Price controls cause serious problems but that doesn’t stop politicians from proposing them. The minimum wage—which is a control on wages—has been in the news for years and recently rent control and interest rate caps on credit cards have joined it in the headlines. Proponents of price controls claim they help, but a closer look shows that even proponents recognize that price controls have significant costs.
Price controls have been enacted throughout history, especially in times of distress. Rent control has routinely been implemented during times of war to control price increases arising from the destruction of buildings and lack of new construction. During World War II rent control was common in America’s major cities.