Wilhelm Vleugels, Theorie der gebundenen Preisbildung (1932)

Wilhelm Vleugels’s text is a single-author theoretical essay. Its scope is official price binding in a private-property market order: fixed prices, ceilings, and floors imposed from outside the market. The opening frames the problem between classical distrust of price decrees, Schmoller’s historical ambivalence, and Schäffle’s hope that “social taxes” might someday replace market price regulation while preserving liberal advantages. Vleugels makes that hope the object of theory:

Es ist Aufgabe der Theorie der gebundenen Preisbildung, diesen Gedanken einer „Verdrängung der Marktpreisregulierung durch Sozialtaxen“ auf seine Möglichkeit hin zu prüfen.

English translation: It is the task of the theory of controlled price formation to examine this idea of a "displacement of market-price regulation by social price fixings" as to its feasibility.

His first move is delimitation. Cartel prices and private monopoly prices are left to monopoly-price theory, because they arise within economic life; the theory of bound prices concerns public intervention from without. The decisive analytical distinction, adapted from Mises, separates tax prices that merely approximate competitive prices from those that depart from them.

Bei der Beurteilung der Preistaxen sind grundsätzlich zwei Arten zu unterscheiden, die wir mit Mises als Ordnungstaxen und als echte Taxen bezeichnen wollen.

English translation: In assessing price fixings, two kinds must in principle be distinguished, which, following Mises, we shall designate as regulatory fixings and genuine fixings.

“Ordnungstaxen” can smooth fluctuations, restrain speculative extra gains, and express administratively a rough idea of the “appropriate” price. Vleugels’s examples include early wartime local maximum prices and professional fee schedules. Their apparent success does not refute market theory, because they work only so long as they remain close to the price that free competition would have produced.

Soweit Taxen in ihrer Höhe den Konkurrenzpreisen entsprechen oder ihnen nahekommen, bedeuten sie keinen folgenschweren Eingriff in den von der modernen sozialökonomischen Theorie in seiner Gesetzmäßigkeit erkannten Ablauf des volkswirtschaftlichen Geschehens.

English translation: Insofar as fixed prices in their level correspond to competitive prices, or come close to them, they do not constitute a momentous intervention in the course of economic events whose lawfulness has been recognized by modern socio-economic theory.

The central argument concerns “echte Taxen,” especially maximum prices set below the competitive level. Such measures cannot simultaneously make goods cheap and abundant. They reduce production incentives, divert goods to uncontrolled or illegal markets, push demand toward substitutes, and then require new controls over those substitutes. Since consumption goods depend on inputs, labor, and related production processes, partial price control tends to expand into system-wide price coordination.

Daraus folgt: Wird in die Volkswirtschaft mit Taxpreisen unter den Konkurrenzpreisen für bestimmte Waren eingegriffen, und zwar eingegriffen mit einem weitergehenden Ziel als dem einer bloßen Umlenkung des Konsums, so muß in weiterer Folge das gesamte Preissystem einer entsprechenden, auf „Abstimmung“ aller Preise untereinander bedachten Taxpolitik unterworfen werden.

English translation: It follows: if intervention is made in the economy through fixed prices below competitive prices for particular goods—and made with an aim more far-reaching than the mere redirection of consumption—then, as a consequence, the entire price system must be subjected to a corresponding price-fixing policy aimed at the mutual "attunement" of all prices.

Even abstracting from evasion, Vleugels argues, such coordination would require prolonged trial and error and would at best reproduce the competitive price system by administrative detour. In practice, evasion is unavoidable: legal supply shrinks, black markets appear, and risk premia restore the price relations the decree tried to suppress. Genuine tax prices may be intelligible for non-economic purposes, but not as ordinary instruments of economic efficiency.

Echte Taxen unter dem Konkurrenzpreise können, sofern nicht einfach eine Produktionsminderung bestimmter Waren erstrebt wird, als sinnvolle Maßnahmen nur gelten, wenn ihre Einführung in erster Linie von anderen als wirtschaftlichen Rücksichten geboten wird.

English translation: Genuine fixings below the competitive price can be regarded as meaningful measures—provided that a mere reduction in the output of particular goods is not simply the aim—only if their introduction is called for chiefly by considerations other than economic ones.

The conclusion is a theory of interventionist escalation. If prices are deprived of their coordinating function, authority must move from price ceilings to public management, rationing, input control, and ultimately coercion of producers. Vleugels is not denying all price policy: order taxes, anti-monopoly measures, and wartime expedients may have limited uses. He denies that a stable middle realm of market economy plus general price binding is possible.

Ebensowenig wie ein ausgebautes Taxsystem als Endzustand der Volkswirtschaft denkbar wäre, ebensowenig kommt es praktisch auch als Anfangszustand zur Überleitung in eine sozialistische Wirtschaft in Frage.

English translation: Just as a fully developed system of price fixings is inconceivable as the terminal state of an economy, so too is it practically out of the question as an initial state for the transition into a socialist economy.

The essay’s relevance lies in this precise distinction between harmless approximation, targeted policy, and comprehensive command. Vleugels converts the experience of wartime maximum prices into a general argument about the limits of partial intervention: price binding can order or supplement markets only when it follows their price relations; when it tries to replace them, it tends toward binding the whole economy.