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If prices are like words, then good policy is listening to what the
words say is the real problem, using the context of the entire sentence
and language. Bad policy is reacting to one symbol. Forcing the meaning
of a word to mean what you want it to mean, though it doesn't quite
mean that, doesn't work. Ask my students who insert words from the
thesaurus into their papers to sound more scholarly. A word like "
pyretic"
sounds good by itself and feels good to use, but it doesn't fit in any
sentence we can imagine. The general use of language determines each
word's fit, so leave the word alone and work on the meaning of the
sentence.
Likewise, leave the price alone. Forcing a price by law to mean what
you want it to mean fits even more poorly within the entire web of
exchange. It invisibly prevents some people from improving their
personal circumstances, their lives, with a voluntary exchange. Raising
the minimum wage or capping rents sounds good and feels like we're
doing good, but the mandated prices don't fit just because we can
imagine they fit. Prices are to good economics as words are to good
literature.
Source: Bart Wilson, "Prices are Like Words," econlog.com, November 12, 2013
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