Price Controls / Money and its Origin

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Price Controls

Price controls are a restriction of maximum or minimum prices that are established and maintained by the government. Such prices are called price ceilings and price floors. I hereby am not in favor of price controls, for they cause various problems in society.

When a natural disaster occurs, and the people who live in the place it happened are in need of lumber and hotel rooms, governments like to place price controls so there can be a “justice”. In this “justice” they restrict lumber companies and hotels to raise their prices, but what the governments don’t see is that these resources are limited, because of the disaster. So, by making these restrictions to the companies, people won’t be able to see that the resources are limited.

For example, a family of six or eight people will get two hotel rooms instead of one, since the price never got raised, and this will automatically leave out one family of a hotel room. If the people are in need of lumber, instead of grabbing the necessary, they grab more leaving out others from lumber. Now, we are told that if the businesses raise their prices, then they are being so inconsiderate with the people that are in need. I believe that it is kind of logical for many people for prices to be raised, considering the limitation of the resources, but here I offer a better way.

What if instead of controlling the price, we controlled the item or resource by the amount of people living in each house? For example, if a family of six or eight are in need of a hotel room, instead of the prices being raised, and the family grabbing two rooms, we leave the prices the same and squeeze in the family in one room. The same thing would go with the lumber, instead raising its price, or grabbing too much, we calculate the size of a house according to the family number, and control the resource.

This may be a more complicated or a more time consuming project, but I believe it is the fairest and more righteous for all.

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Money and its Origin

Money is a generally accepted medium of exchange, and a medium of exchange is a good that is valued, at least in part, for its potential employment in exchange.

Money was never brought in just like that, it couldn’t have had. If I came with a red paper with my picture on it and said “500 Jada’s” you wouldn’t know what it is worth; you wouldn’t even know what it’s for. So money never came in out of nowhere. Before money existed, people used barter, barter is a direct exchange. For example, if we lived in a barter society, and you have a candy bar, but you want a soccer ball, you have to find someone that not only has a soccer ball, but that is willing to exchange the ball for the candy. This will definitely be a very hard task to accomplish; in contrast money is more of an indirect exchange.

Once the people start realizing that they can acquire a more widely, desired, and marketable good than the one they currently possess, then they are more likely to find someone to exchange with. For example, gold is a much more desired good, and if I have the candy bar, and I exchange the candy bar for gold, then I can exchange the gold for the soccer ball. In this way, you will only have to search for the person wanting candy.

As time goes by, and more people start using this system, then the government will intervene and confiscate the gold replacing it with fiat money. In this case, a paper with numbers and people’s faces on it. So, the money still continues to circulate, because people will now recall the structure of the prices from the past, and that is how money comes to be.

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Categories: Government | Tags: | 2 Comments

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2 thoughts on “Price Controls / Money and its Origin

  1. Pingback: The Illusion of Money | JADAS BLOG

  2. Pingback: Job Wages | JADAS BLOG

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