this post was submitted on 10 Aug 2023
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The things that are capped no longer produce (as much) profit, so food suppliers move to items that do bring in profit. Uncapped goods are now more desirable, and the suppliers increase prices to try to make up for the shortfall caused by price controls, making uncapped items even more expensive.
Government intervention like price controls always makes things more expensive, it's just a question of where that expense is spread to.
The government capped the price of electricity here a short while ago and that lowered the price of power massively.
Seems the solution would be to cap the price of all food then.
No, it isnt lowered the price, but you will pay for it elsewhere, indirectly, same like we are in hungary (that also caused rise in inflation). Communism not worked, and never will
Yea, price capping is as much communism as having public healthcare and when the price of electricity was capped it lowered the prices massively.
What was going on was the local power companies made deals with other countries and basically acted as middle men for reselling that power for a massive markup. Our government made a mandatory power plan that forces power companies to produce electricity locally for local supply at a fixed price and that pretty much fixed that. Those companies couldn't sell power at a massive markup anymore because everyone would just switch to the government power plan then.
No, the the prices don't get lowered on capping them, just you pay it from elsewhere. For example in hungary the commie orban capped the electricity and and natural gas prices, so the people pay less on the bills they get (well, not always since they restricted the "discount" only to private person users, and with limit, if someone out of these, they pay much more than the actual real international market price), but they pay of the real, actual price from their tax (in hungary every taxpayer pays 17000 hungarian forint extra over the actual natural gas bills, just they dont see it, as its taken from the usual tax). So the dumb people just seeing the lower price on the bill they actually get, but not the tax money that is used to pay their "discounts". Also, as the companies getting the electricity, and natural gas on "govermental market price", which is 2x more than "discounted" price in electricity, and 7x more in natural gas (about 4x more than the real international market price), which causes prices going up in restaurants, groceries, every commodities that are made, or processed by local companies, which causing the skyhigh inflation. Its just simple common sense, and the economic fundamentals, but a lot of hungarian people lack of these, and not just hungarians :(