323:
230:
scale from the demise of the French economy. However, in practice, the law ultimately targeted local shopkeepers, butchers, bakers, and farmers-the merchants who were profiting the least from the economic crisis. With the
General Maximum, Robespierre offered the people an answer regarding whom to blame for their poverty and their hunger. Furthermore, considering its association with the
68:. Peacetime income policies were resorted to in the U.S. in August 1971 as a response to inflation. The wage and price controls were effective initially but were made less restrictive in January 1973, and later removed when they seemed to be having no effect on curbing inflation. Incomes policies were successful in the
229:
By creating the
General Maximum, Robespierre shifted the attention of the French people away from government involvement in widespread shortages of money and food to a fight between consumers and merchants. The text of the General Maximum was written towards businessmen who were profiting on a large
283:
The 90-day freeze became nearly 1,000 days of measures known as Phases One, Two, Three, and Four, ending in 1973. In these phases, the controls were applied almost entirely to the biggest corporations and labor unions, which were seen as having price-setting power. However, 93% of requested price
414:
government. Employers were not party to the Accord. Unions agreed to restrict wage demands, and the government pledged action to minimise inflation and price rises. The government was also to act on the social wage. At its broadest, this concept included increased spending on education as well as
296:
The first wave of controls were successful at curbing inflation temporarily while the administration used expansionary fiscal and monetary policies. However, the long-term effects proved to be destabilizing. Left unsuppressed after the initial price controls were relaxed, the overly expansionary
201:
had limited success. With respect to its overt intention, that of ensuring the people were able to purchase food at a reasonable rate, the
Maximum was mostly a failure. Some merchants having found themselves forced into a position to sell their goods for a price below cost (e.g. cost of baking
274:
of international currency management established after World War II. The 90-day freeze was unprecedented in peacetime, but such drastic measures were thought necessary. It was quite well known at the time that this would likely lead to an immediate inflationary impulse (essentially because the
279:
of the dollar would boost the demand for exports and increase the cost of imports). The controls aimed to stop that impulse. The fact that the election of 1972 was on the horizon likely contributed to both Nixon's application of controls and his ending of the convertibility of the dollar.
486:
The current polder model is said to have begun with the
Wassenaar Accords of 1982 when unions, employers and government decided on a comprehensive plan to revitalize the economy involving shorter working times and less pay on the one hand, and more employment on the other.
80:
Incomes policies vary from "voluntary" wage and price guidelines to mandatory controls like price/wage freezes. One variant is "tax-based incomes policies" (TIPs), where a government fee is imposed on those firms that raise prices and/or wages more than the controls allow.
269:
imposed price controls on August 15, 1971. This was a move widely applauded by the public and a number of
Keynesian economists. The same day, Nixon also suspended the convertibility of the dollar into gold, which was the beginning of the end of the
288:
power, some economists saw controls as possibly working effectively (though they are usually skeptical on the issue of controls). Because controls of this sort can calm inflationary expectations, this was seen as a serious blow against
471:(Dutch: Sociaal-Economische Raad, SER). The SER serves as the central forum to discuss labour issues and has a long tradition of consensus, often defusing labour conflicts and avoiding strikes. Similar models are in use in
418:
Inflation declined during the period of the Accord, which was renegotiated several times. However, many of the key elements of the Accord were weakened over time, as unions sought a shift from centralised wage fixation to
100:
for enforcement. That happened in the United States during the early 1970s. When the price of a good is lowered artificially, it creates less supply and more demand for the product, thereby creating shortages.
297:
policies proceeded to exacerbate inflationary pressures. Meat also began disappearing from grocery store shelves and
Americans protested wage controls that didn't allow wages to keep up with inflation.
361:
in 1975. This act contained wage and price controls on parts of the economy and remained in force until 1978. In 1979 the anti-inflation board was dissolved and the Anti-Inflation Act repealed.
509:
imposed a simultaneous freeze on wages, prices and interest rates in an effort to curb inflation, despite public resistance. These measures were subsequently repealed by
Muldoon's successor
391:" in which unions would accept smaller wage increases, and business would constrain price increases, imitating Nixon's policy in America. Price controls ended with the election of
480:
108:
as a way of fighting inflation, at least for mild inflation. Others argue that controls and mild recessions can be complementary solutions for relatively mild inflation.
