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War Economy

Consumer Subsidies and Price Control

Consumer Subsidies and Price Control

Most of the rationed items were price-controlled and many were subsidised. Subsidies and price control were discussed in Chapter 12. Apart from their use in curbing some of the effects of inflation and removing some of the influences tending to further inflation, consumer subsidies made possible a fairer distribution of scarce goods. Without subsidies and price control the better-off sections of the community would have received an increased share, simply because they were able to pay higher prices than some people could afford. However, the artificially lowered prices, by keeping up page 472 demand when goods were scarce, increased the need for rationing and other special distribution arrangements and encouraged black marketing.