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Price Controls Are Bad for Israel Price Controls Are Bad for Israel

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26.05.2022

This happens every year or two in a fairly regular cycle. Something happens, and bread producers demand that the Economy Ministry raise the prices of bread under government control.

This time, they say, the COVID crisis and the war in Ukraine have raised the price of wheat, fuel, raw materials and transportation costs and so they have to raise the price of bread.

I’m not so sure. The fact that bread prices have been government-controlled for decades has led to many distortions that do not allow for the “correct” price of bread.

The economic ministries also realize that there’s no apparatus of control in the world that knows how to set the right price for a product. And so they established a panel of experts that examined all aspects of the matter and recommended deregulating bread prices and letting competition do what it does.

Economy and Industry Minister Orna Barbivai quickly opposed the recommendation. She likes regulation. She doesn’t want to remove it, she even wants to expand it to whole-grain bread. That’s what happens when you........

© Haaretz


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