wage and price controls, economic policy measure in which the government places a ceiling on wages and prices to curb inflation. Also known as incomes policy, such programs have generally been avoided in the United States during peacetime. Brief but strict wage and price controls were imposed during World War II and the Korean War, as well as more limited ones in the 1960s. America's most controversial peacetime experiment with an incomes policy was during the period 1971-74, when inflation was fueled by the costs of the Vietnam War, the 1973 oil embargo, and the later quadrupling in the world price of oil by the Organization of Petroleum Exporting Countries (OPEC). Wage and price controls during peacetime have yielded minor gains at best in the United States; in postwar Western Europe, incomes policies have been more frequently used. Britain, the Netherlands, Sweden, and Germany have all implemented controls at various times and France has experimented with wage and price controls many times since the 19th cent.

price, amount of money for which a unit of goods or services is exchanged. Price is equivalent to market value and may or may not measure the intrinsic value of the goods or services to the buyer or seller. Most economists hold that, in the long run, price in a competitive market will equal the cost of production. Such a long-term equilibrium price is called the normal price. In the short run, however, the market price will be determined by supply and demand without reference to cost. The price of an individual item changes with time as well as in its relation to the prices of other goods. In general, prices are closely related to the amount of currency in circulation. If money is plentiful compared with the supply of goods, prices are high and money has less value and is "cheap"; when the opposite condition prevails, goods are cheap and money has greater value and is "dear." The general price level may therefore be influenced by the action of government agencies (such as, in the United States, the Federal Reserve Board) that regulate the supply of currency. Because of the relation of the general price level to the business cycle, government action is usually designed to steer a middle course between the inflationary effects of a too plentiful currency and the deflationary effects of a glut of goods. Stabilization of prices would ensure that the dollar used in repaying a loan would have the same value as the dollar borrowed. The price level is an average of prices of a number of commodities that are important in the economy. It is generally converted into an index, with a particular year designated as the norm and given a value of 100. By comparing the value of an index at different dates, it is possible to ascertain whether prices are rising or falling. Common indexes used by U.S. government economists include the consumer price index and the wholesale price index. Historically, prices have tended to move upward; the wholesale price index, for example, more than doubled between 1930 and 1970. For the history of prices, classic works are Thomas Tooke, A History of Prices … . from 1793 to 1856 (6 vol., 1838-57; repr. 1928) and J. E. T. Rogers, A History of Agriculture and Prices in England (7 vol., 1866-1902; repr. 1963).

bride price: see marriage.

Price, Sterling, 1809-67, Confederate general in the American Civil War, b. Prince Edward co., Va. After moving to Missouri, he practiced law and entered politics. He served in Congress (1844-46), resigning to lead a Missouri regiment in the Mexican War. Made military governor of New Mexico, he put down a rising of Native Americans and Mexicans. Price was governor of Missouri (1853-57) and president of the state convention of Mar., 1861, which opposed secession. However, his displeasure at the activities of the extreme Unionists led him to accept the command of the Missouri secessionist militia in May, 1861. At Wilson's Creek (Aug., 1861) he and Ben McCulloch defeated the Union forces. Price then took Lexington but was soon obliged to retreat into Arkansas. After the Union victory at Pea Ridge (Mar., 1862), Price accepted a regular Confederate commission. His campaign around Iuka and Corinth, Miss. (Oct., 1862), was unsuccessful. He opposed Gen. Frederick Steele in Arkansas (1863-64). Price's raid through Missouri (Sept.-Oct., 1864), after initial successes, was finally turned back at Westport and was the last Confederate threat in the Far West.

Price, Richard, 1723-91, English nonconformist minister and philosopher. His philosophical importance rests on his ethical discussion, Review of the Principal Questions and Difficulties in Morals (1757), in which Price stresses the power of reason in making moral judgments, a position closely allied to that of Kant. He achieved fame with his sponsorship of the American colonists' cause in a pamphlet called Observations on the Nature of Civil Liberty, the Principles of Government, and the Justice and Policy of the War with America (1776). He also defended the French Revolution and was subsequently criticized by Edmund Burke in his Reflections on the Revolution in France. Price's writings on governmental finance were also well known.

Price, Leontyne (Mary Leontyne Price), 1927-, American soprano, b. Laurel, Miss. She studied voice at the Juilliard School of Music with Florence Page Kimball. Subsequently she appeared as Bess in Gershwin's Porgy and Bess on Broadway (1952-54), repeating her performance in a highly successful international tour sponsored by the U.S. State Dept. She made her operatic debut on television in 1955, singing the title role in Tosca. In 1961 she made her debut at the Metropolitan Opera as Leonora in Verdi's Il Trovatore. Five years later, in 1966, she created the role of Cleopatra in Samuel Barber's Antony and Cleopatra, which opened the Metropolitan's new building at Lincoln Center. Price's voice is noted for its extraordinary range and power. She is particularly noted for her performances of the title roles in Verdi's Aïda and Puccini's Madame Butterfly.

Post, Emily Price, 1873-1960, American authority on etiquette, b. Baltimore. Born into a wealthy family, Post began her literary career as a novelist. Her best-known book, however, is Etiquette (1922), a practical guide to proper social behavior, written in a lively style. Etiquette gained wide popularity and sold over a million copies; the 12th and subsequent revised editions were edited by Post's granddaughter-in-law, Elizabeth L. Post. Emily Post broadcast on the radio after 1931 and produced a daily column on good taste that was syndicated in more than 200 newspapers. Also an authority on interior decoration, she wrote The Personality of a House (1930).

