In this episode, Matthew discusses his love for breakfast burritos and the economics of price controls. If a price control were to be installed for breakfast burritos to share with poor people, even the rich will have to say goodbye to their beloved breakfast food wrapped in flour tortillas as the resources will be allocated to produce something more profitable like scrambled eggs or omelettes.
Matthew goes on to discuss how the National Socialists in post 1936 (Nazi Germany), enacted rigorous regulations in the economy on prices and wages that created an illusionary capitalistic economy. However, this form of heavy government regulation that is known to be Fascism, is another form of socialism, where the means of production and capital are privately owned in description, but the government determines who can sell what to whom at which prices. This form of economics was responsible for the destruction of Germany in WWI (the Hindenburg plan) & also in Britain in WWI & WWII. Winston Churchill brought socialism to Britain, not the postwar Labour Government.
Examples of some price controls are water, gasoline, food, rent control, tariffs, & minimum wage.
What is the most important note to understand about government interventions in the economy or "Interventionism", is the fact that with each intervention, a distortion (or a few) occur as a result. To correct for the newly created distortions in the economy, the government will impose more interventions and regulations as to cover the holes in the leaking bag with objects that can only create more holes. As the government's short-sightedness cannot realize; for every intervention they enact as to assist the economy, they produce a multitude of distortions. Ultimately, the misallocation of society's scarce resources fall on the responsibility of the government, profit motivated entrepreneurs are tasked with the obligation of transforming resources into products demanded by consumers, if the government assists in this process then they will only make things much worse so there is no place for the government involvement anywhere near the complexity of human collaboration.