695:
265:
In the early 1970s, inflation had been much higher than in previous decades, getting above 6% briefly in 1970 and persisting above 4% in 1971. U.S. President
923:
1387:
1098:
254:). That agency was rather unpopular with business interests and was phased out as quickly as possible after peace had been restored. However, the
322:
1061:
308:
prices persisted for years after 1973). During times of high inflation, controls have been called for; in 1980 during unprecedented inflation,
234:, when a citizen informed the government about a merchant who was in violation of the law, they were considered to have done their civic duty.
662:
877:
476:
376:
370:
423:. The Accord ceased to play a major role after the recession of 1989–92, and was abandoned after the Labor government was defeated in 1996.
64:
imposed price controls (by penalty of death) in an unsuccessful attempt to curb inflation, and such measures were also attempted after
1053:
974:
907:
869:
799:
460:
247:
251:
84:
Some economists agree that a credible incomes policy would help prevent inflation. However, by arbitrarily interfering with
431:
Italy imitated the United States' price and wage controls in 1971, but soon gave up the policy to focus on controlling the
1413:
259:
1032:
258:
brought a return to the same inflationary pressures, and price controls were again established, this time under the OPS (
1070:
349:
proposed the imposition of a wage and price freeze on the
Canadian economy as a response to rising inflation due to the
1091:
300:
Since that time, the U.S. government has not imposed maximum prices on consumer items or labor (although the cap on
1126:
703:
448:
215:
625:
1418:
1304:
931:
404:
388:
1423:
1229:
1033:"IRIN Africa | ZIMBABWE: Price controls devastating rural economy | Zimbabwe | Food Security"
587:
468:
497:, hence its name (the "polders" are a region comprising the Netherlands and the northern part of Belgium).
214:. However, the General Maximum was very successful in deflecting a volatile political issue away from the
111:
The policy has the best chance of being credible and effective for the sectors of the economy dominated by
1357:
1084:
411:
219:
383:
in an attempt to solve the problem of inflation in the
British economy by managing wages and prices. The
1347:
1342:
1258:
1222:
420:
380:
1362:
1237:
1058:
831:
648:
384:
271:
1121:
670:
490:
The polder model is widely, but not universally, regarded as successful incomes management policy.
210:) chose to hide their expensive goods from the market, either for personal use or for sale on the
127:. Such institutions enable collective negotiation and monitoring of the wage and price agreements.
89:
1408:
1278:
1265:
1147:
1014:
358:
143:
1318:
1203:
1182:
1175:
970:
966:
960:
903:
899:
893:
873:
865:
859:
795:
791:
785:
392:
223:
175:
57:
1352:
1283:
1211:
1006:
346:
222:, enabling them to focus on larger political issues more closely related to completing the
1367:
1293:
1288:
1189:
1155:
1136:
1131:
1065:
350:
331:
231:
179:
154:
120:
61:
1382:
1372:
1298:
1273:
1247:
814:
534:
354:
150:
69:
42:
1402:
1326:
1252:
1216:
1161:
1107:
991:
526:
514:
266:
194:
182:
was imposed in an attempt to decrease inflation. It consisted of limits on wages and
139:
104:
Some economists argue that incomes policies are less expensive (more efficient) than
1018:
649:
The Wages of
Militancy: Incomes Policy, Hegemony and the Decline of the British Left
357:
was originally opposed to this idea, but after winning the election, introduced the
1311:
1049:
456:
444:
432:
327:
310:
276:
243:
211:
147:
135:
124:
85:
65:
96:
and declines in the quality of goods on the market and requiring large government
1242:
1141:
510:
506:
305:
290:
183:
97:
50:
1377:
1196:
956:
889:
781:
464:
255:
190:
for breaking this law. The law was repealed 14 months after its introduction.
187:
1010:
762:
Darrow, M. "Economic Terror in the City: The General Maximum in Montauban."
749:
Darrow, M. "Economic Terror in the City: The General Maximum in Montauban."
736:
Darrow, M. "Economic Terror in the City: The General Maximum in Montauban."
