Rationing

Rationing is the controlled distribution of scarce resources, goods, or services. 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.

In economics
In economics, rationing is an artificial restriction of demand. It is done to keep price below the equilibrium (market-clearing) price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls. An example of rationing in the face of rising prices took place in the various countries where there was rationing of gasoline during the 1973 energy crisis.

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 undesirable 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.

Rationing using ration stamps is only one kind of non-price rationing. For example, scarce products can be rationed using queues. 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. Similarly, in the absence of road pricing, access to roads is rationed in a first come, first served queueing process, leading to congestion.

Authorities which introduce rationing often have to deal with the rationed goods being sold illegally on the black market.

Health care rationing
Shortages of organs for donation forced the rationing of hearts, livers, lungs and kidneys in the United States. During the 1940s, a limited supply of iron lungs for polio victims forced physicians to ration these machines. Dialysis machines for patients in kidney failure were rationed between 1962 and 1967. More recently, Tia Powell led a New York State Workgroup that set up guidelines for rationing ventilators during a flu pandemic. Among those who have argued in favor of health-care rationing are moral philosopher Peter Singer and Oregon governor John Kitzhaber.

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. Changing the price of the loans (interest rate) does not equilibrate the demand and supply of the loans.

Military rationing
Rationing has long been used in the military, especially the navy, to make supplies or rations last for a defined duration, such as a voyage.

Civilian rationing
Rationing is often instituted during wartime for civilians as well. 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.

Military sieges often result in shortages of food and other essential consumables.

The rations allocated to an individual are often determined based on age, sex, race or social standing. During the Siege of Lucknow in 1857 a woman received three quarters the food ration a man received and children received only half. During the Siege of Ladysmith in 1900 white adults received the same food rations as soldiers while children received half that. Food rations for Indian people and Black people were significantly smaller.

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. Rationing was common during World War II.

Civilian peace time rationing of food may also occur, especially after natural disasters, during contingencies, or after failed governmental economic policies regarding production or distribution, the latter happening especially in highly centralized planned economies. Examples include the United Kingdom for almost a decade after the end of World War II, North Korea, China during the 1970s and 1980s, Communist Romania during the 1980s, the Soviet Union in 1990-1991, and Cuba today. This led to rationing in the Soviet Union, in Communist Romania, in North Korea and in Cuba, and austerity in Israel.

United States
Although the United States did not have food rationing in World War I, it relied heavily on propaganda campaigns to persuade the public to moderate their food consumption. Through slogans such as "Food Will Win the War", "Meatless Mondays", and "Wheatless Wednesdays", the United States Food Administration under Herbert Hoover reduced national consumption by 15%.

In summer 1941 the British appealed to Americans to conserve food to provide more to go to Britons fighting in World War II. The Office of Price Administration warned Americans of potential gasoline, steel, aluminum, and electricity shortages. It believed that with factories converting to military production and consuming many critical supplies, rationing would become necessary if the country entered the war. It established a rationing system after the attack on Pearl Harbor. Of concern for all parts of the country was a shortage of rubber for tires since the Japanese quickly conquered the rubber-producing regions of Southeast Asia. Although synthetic rubber had been invented in the years preceding the war, it had been unable to compete with natural rubber commercially, so the USA did not have enough manufacturing capacity at the start of the war to make synthetic rubber. Throughout the war, rationing of gasoline was motivated by a desire to conserve rubber as much as by a desire to conserve gasoline.

Tires were the first item to be rationed by the OPA, which ordered the temporary end of sales on 11 December 1941 while it created 7,500 unpaid, volunteer three-person tire ration boards around the country. By 5 January 1942 the boards were ready. Each received a monthly allotment of tires based on the number of local vehicle registrations, and allocated them to applicants based on OPA rules. The War Production Board (WPB) ordered the temporary end of all civilian automobile sales on 1 January 1942, leaving dealers with one half million unsold cars. Ration boards grew in size as they began evaluating automobile sales in February (only certain professions, such as doctors and clergymen, qualified to purchase the remaining inventory of new automobiles), typewriters in March, and bicycles in May. Automobile factories stopped manufacturing civilian models by early February 1942 and converted to producing tanks, aircraft, weapons, and other military products, with the United States government as the only customer. By June 1942 companies also stopped manufacturing for civilians metal office furniture, radios, phonographs, refrigerators, vacuum cleaners, washing machines, and sewing machines.

