Rationing is the controlled distribution of resources and scarce goods or services. The 1973 oil crisis began on October 17 1973 when the members of Organization of Arab Petroleum Exporting Countries (OAPEC consisting of the Arab members of Scarcity (also called paucity) is the problem of Infinite human needs and Wants, in a world of Finite Resources In other Rationing controls the size of the ration, one's allotted portion of the resources being distributed on a particular day or at a particular time.
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In economics
In economics, it is often common to use the word "rationing" to refer to one of the roles that prices play in markets, while rationing (as the word is usually used) is called "non-price rationing. Economics is the social science that studies the production distribution, and consumption of goods and services. Sao Paulo Stock Exchangejpg|thumb| Virtual market arena where buyer and seller are not present and trade via intemediates and electronical information " Using prices to ration means that those with the most money (or other assets) and who want a product the most are first to receive it. Such rationing happens daily in a market economy. Non-price rationing follows other principles of distribution. Below, we discuss only the latter, dropping the "non-price" qualifier, to refer only to marketing done by an authority of some sort (often the government).
In market economics, rationing artificially restricts demand. Economics is the social science that studies the production distribution, and consumption of goods and services. It is done to keep price below the equilibrium (market-clearing) price determined by the process of supply and demand in an unfettered market. In Economics, market clearing refers to either a simplifying assumption made by the new classical school that Markets always Supply and demand is an Economic model describing effects on price and quantity in a Market. A free market is a Market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers Thus, rationing can be complementary to price controls. Incomes policies in Economics are Wage and Price controls, most commonly instituted as a response to Inflation. An example of rationing in the face of rising prices took place in the Netherlands, where there was rationing of gasoline in the 1973 energy crisis. The Netherlands ( Dutch:, ˈnedərlɑnt is the European part of the Kingdom of the Netherlands, which consists of the Netherlands the Netherlands The 1973 oil crisis began on October 17 1973 when the members of Organization of Arab Petroleum Exporting Countries (OAPEC consisting of the Arab members of
A reason for setting the price lower than would clear the market may be that there is a shortage, which would drive the market price very high. High prices, especially in the case of necessities, are unacceptable with regard to those who cannot afford them. Traditionalist economists argue, however, that high prices act to reduce waste of the scarce resource while also providing incentive to produce more (this approach requires assuming no horizontal inequality). See also Social equality Horizontal inequality is the inequality — economical social or other — that does not follow from a difference in an inherent quality such
In wartime, it is usually imperative for a government to maintain the support of this part of the population, to maintain "equality" especially since in most countries, the working-class and poor families contribute most of the soldiers.
Rationing using coupons is only one kind of non-price rationing. For example, scarce products can be rationed using queues. Scarcity (also called paucity) is the problem of Infinite human needs and Wants, in a world of Finite Resources In other This is seen, for example, at amusement parks, where one pays a price to get in and then need not pay any price to go on the rides. Theme park is the generic term for a collection of rides and other Entertainment attractions assembled for the purpose of entertaining a large group Similarly, in the absence of road pricing, access to roads is rationed in a first come, first serve queueing process, leading to congestion. Road pricing is an economic concept regarding the various direct charges applied for the use of Roads The road charges includes Fuel taxes licence fees Queue areas are places in which people in line ( First-come first-served) wait for goods or services
Authorities which introduce rationing often have to deal with the rationed goods being sold illegally on the black market.
Credit rationing
The concept in economics and banking of credit rationing describes the situation when a bank limits the supply of loans, although it has enough funds to loan out, and the supply of loans has not yet equalled the demand of prospective borrowers. Economics is the social science that studies the production distribution, and consumption of goods and services. A banker or bank is a Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money Supply and demand is an Economic model describing effects on price and quantity in a Market. Changing the price of the loans (interest rate) does not equilibrate the demand and supply of the loans. The bank finds that raising the interest rate beyond a certain level actually reduces its profitability.
Joseph E. Stiglitz and Andrew Weiss's 1981 paper was one of the early papers to explain why the bank (or any lending institution for that matter) may credit ration its borrower if 1) the bank was unable to perfectly distinguish the risky borrowers from the safe ones 2) the loan contracts were subject to limited liability (if projects returns were less than the debt obligation, the borrower bears no responsibility to pay out her pocket). Joseph Eugene Stiglitz (born February 9, 1943) is an American Economist and a professor at Columbia University.
