Preistaxen: I. Theorie (reprinted as Theorie der Preistaxen)

Summary

Mises’s Theorie der Preistaxen is a theoretical essay on official price fixing in a private-property market order. It asks not whether the state can decree prices, but what follows when decreed prices are meant to replace market-clearing prices. The problem is intervention inside an order still based on private ownership.

Die Lehre von den Preistaxen hat zu untersuchen, welche Wirkungen die obrigkeitlichen Eingriffe in die Preisgestaltung des Marktes in einer auf dem Sondereigentum an den Produktionsmitteln beruhenden Gesellschaftsordnung auslösen.

English translation: The theory of price fixing has to investigate what effects governmental interventions in the market's price formation produce in a social order based on private property in the means of production.

The opening argument is historical and methodological. Older opinion treated prices as if they arose from arbitrary will; from that premise, legal correction looks obvious. Modern price theory instead treats prices as effects of market conditions. Liberalism’s objection is therefore not that price commands cannot be issued, but that they work against the purposes for which they are adopted.

Es wäre mithin korrekter gewesen, wenn der Liberalismus die Preistaxen nicht als unmöglich, sondern als unzweckmäßig, d. i. den Absichten, die ihren Urhebern vorschwebten, zuwiderlaufend, bezeichnet hätte.

English translation: It would therefore have been more correct if liberalism had characterized price controls not as impossible, but as inexpedient, i.e., as running counter to the intentions their originators had in mind.

This also explains Mises’s attack on interventionism as a supposed middle way. Liberalism leaves market prices to coordinate plans; socialism abolishes private control of production and substitutes collective direction. Etatism tries to keep private property formally while commanding outcomes by prohibition and order. For Mises, this evades the lawlike interdependence of social action and ignores the informational and rationing work performed by prices.

The body turns on the difference between Ordnungstaxen and echte Taxen. The first type stays close to the market price, ratifies a prevailing price, checks a temporary disturbance, or reduces monopoly prices toward the competitive range. It does not fundamentally displace the price mechanism. Genuine price controls, by contrast, deliberately set maximum or minimum prices away from the unhampered market level. A maximum set below that level increases the quantity demanded and reduces the quantity supplied; compulsory sale only exposes the remaining shortage.

Angebot und Nachfrage decken sich nicht mehr; die Nachfrage übersteigt das Angebot, und der Marktmechanismus, der sonst durch Verschiebung der Preishöhe Angebot und Nachfrage zur Deckung zu bringen sucht, kann eben infolge des obrigkeitlichen Eingriffes nicht mehr spielen.

English translation: Supply and demand no longer coincide; demand exceeds supply, and the market mechanism, which otherwise seeks to bring supply and demand into balance through shifts in the price level, can no longer function precisely because of the government intervention.

If price can no longer ration the good, allocation shifts to queues, favoritism, personal connections, illicit exchange, or administrative rationing. If production ceases to cover costs, the state must then control inputs, wages, firms, and labor deployment. Mises reads wartime controls as this cumulative sequence from ceilings to ration cards and production commands. His monetary example makes the same point against inflationary governments that try to preserve old nominal prices while expanding money.

Der behördlich festgelegte Preis aber zerstört den Markt, auf dem Waren und Dienste gegen Geld gekauft und verkauft werden.

English translation: The officially fixed price, however, destroys the market on which goods and services are bought and sold for money.

Minimum prices show the symmetrical defect. Set above the market price, they create unsold surpluses. Minimum wages raise costs, contract output, and displace workers unless employment and production are also commanded. A general wage minimum may redistribute temporarily, but if pushed beyond what private calculation can bear it consumes capital or requires socialized direction. Monopoly is the limited qualification: within the gap between monopoly and competitive prices, a price order may lower price before it becomes a genuine disruptive intervention.

The conclusion is institutional. Price controls are not a stable third system between capitalism and socialism. Where private owners direct production, market prices coordinate plans; where prices are suppressed, the state must assume the wider functions that prices performed. The essay’s lasting force is to present price fixing as cumulative social theory: interventionism must either retreat to the market or advance toward comprehensive control.