Are wage/price controls like Pres. Nixon implemented, good for small companies? (bankruptcy, small business)

[Ericthebean]

I notice the rise of larger corporations took place more after the 1980s.

Bigger giant companies, fewer competitors in airlines (American vs Delta), retail stores (Walmart and Best Buy), hardware stores (Home Depot and Lowes), value stores (Walgreens or CVS),

Consumer electronics (RadioShack)

And it used to be more brand stores

Impact of Wage/Price controls I would think would be (besides curbing inflation)

1) makes it so small companies can keep wage expenses down without employees able to leave and find wages any higher, which will enable company to keep prices down without richer consumers seeking better products that cost more money since those better products are illegal to sell at market price...so it will make a small business sell more quantity of low price stuff

2) this would help small businesses by preventing competitors from getting too big because the cost of expanding or acquiring new land or buildings or equipment would put the company's equilibrium price at above the legal threshold...so all businesses will stay smaller.

Downside is those with the best stuff will refuse to sell it until the controls are repealed so nobody can legally buy it and so those with high quality equipment have a constant edge on production until their assets depreciate in functional use. During that time they could use the unsellable machinery in-house to produce a large quantity of cheap inventory to sell at the one price fits all...the highest legal price under the wage/price controls. If leases aren't regulated, there can be a lot of lease contracts and performance-for-performance bartering

[cdelena]

Government manipulation of any market is not good... the administration cronies can benefit for a while but the consequences hurt all in the long term.

The is no way a few hundred bureaucrats in the federal government will know better than millions of businesses and consumers on what values / prices should be.

[texdav]

As china learned the way to more than one bowl of rice is competitive market place. Governemnt controls means less production and eventual loss of production ability.

[Ericthebean]

Govt controls aren't always bad though. What about Govt regulating patents and trademarks on new innovations so that businesses will have incentive to create a new product without the product ingredients being copied and stolen inmediately. Absent Govt intervention, would any company invest in research and development when some other company can do the dirty work instead?

Absent Govt regulation, which company would sacrifice its competitive edge to care about reducing carbon emissions and greenhouse gases when competitors choose the easy way of screwing it?

And without Govt regulations, what happens to a family farmer, when a larger corporate 400 million dollar farm drops its price deliberately below cost and engages in a price war with the small family farm to push the small guy into closing shop or filing bankruptcy, so that after all other competitors shut down, the big bad company doubles its price and has no competitors?

And absent Govt regulations, what happens when you are sold a share of stock in a company that claims to sell equipment but really is using the money on mob crime?

[ohhboy]

you cant fight market forces. People keep trying and just makes things worse than they really should be.


if consumers liked paying higher prices to ma and pa instead of lower prices at wal-mart then im sure there would be no wal-mart...................lol.

[woxyroxme]

I am old enough to remember that Nixon's wage and price controls were a disaster.

Remembering Nixon's Wage and Price Controls | Cato Institute