Price Regulatory Mechanisms: The Solution to the Economic Hardship in Countries

[Funke]

Price Regulatory Mechanisms: The Solution to the Economic Hardship in Countries

The basic principle of businesses and productions is making of gains for the advancement of that business and life. In most cases , state economic systems determine the constant increase in the prices of goods that leaders to the hardship.

In political Economies, three factors generally leads to price increment.

1. Increase in Petroleum products, the increase in fuel , diesel prices automatically increases the price of transportation and distribution of goods across state boarders.

2. The forces of Demand,  when there excess demand for a product, an artificial scarcity is created which places value on the product. This scarcity is artificially created by two means - There could be scarcity created by shortage in the production and distribution process or short of the product in the market over a period of time.

3. Supply Chain, the supply forces are most times influenced by the increment in petroleum products and other motor body parts, the cost of transportation as the major means of distribution and supply greatly affects the price of goods , which makes it hard for individuals to easily purchase such products.

These factors are greatly affect in times of war and conflicts. For instance inflation the Russia - Ukrainian war.

 https://www.statista.com/statistics/296164/ukraine-inflation-rate/

The Nigeria civil war of 1967 -1970 ended as a result of the artificial scarcity and inflation that was caused by the Nigerian Government. Nigeria's inflation increased from 0.3% to near 10.5% inflation rate in 1967 to near 20% by 1970, the afterward effect of that war raised inflation to over 20% from 1974.

https://www.funtimesmagazine.com/2023/01/15/423779/the-nigerian-civil-war-against-biafra

What will the government do to reduce inflation and hardship among the citizens that are complaining especially countries with such unbearable inflation's.

What states and countries needs is an effective price regulation body and law on certain areas that directly affects the citizens.

1. Petroleum products Price Regulatory Board (PPPRB) is an essential component that need to improve on its effectiveness especially in the Nigerian economy for instance, component states also need the same board in regulating the price and behaviours of petroleum product marketers , like the petroleum task force of states that will be effective enough to regulate the constant increment of prices of petroleum products.

2. House Rents, in many African countries, house rents are increased by landlords at will whenever they like , thereby putting an undue pressure on tenants especially in urban areas. This pressure and hardship has also lead to decrease in population or urban - Rural Migration.

3.Electricity Price Regulation, Power supply in most African countries are privately produced and distributed , so prices of electricity tariff increases at every point for the purpose of making gains.

4. Externalities such as consumable, externalities are essential products or goods man cannot do without. Government of states and countries should create a task force to regulate the powers of monopoly on such products.

In another way, governments should be the producers of some of these products , the distributor and retailer of these products in order to drag down the monopoly of the private hands.

[1715029979]

1715029979

[Zlantann]

In another way, governments should be the producers of some of these products , the distributor and retailer of these products in order to drag down the monopoly of the private hands.

The government cannot be the only producer, distributor and seller of essential commodities. If this happens it means that the government is moving towards fascism where almost all the sectors of the state are under strict control of the government. If you look closely at some of the sound economies of the world you will see that their economy is driven by private businesses. The government responsibilities in those developed nations are just supervisory. These regulatory bodies supervise businesses to ensure that they are abiding by the laws that control them.

You gave an example of Nigeria and advised the government to go into the production of essential goods and services. But in the history of the country, the government has never been a good business entity. The refineries, telecom, railway, airport and other businesses that were controlled by the government have all been mismanaged because of corruption. Out of four refineries that the nation has none is functioning today due to mismangement. The telecom sector is currently effective in the country because it was privatised.

In summary, the government should make laws to control the private sector to avoid monopoly and exploitation. They can also subsidise some essential commodities to cushion the effect of some negative economic conditions. However, the private sector is the major driver of the economic development of any country.

Price Regulatory Mechanisms: The Solution to the Economic Hardship in Countries

The establishment of price regulatory boards is essential to check the excesses of greedy businessmen, but the solution to the economic hardship of most developing nations is the eradication of bribery and corruption. My reason is that these price regulatory boards are useless if they are headed by corrupt officials. In my country, the officials of these boards connive with businesses to exploit the people.           

[Promocodeudo]

Price Regulatory Mechanisms: The Solution to the Economic Hardship in Countries

The basic principle of businesses and productions is making of gains for the advancement of that business and life. In most cases , state economic systems determine the constant increase in the prices of goods that leaders to the hardship.

In political Economies, three factors generally leads to price increment.

1. Increase in Petroleum products, the increase in fuel , diesel prices automatically increases the price of transportation and distribution of goods across state boarders.

