Historical Examples
An early example of this type of policy is attested to in the Old Testament, where the Israelites were instructed not to charge interest on other Israelites.
The Roman Emperor Diocletian tried to set maximum prices for all commodities in the end of the 3rd century CE, but with little success.
Price controls have also been used in modern times for such things as rent control and usury laws.
During World War I, the United States Food Administration enforced price controls on food. Price controls were also imposed in the US and Nazi Germany during WWII.
States have sometimes chosen to implement their own control policies. California controls the prices of electricity within the state, which economist Thomas Sowell blames for the occasional electricity shortages the state experiences. Sowell said of California's controls in 2001: "Since the utility companies have been paying more for electricity than they were allowed to charge their customers, they were operating in the red and the financial markets are downgrading their bonds." California's price-setting board has agreed to raise rates, but not as much as the companies were paying on the wholesale market for their electricity. Economist Lawrence Makovich contended, "We've already seen in California that price caps on retail rates increased demand and made the shortage worse and price caps also forced the largest utility, Pacific Gas and Electric, into bankruptcy in four months." While some charged that electricity providers had in past years charged above-market rates, in 2002 the San Francisco Chronicle reported that before the blackouts, many energy providers left the state because they could make a greater profit in other Western states. The Federal Energy Regulatory Commission stepped in and set price caps for each megawatt of power bought, after lifting the caps to avoid rolling blackouts six months previously.
The state of Hawaii briefly introduced a cap on the wholesale price of gasoline in an effort to fight "price gouging" in that state in 2005. Because it was widely seen as too soft and ineffective, it was repealed shortly thereafter.
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—Henry David Thoreau (1817–1862)
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