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that of the rest of the world as it would be for the corner 

 grocer to try to do business on a set of prices either above or 

 below those that generally prevailed. The difficulty of under- 

 standing exchange rates, the temptation to make long-run 

 conclusions from short-run observations, and the tendency 

 to become absorbed in the institutions of one's own country 

 have led many people to the belief that price stabilization 

 was possible without regard to world influences. Most of 

 these efforts enjoy little success. Some hobble along in a 

 strait-jacket of rigid government control. 



These methods of price control have not been very effec- 

 tive in the United States ; they have been somewhat effective 

 in Canada, very effective in England, and seemingly faultless 

 in Germany. It would appear that the believed effectiveness 

 of controls is inversely proportional to the amount of infor- 

 mation available and directly proportional to the distance 

 between the countries in question. 



Price Control Is Expensive 



To police the country's distributive machinery rigidly 

 enough to maintain prices at fixed levels would take a huge 

 amount of human effort. Such an expense would be extrava- 

 gant in time of peace and prohibitive in time of war because 

 it would be a net deduction from the war effort. Since the cost 

 of complete control of the distributive system is prohibitive, 

 nations undertake varying degrees of partial control. A skele- 

 ton of official pronouncements is buttressed by pleas, threats, 

 and coercion. This method achieves some degree of success 

 while there are still plenty of goods on the shelves and the 

 bluffs are not called. The complete cost of a system of rigid 

 and thoroughgoing controls has not yet been realized; and 

 the final effectiveness of a partial system such as our present 

 one has not yet been measured. The nation is still in the 

 honeymoon days of price control. 