Civilians first received ration books&mdash;War Ration Book Number One, or the "Sugar Book"&mdash;on 4 May 1942, through more than 100,000 schoolteachers, PTA groups, and other volunteers. A national speed limit of 35 miles per hour was imposed to save fuel and rubber for tires. Later that month volunteers again helped distribute gasoline cards in 17 Atlantic and Pacific Northwest states. To get a classification and rationing stamps, one had to appear before a local War Price and Rationing Board which reported to the OPA (which was jokingly said to stand for "Only a Puny A-card"). Each person in a household received a ration book, including babies 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 gasoline 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 gasoline rationing and entitled the car owner to 3 to 4 gallons of gasoline per week. B stickers were issued to workers in the military industry, entitling their holder up to 8 gallons of gasoline 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, firemen, and civil defense workers were in this category. A scandal erupted when 200 Congressmen received these X stickers.

As of 1 March 1942, dog food could no longer be sold in tin cans, and manufacturers switched to dehydrated versions. As of 1 April 1942, anyone wishing to purchase a new toothpaste tube, then made from metal, had to turn in an empty one. Sugar was the first consumer commodity rationed, with all sales ended on 27 April 1942 and resumed on 5 May with a ration of one half pound per person per week, half of normal consumption. Bakeries, ice cream makers, and other commercial users received rations of about 70% of normal usage. Coffee was rationed nationally on 29 November 1942 to one pound every five weeks, about half of normal consumption, in part because of German U-boat attacks on shipping from Brazil. By the end of 1942, ration coupons were used for nine other items. Typewriters, gasoline, bicycles, footwear, Silk, Nylon, fuel oil, stoves, 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. Many retailers welcomed rationing because they were already experiencing shortages of many items due to rumors and panics, such as flashlights and batteries after Pearl Harbor.

Scarce medicines such as penicillin were rationed by triage officers in the US military during World War II. Civilian hospitals received only small amounts of penicillin during the war, because it was not mass-produced for civilian use until after the war. A triage panel at each hospital decided which patients would receive the penicillin.

Many 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.

There was a black market in stamps. To prevent this, the OPA ordered vendors not to accept stamps that they themselves did not tear out of books. Buyers, however, circumvented this by saying (sometimes accurately, as the books were not well-made) that the stamps had "fallen out." In actuality, they may have acquired stamps from other family members or friends, or the black market.

As a result of the rationing, all forms of Automobile racing, including the Indianapolis 500, were banned. Sightseeing driving was also banned. In some regions breaking the gas rationing was so prevalent that night courts were set up to supplement the number of violators caught, the first gasoline-ration night court was created at Pittsburgh's Fulton Building on May 26, 1943.

Rationing was ended in 1946.

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. Rationing was in some respects more strict after the war than during it—two major foodstuffs that were never rationed during the war, bread and potatoes, went on ration after it (bread from 1946 to 1948, and potatoes for a time from 1947). Tea was still on ration until 1952. In 1953 rationing of sugar and eggs ended, and in 1954, all rationing finally ended when cheese and meats came off ration.

Poland
Food rationing for the first time appeared in Poland after World War I, and ration stamps were in use until the end of the Polish–Soviet War. They were introduced again by the Germans in the General Government, during World War II.

In the immediate post-war period, rationing was in place until 1948. Shortages of food products were common in Poland at that time, but food rations also served another purpose. Cards were unevenly distributed by the Communist authorities - leading udarniks, known in Poland as przodownicy pracy, were entitled to as much as 3700 calories daily, while some white-collar workers received as little as 600 calories a day. Rationing covered more than food products. In different periods of Communist Poland, especially in early 1980s, stamps were introduced for shoes, cigarettes, sugar, sweets, liquor, soap, even baby diapers, tires and cars.

