Governments controlling prices? It has long been unthinkable – but may now be inevitable | Andy Beckett

In Mexico and Spain, leaders who have capped public costs have been rewarded at the ballot box. As another cost of living surge arrives, it may be a policy our leaders are unable to resist Politicians are not supposed to meddle with prices. Even though much of politics is about whether voters can afford things – especially in an era of recurring inflationary shocks – ever since the collapse of the Soviet Union’s planned economy four decades ago, the orthodoxy across much of the world has been that only markets should decide what things cost. As the hugely influential Austrian economist Friedrich Hayek argued, in a complex modern society, information is too dispersed among potential sellers and buyers of goods or services for government to make informed and correct decisions about the prices of those goods. Hence, his disciples say, the inefficiency of state-run economies, from post-colonial Africa to the eastern bloc. Yet as the 21st century has gone on, and market economies have proved ever less able to provide essentials such as energy and housing at an affordable cost – while also generating their own huge inefficiencies, such as soaring salaries for failing executives,