Recently while visiting my parents, my oldest son Ethan uncovered large amounts of the baseball cards I collected as a kid. While not a huge baseball fan himself, he does like money and recognized some of these cards might be valuable and began sifting through them to find cards he could sell online.

As he looked at places like eBay he found cards that were being sold for hundreds and even thousands of dollars. While he didn’t find any of those cards in his collection, he did find cards of the same or better players in his boxes, but most of those were being sold for mere pennies and wondered why his cards were worth so much less.

As I often do, I used this as a teachable moment. I showed him as an example, a 1975 George Brett rookie card that was selling for just over $1,200 and compared it to a 1990 George Brett card he had worth .20. I explained one card is hard to find and is in demand, while the other is not. I explained that in 1975 baseball cards were not as mass produced. There were far fewer of them that existed, and even fewer that still exist today. Whereas his card was produced in a time when every kid bought baseball cards and most parents saved them as mine had, lowering their overall value.

Rather than being disappointed that his cards were not worth what he hoped, he responded by stating that this difference in price was not fair. He felt he should be able to charge as much for his cards as others were getting for theirs. I told him he can charge whatever he wants for his cards, but he will only get what someone else is willing to pay. In the end, while price can be determined by the seller, value is always determined by the buyer.

Sadly, too many of our leaders today have a similar way of thinking as my 12-year-old son. When it comes to the prices of goods and services, they think laws of supply and demand are not fair, and should be artificially manipulated for the good of the consumer.

Whether it be groceries, prescription drugs, or the cost of rent, many politicians, especially during election years, want to convince you they should have the power to control the price of things you need. After all, wouldn’t it be better for more people if businesses were forced to charge a low price for their goods and services? The answer is no. The unintended consequences of trying to bypass the laws of supply and demand always make things worse.

A perfect example of this occurred in the 1970’s when Richard Nixon signed the Economic Stabilization Act, giving the federal government the power to place ceilings on the cost of some things. Because many businesses could no longer make a profit on those products and services, they simply stop selling them. The net result of these price freezes were shortages.

To go back to my example of the baseball cards, if we declared $50 was the maximum amount that could be charged for George Brett rookie cards it would not result in more of those cards being made available to people at that low price. Instead, those who had them would keep them, and as a result it would be impossible to obtain one at any price.

On the other hand, if all of a sudden, thousands of that same card were found in an old warehouse, the market value of that card would likely go down almost immediately because of the increased supply available. That is the key to lowering prices. You must increase supply or decrease demand. Don’t be fooled by any politician that tells you they can, through royal edict, override market forces and make your life better. They are either clueless to how economies work, or they are lying. Either way, they are dangerous.

(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)