Synopsis
Forty Centuries of Wage and Price Controls: How Not to Fight Inflation, co-authored by Robert L. Schuettinger and Eamonn F. Butler, is a comprehensive historical critique of government-mandated economic interventions. First published in 1979 by the Heritage Foundation, the book examines a vast timeline spanning over four thousand years to analyze the effectiveness of wage and price ceilings. The authors argue from a free-market perspective, asserting that regardless of the era, culture, or political system, statutory controls consistently fail to curb inflation and inevitably produce destructive economic side effects.
The narrative begins in the ancient world, examining the earliest recorded attempts at price fixing, such as the Code of Hammurabi in Babylon and the economic regulations of ancient Egypt's Old Kingdom. Schuettinger and Butler guide the reader through classical antiquity, detailing the disastrous consequences of Diocletian’s Edict on Maximum Prices in the late Roman Empire, before moving through the Middle Ages and early modern history. They analyze various historical inflection points, including the rigid controls of the French Revolution's "Law of the Maximum" and the domestic regulations implemented during the American Revolution and the Civil War, demonstrating how each attempt resulted in artificial shortages, black markets, and economic stagnation.
In the modern era, the book focuses heavily on 20th-century economic policies, scrutinized through the lens of monetary theory. The authors dissect the wartime controls of World Wars I and II, as well as the peacetime implementation of wage and price guidelines under the Nixon administration in the early 1970s. Throughout these modern case studies, Schuettinger and Butler reinforce their core thesis: inflation is fundamentally a monetary phenomenon caused by an expansion of the money supply, and attempting to suppress it by legally fixing prices is akin to masking a fever by breaking the thermometer. The book concludes that stable monetary policy, rather than government coercion, is the only viable solution to inflation.