Why do some economists feel that rationing is an unwise economic policy?

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pohnpei397 eNotes educator| Certified Educator

I would actually say that ALL economists feel that rationing is unwise.  The main reasons for this are that they feel that A) it is an unfair system of distribution and B) that it fails to tell producers what people really want and how much they want it.  This second factor leads to misallocation of resources.

To economists, the only fair way to distribute goods and services is to have them be available to whoever wants to pay the market price for them.  Otherwise, you end up in a situation where some people might want to pay the market price but be unable to get the product because there is only a certain number of the products that are allowed.

More importantly, prices are supposed to tell producers what to make.  This, to economists, is the most efficient system.  If there is rationing, producers simply make a given number of products no matter how many people really want.  If we leave this decision to the free market, we will produce the number of products that people are willing to buy at the market price.  This is the most efficient way because it gives people the number of products that they want at the price they want to pay.