England vs. the Price System

July 25, 2008 8:02 AM by Mises.org Updates | Other posts by Mises.org Updates | Comments (1)

[This article was written by Henry Hazlitt from London and published in Newsweek, June 2, 1947. It appears here for the first time online.]

England's major economic troubles today seem not so much the result of its war losses, appalling as these were, as of its postwar policies. Temporary impoverishment was inevitable, but the postwar series of special crises in coal, food, and dollars was not.

The underlying assumption beneath the present strangling network of economic controls is that a free market and price system is at best a fair-weather system, a luxury a country can afford only when it is already well off. It is the precise function of free prices, however, to allocate production among thousands of different commodities and services and to relieve the most serious shortages most quickly by providing the greatest profit and wage incentives precisely where those shortages exist.FULL ARTICLE