Effects of wage and price controls

• Are there some instances where they might be effective for certain types of government such as in war time economics? How about in the long run?
• Does anyone particular government work better for maintaining a long term wage and price control system? Why?
• In answering this question, please consider how wage and price controls function in the system of economic and political regime of a country.
• Where do wage and price controls lie on the spectrum of political (democratic vs autocratic) and economic regime (command vs free market)?
• Would you consider them an element of a democratic government or do they take away from the elements of democracy?

 

Sample Solution

winters and required hard toil to produce food, Tahiti was perceived as plentiful. The arrival of the English destroyed much of what they had found so attractive through the arrival of gunpowder, diseases such as smallpox and syphilis against which the locals were defenceless, tobacco and alcohol, destroying communities. It has been estimated that within ten years of the arrival of Europeans, close to 90% of the Polynesian population were wiped out, while the Aboriginal population plummeted from over 300,000 to around 80,000 in 1889, and the Maori population had dwindled to 40,000 by the beginning of the 20th century, counting for just 1/15 New Zealanders. (2)

To counter a popular misconception, however, this forceful imposition of English culture upon the islands was not the voyagers’ original intention. When Cook embarked on his first voyage in 1768, he received two sets of instructions from the admiralty. The first, relating to the observation of the Transit of Venus, gave the voyage a purpose. The second were opportunistic, and rarely discussed. These instructed Cook to “make discovery of” the southern landmass Terra Australis (appendix F), and to take possession of it if uninhabited. If not, the crew were to show the indigenous population “every kind of Civility and Regard”, reinforced by a letter from the 14th Earl of Morton, President of the Royal Society in London, who had organised the expedition (appendix G). The voyage was intended to be the perfect representation of the Enlightenment, furthering scientific research and uncovering the secrets of the last unknown quarter of the world, not one of violence and plunder. It is therefore clear that these instructions were disregarded when Cook’s expedition reached their destination, engaging in violence on numerous occasions. Aside from trade, at no point were these first encounters positive for the indigenous people.

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