Don at Cafe Hayek disposes of the high-prices-have-a-disparate-impact-on-the-poor argument.
I'd add something further. "To each according to his need" requires a measuring stick for neediness. Is a disaster area really the best place to set up the studio for Queen for a Day? (That was a proto-reality show of the early 1960s in which women would tell their tales of woe and the most successful of the three, as measured by audience applause, would get goods provided by manufacturers who offered a promotional consideration to the show.)But if regulation keeps price from rising, some method other than higher prices must be used to determine which of the many demanders of lumber get the relatively few supplies of lumber.
What are these other methods? They include principally queuing, black-market transactions, and use of political or commercial connections. They might include even violence.
An inevitable consequence of price caps, therefore, is to raise the value of the skills and other assets useful in carrying out these other methods of rationing – skills at queuing; skills at successfully conducting black-market exchanges; skills at manipulating personal and political connections.
Even if you’re concerned only with ‘the poor,’ therefore, the correct question is not "are the poor less able to pay higher prices than lower prices for staple goods?’ The answer to this question is all too obvious: yes.
The relevant question instead is "are the poor less able to pay higher market prices than they are able to pay to take advantage of the other methods of rationing that necessarily replace higher prices?"
Market Power has noted the broken window argument. He has also suffered a real loss. Send your condolences.
And yes, somebody in the main press did offer the broken window argument. Exploit the Worker caught it.
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