723:
Darrow, M. "Economic Terror in the City: The General Maximum in Montauban."
555:
408:
301:
207:
116:
105:
46:
34:
407:
during the 1980s. The Accord was an agreement between trade unions and the
246:, price controls were used in an attempt to control wartime inflation. The
17:
817:
Richard Nixon speech announcing Phase Four price controls, June 13th, 1973
530:
285:
131:
112:
93:
582:
387:
in the 1970s sought to reduce conflict over wages and prices through a "
345:
During the 1974 federal election, Progressive Conservative Party leader
56:
Incomes policies have often been resorted to during wartime. During the
494:
472:
452:
447:
in the Netherlands is characterized by tri-partite cooperation between
339:
284:
increases were granted and seen as necessary to meet costs. With such
161:
in the economy greatly distorting other areas, exempt from the policy.
335:
198:
134:
phenomenon, and the only way to deal with it is by controlling the
314:
editorialized in favor of semi-permanent wage and price controls.
203:
158:
1076:
142:. They argue that price inflation is only a symptom of previous
38:
1080:
72:
during World War II but less successful in the post-war era.
1071:
Nixon's Wage and Price Freeze – Forty Years After the Freeze
1059:
PBS Special Report on California Electricity Price Controls
49:, and usually seeking to establish wages and prices below
992:"The Polder Model Reviewed: Dutch Corporatism 1965—2000"
130:
Other economists argue that inflation is essentially a
197:
and food hoarding into crimes against the government,
815:
http://www.presidency.ucsb.edu/ws/index.php?pid=3868
403:
Australia implemented an incomes policy, called the
123:, with a significant sector of workers organized in
1335:
1114:
854:
852:
505:In 1982, then Prime Minister and Finance Minister
481:universal validity of collective labour agreements
951:
949:
776:
774:
772:
825:
823:
157:the incomes policy can never work, the excess
88:, it provides an additional bar to achieving
1092:
8:
790:. New York, New York: Basic Books. pp.
689:
687:
45:, most commonly instituted as a response to
965:. New York, New York: Basic Books. p.
898:. New York, New York: Basic Books. p.
864:, Greenwood Publishing Group, 1991, p. 232
663:"Price Controls and California Electricity"
326:Demonstration against wage controls during
1099:
1085:
1077:
858:Friedman, Leon / Levantrosser, William F.
624:Yergin, Daniel; Joseph Stanislaw (1997).
529:'s government imposed a price freeze in
321:
546:
381:the government of Harold Wilson in 1965
990:Woldendorp, Jaap; Keman, Hans (2007).
830:Morris, Charles R. (7 February 2004).
537:. That policy led only to shortages.
153:. They believe that without a totally
619:
617:
615:
613:
611:
609:
607:
605:
577:
575:
477:Comprehensive Income Policy Agreement
377:National Board for Prices and Incomes
371:National Board for Prices and Incomes
7:
27:Economy-wide wage and price controls
1054:The Wolfram Demonstrations Project
467:. These talks are embodied in the
25:
999:Economic and Industrial Democracy
248:Franklin Roosevelt Administration
700:Fiat Money: Inflation in France
353:. The Liberal government under
694:White, Andrew Dickson (1912).
252:Office of Price Administration
1:
260:Office of Price Stabilization
626:"Nixon Tries Price Controls"
924:"Wage & Price Controls"
493:This model is also used in
439:The Netherlands and Belgium
1440:
661:Irons, John (2001-06-24).
556:"Price Controls Are Back!"
