I don’t get the love-affair the Left has with price caps. They do not work. Demonstrably, they do not work. At a *stretch*, one on residential energy prices has been better on aggregate but is more of a buffer, and longer-term will fail. Burgon is talking about price caps across the board. That is stupid.
Countries like Venezuela have price caps on many essential food items (a product Burgon specifically called out). This has directly led to endemic nationwide shortages of those foods. Quite simply, if you cap the price of a loaf of bread at £1, the moment it gets to £1 to produce that loaf, companies stop making it. Why would they engage in a business that’s guaranteed to be loss-making? They’d literally be better off not making anything and being cost-neutral than actively losing money.
This is a stupid reactionary suggestion from a reactionary. No evidence or case studies support its use and it appears to be supported by little other than it being generally seen as a “leftie” idea.
what a reasonable thought.
This will just cause investments into the UK to be pulled out or stopped. Not a smart idea.
Does this MP exist solely to pitch sound bites to twitter that would result in economic ruin ?
The rich have not seemed to have asked themselves ‘What happens when enough people cannot afford what we are selling?’ People are making sacrifices when it comes to food and energy usage, let alone luxury purchases, this will only increase come winter and the next lot of energy bill price rises. Companies will soon find themselves with far fewer customers and much lower profits as their customers have no extra spending money for widgets and doo-dads. Will the penny finally drop then? You cannot hoard wealth like they have and not expect there to come a time when the poor run out.
Please read some economics. The first thing that happens when you manipulate prices is that they become weaker in their ability to communicate distributed information.
Capping profits is anti freedom and insane.
People worked for that profit, you have no right to it in a free society.
Capping prices will never work. Who is going to produce a product once the cost of production approaches the price cap. Nobody. Maybe they can argue “well we will review the price cap every X months”. Well done, you just created an entirely new government department + red tape and bureaucracy at every level of production. You’ll have a million lobbyists trying to get the government to cap the price of screws and bolts and solder and wheat and soy and sugar and riboflavin and rice and milk and barley and gluten and all the E numbers.
What’s this? A Politician talking sense? I expect we’ll see hot pieces in the Daily Heil in the next few weeks.
9 comments
I don’t get the love-affair the Left has with price caps. They do not work. Demonstrably, they do not work. At a *stretch*, one on residential energy prices has been better on aggregate but is more of a buffer, and longer-term will fail. Burgon is talking about price caps across the board. That is stupid.
Countries like Venezuela have price caps on many essential food items (a product Burgon specifically called out). This has directly led to endemic nationwide shortages of those foods. Quite simply, if you cap the price of a loaf of bread at £1, the moment it gets to £1 to produce that loaf, companies stop making it. Why would they engage in a business that’s guaranteed to be loss-making? They’d literally be better off not making anything and being cost-neutral than actively losing money.
This is a stupid reactionary suggestion from a reactionary. No evidence or case studies support its use and it appears to be supported by little other than it being generally seen as a “leftie” idea.
what a reasonable thought.
This will just cause investments into the UK to be pulled out or stopped. Not a smart idea.
Does this MP exist solely to pitch sound bites to twitter that would result in economic ruin ?
The rich have not seemed to have asked themselves ‘What happens when enough people cannot afford what we are selling?’ People are making sacrifices when it comes to food and energy usage, let alone luxury purchases, this will only increase come winter and the next lot of energy bill price rises. Companies will soon find themselves with far fewer customers and much lower profits as their customers have no extra spending money for widgets and doo-dads. Will the penny finally drop then? You cannot hoard wealth like they have and not expect there to come a time when the poor run out.
Please read some economics. The first thing that happens when you manipulate prices is that they become weaker in their ability to communicate distributed information.
Capping profits is anti freedom and insane.
People worked for that profit, you have no right to it in a free society.
Capping prices will never work. Who is going to produce a product once the cost of production approaches the price cap. Nobody. Maybe they can argue “well we will review the price cap every X months”. Well done, you just created an entirely new government department + red tape and bureaucracy at every level of production. You’ll have a million lobbyists trying to get the government to cap the price of screws and bolts and solder and wheat and soy and sugar and riboflavin and rice and milk and barley and gluten and all the E numbers.
What’s this? A Politician talking sense? I expect we’ll see hot pieces in the Daily Heil in the next few weeks.