Raising the interest rate may cause adverse selection which would lead to increases in the number of 'risky' borrowers in the pool of aspiring borrowers. Adverse selection, anti-selection, or negative selection is a term used in Economics, Insurance, Statistics, and Risk management With higher debt obligations (due to higher interest rate) only the risky borrowers with higher returns would be ready to take up the banks contract. Recall, that with limited liability, the borrowers repay the loan if successful, but escape the consequence of failure of the project. Thus, only borrowers with riskier projects would be ready to take high interest rate loans. Thus, raising the interest rate increases the proportion of the risky borrowers in the project and reduces the overall profitability of the bank.
Military rationing
Rationing has long been used in the military, especially the navy, to make supplies last for a defined duration, such as a voyage. A military is an Organization authorized by its Nation to use force usually including use of Weapons in defending its Country (or by attacking To ration the supplies, they are divided up into equal portions for each person for each day, or even a meal, over the expected voyage period.
Civilian rationing
Rationing is often instituted during wartime for civilians as well. New Orleans (nʲuːˈɔrliənz nʲuːˈɔrlənz French: La Nouvelle-Orléans) is a major United States port city and the largest city in Louisiana For example, each person may be given "ration coupons" allowing him or her to purchase a certain amount of a product each month. Rationing often includes food and other necessities for which there is a shortage, including materials needed for the war effort such as rubber tires, leather shoes, clothing and gasoline. Food is any substance usually composed primarily of Carbohydrates Fats water and/or Proteins that can be eaten or drunk by an This article is about tires used on road Vehicles including pneumatic tires and solid tires. Leather is a material created through the Tanning of hides and Skins of Animals primarily Cattlehide The Tanning process A shoe is an item of Footwear. Shoes may vary from a simple Flip-flop to a complex Boot. Clothing (also called clothes, accoutrements, accouterments, or habiliments) protects the Human body from extreme Weather Towards the end of the First World War, panic buying in the United Kingdom prompted rationing of first sugar, then meat, for the rest of the war. World War I (abbreviated WWI; also known as the First World War, the Great War, and the War to End All Panic buying is an imprecise common use term to describe the act of people buying unusually large amounts of a product in anticipation of or after a Disaster or perceived disaster The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located Sugar is a class of edible Crystalline substances mainly Sucrose, Lactose, and Fructose. In modern English usage meat most often refers to Animal tissue used as food mostly Skeletal muscle and associated Fat, but it may also refer During World War II rationing existed in many countries including the United Kingdom and the United States. World War II, or the Second World War, (often abbreviated WWII) was a global military conflict which involved a majority of the world's nations, including The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located The United States of America —commonly referred to as the
Civilian peace time rationing of food may also occur, especially after natural disasters, during contingencies, or even after failed governmental economic policies regarding production or distribution, the latter happening especially in highly centralized planned economies. A planned economy or directed economy is an Economic system in which the Government or Workers' councils manages the Economy. Examples of these situations include North Korea, China during the 1970s and 1980s, Communist Romania during the 1980's, the Soviet Union in 1990-1991, and Cuba today. North Korea is the commonly used short form name for the Democratic People's Republic of Korea (or DPRK) a State located in East Asia, China ( Wade-Giles ( Mandarin) Chung¹kuo² is a cultural region, an ancient Civilization, and depending on perspective a National The Union of Soviet Socialist Republics (USSR was a constitutionally Socialist state that existed in Eurasia from 1922 to 1991 The Republic of Cuba (ˈkjuːbə or) consists of the island of Cuba (the largest and second-most populous island of the Greater Antilles) Isla de la This led to rationing in the Soviet Union, Rationing in Communist Romania, rationing in North Korea, rationing in Cuba, and austerity in Israel. Rationing in the Soviet Union was introduced several times in periods of economical hardships Rationing in Cuba refers to the system of food distribution known in Cuba as the Libreta de Abastecimiento ("Supplies booklet" See also History of Israel Austerity in Israel: From 1949 to 1959, the state of Israel was to a varying extent under a regime of
United States
At the beginning of World War II, a rationing system was put in place in the United States. Gasoline shortages were especially acute in the Eastern states, because in the early 1940s, most petroleum was carried by tanker. The 1940s decade ran from 1940 to 1949 Events and trends The 1940s was a period between the radical 1930s and the conservative 1950s which also leads the period to be This conveyance became dangerous with U-Boats operating off the US coast. Until the Big Inch and Little Big Inch pipelines [1] started pumping petroleum from East Texas to the northeast states, gas supplies in the East were tight. The Big Inch and its companion project the Little Big Inch were Petroleum Pipelines constructed during 1942 and 1943 as an emergency war measure from Texas The Big Inch and its companion project the Little Big Inch were Petroleum Pipelines constructed during 1942 and 1943 as an emergency war measure from Texas Pipeline transport is the transportation of goods through a pipe. A national speed limit of 35 miles per hour was imposed to save fuel and tires. Depending on need, civilians were issued one of a number of different classifications of gas cards, entitling them to different quantities of gasoline each week. When purchasing gas, one had to present a gas card along with a ration book. Ration stamps were also issued for other commodities and were valid only for a set period, to forestall hoarding.
