Islamic Marketplace on Nostr: "Many believe that a strong state will not allow market partici- pants to exploit ...

"Many believe that a strong state will not allow market partici-
pants to exploit consumers. Hoarding or abnormal price hikes,
however, should not be understood just as a manifestation of
market failure. As Ibn Qudamah realized, price control itself
can be responsible for causing both hoarding and price hikes. If
the state enforces an artificial price ceiling on traders wherein
the true and natural costs of the product are responsible for
price escalation, then traders are likely to resort to hoarding.
Moreover, hoarding will lead to a shortage of supply, which will
result in price hikes. Thus, price control itself can start a vicious
cycle of price instability, and Islamic jurists have understood
and analyzed this problem very clearly."

- from "Islam & Economics"