Office of Price Administration (OPA), U.S. federal agency in World War II, established to prevent wartime inflation. The OPA issued (Apr., 1942) a general maximum-price regulation that made prices charged in Mar., 1942, the ceiling prices for most commodities. Ceilings were also imposed on residential rents. These regulations were gradually modified and extended by OPA administrators—notably Leon Henderson (1941-42), Prentiss H. Brown (1943), and Chester B. Bowles (1943-46)—until almost 90% of the retail food prices were frozen. Prices continued to rise, however, and new drives to secure compliance resulted; ultimately the OPA succeeded in keeping consumer prices relatively stable during the remaining war years. Besides controlling prices, the OPA was also empowered to ration scarce consumer goods in wartime. Tires, automobiles, sugar, gasoline, fuel oil, coffee, meats, and processed foods were ultimately rationed. At the end of the war rationing was abandoned, and price controls were gradually abolished. The agency was finally disbanded in 1947.

Consumer Price Index: see cost of living.

Setting of government guidelines to limit increases in wages and prices. It is one of the most extreme approaches to incomes policy. By controlling wages and prices, governments hope to control inflation and prevent extremes in the business cycle. Countries with highly centralized methods of setting wages tend to have the greatest degree of public or collective regulation of wage and price levels. For example, wage settlements in The Netherlands must be approved by the government, and price increases are investigated by the Ministry of Economic Affairs. Other countries, including the U.S., have also made efforts at restraining wage and price increases, usually seeking the voluntary cooperation of management and labour. In the U.S., wage-price controls were instituted by Pres. Franklin D. Roosevelt during World War II and by Pres. Richard M. Nixon in the early 1970s, when high inflation combined with rising unemployment to create instability.

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Measure of living costs based on changes in retail prices. Consumer price indexes are widely used to measure changes in the cost of maintaining a given standard of living. The goods and services commonly purchased by the population covered are priced periodically, and their prices are combined in proportion to their relative importance. This set of prices is compared with the initial set of prices collected in the base year to determine the percentage increase or decrease. The population covered may be restricted to wage and salary earners or to city dwellers, and special indexes may be used for special population groups (e.g., retirees). Such indexes do not take into account shifts over time in what the population buys; when modified to take subjective preferences into account, they are called constant-utility indexes. Consumer price indexes are available for more than 100 countries.

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Measures taken by manufacturers or distributors to control the resale prices of their products (i.e., the prices charged by businesses that resell them). Such measures have been applied to a limited array of goods, including pharmaceuticals, books, photographic supplies, and liquor. Resale price maintenance first began to be employed in the 1880s, reflecting the success of brand promotion and the resulting increase in competition among retailers. It became especially common in the U.S. but declined after World War II. It is prohibited in some countries. The complexity of marketing channels in industrialized countries makes it increasingly difficult for manufacturers to establish and enforce a single price or even a minimum price for their goods. Seealso fair trade law.

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Measure of change in a set of prices, consisting of a series of numbers arranged so that a comparison of the values for any two periods or places will show the change in prices between periods or the difference in prices between places. Price indexes were first developed to measure changes in the cost of living in order to determine the wage increases necessary to maintain a constant standard of living. There are two basic types. Laspeyres-type indexes define a market basket of goods in a base period, then use the prices for those goods to examine change over space and time. In its simplest form, this is simply the ratio of what those goods cost today to what they cost in the base period. The two most familiar indexes of this type are the consumer price index (CPI) and the producer price index (PPI). The CPI measures changes in retail prices in such component parts as food, clothing, and shelter. The PPI (formerly called the wholesale price index) measures changes in the prices charged by manufacturers and wholesalers. Paasche-type indexes define a market basket of goods in the current period, then use the prices of those goods from past periods. The most familiar index of this type is the GDP deflator, used in the U.S. in the national income accounting to differentiate amounts in constant dollars from those in current dollars.

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Practice of selling goods or services at different prices to different buyers, even though sales costs are the same for all the transactions. Buyers may be discriminated against on the basis of income, ethnicity, age, or geographic location. For price discrimination to succeed, other entrepreneurs must be unable to purchase goods at the lower price and resell them at a higher one.

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Collective governmental effort to control the incomes of labour and capital, usually by limiting increases in wages and prices. The term often refers to policies directed at the control of inflation, but it may also indicate efforts to alter the distribution of income among workers, industries, locations, or occupational groups. Seealso wage-price control.

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Amount of money that has to be paid to acquire a given good, service, or resource. Operating as a measure of value, prices perform a significant economic function, distributing the scarce supply of goods, services, and resources to those who most want them through the adjustments of supply and demand. Prices of resources are called wages, interest, and rent. This system, known as the price mechanism, is based on the principle that only by allowing prices to move freely will the supply of any given commodity match demand. If supply is excessive, prices will be low and production will be reduced; this will cause prices to rise until there is a balance of demand and supply. If supply is inadequate, prices will be high, prompting an increase in production that in turn will lead to a reduction in prices until supply and demand are in equilibrium. A totally free price mechanism does not exist in practice; even in free-market economies, monopolies or government regulation may limit the efficiency of price as a determinant of supply and demand. In centrally planned economies, the price mechanism may be supplanted by centralized government control. Attempts to operate an economy without a price mechanism usually result in surpluses of unwanted goods, shortages of desired products, black markets, and stunted economic growth.

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(born Feb. 10, 1927, Laurel, Miss., U.S.) U.S. soprano. She was trained at the Juilliard School. After her debut in a revival of Four Saints in Three Acts in 1952, she made her name in the international tour of Porgy and Bess (1953–55). She sang in Aïda at Milan's La Scala in 1960 and made her Metropolitan Opera debut in 1961. Price was one of the Met's most popular stars for more than two decades and was the first African American singer to achieve an international reputation in opera. She gave her farewell performance of Aïda at the Met in 1985 but continued to give recitals.

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