Staple Food Price Ceilings Inevitably Fail

Lily C Escalante, Writer/Editor

“I never look back, darling! It distracts from the now,” Edna Mode said in the Incredibles. Edna’s political advice might actually be more useful than her fashion advice for once. Staple food price ceilings only looks back and distracts us from the present. For these three reasons, staple food price ceilings fail inevitably.

Firstly, this concept is a blatant rejection of basic economic principles. Limiting how much companies can charge on foods will distort markets, and cause shortages. Along with that, it will exacerbate supply chain problems while only temporarily reducing inflation. Economists point to basic economic concepts. They argue that capping prices encourages companies to produce less of a product while staple food price ceilings make these products more attractive to consumers. Supply goes down, and demand goes up, with shortages being the inevitable result. We cannot simply play God with our food prices when it goes against everything we learn about economics in high school.

Secondly, food price ceilings empirically fail, it was tried in the 70s but only exacerbated inflation and created a black market. No wonder we don’t have it now. They were last deployed at the federal level during the 1970s and inflation surged to 11% in 1974. Price controls gave rise to a thriving black market. Limited price controls are also present in the US today. Some cities cap rents or the amount landlords can hike them each year, while government agencies limit the price that some monopolistic utilities charge. But a price cap on food will simply be too far of a reach for the American people.

Lastly, this failed awfully in Peru. In 1985, President Garcia ordered controls on shortages and a black market arose, Peruvians had to stand in line for hours for basic food. Five years later, Garcia’s presidency dissolved in a spiral of hyperinflation. Inflation will rise beyond what the US has ever seen. And that is the last thing the American people need.

Follow Edna Mode’s advice: Do not distract ourselves from the now.