Price Controls
An economic policy reportedly proposed by Kamala Harris to ban corporate price gouging. The policy is heavily criticized in the podcast as a form of socialism that destroys innovation, productivity, and leads to shortages.
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8/26/2025, 6:01:56 AM
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8/26/2025, 6:03:39 AM
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8/26/2025, 6:03:39 AM
Summary
Price controls are government-mandated economic interventions that set legal minimum or maximum prices for specific goods and services, such as groceries, rent, or prescription drugs. While intended to manage affordability, curb inflation, or protect consumers, they are often criticized for being anti-free market, leading to shortages, stifling innovation, and undermining economic growth. A recent discussion on the All-In Podcast, for instance, vehemently critiqued a reported proposal by Kamala Harris to institute price controls on groceries, denouncing it as a form of failed socialism.
Referenced in 1 Document
Research Data
Extracted Attributes
Types
Price ceilings (maximums) and price floors (minimums).
Purpose
Manage affordability, curb inflation, protect vulnerable consumers, maintain producer incomes, steer the economy.
Criticism
Leads to shortages, stifles innovation, anti-free market, failed socialism, undermines growth and development, imposes fiscal burdens, weakens monetary policy effectiveness, reduces overall consumer welfare.
Definition
Government-mandated economic intervention setting legal minimum or maximum prices for specified goods and services.
Alternative to
Prices set by market forces (supply and demand).
Economic Theory
Price ceilings lead to shortages by forcing prices below market levels.
Policy Tool Type
Industrial policy tool.
Common Applications
Rent, gasoline, food, prescription drugs.
Timeline
- The Consumer Fuel Price Gouging Prevention Act, which would give the President power to declare an emergency and allow the Federal Trade Commission to control fuel prices, passed the House of Representatives. (Source: JEC Senate)
2022-05
- President Biden signed the Inflation Reduction Act into law, implementing price controls by allowing Medicare to effectively cap the price of prescription drugs. (Source: JEC Senate)
2022-08
- Discussion on the All-In Podcast where hosts, particularly David Friedberg, vehemently critiqued a reported proposal from Kamala Harris to institute price controls on groceries, denouncing it as failed socialism. (Source: All-In Podcast)
Undated
Web Search Results
- Price Controls: Types, Examples, Pros & Cons
Price controls are the legal minimum or maximum prices set for specified goods. Price controls are normally mandated by the government in the free market. They are usually implemented as a means of direct economic intervention to manage the affordability of certain goods and services, including rent, gasoline, and food. [...] Price controls are a form of government-mandated economic intervention. They are intended to make important purchases more affordable for consumers and are also commonly used to help steer the economy in a certain direction. For instance, these restrictions may be deemed necessary in order to curb inflation. Price controls are the opposite of prices set by market forces, which are determined by producers because of supply and demand. [...] Price control is an economic policy imposed by governments that set minimums (floors) and maximums (ceilings) for the prices of goods and services, The intent of price controls is to make necessary goods and services more affordable for consumers. ## What Are Examples of Price Controls?
- Why Price Controls Should Stay in the History Books
Price controls are government regulations on wages or prices or their rates of change. Governments can impose such regulations on a broad range of goods and services or, more commonly, on a market for a single good. Governments can either control the rise of prices with price ceilings, such as rent controls, or put a floor under prices with policies such as the minimum wage. The following table shows some examples of common price controls.
- PRICE CONTROLS: HOW THE US HAS USED THEM AND ...
Price controls are an industrial policy tool whereby the government sets rules on what private firms are allowed to charge their customers. These controls can be set either for one or multiple industries, but this kind of tool is different than overall macroeconomic inflation management through monetary policy, where overall price levels are indirectly controlled through interest rate adjustments. In turn, through increased or decreased bank lending, this affects the pace of economic activity. [...] Price controls, on the other hand, take a more direct form: as instructions to specific producers (including, notably, many if not mostly non-banks) on how much they may or may not legally demand for their products. In so doing, government limits or expands the distribution of money between different industries—our definition of industrial policy (Tucker 2021). [...] As noted in the introduction, several contemporary challenges precipitated by the COVID-19 era indicate a role for price controls. The central one is this: Anytime policymakers freeze and then unfreeze the economy—or convert resources from one type of production (war mobilization) to another (peacetime production)—normal markets and price mechanisms are disrupted, and prices can soar. In these times, price controls can help guard against unfair or inequitable economic dislocations. These
- The Economics of Price Controls
out the economic theory of price controls, describing how price ceilings lead to shortages by forcing prices below market levels. Next, we briefly outline the history of price controls in the United States. Finally, we review academic studies that estimate the negative effects of price controls in specific contexts. BASIC ECONOMICS OF PRICE CONTROLS A price control is a requirement that a seller charges a government-mandated price for a good instead of letting the price be determined by supply [...] increase, reaching 9.1 percent in June 2022, a 41-year high.1 In response to historically high levels of inflation, some economists and lawmakers have called for price controls to set a maximum price ceiling on what sellers are allowed to charge consumers. 2 Basic economics and historical evidence clearly show that price ceilings fail to tame inflation while reducing overall consumer welfare.3 This report is inspired by the re-introduction of price controls in the fiscal policy conversation. [...] Calls for price controls were realized when in August 2022, President Biden signed the Inflation Reduction Act into law. This bill implements price controls by allowing Medicare to effectively cap the price of prescription drugs.4 Another piece of legislation to implement price controls passed the House of Representatives in May 2022. The Consumer Fuel Price Gouging Prevention Act, if it became law, would give the President the power to declare an emergency, allowing the Federal Trade
- [PDF] Price Controls: Good Intentions, Bad Outcomes
a competitive market. In emerging markets and developing economies (EMDEs), price controls on goods are often imposed to serve social and economic objectives. They may be part of government efforts to protect vulnerable consumers, by addressing market failures or subsidizing the cost of essential goods. Or they may be intended to maintain the incomes of producers, as part of a price-support program. Alternatively, they can serve the purpose of price smoothing, especially for key commodities [...] goods and services, including rent and pharmaceuticals, remain in use to this day (Morton 2001). Price controls can be imposed in a variety of ways. They may involve price ceilings, or price floors, imposed on selected goods and services by the authorities. Government management of prices can also occur as a by-product of other policies. For instance, preferential exchange rates for certain goods and the imposition of non-tariff barriers can all push prices away from that which would prevail in [...] available evidence suggests that price controls often undermine growth and development, impose fiscal burdens and can weaken the effectiveness of monetary policy. At least in part, this is because price controls cause a shift in consumption towards the subsidized good, and away from other non-subsidized goods. Moreover, when there are trend increases in international prices, or when they interact with barriers to entry, price control measures frequently morph into distortive subsidy regimes.