capitalism

Price Controls 389
University of Aberdeen conferred an honorary doctorate of
divinity upon him.
In addition to his work in these areas, Price established
a reputation as an original economic thinker, especially in
the area of insurance and finance. In 1769, he published a
pioneering work on life expectancy in the Philosophical
Transactions, a scientific journal published by the Royal
Society. A later work, “Observations on Reversionary
Payments” (1771), laid the foundation for today’s system of
pensions and life insurance and underscored the inadequacy
of the calculations then being used. At the request of
William Pitt the Younger, later prime minister of Britain,
Price published a pamphlet in 1772 titled “Appeal to the
Public on the Subject of the National Debt,” in which he
decried the surging public debt and prescribed a program
for eliminating it. The program became so widely respected
that, in 1778, the U.S. Congress asked Price to advise the
fledging United States on finance. He also wrote “Essay on
the Population of England” (1780), which influenced the
economic theorist Robert Malthus.
Price’s support for American independence was first
expressed in print in his “Observations on the Nature of
Civil Liberty, the Principles of Government, and the Justice
and Policy of the War with America.” Price favored American
independence on the principle of self-determination, and he
argued that no social contract could alienate that principle.
Within a few days, the “Observations” sold several thousand
copies, prompting the release of a cheaper second edition
that circulated widely in both Britain and America. The
work sparked furious debate. In 1777, Price wrote a second
pamphlet, “Additional Observations,” to clarify his position
in the face of severe opposition.
Considered a hero by the American revolutionaries, Price
was offered American citizenship, which he declined.
However, he did address Congress in 1778 and was awarded
a degree by Yale in 1781. His final work on American independence
was “Observations on the Importance of the
American Revolution and the Means of Rendering It a
Benefit to the World,” and in it extended his arguments in
support of the colonists’ claims against the British crown.
Price also championed the French Revolution. Shortly
after the fall of the Bastille, he delivered a sermon,
“Discourse on the Love of Our Country,” that was meant to
commemorate the 101st anniversary of England’s Glorious
Revolution of 1688, through which the short reign of King
James II had come to a bloodless end. In supporting the
events of 1688, Price praised what he called the “two other
Revolutions”—the American and French. In rebuttal, the
British statesman Edmund Burke penned his famous antirevolutionary
work, Reflections on the Revolution in France.
A fiery public debate followed the appearance of Price’s
pamphlet and Burke’s response, which lasted years and had
such wide-ranging implications that the historian Thomas
W. Copeland referred to it as “the most crucial ideological
debate ever carried on in English.” Burke’s arguments
inspired responses not merely from Price, but also from
Thomas Paine’s The Rights of Man in 1792 and Mary
Wollstonecraft’s A Vindication of the Rights of Men in 1790.
Price died on April 19, 1791. His intimate friend and
associate Joseph Priestley preached at his funeral service.
Although they disagreed on many points of theory, the two
men had been leading voices for “rational dissent” for
decades. With Priestley, Price had written the influential
work A Free Discussion of the Doctrines of Materialism
and Philosophical Necessity (1778), which took the form of
a debate. Perhaps it was in his openness to civil debate that
Price most contributed to British intellectual history.
See also Assurance and Trust; Burke, Edmund; Classical
Economics; Enlightenment
Further Readings
WME
Cone, Carl B. Torchbearer of Freedom: The Influence of Richard
Price on Eighteenth Century Thought. Lexington: University of
Kentucky Press, 1952.
Laboucheix, Henri. Richard Price as Moral Philosopher and
Political Theorist. Oxford: Voltaire Foundation, 1982.
Peach, Bernard. Richard Price and the Ethical Foundations of the
American Revolution: Selections from His Pamphlets, with
Appendices. Durham, NC: Duke University Press, 1979.
Thomas, David Oswald, Richard Price, 1723–1791. Cardiff, UK:
University of Wales Press, 1976.
PRICE CONTROLS
Price controls are said to exist whenever government mandates
a maximum price (“price ceiling”) above which a
good or service cannot legally be sold or a minimum price
(“price floor”) below which a good or service cannot
legally be sold.
Price ceilings attempt to lower the cost to the consumer
of acquiring the price-ceilinged product, whereas a price
floor attempts to increase the return received by sellers of
the product in question. Both schemes achieve outcomes
opposite of their objectives.
In markets without price controls, prices are determined
by the interaction of the voluntary purchase and use decisions
of buyers (“demand”) with the voluntary production
and sales decisions of sellers (“supply”). If, for whatever
reason, buyers demand a product more intensely than had
previously been the case—meaning that, at a specific price,
they are prepared to buy greater quantities of it today than
they were willing to buy yesterday—the result will be that
the price will go up.