Price Controls and Barter

4 minute video featuring Milton Friedman discussing the real-world effects of price controls.
There are many areas in which there have been price control, one is the reduction of the supply of whatever has been controlled. The other is the reduction of the quality of what has been controlled.
In Germany’s post WW2, Germany was occupied by the American, British, and French. These were able to enforce price control much more effectively than a domestic government could have enforced it.
During this time period, there was a price control introduced in the German occupied territory.
As a result, there was no inflation. There was simply money that was not used. There was barter.
Cigarettes were used as money, as well as liquor, cognac, etc.

The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.

Share this article