2. The forces of Demand,  when there excess demand for a product, an artificial scarcity is created which places value on the product. This scarcity is artificially created by two means - There could be scarcity created by shortage in the production and distribution process or short of the product in the market over a period of time.

3. Supply Chain, the supply forces are most times influenced by the increment in petroleum products and other motor body parts, the cost of transportation as the major means of distribution and supply greatly affects the price of goods , which makes it hard for individuals to easily purchase such products.

These factors are greatly affect in times of war and conflicts. For instance inflation the Russia - Ukrainian war.

 https://www.statista.com/statistics/296164/ukraine-inflation-rate/

The Nigeria civil war of 1967 -1970 ended as a result of the artificial scarcity and inflation that was caused by the Nigerian Government. Nigeria's inflation increased from 0.3% to near 10.5% inflation rate in 1967 to near 20% by 1970, the afterward effect of that war raised inflation to over 20% from 1974.

https://www.funtimesmagazine.com/2023/01/15/423779/the-nigerian-civil-war-against-biafra

What will the government do to reduce inflation and hardship among the citizens that are complaining especially countries with such unbearable inflation's.

What states and countries needs is an effective price regulation body and law on certain areas that directly affects the citizens.

1. Petroleum products Price Regulatory Board (PPPRB) is an essential component that need to improve on its effectiveness especially in the Nigerian economy for instance, component states also need the same board in regulating the price and behaviours of petroleum product marketers , like the petroleum task force of states that will be effective enough to regulate the constant increment of prices of petroleum products.

2. House Rents, in many African countries, house rents are increased by landlords at will whenever they like , thereby putting an undue pressure on tenants especially in urban areas. This pressure and hardship has also lead to decrease in population or urban - Rural Migration.

3.Electricity Price Regulation, Power supply in most African countries are privately produced and distributed , so prices of electricity tariff increases at every point for the purpose of making gains.

4. Externalities such as consumable, externalities are essential products or goods man cannot do without. Government of states and countries should create a task force to regulate the powers of monopoly on such products.

In another way, governments should be the producers of some of these products , the distributor and retailer of these products in order to drag down the monopoly of the private hands.

Yes I agre with you that government should be in charge of most products both in production and distribution so that the price can be subsidize, but I must tell you that even though the government take charge of the production aspect without strict monitor, there will still be price hike by the retailers, if price control can be effective, then we can get it right, the problem most under developed nations are experiencing is as a result of inefficiency of their government to set a standard for their pricing scheme but before the government solve this problem, the gas industry or petroleum sector has to be tackled very well because this sector virtually controls every aspect of logistics and production, a country that doesn't have a good gas sector does not function well for some at reasons, so this calls for the urgent attention of the government, before you control some stuffs you have to put somethings in other, you can't control a price of goods when the transportation is high and production aspect aspect unbearable because of high cost of raw materials, but we have to start from somewhere to make it right.

[Betwrong]

I don't know, I think when a government resorts to price controls, it's never a good idea. What government should do is keep the streets clean from garbage and criminals. They should ensure that nobody from the government officials is stealing from the state. But economy itself should be regulated by the government as little as possible. The market should regulate it.

[Poker Player]

What a load of bullshit, and the bad thing is that it's not crazy what the OP is saying, it's just commonly held beliefs. OP, read what happened with the Edict of Diocletian, which people throughout history have tended to forget and repeat.

In another way, governments should be the producers of some of these products , the distributor and retailer of these products in order to drag down the monopoly of the private hands.

Pure and hard Communism, that is, the political theory that the more it fails and the more millions of deaths it produces, the more popular it becomes. Leaving the means of production in state hands and taking them away from private initiative has had the same result, identical, in all the countries where it has been carried out: extreme poverty, famines, exodus, political-psychopathic repression and millions of dead.

[tabas]

It is true that whenever the oil price hikes, it is causing a domino impact for almost everything. When cost of transport increases then everything is also gonna be required to increase. That's why those countries that don't have their own fuel production are the ones that suffers on this one, while those countries that produces it will merely feel the effect of the war.

In another way, governments should be the producers of some of these products , the distributor and retailer of these products in order to drag down the monopoly of the private hands.

On an open market, they are allowing everyone to participate on the economy but sadly, many becomes the oligarchs for each of the industries that have been controlled by the government. One way that they can help the people is through subsidies but it should be weighed properly as many countries that also implemented subsidies but didn't end well.

