Since you already know the main stream view point of rent control, which is based on John Maynard Keynes's* Keynesian economics, let me tell you what they don't want you to know... An Austrian economist would explain how rent control laws increase rent and damage the very people it claims to protect by using the concepts of market process, price signals, and interventionism. Here is a summary of their argument: ...
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Rent control laws are a form of interventionism that set a maximum price for rental housing, below the market-clearing level, in order to make it more affordable for low-income tenants.
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However, rent control laws distort the price signals and create a mismatch between supply and demand, leading to several negative consequences:
- Shortage: The quantity of rental housing supplied by landlords decreases, while the quantity demanded by tenants increases, creating a gap that cannot be filled by the market. This leads to long waiting lists, black markets, and reduced quality of housing.
- Misallocation: The rental housing that is available is not allocated to the most efficient or needy users, but to those who are lucky, well-connected, or willing to pay bribes. This creates a loss of social welfare and a waste of resources.
- Disincentive: The rent control laws reduce the incentive for landlords to maintain, improve, or invest in rental housing, as they cannot recoup their costs or earn a profit. This leads to deterioration, obsolescence, and abandonment of rental properties.
- Unintended consequences: The rent control laws create a cascade of further problems and interventions, such as reduced mobility, increased homelessness, gentrification, and political lobbying. This leads to a vicious cycle of interventionism that undermines the market process and erodes individual freedom.
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Therefore, an Austrian economist would argue that rent control laws increase rent and damage the people it claims to protect by interfering with the market process, distorting the price signals, and creating a host of inefficiencies, injustices, and unintended consequences. They would advocate for a free market approach that respects property rights, allows prices to reflect supply and demand, and encourages entrepreneurship and innovation.
The World Bank was created at the 1944 Bretton Woods Conference, along with the International Monetary Fund (IMF). The two main architects of the World Bank and the IMF were Harry Dexter White and John Maynard Keynes, who represented the United States and the United Kingdom, respectively12. However, White had more influence on the design and structure of the World Bank, while Keynes had more influence on the IMF3. Therefore, Keynes was one of its founding fathers.
1: World Bank - Wikipedia 2: World Bank | Definition, History, Organization, & Facts 3: A brief history of the World Bank - DevelopmentAid