BBC reporter Daniel Pardo … of the
Latin America-centric BBC Mundo, spent four hours [in Caracas] waiting in long lines,
searching in vain for milk, coffee, cooking oil, shampoo, corn flour,
detergent, dishwashing soap, and toilet paper
notes
Benny Huang.
Of these items, he located only three on the bare shelves of Venezuela’s capital and largest city.
Venezuela is the laboratory in which the now deceased Hugo Chavez
conducted his grand socialist experiment, which his successor, Nicolas
Maduro, has seamlessly continued. Supporters of the Chavez brand of
petro-socialism characterize it as a popular revolution that has allowed
regular folks to reclaim their economy from the hated rich.
In short,
they’re stickin’ it to the man.
In the new Venezuela there shall be no more price gouging, no more exploitation, no more…toilet paper? Among the items left unpurchased on
Daniel Pardo’s list was toilet paper, a scarce commodity in a country
that doesn’t exactly lack trees. Scrounging for TP has become something
of a national pastime in Venezuela. President Maduro predictably blamed
“unscrupulous traders,” not the policies of his government, for the
shortage. In September of 2013, Venezuelan troops actually seized a
toilet paper factory in order to better oversee production and
distribution. A shortage nonetheless
persists.
Such is life in the Bolivarian Republic of Venezuela. “We’re queuing
here to get a number so we can queue again and buy the product,”
explained Daniel Pardo.
… “Critics say that the cause of
shortages is price controls, which make reselling too profitable and
producing, well, the worst business ever,” said Pardo.
The critics, in this case, are right. Government price controls and
other strong arm tactics make people think twice about making or selling
anything.
The government claims that it’s only setting prices that are “fair,”
though the people who actually produce the stuff disagree. If no one
will make the products at the tiny profit margins that the government
permits, that’s a pretty good indicator that the price is not really
fair at all. In most cases, the government bureaucrats who determine the
“fair” price don’t really understand all of the costs—capital,
material, and labor—that go into making the product. They simply see the
producer as a robber baron who must be brought to heel.
Therein lies the problem. In true demagogic fashion, Maduro rose to
power using class warfare rhetoric, most of which he probably even
believes. Maduro is no son of landed gentry but a former bus driver who
didn’t finish high school. He identifies with the “little guy,” and it
is for his sake that Maduro’s government is constantly interceding in
every aspect of production and distribution. The Chavez/Maduro message
(“soak the rich”) resonates with people who perceive themselves as
victims but unfortunately it doesn’t make good economic policy. The more
the government tightens the controls, the more people try to circumvent
them, or else they decide not to be part of the productive class
anymore, in which case they stop producing and wait for the state to
redistribute to them someone else’s stuff. The same pattern is apparent
anywhere economic policy-makers care more about the fair distribution of
wealth than about its creation. When government interventions backfire,
harming those people they’re supposed to help, the state responds like a
dog chasing its own tail with even more interventionist “solutions” to
the problems it created.
… Yet the socialist government accepts no
responsibility. Again, Maduro suspects that a conspiracy is afoot among
shopkeepers and probably
Yanquis. As Pardo explains: “But the
government says that scarcity is part of an economic war, which hides,
smuggles, and hordes products to destabilize the country.”
Oh, I’m sure there’s plenty of hiding, smuggling, and hording taking
place in Venezuela, but it isn’t a counterrevolutionary conspiracy. It’s
basic economics. Furthermore, the governmental explanation confuses
cause and effect. Hording in particular is the result of scarcity. When
Venezuelans see an opportunity to buy toilet paper, for example, they
buy it in bulk out of fear that it might soon become unavailable.
Smuggling and hiding are also effects, not causes, of Venezuela’s
economic troubles.
