UK cost of living crisis, Economic policy, Cost of living crisis, Spain, Mexico, Europe, Business, World news
In Mexico and Spain, leaders who have capped public costs have been rewarded at the ballot box. As another cost of living surge arrives, it may be a policy our leaders are unable to resist
Politicians are not supposed to meddle with prices. Even though much of politics is about whether voters can afford things – especially in an era of recurring inflationary shocks – ever since the collapse of the Soviet Union’s planned economy four decades ago, the orthodoxy across much of the world has been that only markets should decide what things cost.
As the hugely influential Austrian economist Friedrich Hayek argued, in a complex modern society, information is too dispersed among potential sellers and buyers of goods or services for government to make informed and correct decisions about the prices of those goods. Hence, his disciples say, the inefficiency of state-run economies, from post-colonial Africa to the eastern bloc.
Andy Beckett is a Guardian columnist
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