The Maker of Shortages
sumer. Wages, the largest element of cost, must also be included in the rubric of rigidity. It is obvious that the effort to regulate distribution at the point of price must be followed by an attempt to regulate production, to the allocation of raw materials, to the fixing of production standards, to the limitation of variety—to shortages. An economy cannot long remain half free and half socialistic. As soon as Society accommodates itself to one intervention, accepts it as a necessary condition of existence, the resulting scarcity calls for a contiguous interference, which is the more easily introduced because of the antecedent adjustment.
What exactly is meant by price, wages, rent, interest? These mechanisms of the market place are self-operating, self-controlling, inanimate, and quite oblivious of human whim. They reflect what humans do, to be sure; prices rise if humans produce less and demand more; they drop when humans produce more and consume less; they do so automatically and regardless of statutes. They cannot be controlled by political power, and the State concedes that point when it includes in the price-control law a punishment clause. The punishment law is not directed at price but at men. This is the only field in which the State has any competence—the regulation of human conduct by the use of coercion. The price-control law directs the consumer not to pay more than the legal list for his satisfactions, and it instructs the producer not to accept more. If either or both of them disobey the interdict, the law says, punishment will follow. Thus, a price-control law does not aim to control price, which is beyond the jurisdiction of the State, but aims to control human behavior. And that, of course, is a denial of freedom—which is no concern of the State.
