Government 1A Essay 8

Prompt:  “Price controls are people controls.”


Price controls are people controls, because they don’t give the people or the business any say in the pricing of a product. In a natural uncontrolled economy the business decides the price of a product by comparing it to other business’s with similar products, and adjusting their prices to compete for the customers attention. The business that can sell the most products for the cheapest amount is where the majority of consumers are looking to buy. Then that business needs to get popular enough to maintain these cheap deals and keep the cycle going, slowly maturing their trade empire through good decisions and competitive growth.

But price controls stifle this competition, instead relying on the government to know every aspect of economical commerce. Its a biased system that favors corporate industry and muddles the prospective futures of small shops and startup businesses. In our lessons this week I learnt of the GM bankruptcy in 2009. GM had acquired nearly 200 billion in dept, and ended up having to declare bankruptcy. The state stepped in, loaning GM around 50 billion dollars. 11 billion of this was taken from tax payers, and the stockholders of GM lost nearly all their holdings. The reason I bring this up is it shows the disruption of natural economical growth price controls and corporate bias bring into business. GM was at the top of its popularity around the late 60’s, customer satisfaction made it big. Then, either because of poor decision making or a downgrade in quality GM’s popularity began decreasing. In an uncontrolled system GM would naturally go out of business, but because its the state and not the customer deciding who stays in business GM was given a second chance. A second chance made possible by disapproving tax payers and stockholders anyway.

Business is supposed to be a consenting, cooperative exchange between seller and buyer. Its supposed to evolve and adapt to the changing market, and those who don’t adapt need to go out of business. This sets the stage for a better business to rise up and take the former’s place. When the state acts as a omnipotent hand of law and takes charge of who thrives and who crumbles in the economy, financial bias and manipulation is sure to take root. And when this happens you end up with the greediest, most manipulating money grubbers as the financially prosperous. The lying cheating fat cats of business are the ones who manage to snake to the top. They figure out the algorithm, and don’t care who they hurt or tear down in the process of climbing up the ladder. If corporate monsters are able to buy bias from the government, so much so that even when they’re broke the state is willing to lend a hand, we’ll find ourselves surrounded by a select number of unstoppable company’s. Young soulful businesses will find it harder and harder to grow, and the 10% will continue to build their hoard of wealth while smaller enterprises get left in the dust.

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