[Faisal2202]

I don't want to say something that would hurt the feelings of Nigerians but I will say one thing and that is we create problems by taking wrong decisions for us, we do something today, we make some decisions today, we vote for one dude for some profit (a little profit) and after some time we have to bear the consequences also. What we do today we have to face consequences tomorrow.

The same thing happening here, we do know the problems, and we do know the solutions but solutions are not being implemented by those whom we voted for today, that's due to a number of reasons, one is the person we voted for became corrupt after having some power and money or he/she is being forced by upper powers to not implement the solutions to these problems.

And this is not happening in your country only, we are also facing the same issue, we are under huge debt, and whenever we become this close to declare default our officials took more loan, and I don't know exactly on which collateral, our Motorways, roads, railways, schools are already been sold to foreign power by our officials to take the loans, I doubt if they are selling the citizens too.

[Gozie51]

I don't know, I think when a government resorts to price controls, it's never a good idea. What government should do is keep the streets clean from garbage and criminals. They should ensure that nobody from the government officials is stealing from the state. But economy itself should be regulated by the government as little as possible. The market should regulate it.

I believe also that price control is not the only thing that help to grow the economy to the exclusion of all other indices that supports the economy to improve. What if there is excess money in the economy , that causes inflation. What if the constitution is not strengthen for the benefit of the larger society but only benefit the few by appointment? What about corruption in government where they embezzle money for capital projects like roads, bridges , low cost houses etc, that leads to under development and further impoverish the people.

So price control is just the very few and minor factors that are even secondary in a sane economy because if government officials are honest, inflation will be dropped. It is inflation that is part of the reason for prices of goods and services to be uncontrollable.

[Betwrong]

I don't know, I think when a government resorts to price controls, it's never a good idea. What government should do is keep the streets clean from garbage and criminals. They should ensure that nobody from the government officials is stealing from the state. But economy itself should be regulated by the government as little as possible. The market should regulate it.

I believe also that price control is not the only thing that help to grow the economy to the exclusion of all other indices that supports the economy to improve. What if there is excess money in the economy , that causes inflation. What if the constitution is not strengthen for the benefit of the larger society but only benefit the few by appointment? What about corruption in government where they embezzle money for capital projects like roads, bridges , low cost houses etc, that leads to under development and further impoverish the people.

So price control is just the very few and minor factors that are even secondary in a sane economy because if government officials are honest, inflation will be dropped. It is inflation that is part of the reason for prices of goods and services to be uncontrollable.

I think inflation is a consequence of money printing, that's all. In some countries when people get their hands on power, the first thing they do they turn on the printing press, and start buying hard currencies, gold, diamonds and precious metals with the money for themselves. The price of everything starts to rise and hence the inflation. People just shouldn't elect thieves into their government.

[btc78]

I don't know, I think when a government resorts to price controls, it's never a good idea. What government should do is keep the streets clean from garbage and criminals. They should ensure that nobody from the government officials is stealing from the state. But economy itself should be regulated by the government as little as possible. The market should regulate it.

This is true the government can only do so much about price regulations remember that producers and sellers are also citizens of the country and they also need to make profit

They also need support from the government they could only lower the price of their goods if they have given the appropriate amount of money into it otherwise they are gonna be having some loss which will result in product or goods not being produced so no the government can not control prices forever

Maybe they can for a short period of time and then find a solution that would both satisfy the producers and the consumers

[Spaceman1000$]

In another way, governments should be the producers of some of these products , the distributor and retailer of these products in order to drag down the monopoly of the private hands.

The government cannot be the only producer, distributor and seller of essential commodities. If this happens it means that the government is moving towards fascism where almost all the sectors of the state are under strict control of the government. If you look closely at some of the sound economies of the world you will see that their economy is driven by private businesses. The government responsibilities in those developed nations are just supervisory. These regulatory bodies supervise businesses to ensure that they are abiding by the laws that control them.

You gave an example of Nigeria and advised the government to go into the production of essential goods and services. But in the history of the country, the government has never been a good business entity. The refineries, telecom, railway, airport and other businesses that were controlled by the government have all been mismanaged because of corruption. Out of four refineries that the nation has none is functioning today due to mismangement. The telecom sector is currently effective in the country because it was privatised.

In summary, the government should make laws to control the private sector to avoid monopoly and exploitation. They can also subsidise some essential commodities to cushion the effect of some negative economic conditions. However, the private sector is the major driver of the economic development of any country.

