With conflict in the Middle East, global oil shocks and lingering cost-of-living pressures, the 2020s are beginning to look a lot like the 1970s. In the west, politicians are also now increasingly reverting to one of that era’s key tools for fighting inflation: price controls.
After Russia’s invasion of Ukraine in 2022, several European nations implemented price caps to tame electricity costs. But interfering in markets has since remained seductive for governments across the developed world — on both the left and the right — as voters’ worries around affordability have persisted. Recent polls from the US and Europe show, unsurprisingly, high public support for the state to directly limit the cost of essentials.
In January, US President Donald Trump proposed a one-year, 10 per cent cap on credit card interest rates. Zohran Mamdani’s successful New York mayoral campaign last year included popular proposals for citywide rent freezes and publicly-owned grocery stores. Britain’s Labour government has introduced legislation to ensure landlords only raise rents once a year. Last week it announced a vague new “anti-profiteering framework” to clamp down on price gouging by food and petrol companies during the Iran war, if it takes place. And, throughout Europe and Asia, the conflict’s potential impact on energy costs means price restraints are once again in consideration.