Price Controls: An Inflation Solution That Doesn’t Screw Workers

Deconstructed

The Intercept

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4.8 • 4.7K Ratings

🗓️ 7 July 2023

⏱️ 43 minutes

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Summary

Centrist and right-wing economists continue to advocate for laying off workers and engineering a recession to address inflation. But why not set commodity price controls instead? This week on Deconstructed, Ryan Grim is joined by James K. Galbraith, a professor of government and business relations at the University of Texas at Austin. Galbraith has an extensive history of working in government, including as executive director of the Joint Economic Committee of the U.S. Congress and an economist for the House Banking Committee. Galbraith and Grim discuss the implementation of price controls by the U.S. government, how it brings down prices, how the Biden administration has used it and could use it more, and how Galbraith’s father — economist and politician John Kenneth Galbraith — was instrumental in setting commodity price controls during the post-World War II era.

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Transcript

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0:00.0	Welcome to an on the road edition of Deconstructed.
0:07.3	I'm Ryan Grimm.
0:09.0	At the very end of 2021, an economist at the University of Massachusetts Amherst, named
0:13.5	Isabella Weber, published a short op-ed in the Guardian that surprised her and everybody
0:17.8	else by going viral in a very bad way.
0:20.9	The leading lights in her field annihilated her for it.
0:23.6	Paul Kruebwin called her truly stupid and lesser-known figures called her much worse.
0:28.5	Her crime had been to strike at the heart of free market economic orthodoxy.
0:32.9	Weber suggested policymakers should learn from the past and do something directly about
0:37.5	soaring prices rather than trying roundabout solutions like slowing down the entire economy
0:42.0	and engineering layoffs.
0:43.7	But the idea that the government could ever have any direct say in setting prices raises
0:47.3	profound questions about the nature of the economy and whether it falls properly within
0:51.4	the sphere of democratic control or whether it lives outside of it, like some otherworldly
0:55.8	force that we can only communicate with indirectly.
0:58.6	Yet that's not how it really works.
1:00.5	So when Weber raised the example of American policy in the 1940s, which was guided by the
1:04.8	economist John Kenneth Galbraith, she had to be ridiculed rather than treated seriously.
1:10.3	During the Roosevelt administration, Galbraith was a top official at the Office of Price
1:14.0	Administration, which was in charge of, yes, setting prices.
1:17.9	The idea Weber put forward was anything but radical.
1:20.5	Here's what she wrote in the Guardian.
	...

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