On August 30, 1951, Trybuna Ludu announced that “temporary monthly stamps are introduced for meat and fat products in selected enterprises”. At the same time, Communist propagandists tried to assure the nation that the announcement did not mean rationing. One year later, on April 24, 1952, “temporary” stamps were introduced for sugar and soap. The program was abandoned at the beginning of 1953.

Food stamps returned on July 25, 1976, when the “goods tickets” were introduced. They entitled every citizen to buy 2 kg of sugar a month. In 1977 Poland was struck by a crisis, which resulted in creation of Solidarity, in 1980. Food shortages were so common, that citizens themselves demanded rationing. On February 28, 1981, Polish Press Agency announced introduction of meat stamps, due on April 1. One month later, stamps were introduced for cereals, flour and rice. The society was divided into eight groups, and several kinds of cards were introduced. A good example is the monthly rationing of butter, valid from May 1, 1981:
 * owners of M-1 cards (laborers and children under three) were entitled to 0.5 kg of butter a month,
 * owners of M-2 cards (pregnant women and children between the ages 4 – 18) were entitled to 0.75 kg of butter,
 * owners of M-R cards (farmers) were entitled to 0.25 kg of butter.

On August 1, 1981, stamps were introduced for cleaning products (300 g of washing powder a month), chocolates (100 g a month) and liquor. After introduction of the Martial law (December 13, 1981), monthly allotments for stamps were reduced - for example, instead of 2 kg of sugar, 1 kg per month per citizen was allowed. Basic meat allotment was reduced from 3.5 kg to 2.5 kg monthly, except for coal miners, who were entitled to up to 7 kg. Further products were covered by rationing - whole milk, lard or margarine (250 g monthly), flour (1 kg monthly), cigarettes (10 packages monthly), and liquor (one .5 l bottle of vodka a month or one bottle of imported wine. In some cases, such as weddings, citizens were allowed by local authorities to buy more alcohol).

On February 1, 1982, gasoline rationing was introduced. Depending on the size of a car, 24 to 45 l of gasoline were available monthly. On July 1, 1982, a wide range of products was rationed, from sweets to school exercise books. On June 1, 1982, rationing of butter, margarine and lard was cancelled, only to be reintroduced on November 1982. Finally, on July 1, 1989, rationing of meat was officially cancelled.

Europe
Another form of rationing that was employed during World War II, called Ration Stamps. 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.

Israel
From 1949 to 1959, Israel was under a regime of austerity, during which a state of rationing was enforced. At first, only staple foods such as oil, sugar, and margarine were rationed, but it was later expanded, and eventually included furniture and footwear. Every month, each citizen would get food coupons worth 6 Israeli pounds, and every family would be allotted a given amount of food. The average Israeli diet was 2,800 calories a day, with additional calories for children, the elderly, and pregnant women.

Following the 1952 reparations agreement with West Germany, and the subsequent influx of foreign capital, Israel's struggling economy was bolstered, and in 1953, most restrictions were cancelled. In 1958, the list of rationed goods was narrowed to just eleven, and in 1959, it was narrowed to only jam, sugar, and coffee.

During the period of rationing, a black market emerged, where goods smuggled from the countryside were sold at prices higher than their original worth. Government attempts to stop the black market failed.

Emergency rationing
Rationing of food and water may become necessary during an emergency, such as a natural disaster or terror attack. The Federal Emergency Management Agency (FEMA) has established guidelines for civilians on rationing food and water supplies when replacements are not available. 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.

Carbon rationing
Personal carbon trading refers to proposed emissions trading schemes under which emissions credits are allocated to adult individuals on a (broadly) equal per capita basis, within national carbon budgets. Individuals then surrender these credits when buying fuel or electricity. Individuals wanting or needing to emit at a level above that permitted by their initial allocation would be able to engage in emissions trading and purchase additional credits. Conversely, those individuals who emit at a level below that permitted by their initial allocation have the opportunity to sell their surplus credits. Thus, individual trading under Personal Carbon Trading is similar to the trading of companies under EU ETS.

Personal carbon trading is sometimes confused with carbon offsetting due to the similar notion of paying for emissions allowances, but is a quite different concept designed to be mandatory and to guarantee that nations achieve their domestic carbon emissions targets (rather than attempting to do so via international trading or offsetting).