To get a classification and rationing stamps, one had to appear before a local War Price and Rationing Board which reported to the U. S. Office of Price Administration. The Office of Price Administration ( OPA) was established within the Office for Emergency Management of the United States Government by Executive Order Each person in a household received a ration book, including babys and small children who qualified for canned milk not available to others. To receive a gasoline ration card, a person had to certify a need for gas and ownership of no more than five tires. All tires in excess of five per driver were confiscated by the government, because of rubber shortages. An A sticker on a car was the lowest priority of gas rationing and entitled the car owner to 3 to 4 gallons of gas per week. B stickers were issued to workers in the military industry, entitling their holder up to 8 gallons of gas per week. C stickers were granted to persons deemed very essential to the war effort, such as doctors. T rations were made available for truckers. Lastly, X stickers on cars entitled the holder to unlimited supplies and were the highest priority in the system. Ministers of Religion, police, volunteer firemen, and civil defense workers were in this category. [2] A scandal erupted when 200 Congressmen received these X stickers. The United States Congress is the bicameral Legislature of the federal government of the United States of America, consisting of two houses
Tires were the first item to be rationed in January 1942 because supplies of natural rubber were interrupted. Soon afterward, passenger automobiles, typewriters, sugar, gasoline, bicycles, footwear, fuel oil, coffee, stoves, shoes, meat, lard, shortening and oils, cheese, butter, margarine, processed foods (canned, bottled and frozen), dried fruits, canned milk, firewood and coal, jams, jellies and fruit butter, were rationed by November 1943. [3]
Medicines such as penicillin were rationed by a triage committee at each hospital. Triage (ˈtriːɑːʒ is a process of prioritizing patients based on the severity of their condition so as to treat as many as possible when resources are insufficient for all
Many different levels of rationing went into effect. Some items, such as sugar, were distributed evenly based on the number of people in a household. Other items, like gasoline or fuel oil, were rationed only to those who could justify a need. Restaurant owners and other merchants were accorded more availability, but had to collect ration stamps to restock their supplies. In exchange for used ration stamps, ration boards delivered certificates to restaurants and merchants to authorize procurement of more products.
The work of issuing ration books and exchanging used stamps for certificates was handled by some 5,500 local ration boards of mostly volunteer workers selected by local officials.
Each ration stamp had a generic drawing of an airplane, gun, tank, aircraft carrier, ear of wheat, fruit, etc. and a serial number. Some stamps also had alphabetic lettering. The kind and amount of rationed commodities were not specified on most of the stamps and were not defined until later when local newspapers published, for example, that beginning on a specified date, one airplane stamp was required (in addition to cash) to buy one pair of shoes and one stamp number 30 from ration book four was required to buy five pounds of sugar. The commodity amounts changed from time to time depending on availability. Red stamps were used to ration meat and butter, and blue stamps were used to ration processed foods.
