And if private enterprise is to survive, it must not only apply careful entrepreneurial forethought to all endeavours, but, above all, it must satisfy the customer. On the cards for some Canadian jurisdictions is a Third Wayism, an interventionism, but not a free market in power. It is precisely this hydra-headed monster that has caused the California market to implode. In 1940, economist Ludwig von Mises warned that middle of the road interventionism leads to socialism. Interventionism, and in particular price control, must eventually cause a failure to bring supply and demand into balance through the price system.
Any price fixing below true market level invariably results in increased demand and scarcity.
When politicians make a commodity cheaper so as to procure votes, the good becomes scarce. With rising demand and unchanged supply, chronic shortages ensue. Once scarcity develops, the regulator must step in, and begin fixing prices of labour and materials at every stage of production. Our state-mediated utilities may be able to buy and sell on the free market. But, unlike private firms, they need not respond to profit and loss signals.