"As a food system, however, the Assize of Bread was expensive, and although it kept grain prices stable, it also squashed the energies of enterprising middlemen and entrepreneurial bakers. As such, it ran counter to the logic of Adam Smith and his fellow economic rationalists, one of whom argued, "Let corn flow like water, and it will find its own level." Smith, in particular, believed that instead of helping the poor, such interference with the market damaged food security. If during a bad harvest year, for example, the government kept prices artificially low by preventing merchants from stockpiling food, then there would be no incentive to store grain or reduce consumption. This would only lead to greater hardship later in the year when food grew even scarcer. In a free market, prices would rise and merchants with surpluses would retain their stores. Hoarding would be considered a virtue when the merchants eventually released their surplus into the shopping bags of a needy public (for the right price).
Theoretically, this made sense. But rioting mobs are not economically rational. England's and France's slow shift from the protection offered by the Assize of Bread to the market-driven efficiency of laissez faire economics in the late 1600s and early 1700s coincided with the tail end of the Little Ice Age, which was spoiling harvests worldwide. The combination of volatile production and the replacement of welfare policy with free-market principles convinced many that unscrupulous merchants were profiting from hunger. In his description of the large-scale food riots that erupted across England and France at this time, the historian E. P. Thompson cited contemporary correspondence to show that the object of the crowds' anger was not high food prices so much as the ethical wrong of profiteering.
Policymakers today must be mindful of the psychological causes of food riots when they discuss the correct mix of trade and protectionism that will safeguard our food security. If they simply embrace the efficiency of the market, public feelings of injustice may cause more trouble than the volatile price of food itself."
-More Here
Theoretically, this made sense. But rioting mobs are not economically rational. England's and France's slow shift from the protection offered by the Assize of Bread to the market-driven efficiency of laissez faire economics in the late 1600s and early 1700s coincided with the tail end of the Little Ice Age, which was spoiling harvests worldwide. The combination of volatile production and the replacement of welfare policy with free-market principles convinced many that unscrupulous merchants were profiting from hunger. In his description of the large-scale food riots that erupted across England and France at this time, the historian E. P. Thompson cited contemporary correspondence to show that the object of the crowds' anger was not high food prices so much as the ethical wrong of profiteering.
Policymakers today must be mindful of the psychological causes of food riots when they discuss the correct mix of trade and protectionism that will safeguard our food security. If they simply embrace the efficiency of the market, public feelings of injustice may cause more trouble than the volatile price of food itself."
-More Here
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