Price and wage controls are counterproductive for this purpose. They distort the price structure, which reduces the efficiency with which the system works. The resulting lower output adds to the adverse side effects of a cure for inflation rather than reducing them. Price and wage controls waste labor, both because of the distortions in the price structure and because of the immense amount of labor that goes into constructing, enforcing, and evading the price and wage controls. These effects are the same whether controls are compulsory or are labeled “voluntary.”
