Here’s a blast from the past: Phil Gramm, in 1975, while a professor at Texas A&M, presenting Inflation: Its Costs and Cure to the St. Louis Fed:
So successful is our system and so high are the aspirations of the American people that we define poverty at an income level that is higher than the average income level of the world’s second most powerful nation. Yet, paradoxically, this great system is under attack at all levels of Government, and is being replaced by a system which has never worked in history and which is working effectively nowhere in the world today.
While we in economics have a lot of data on inflation, we have even more data on wage and price controls. In fact, our first history of wage and price controls occurred 5,000 years ago when price controls were imposed in the fifth dynasty of ancient Egypt. Pericles imposed price controls in ancient Athens, and Diocletian imposed wage and price controls in ancient Rome. And from the fifth dynasty of ancient Egypt to President Nixon’s Phase IV price controls, all of these experiences have one thing in common – not one has ever worked. And they do not work for a very simple reason: they freeze prices at a level where the quantity demanded exceeds the quantity supplied. They simply turn price increases into shortage- and stifle the incentive to produce, therefore causing output to fall.
I told him that I envisioned a system whereby we would allow people to own property, and we would allow them to combine this property with their God-given talents to produce output – we would allow them to sell output in a free market so that each individual, in attempting to maximize his own welfare, would operate at maximum efficiency. And each consumer, in attempting to maximize his own individual welfare, would economize on the things that were scarce and therefore expensive, and substitute for them things that were abundant and therefore cheap. In such a system, by rewarding production and innovation, we could assure a maximum level of economic growth.