Governments within mixed economies have regularly supplanted the market determination of prices with legally instituted prices. In some cases, governments dictate that goods and services may not be sold for more than a specific price—price ceilings. In other cases, just the opposite happens and governments set minimum acceptable prices—price floors. In most of these circumstances, the goal of government is to "protect" either the producers or the consumers of the good or service from what are thought to be burdensome or unfair market-determined prices. And, in many of these cases, there is wide support for the government action.
        When government sets prices, however, two important principles must be kept in mind. First, markets tend to react to government price setting in ways that, to some extent, offset or negate the intended action. Second, there are often unintended consequences of the government price-setting actions.
       These two points can be clearly seen by considering the cases of rent controls and minimum wages. Concerned about keeping housing affordable, governments often institute price ceilings on rents. And some clearly benefit—those who are able to find and keep a well-maintained, rent-controlled apartment. But what other outcomes do rent controls create? First and most importantly, as with all price ceilings set below the equilibrium market level, housing shortages are generated. Further, the incentive to maintain property is reduced since invested monies cannot be recouped by the landowners and worse yet, over time, the incentive to build new housing units is either reduced or actually eliminated. Finally, it is not at all clear that those for whom the program was enacted actually are the ones who benefit by being able to occupy a well-maintained, rent-controlled apartment.
       Minimum wages—a price floor for labor—are often enacted by governments as a means of helping the working poor. What are the actual outcomes? Again, some win—those who keep their jobs at the new higher rate of pay. Unfortunately, others are not so lucky. As with any price floor set above the market-determinedprice, the minimum necessarily leads to a surplus of labor, unemployment. Especially hard hit are teenagers who disproportionately work for the minimum and if unemployed lose the opportunity to attain job experience and training that they will so desperately need later in life. Finally, it should be noted that the minimum wage seems poorly targeted since so few of those working for the minimum are in fact heads of households. In the case both of rent controls and of the minimum wage, one is left to ask, "Might there be better ways to help those of modest means?"