Flaws and Ceilings: Price Controls & the Damage They Cause

by Christopher J. Coyne (Editor), Rachel Coyne (Editor)

Price controls across many sectors are currently being hotly debated. New controls in the housing market, more onerous minimum wages, minimum prices for alcohol, and freezes on energy prices are very high up the agenda of most politicians at the moment. Even without any further controls, wages, university fees, railway fares and many financial products already have their prices at least partly determined by politicians rather than by supply and demand in the market. Indeed, barely a sector of the UK economy is unaffected in one way or another by government controls on prices. This book demonstrates why economists do not like price controls and shows why they are widely regarded as being amongst the most damaging political interventions in markets. The authors analyse, in a very readable fashion, the damage they cause. Crucially, the authors also explain why, despite universal criticism from economists, price controls are so popular amongst politicians. This excellent book, edited by Christopher Coyne and Rachel Coyne, should be of great value to all those with an interest in minimum wages and other forms of price control.

Genres: Economics

224 pages, Paperback

First published March 27, 2015

About the author

Christopher J. Coyne is Associate Professor of Economics at George Mason University and Associate Director of the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center. He is the author of Doing Bad by Doing Good: Why Humanitarian Action Fails (Stanford, 2013) and After War: The Political Economy of Exporting Democracy (Stanford, 2008).

Reviews

[Attila Rebak · Rating 4 out of 5]

Most debates about price controls begin with morality.

Should housing be affordable?
Should energy prices be capped?
Should wages guarantee a decent living?

But Flaws and Ceilings, edited by Christopher Coyne and Rachel Coyne, asks a deeper question:

Even if the intentions are good, can price controls actually work?

What makes this book compelling is its breadth. From Diocletian’s Rome to modern Britain, from rent controls to minimum wages and energy regulation, the same pattern appears repeatedly: suppressing prices rarely removes the underlying problem. Instead, the costs reappear elsewhere through shortages, deteriorating quality, black markets, underinvestment, or reduced opportunity.

The book’s central insight is simple but powerful:

Prices are not merely numbers. They are information signals coordinating millions of individual decisions across society.

And once those signals are distorted, unintended consequences follow.

I wrote a longer review exploring the book’s arguments, historical examples, and the reasons policymakers continue to return to price controls despite centuries of disappointing results.

Full review here:
https://attilarebak.substack.com/p/fl...

[David · Rating 3 out of 5]

A good primer on price controls for the uninitiated, and full of examples that both the expert and lay reader will find useful.

[John · Rating 3 out of 5]

A good look at some of the practical instances of the economic theory behind price floors and price ceilings.