368:
216:Committee of Public Safety
138:, directly or by changing
962:How We Got Here: The '70s
895:How We Got Here: The '70s
787:How We Got Here: The '70s
764:French Historical Studies
751:French Historical Studies
738:French Historical Studies
725:French Historical Studies
405:Prices and Incomes Accord
193:By turning the crimes of
92:, potentially leading to
1388:Public policy by country
1011:10.1177/0143831X07079351
449:employers' organizations
180:"The Law of the Maximum"
62:"The Law of the Maximum"
696:"The French Revolution"
588:George Mason University
469:Social Economic Council
186:. Many dissidents were
1358:Public policy doctrine
342:
220:Maximilien Robespierre
1348:Public administration
1343:Evidence-based policy
1052:by Fiona Maclachlan,
560:Making Economic Sense
513:and Finance Minister
421:enterprise bargaining
325:
121:nationalised industry
1414:Macroeconomic policy
1363:Public policy school
1073:by William N. Walker
832:"The Nixon Recovery"
651:By David Purdy, 2006
385:Callaghan government
272:Bretton Woods system
250:instituted the OPA (
928:The History Project
591:. 29 September 1793
90:economic efficiency
1064:2013-06-19 at the
836:The New York Times
630:Commanding Heights
554:Rothbard, Murray.
359:Anti-Inflation Act
343:
144:monetary inflation
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1321:
1314:
1307:
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1192:
1185:
1178:
1171:
1164:
1150:
878:978-0-313-27653-8
706:on August 8, 2008
393:Margaret Thatcher
224:French Revolution
176:French Revolution
58:French Revolution
37:are economy-wide
16:(Redirected from
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1419:Household income
1353:Public budgeting
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1230:Renewable energy
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1029:
1023:
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996:
987:
981:
980:
953:
944:
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941:
939:
930:. Archived from
920:
914:
913:
886:
880:
861:Richard M. Nixon
856:
847:
846:
844:
842:
827:
818:
812:
806:
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767:
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753:1991, pp. 503–05
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741:
740:1991, pp. 523–25
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728:
727:1991, pp. 517–19
721:
715:
714:
712:
711:
702:. Archived from
691:
682:
681:
679:
678:
669:. Archived from
667:ArgMax Economics
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652:
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637:
636:
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600:
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579:
570:
569:
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347:Robert Stanfield
31:Incomes policies
21:
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1398:
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1368:Policy analysis
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1110:
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1066:Wayback Machine
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988:
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934:on 27 June 2011
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389:social contract
379:was created by
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332:Parliament Hill
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232:Law of Suspects
172:
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155:planned economy
119:, particularly
78:
28:
23:
22:
15:
12:
11:
5:
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1424:Price controls
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1271:
1270:
1269:
1262:
1259:Pharmaceutical
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1234:
1233:
1226:
1223:Nuclear energy
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1207:
1200:
1193:
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1179:
1172:
1165:
1153:
1152:
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1139:
1134:
1129:
1127:Climate change
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1118:
1116:
1112:
1111:
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1089:
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1075:
1074:
1068:
1056:
1050:Price Controls
1045:
1044:External links
1042:
1039:
1038:
1024:
1005:(3): 317–347.
982:
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915:
908:
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800:
768:
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742:
729:
716:
683:
653:
641:
601:
571:
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544:
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539:
535:hyperinflation
522:
519:
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440:
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428:
425:
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369:Main article:
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365:United Kingdom
363:
355:Pierre Trudeau
319:
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178:in the 1790s,
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151:money creation
140:interest rates
77:
74:
70:United Kingdom
43:price controls
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1108:Public policy
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1035:. 2007-07-24.
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976:0-465-04195-7
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870:0-313-27653-6
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673:on 2007-10-20
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583:"The Maximum"
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527:Robert Mugabe
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1336:Other topics
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1122:Agricultural
1027:
1002:
998:
985:
961:
936:. Retrieved
932:the original
927:
918:
894:
884:
860:
839:. Retrieved
835:
810:
786:
766:1991, p. 511
763:
758:
750:
745:
737:
732:
724:
719:
708:. Retrieved
704:the original
699:
675:. Retrieved
671:the original
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533:because of
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501:New Zealand
306:natural gas
291:stagflation
275:subsequent
206:or growing
184:food prices
174:During the
117:oligopolies
51:free market
18:Wage freeze
1403:Categories
1378:Regulation
1319:Technology
1183:Investment
1176:Industrial
710:2008-11-03
677:2008-11-06
635:2008-11-03
595:2008-11-03
565:2008-11-03
541:References
465:government
463:, and the
351:oil crisis
256:Korean War
208:vegetables
146:caused by
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106:recessions
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1284:Knowledge
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475:, namely
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399:Australia
395:in 1979.
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