Moving on from the Edict of Diocletian in Part 1, next up in our skim through the failed history of price controls is “La Loi du Maximum General” or “The Law of the General Maximum” – France 1793. A digression is in order here. You may ask, why discuss price controls when its excess profit taxes that are being bruited by politicians? Excess profits taxes versus price controls are a distinction without a difference. By imposing extra taxes on a provider of goods or services you have in effect retroactively set a cap on the prices of those good and services. The net effect to the provider is as if it sold its good and services at the controlled price with the added disincentive of not being able to plan costs or production levels in advance.
