Well, price caps are against the principles of the free market. So, on an ideological level it doesn’t make sense.
Any ideology hardly ever works as it is, so changes need to be adapted to make the ideology work. Capitalism is very much tied to western electoral “democracy”. The idea in capitalism is that the economy works as a separate entity from government. This simpy is not true since it is the legislation that allows for capitalism to function in the first place.
The so called " free market" has never been free. When there is a crisis, governments give aid to capitalists, which is againts capitalistic principles. Capitalism would not function without governmental intervention and would collapse. The price caps are simply just a another tool to preserve capitalism.
Price caps can also be a way to limit profits made by capitalists. Basic necessities like water, food and electricity should have price caps in a way, that profit cannot be made.
But at the end of the day, price caps are a tool to preserve capitalism, not to change economical status quo.
In what way do you mean?
Our party, for example, is putting heavy pressure on applying price caps on energy and groceries right now. Is that a Marxist thing? Not really. Is it achievable and will it help the working class here? Absolutely. It is one of the things we can do as a party right now to improve the lives of the working class. And after that we can shift the pressure to a step further.
But for capitalists, it doesn’t make sense as it impacts your ‘unlimited growth’ fantasy. It would make sense in a way that you can’t always charge as much as you want as people might not be able to afford it, thus harming profits as well. A price cap is always in effect, in some way, as capitalists do have to calculate how much they can charge while still maintaining a good enough income flow. But as soon as the price cap is forced by a third party, like the government, you can bet your ass the capitalists will raise hell.
Under capitalist logic maybe they make sense in natural monopoly situations -water, electricity, telecoms, trains. But nationalization makes more sense in such “markets” rather than attempting to create artificial market “competiton”.
It would be more of a social democracy thing wouldn’t it, to keep the price from inflating too high. Corporate greed…
Not too sure.
It could also be a tool under socialism. The USSR had price caps, arranged by trade unions and the party.
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It’s been done before…
Yes, but you have to understand that the ruling class doesn’t merely do things that “make sense”. They care about their own personal profit over everything else, including the long-term viability of their own society. While they are able to cooperate to a certain extent to implement the likes of price controls in order to keep capitalism stable, such cooperation is always fragile and prone to collapse as soon as one capitalist decides they can make more money by undermining the other members of their class.
Class solidarity is possible for them, but is always in contradiction with their own ideology of liberal individualism. Yet individualism is a necessary part of the superstructure to reproduce the capitalist base, so they can’t just reject individualism in favor of bourgeois solidarity.
Quite the conundrum!
Never.
When prices are capped, it creates a supply and demand imbalance, the demand is higher than supply can keep up with and so the thing with the capped price experiences shortages. People want (at the capped price) the thing and can’t get it. This usually results in a black market for the item, where scalpers buy it up at the artificially reduced price and sell it for a profit at close to or above what the market rate would be.
For a good example of this look at the price controlled housing market in Sweden, people wait years for an apartment and some people rent them illegally when they get them.
Supply and demand have basically no weight in the housing market, lots of capitalist countries have more empty homes than they have homeless people. Once landlords and mortgage banks form a cartel, it becomes only about fleecing the working class that can’t live healthy lives without a roof.
What you describe there is actually a good example of escalation, where a good reform has some negative effects simply because real estate bourgeois types still want to keep profits. If people using the capped price to rent illegally is a systemic issue, then the next step is to curb ownership of multiple homes. If working with reform, every reform should usually be the stepping stone for the next one, and the blame should not fall on the reform itself if the ones causing issues are the same capitalists who made it necessary in the first place.
Having to wait some time to buy an apt seems like a better choice than being priced out for a much longer period (or forever)
I think they’re saying the problem is that sub-landlords get hold of the properties through the scheme.
This doesn’t seem like an unsolvable problem, so I don’t understand why someone would conclude that price caps “never” work just because they can lead to some problems.
I’m not “concluding”, I’m just answering OPs question. He asked if price caps have a place in capitalism I don’t understand why you guys have to be so adversarial all the time.
How is that not a conclusion? Just because capitalism is about having free markets doesn’t mean that price caps have no place in it. To me, it’s the same as saying that regulations have no place in capitalism.
I also don’t see how I was being adversarial.
Possibly hyperbole. If it’s under any kind of capitalism, it is doomed to fail.
The only answer to capitalism is its abolition in favor of anarcho-communism.
Or just good old regular communism
@housepanther @krustycheeze LOL. No.
