Sam: If you buy rice in Venezuela the smartest thing to do, not necessarily the most honest, is to immediately move it over the border and resell it for a huge profit. Then smuggle it back for another huge profit.
Of course that is exactly what is going on. Also an unbelievable amount of hoarding. The stores in the middle and upper class areas are full, stocked to the rafters, so the business community is supplying them just fine. It’s just the poor areas that they are not supplying.
The price controls were put in after the first time the Opposition tried to blow up the economy. They had a lockout strike where businesses all over the country simply closed their doors. Factories too. A lot of employees tried to invade businesses and factories to run them themselves, but it was hard. This so ruined the economy and caused such horrendous inflation that price controls were put in as a necessity to stop the inflation. So it’s the Opposition that created the conditions for the price controls.
The price controls worked just fine for many years. They were put in in 1993. It’s only when the oil price crashed that they became a problem.
Sam: Why don’t they try just subsidizing just the poor with enough money to buy basic rice and oil?
There are Bolivarians who are saying to get rid of the price controls. I agree with them.
Sam: Blaming the US for this not working is just stupid as I can easily see a way to game the system in seconds.
There is also a plot to blow up the economy. This would be the third such plot. The first two were defeated – lockout strike and oil strike – but this one is working very well. There is a ton of hoarding going on. The US has been behind all of these plots to blow up the economy.
Sam: Blaming the US for this not working is just stupid as I can easily see a way to game the system in seconds. Surely the people in Venezuela are not so stupid that they can’t see a way to game it also.
Yes, the business sector is just gaming the system. I cannot really blame them. Capital will just go wherever the profits are highest.
It also makes everyone into a criminal. If the only way you can get food is to game the system or deal with black marketeers then everyone will become complicit making everyone a criminal.
It’s not the only way to get food. The stores in the middle and upper class areas are full. And the stores in the poor areas are full too. Non price controlled stuff is often quite available. Perhaps it is expensive though. It is the cheap staples that are hard to get.
Reuters: But obtaining goods at those prices requires waiting in long lines that are increasingly the site of robberies or lootings.
The looting is exaggerated, and there are police guarding most of the lines.
You realize that every piece on Venezuela in the Western press is part of a propaganda war, right?
0 thoughts on “Some Comments on Shortages and Price Controls in the Venezuelan Economy”
Hugo Chavez was a career officer in the military without a great deal of insight into economics or trade.
He screwed himself and the US taxpayer does not have the money to prop up EVERY Banana Republic in the world with a Strongman leader who sets it back 400 years.
Anglo-Saxons can create excellent countries but cannot prop up the entire world.