What price controls did Nixon enact

1. The core action: an immediate 90‑day freeze

Nixon announced a national freeze that “hold[ed] prices at levels no higher than those charged during the first 8 days of June,” covering nearly all consumer prices and initially wages, interest and dividends under existing control rules, in a televised August 15, 1971 address that launched the New Economic Policy ^{[1] [5]}. The freeze was characterized publicly as temporary—designed to buy time to build a more permanent control system—and was the first peacetime national wage‑price freeze since the Korean War ^{[5] [1]}.

2. The institutional apparatus: boards, commissions, and Executive Order 11615

After the freeze, Nixon created administrative machinery to police increases: a Pay Board and a Price Commission (and later a Cost of Living Council) would review and approve wage and price changes and set guidelines for phased control ^{[4] [1]}. The legal authority came through the Economic Stabilization Act and Executive Order 11615, “Providing for Stabilization of Prices, Rents, Wages, and Salaries,” which gave the administration statutory and executive tools to impose and manage controls ^{[2] [1]}.

3. Timeline: phases, re‑imposition, and repeal

The initial freeze lasted the announced period but was succeeded by a system of phased guidelines (phase II and phase III) intended to manage gradual adjustments; inflation, however, remained persistent and a second temporary freeze was reimposed in June 1973 ^{[3] [4]}. The wage‑price control apparatus remained in place until statutory authorization lapsed and the program was abolished on April 30, 1974 ^[3].

4. Economic effects and criticisms: shortages, distortions, and mixed results

Contemporaneous and later accounts conclude the controls produced short‑term political relief but economic distortions—temporary slowing of headline inflation followed by renewed rises, sectoral shortages (notably energy and agricultural dislocations), and unintended supply responses such as withheld shipments—leading many economists to judge the policy unsuccessful in curing stagflation ^{[4] [2] [3]}. Critics from libertarian and classical liberal perspectives called the program a political and economic mistake, while some defenders argued it bought breathing room for other policy adjustments; scholarly work links the controls to longer‑run shifts in wage dynamics and distributional outcomes ^{[6] [7] [2]}.

5. Politics and motive: crisis management, Camp David deliberations, and electoral timing

Nixon convened top economic advisers at Camp David before the announcement and coordinated the controls with ending dollar‑gold convertibility and import surcharges as part of a broader “Nixon shock” to address balance‑of‑payments pressures and domestic inflation ^{[8] [5]}. Historians and analysts note political calculations—controls were politically popular and came in an election year—and some evidence from tapes and later scholarship suggests electoral considerations factored into an administration that had previously opposed such interventions ^{[6] [4]}.

6. Legacy: end of Bretton Woods and a cautionary tale

Nixon’s controls were part of a package that ended dollar convertibility to gold and precipitated a reordering of international exchange rates (the Smithsonian Agreement later in 1971), and they left a contested policy legacy: a short‑term tool that many economists say failed to solve underlying macroeconomic imbalances and arguably worsened sectoral shortages and political trust in interventionist fixes ^{[9] [8] [2]}. Scholarly and policy literature generally treats them as a cautionary episode about the limits and political allure of administratively set prices ^{[4] [7]}.