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A Michael Kinsley article on how American's reacted to losing one of their basic freedoms in the 1970's has inspired a discussion of price controls and the modern history of the freedom movement over at The Volokh Conspiracy. Worth quoting:

Nixon's [price control] edict was the precipitating event for the founding of the Libertarian Party by a group of activists who thought the Republican Party had finally become entirely hopeless. Whatever has become of the LP since then, I think that fact was and is important. Largely under Nozick's influence, academics often talk as if the defining issue for libertarians is opposition to welfare or poverty relief by the state. (Not that Nozick himself thought this; he talked about it more because it was an interestingly hard case.) But Republicans had been administering and expanding the welfare state for years; and Friedman and Hayek and their followers had been arguing about extent and incentives, but didn't believe that state-directed poverty relief was wrong per se and both Hayek and Friedman advocated a particular form of it. It was the assertion of control over the price system that broke the activists' back.

The discussion was started by this quotation from Kinsley:

The notion that the government could tell everyone from General Motors to a baby-sitting teenager what they could charge�and did so�seems shocking in retrospect, at least to me. There was no real national emergency. It was part of a cynical re-election strategy to gun the economy while holding inflation temporarily in check. But at the time, controls were not just accepted but popular. When they disappeared, even those (like me) who had opposed them found it strange and, at first, unnatural. You mean, anyone can just charge whatever they want? How does that work? The analogy isn't perfect. The right to set your own price isn't as profound as the right to express your own political opinion. But it is, if anything, even more a part of every citizen's daily life. And yet when they took it away, we freedom-loving Americans didn't even miss it.

Over time it's simply not true that the right to set your own price is not as profound as your right to express your own opinion -- and this is what folks quickly were learning in the early 1970s. It was a lesson learned not in the least instance by the economists and bureaucrats around Nixon. After having taken a crash-course in the significance of prices to the functioning of an economy - and the hopelessness and destructiveness and blocking this function from occuring -- many of these folks found their thinking changing decisively. Among these you might include George Schultz. Schultz not only played a key role the administration of prices control -- he also helps bring them to an end. As Schultz puts it, "A line of talented people were involved, and even with all that talent we couldn't make wage and price controls work. They're terrible. So at least maybe we proved the negative." Only a few years later, Schultz was supporting Ronald Reagan -- who ran on a plank promising to end the last vestiges of Nixon's failed price control program -- controls on energy prices. The move which finally ended the "energy crisis". Another lesson learned by economist aligned with both major parties. A lesson, by the way, which Hayek had been teaching since his first successful conference paper on housing price controls. And it was no accident that Hayek's work on the coordinating role of prices was rediscovered to wide acclaim during the 1970s. Without the failed monetary policies of stagflation and the failed microeconomic policies of wage and price controls, one wonders whether Hayek would have won the Nobel Prize.