good theories should have testable results. This book describes examples in history where the government initiated price controls. It then shows the ill effects such controls caused. The most insightful criticism comes from perceptive contemporary sources who cite the source of their misery. Examples from ancient Eqypt, Hammurabi’s Babylon, ancient Greece, French and American revolution, Civil War, World War I and II and the Communism states. The book was written 25 years ago as a polemic against political pressure to freeze prices (remember Nixon’s price freeze), yet is still readable and valid today.
Here is an excerpt from LewRockwell.com as it relates to Ancient Egypt:
In the Land of the Nile
In the ancient world, of course, authority over the most important economic commodity, foodstuffs, was power indeed. “The man, or class of men, who controls the supply of essential foods is in possession of the supreme power. The safeguarding of the food supply has therefore been the concern of governments since they have been in existence,” wrote Mary Lacy in 1922. And as far back as the fifth dynasty in Egypt, generally dated about 2830 BC or earlier, the nomarch Henku had inscribed on his tomb, “I was lord and overseer of southern grain in this nome.”For centuries the Egyptian government strived to maintain control of the grain crop, knowing that control of food is control of lives. Using the pretext of preventing famine, the government gradually regulated more and more of the granaries; regulation led to direction and finally to outright ownership; land became the property of the monarch and was rented from him by the agricultural class.
Under the Lagid dynasty (founded by Ptolemy I Soter in 306 BC) “there was a real omnipresence of the state…. The state … intervened by employing widely all its public law prerogatives … all prices were fixed by fiat at all levels.”
French historian, Jean-Philippe Levy - “Control took on frightening proportions. There was a whole army of inspectors. There was nothing but inventories, censuses of men and animals … estimations of harvests to come…. In villages, when farmers who were disgusted with all these vexations ran away, those who remained were responsible for absentees’ production… [one of the first effects of harsh price controls on farm goods is the abandonment of farms and the consequent fall in the supplies of food]. The pressure [the inspectors] applied extended, in case of need, to cruelty and torture.”
Egyptian workers during this period suffered badly from the abuses of the state intervention of the economy, especially from the “bronze law,” an economic theory which maintained that wages could never go above the bare necessities for keeping workers alive. The controls on wages set by the government reflected the prevailing economic doctrine.
“After a period of brilliance,” Levy concludes, the Egyptian economy collapsed at the end of the third century BC, as did her political stability. The financial crisis was a permanency. Money was devalued. Alexandria’s commerce declined. Workers, disgusted by the conditions imposed on them, left their lands and disappeared into the country.”
Click here or in the cover image to order the book.
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