From this point on, our discussion of the consequences of price controls becomes a discussion of the consequences of socialism. In studying the consequences of socialism, it does not matter whether we study an economy that has arrived at socialism through price and wage controls or one that has arrived at socialism openly, through the explicit nationalization of all industry. Nor does it matter whether socialism has been brought about peacefully, through lawful processes and the observance of democratic procedures, or by means of a violent revolution; it also does not matter whether the professed goal of socialism is universal brotherly love or the supremacy of a particular race or class. Economically, the system is the same in all these cases: The government owns the means of production and it is the government's responsibility to decide how they are to be used. Consequently, everything we will have to say about socialism will apply to all variants of socialism: to the socialism of the Nazis, to the socialism of the Communists, and to the socialism of the Social Democrats, such as the late Norman Thomas. What we have to say will apply to any economic system actually based on government ownership of the means of production. Of course, it will not apply to countries such as Great Britain, Israel, and Sweden, which, though governed for extensive periods by political parties espousing the philosophy of socialism, did not implement socialism as their actual economic system. Of course, it may apply to one or more of those countries in the future. Most importantly, it will apply to the economic system of the United States, should price controls once again be imposed and made universal and the government seize control over production and distribution in this country, which is more than possible at some point in the years ahead, given the profoundly inflationary nature of our present monetary system.

The most important principle to grasp about socialism is that its economic consequences are essentially the same as those which result from universal price controlled. If socialism is introduced in response to the chaos created by universal price controls, its effect is to perpetuate that chaos; if it is introduced without the prior existence of universal price controls, its effect is to inaugurate that very chaos. This, of course, is ironic insofar as the government uses the chaos created by price controls as the grounds for its socialization of the economic system. Nevertheless, socialism and universal price controls are fundamentally the same in their economic nature and therefore produce the same effects. It is for precisely this reason that Soviet Russia has so consistently provided such excellent examples of the consequences that follow from universal price controls: Among these examples have been restrictions on the internal freedom of migration and the compulsory sharing of housing, shortages so severe that they result in mile-long waiting lines and people being ready to swoop down on whatever may happen to be available, and, above all, gross inefficiencies in the production and use of capital goods, which radically reduce the overall ability to produce.

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