Monday, August 22, 2016
Richard Lorenc of the Foundation for Economic Education comments
on a graph of prices over the last twenty years for a variety of
goods and services:
[T]his chart ... reveals two important points. First, there is no such thing as an aggregate price level, or, rather what we call the price level is a statistical fiction. Second, it shows that competitive industries offer goods and services that are falling in price due to market pressure. In contrast monopolized industries can extract ever higher rents from people based on restriction.I take issue with the term "monopolized," but it quickly becomes clear what Lorenc is really talking about. All of the items with rising prices are from industries that are more centrally-planned, via subsidies and regulations (including licensing laws), while those with falling prices are from freer industries.
Of course, there are also other, hidden costs, such as freedom and convenience, and it is these that Lorenc alludes to with his title and his opening paragraph.