Price Regulatory Mechanisms: The Solution to the Economic Hardship in Countries

The establishment of price regulatory boards is essential to check the excesses of greedy businessmen, but the solution to the economic hardship of most developing nations is the eradication of bribery and corruption. My reason is that these price regulatory boards are useless if they are headed by corrupt officials. In my country, the officials of these boards connive with businesses to exploit the people.            

With the examples you outlined, is as best someone even ask that the day to day running of government should be privatized. because it's beginning to sound as if whatever that is given to government to run always turns out to be Moribund after some years. A Lot of people always say that government don't have any business going into business, because government are bad managers of business. However this theory really work because most of the juicy and productive aspects of the nation is being owned by the government.

for the Nigerian case, a very good example is the oil and gas sector, the government are the sole regulators of the oil and gas sector headed by the NNPL, and the government have run the business of oil and gas to the ground,  to a point we don't have refined product crude oil in our country and we are also buying this oil and gas product at a very high rate even as a producing nation. So truly the small scale medium Enterprise and the multinationals and big private sectors are the one that are solely helping to keep the economy afloat given their impact on the economy.

[Betwrong]

~

This is true the government can only do so much about price regulations remember that producers and sellers are also citizens of the country and they also need to make profit

They also need support from the government they could only lower the price of their goods if they have given the appropriate amount of money into it otherwise they are gonna be having some loss which will result in product or goods not being produced so no the government can not control prices forever

Maybe they can for a short period of time and then find a solution that would both satisfy the producers and the consumers

Exactly. And no one knows better what price must be set for this or that product but the market itself. Governments shouldn't intervene, or, if they must, they should do it as little as possible. It may look like Wild West at first, but it will settle down with time, and the government will be left with dealing with various scammers, not with the vendors who's price is "too high".

[Gozie51]

~

This is true the government can only do so much about price regulations remember that producers and sellers are also citizens of the country and they also need to make profit

They also need support from the government they could only lower the price of their goods if they have given the appropriate amount of money into it otherwise they are gonna be having some loss which will result in product or goods not being produced so no the government can not control prices forever

Maybe they can for a short period of time and then find a solution that would both satisfy the producers and the consumers

Exactly. And no one knows better what price must be set for this or that product but the market itself. Governments shouldn't intervene, or, if they must, they should do it as little as possible. It may look like Wild West at first, but it will settle down with time, and the government will be left with dealing with various scammers, not with the vendors who's price is "too high".

There must be a balance point between the government, manufacturers and sellers or middle men. The government has a contributing role and a controlling role to play in the supply chain because if those in the manufacturing sector are left without some check then they would milk the consumers dry as no body hates to make profit from there business. So the government has to ensure that there is enabling environment for businesses to thrive including security but where such environment for business is not provided then controling and regulations will be difficult and compromised. For example if a business venture provides security for theirselves and incurs other expenses that are suppose to be done by the government, it is expected that such cost would also be added to the cost of running the business and that obviously will affect selling price to customers.

So the government has a lot of role to play in the regularisation of businesses.

[davis196]

1. Increase in Petroleum products, the increase in fuel , diesel prices automatically increases the price of transportation and distribution of goods across state boarders.

2. The forces of Demand,  when there excess demand for a product, an artificial scarcity is created which places value on the product. This scarcity is artificially created by two means - There could be scarcity created by shortage in the production and distribution process or short of the product in the market over a period of time.

3. Supply Chain, the supply forces are most times influenced by the increment in petroleum products and other motor body parts, the cost of transportation as the major means of distribution and supply greatly affects the price of goods , which makes it hard for individuals to easily purchase such products.

1.How do you plan to regulate petroleum prices, since they are "regulated" by OPEC+? Nigeria also exports oil, so it benefits from high oil prices just like the OPEC+ members.

2.Excess demand for products is created mostly by the money printing machines of the central banks. There's no point regulating prices of consumer goods, when the money printing increases the demand for products artificially. The solution is "regulating" the central banks and stopping the money printing machines.

3.How can you regulate disrupted supply chains? Sometimes, supply chains can be disrupted by other factors-political, technological, even environmental.

Imposing "regulated" or controlled prices over consumer goods and services in a pretty dumb socialist policy.

[kryptqnick]

There are no simple solutions to hardships, and I think that careful policies, accounting for the values of people inside the country, are needed. For example, in Ukraine, the value of the free market isn't that big, and people often support decisions of the state to nationalize some things that are important for society. So setting up a price regulation on certain goods and services will not be met with much outrage here. But I think it can be a very different story in a country like the US, where around a half of the population is strongly against governmental regulations and oversight of the free market, so different solutions (like special programs of the state covering a part of the market price for vulnerable groups, perhaps) are needed there.

