Rationing

Command Economies

Nonprice mechanisms for rationing can be used. One of these is the use of long lines. This was the mechanism used in the United States during the Arab oil crisis in 1973.

In command economies the central authority allocates the resources according to its plan. A command economy does not guarantee that resources will be equitable any more than a market economy guarantees that some “invisible hand” will guide the trading of the marketplace to a harmonious conclusion.

Command economies ration according to the interests of the ruling elite. If their principle is a form of distributive justice, then the rations that people receive will be approximately equal. However, this may not be fair. The reason is that the needs of people vary, often enormously. For example the amount of food needed for a young active athlete or soldier is many more calories per day than it would be for a sedentary octogenarian. Consequently command economies usually ration according to matters of political expediency even if the distribution seems to be based upon an equitable principle.

In times of war or severe civil distress caused by natural disasters or supply disruptions, market economies have resorted to rationing by different kinds of regulations. The military often uses rationing in order to make supplies last for the duration of a battle or a voyage.

During World War I and World War II, rationing was often used. The public was given coupon books for just about every good or service available, from sugar to automobile tires. In general these policies worked well. Such things as clothing swap shops and regulations to control the styles of clothing in order to save cloth were patriotically received by the public, desirous of doing its part for the war effort. Rationing often leads to black markets where goods and services are sold at a price that is whatever the traffic will bear.

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