Abstract:
The Second World War created conditions which led the South Africa Government of the day to interfere with the free price mechanism to a much larger extent than before. Shortly after the declaration of war in 1939, it introduced, inter alia, price control in an attempt to cope with the expected increase in prices. The inflation which, as a matter of fact, developed in the ensuing period, failed to abate in 1945/1946, and price control was, therefore, maintained and applied with new vigour in 1948 and thereafter. During the fifties it was, however, gradually lifted and at present relatively few prices are still subject to it.
Although, unfortunately, a clear statement of the objectives of price control was never supplied, it may be said that the general aim was to control the forces affecting the cost of living in the country. It was never intended to stabilise the price level, but rather to control the extent of price increases. In South Africa, thus far, little attention has been given to those aspects of price control that are of particular and direct interest to business. In his lecture an attempt is made to inquire, particularly with reference to locally produced factory goods, in how far Government policy in the years folowing 1948 was, and in fact could be, based on sound principles. The analysis is based on a study of unpublished reports on cost investigations by the Price Controller and on discussions with cost investigators.
