John Hinderaker of the Powerline blog documents the latest revival of a bad idea in the world of public policy.
Price controls are in the Hall of Fame of bad ideas. They have an unbroken record of failure, stretching back literally thousands of years. And yet, they remain alluring to people with no knowledge of either history or economics, or–probably more relevant–to failing governments.
There was a time when Britain’s government was known for a certain level of financial sophistication. No longer:
“[British Chancellor] Rachel Reeves is pressuring supermarkets to cap food prices in an attempt to limit inflation unleashed by the Iran war.”
The Iran war has nothing to do with it. The inflation rate on grocery prices in the U.K. is lower than in mid-2025, and the world has plenty of oil. A temporary disruption of a single channel of transportation will have no impact on gas prices beyond a couple of months
The proposal being floated by Keir Starmer’s government would cap prices on around 20 food items. The government is invoking the incoherent theory of “price gouging”:
Before the announcement, Ms Reeves unveiled plans to hand new powers to regulators to stop firms from price gouging during times of crisis.
This would include allowing the Competition and Markets Authority to name and shame companies that it believed to be raising prices more than necessary.
The Chancellor said on Wednesday that she would be willing to go further if needed, including potentially fining companies if they engaged in “exploitative pricing practices”.
The ignorance on display is enough to make you want to cry. Or maybe to require a test of basic economic literacy as a qualification to serve in government. Or, better yet, to vote.
Reeves’ proposal has gotten very bad reviews:
Helen Dickinson, the chief executive of the British Retail Consortium, a trade group, said price caps represent a return to the failed policies of the 1970s.
