Another way price controld make shortages is they tend to creat a "Black Market". The USA in WW2 had several good examples of this. I will list two: Tires and gas. Criminals/employees at tire plants would steal tires from the production line to sell to the Mafia to resell on the "black market". This made the supply of tires for the "legal" market even lower that it would otherwise have been.
The same was true with gass only the stolen gas frequently went to politicans in return for other favors. Again reducing the supply for those with ration tickets.
Jo macDougal | 09.24.05 - 5:42 pm | #