Price Controls Lead to Empty Shelves in Zimbabwe
NY Times: Robert G. Mugabe has ruled over this battered nation (Zimbabwe), his every wish endorsed by Parliament and enforced by the police and soldiers, for more than 27 years. It appears, however, that not even an unchallenged autocrat can repeal the laws of supply and demand (with price controls). Neither can Congress nor local governments in the U.S. Like when they pass minimum wage laws, rent control laws, price gouging laws, etc.
The biggest difference between market prices and government-controlled prices? See pictures above (controlled prices) and below (market prices) for the answer. 
4 Comments:
Sometimes I wonder what America would look like if Carter had been elected to a second term. Nixon didn't know economics; Carter didn't know anything.
"Nixon didn't know economics; Carter didn't know anything"...
Now that was both funny and so on target!
The only thing Carter did economically sound was to put Paul Volcker in at the Fed, other than that his dealings with the oil/gas problems during his tenure were a total failure. Let the market work!
I am from Czech republic, former communist country, where all the prices and wages used to be set by the central government for 40 years, until 1989.
I was young that time, but I can remember, that once I was asking my mother, why there is such a big store, when it's half empty --- she just replied "Not so loud, someone could hear you.".
There were very long queues for rare goods (like bananas), while the stores were full of junk nobody wanted --- but it was still produced, because it was planned so by the government.
Since the Velvet revolution, the free market returned to us after 40 years and everything works fine again.
I'm glad for people like Reagan, who did help to defeat the communists. My country was third most wealthy economy in the Europe before WW2, now we're on 70% of the EU average, and it was even much worse 15 years ago.
Zimbabwe had quite good economy (if you compare with other countries in region), now it's the worst economy in the world.
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