[Betwrong]

~

There must be a balance point between the government, manufacturers and sellers or middle men. The government has a contributing role and a controlling role to play in the supply chain because if those in the manufacturing sector are left without some check then they would milk the consumers dry as no body hates to make profit from there business. So the government has to ensure that there is enabling environment for businesses to thrive including security but where such environment for business is not provided then controling and regulations will be difficult and compromised. For example if a business venture provides security for theirselves and incurs other expenses that are suppose to be done by the government, it is expected that such cost would also be added to the cost of running the business and that obviously will affect selling price to customers.

So the government has a lot of role to play in the regularisation of businesses.

Besides, no business entity can provide security for themselves on the same level as it can be done by the government forces. What they can do is, like you said, they can try to do it on a pretty good level, but that will surely affect the price of their product big time. Better leave security to the government and keep the price of your product as low as possible.

[0t3p0t]

I don't know, I think when a government resorts to price controls, it's never a good idea. What government should do is keep the streets clean from garbage and criminals. They should ensure that nobody from the government officials is stealing from the state. But economy itself should be regulated by the government as little as possible. The market should regulate it.

I agree with your opinion mate. What really is a solution to every country's hardship is not the regulation itself but the lack of good governance it has. Corrupt government is what pulled a specific country's economy down not the regulation. As long as there were corrupt officials in the government regulation will always have a loophole. 

[DrBeer]

Government regulation is a very bad way!
I'll even explain it with an example.
1. State regulation is possible only for a certain group of social products in order to provide the masses of the population with the necessary, minimum set of products. And this regulation should not be a force on producers, but should be compensation to producers, part of the price. Why ? Because you can’t force someone to sell for $10 something that cost you $15 in cost. Otherwise, the manufacturer will simply close production and make the situation even worse.

2. An example of state mass regulation is the USSR. On paper and on TV, everyone is happy and everyone is well off. But you will laugh now - in the 20th century, in the USSR, butter could not be bought everywhere, even in the capitals of the republics, and it was necessary to “catch” it, because... if they were imported, it was in very limited quantities. The meat was of disgusting quality and was not cheap. With an average salary in the country of 90-120 rubles, a kilogram of pork, which apparently was not slaughtered, but died a natural death, cost 3.50. Most of the products were of very low quality. And all this was compensated by low salaries of the entire population! Moreover, several times in the USSR, we learned that “at the request of USSR citizens, we are raising prices on (list of products).” How do you like these prospects?!

[Hispo]

I believe you have a problem of definitions with this economical theory of yours about ways to improve the quality of life in the developing countries. For example, you talk about scarcity of necessary goods and services for the well-being of people, you are mixing up the definition of scarcity (natural scarcity) with artificial scarcity.
When there is high demand for an specific product and the production is not as high as such demand, then we are talking about natural scarcity or logical scarcity, because it is not being provoked in purpose by a centralized entity for the sake of increasing prices of those goods. An example of actual artificial scarcity would be if (for example), producers of shampoo or soap decided to lower the production of their factories on purpose or to only sell their products in bulk instead of providing for the retail market, or if they decided to export all their products instead offering them to their own people, having in mind to take advantage of the increase of the price for them to later get more profits.
Though, if there is no market manipulation and they continue to produce and distribute at the same rate they used to, then there is no reason to talk about artificial or provoked scarcity in your national market.

Also, there is al intense debate whether regulations actually help to improve the living conditions of the people of a country, there is a important percentage of the population who will instead argue for the free market to deal with the needs of the people to get food, shelter and even health.
I reserve my own points of view for another occasion, though.

[Betwrong]

I don't know, I think when a government resorts to price controls, it's never a good idea. What government should do is keep the streets clean from garbage and criminals. They should ensure that nobody from the government officials is stealing from the state. But economy itself should be regulated by the government as little as possible. The market should regulate it.

I agree with your opinion mate. What really is a solution to every country's hardship is not the regulation itself but the lack of good governance it has. Corrupt government is what pulled a specific country's economy down not the regulation. As long as there were corrupt officials in the government regulation will always have a loophole. 

Yes, corruption in the government on various levels is what makes lives of most people miserable, especially when they are poor. I would propose to hang corrupt government officials on main squares, but I know it's the solution. Beheading is a better one. But then again, little kids might have accidentally seen it, and in my opinion they don't deserve such a trauma. So, it's complicated how to punish those scumbags, but what is certain they must punished severely.