Note: This is post #29 in a weekly video series on basic microeconomics.

If price controls have negative consequences—and they do—then why do governments enact them? In this video by Marginal Revolution University, economist Alex Tabarrok looks at the example of President Nixon’s wage and price controls in the 1970s. These price controls were popular, because the American public didn’t think that the price controls were to blame for things such as long lines at the fuel pump. Without knowledge of the economics behind price controls, says Tabarrok, the public blamed foreign oil cartels and panies for the shortages.

(If you find the pace of the videos too slow, I’d mend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series:Why government regulation of airline fares created ‘quality waste’