Economists ‘Discover’ that Artificial Restrictions on Supply Lead to High Prices December 12, 2005
Posted by Resident Egoist in : Culture, Economics, Politics , comments closedFrom the Washington Times, via FEE:
Escalating prices that have made houses unaffordable for many people in Washington are mostly the result of homeowners using political and regulatory means to block construction of new housing, economic studies show.
[...]
The remarkable run of record housing sales and prices since 1998 has become a major puzzle and topic among economists. The high prices have put homeownership out of reach for many young people and low-income households hoping to break into the market.
Economists increasingly are concluding that the shortage of affordable housing in Washington and other major U.S. cities on the East and West coasts is a result more of man-made restrictions on development than high construction costs or other market forces.
Well, stop the presses, ladies and gentlemen! “A major puzzle and topic among economists” has been solved … if only this groundbreaking discovery weren’t at least three centuries behind the times! It’s almost sad really: that most contemporary econmists are still in the process of catching up to Adam Smith. It’s good to hear however that Capitalism isn’t being falsely blamed for once.
You should read the whole article. It might surpise you the things people are ready to do in order to actualize and protect their petty aesthetic visions — if only they spent half that effort defending their individual rights …
Technorati Tags: Adam Smith, Economics, Capitalism, Supply and Demand, Unintended Consequences