thaumasiotes 2 days ago

Somehow this author has come to the conclusion that price controls are the "solution" to inflation.

This is a fundamental misunderstanding of why inflation is viewed as bad.

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gostsamo 2 days ago

The article talks about history of alternatives to the interest rates, mainly controlling the currency supply and how it might be implemented in the future. How you discovered price control as the solution in there is still a mystery to me.

shigawire 2 days ago

I think they are considering the last part of the article to be "price controls". If the government prevents people from buying certain goods by selectivity freezing certain purchases I'm not sure I'd call that a price controls -- more like a prohibition.

But I could see how this could be done similarly more like a price control. If the control was this granular, then maybe car purchases could be limited to $30,000 instead of blocked fully. This is effectively a price control.

Also - the author notes in the comments the post is a prognostication, not endorsement.

That said, much like the original Finnish plan, I have no idea how you'd implement this without massive loopholes. I'd imagine even if there were merits to the policy it would fail on account of the difficulty in implementation.

I wonder if it is more reasonable if there was equally a carrot to go with the stick - something analogous to the bond portion of the Finish approach.

pjc50 2 days ago

In this context, all European countries including Finland were subject to rationing during the war; the question is about how to phase out both rationing and price controls without having a huge discontinuity at that moment.

eru 2 days ago

Or you can just accept the discontinuity, because sometimes the cures are worse than the disease.

thaumasiotes 2 days ago

Yes, the solution he advocates is "we freeze your assets, allot you a certain basket of consumer goods, and take what we consider the appropriate price out of your frozen assets".

If you'd rather describe that as "communism" than "price controls", feel free.

The theme of the whole piece is that, if you don't allow people to pay more for things, then the price of those things won't rise, and that this is some sort of policy victory. It's a very stupid viewpoint; seeing prices fail to rise because you redenominated the currency means nothing. Seeing prices fail to rise because you prohibit that, on the other hand, doesn't mean nothing - instead, it means your economy is collapsing.

Lvl999Noob 2 days ago

The post is not a study or a solution or a suggestion or anything of the sort. The author clarified in the last portion that it is a prediction. Someone predicting the bad consequences of the current direction is not advocating for that direction.

gostsamo 2 days ago

price control would be if they forbid some goods to be paid beyond certain price where the goal is to regulate the distribution of those goods. Currency supply control is a general policy targeted at the total of goods one can pay for in order to maintain the overall economic activity. This is the difference between heating certain rooms in the house and causing global warming.