To enable making change for ration stamps, the government issued "red point" tokens to be given in change for red stamps, and "blue point" tokens in change for blue stamps. The red and blue tokens were about the size of dimes (16 mm) and were made of thin compressed wood fiber material, because metals were in short supply. [4]
 USA Ration Book No. Rationing in the United Kingdom is the series of Food rationing policies put in place by the government of the United Kingdom during certain wartime periods of 3 circa 1943, front |
 Back of ration book |
 Fighter plane ration stamp |
 Artillery ration stamp |
 Tank ration stamp |
 Aircraft Carrier ration stamp |
United Kingdom
The British Ministry of Food refined the rationing process in the early 1940s to ensure the population did not starve when food imports were severely restricted and local production limited due to the large number of men fighting the war. Year 1943 ( MCMXLIII) was a Common year starting on Friday (the link will display full 1943 calendar of the Gregorian calendar. Rationing in the United Kingdom is the series of Food rationing policies put in place by the government of the United Kingdom during certain wartime periods of Ration stamps or ration card is a card issued by a government allowing the holder to obtain certain Rations They are frequently seen in Wartime. Ration stamps or ration card is a card issued by a government allowing the holder to obtain certain Rations They are frequently seen in Wartime. Ration stamps or ration card is a card issued by a government allowing the holder to obtain certain Rations They are frequently seen in Wartime. Ration stamps or ration card is a card issued by a government allowing the holder to obtain certain Rations They are frequently seen in Wartime. Rationing in the United Kingdom is the series of Food rationing policies put in place by the government of the United Kingdom during certain wartime periods of The Minister of Food Control (1916-1921 and the Minister of Food (1939-1954 were British government Ministerial posts separated from that of the Minister of Agriculture The 1940s decade ran from 1940 to 1949 Events and trends The 1940s was a period between the radical 1930s and the conservative 1950s which also leads the period to be Rationing did not end in the United Kingdom until the 1950s. The 1950s Decade refers to the years of 1950 to 1959 inclusive
Europe
Another form of rationing that was employed during World War II, called Ration Stamps. World War II, or the Second World War, (often abbreviated WWII) was a global military conflict which involved a majority of the world's nations, including World War II, or the Second World War, (often abbreviated WWII) was a global military conflict which involved a majority of the world's nations, including Ration stamps or ration card is a card issued by a government allowing the holder to obtain certain Rations They are frequently seen in Wartime. These were redeemable stamps or coupons. Every family was issued a set number of each kind of stamp based on the size of the family, ages of children and income. This allowed the Allies and mainly America to supply huge amounts of food to the troops and later provided a surplus to aid in the rebuilding of Europe with aid to Germany after food supplies were destroyed.
Emergency rationing
Rationing of food and water may become necessary during an emergency, such as a natural disaster or terror attack. A natural disaster is the consequence of a Natural hazard (eg Terrorism is the systematic use of terror especially as a means of coercion The Federal Emergency Management Agency (FEMA) has established guidelines for civilians on rationing food and water supplies when replacements are not available. The purpose of FEMA is to coordinate the response to a Disaster which has occurred in the United States and which overwhelms the resources of local and state authorities According to FEMA standards, every person should have a minimum of one quart per day of water, and more for children, nursing mothers, and the ill. Water should not be rationed in an emergency. Food, on the other hand, can be rationed for many days.
See also
- 10-in-1 food parcel
- 2007 Gas Rationing Plan in Iran
- Combat Ration One Man
- Juntas de Abastecimientos y Precios, rationing in Chile under Allende
- MRE
- Rationing in the United Kingdom
- Road space rationing (Vehicle travel restriction based on license plate number)
- Siege of Leningrad
- United States army rations
References
- ^ University of Texas Big Inch Little Inch handbook
- ^ fuel ration stickers
- ^ rationed items
- ^ Joseph A. 2007 Gas Rationing Plan in Iran was launched by president Mahmoud Ahmadinejad 's cabinet to reduce that country's fuel consumption The Combat Ration One Man, or CR1M is a self-contained individual field ration in lightweight packaging procured by the Australian military for its members for use in combat or other Juntas de Abastecimientos y Precios (JAP literally "Committees of Supplies and Prices" were local administrative units in Chile created in the last years of Salvador Allende was the president of Chile from 1970 until 1973 and head of the Popular Unity government he was the first Marxist ever to be elected Rationing in the United Kingdom is the series of Food rationing policies put in place by the government of the United Kingdom during certain wartime periods of Road space rationing ( Spanish: Restricción vehicular; Portuguese: Rodízio veicular) is a travel demand management strategy aimed The Siege of Leningrad, also known as The Leningrad Blockade ( Russian: блокада Ленинграда ( transliteration: blokada Leningrada Lowande, U. S. Ration Currency & Tokens 1942-1945.
- Stiglitz, J. & Weiss, A. (1981). Credit Rationing in Markets with Imperfect Information, American Economic Review, vol. 71, pages 393-410.
- Matt Gouras. "Frist Defends Flu Shots for Congress. " Associated Press. October 21, 2004.
External links
- http://www.spartacus.schoolnet.co.uk/FWWrationing.htm
- http://www.youth.net/memories/hypermail/0189.html
- WWII Rationing on the U.S. homefront
- Links to 1940s newspaper clippings on rationing
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