Trou­ble in Par­adise

When Venezuela holds a Black Fri­day sale, ev­ery­thing goes

The Washington Times Daily - - Editorial -

Some­times the gov­ern­ment can make life bet­ter for ev­ery­one. This is the so­cial­ist dream. Most of the time the gov­ern­ment fails, usu­ally mis­er­ably, as with Pres­i­dent Obama’s mis­er­able at­tempt to man­age the na­tion’s health care. So far his ad­min­is­tra­tion has been un­able to man­age a web­site. So­cial­ist dreams al­ways die hard, as the com­mon folk — and the un­com­mon folk as well — are learn­ing in Venezuela in the wake of the Hugo Chavez ex­per­i­ment in eco­nomic fan­tasy.

Venezuela’s so-called Bo­li­var­ian rev­o­lu­tion, now presided over by Ni­co­las Maduro, the hand­picked suc­ces­sor to Mr. Chavez, has set out to main­tain “fair” prices on ev­ery­thing in the mar­kets. It’s all to pro­tect the peo­ple. Ba­sic goods such as but­ter and milk have all but dis­ap­peared, and when there’s a ru­mor that a mar­ket has a few rolls of toi­let pa­per for sale, the riot po­lice are dis­patched to calm the mob. How can you have a par­adise with­out toi­let pa­per? But such is the legacy of the Hugo Chavez rev­o­lu­tion.

Pres­i­dent Maduro is try­ing to di­vert the at­ten­tion of the peo­ple, stuck with toi­lets bereft even of old Sears and Roe­buck cat­a­logs, by declar­ing a na­tional emer­gency over the price of tele­vi­sion sets and other elec­tronic goods. The Venezue­lan army, armed with au­to­matic weapons, seized the Daka chain of elec­tron­ics stores as a demon­stra­tion of the gov­ern­ment’s com­mit­ment to “fair” prices. Mr. Maduro then de­clared some­thing of a Black Fri­day sale, giv­ing the old ad­ver­tis­ing slo­gan of “Ev­ery­thing Must Go” an en­tirely new twist. He re­ally meant it. Ev­ery­thing was free. “This is for the good of the na­tion,” the pres­i­dent said. “Leave noth­ing on the shelves, noth­ing in the ware­houses Let noth­ing re­main in stock.” His in­struc­tions were fol­lowed to the last digit and fi­nal gi­ga­byte. The “cus­tomers” ran into the stores and ran out with a cor­nu­copia of elec­tron­ics goods, big-screen tele­vi­sion sets, tape recorders, lap­tops, prin­ters and stuff, as many items as a man or woman (or child) could carry. Many ran back for sec­onds. Loot­ing had never been so much fun.

In places with a free mar­ket, the cus­tomers can of­ten get a “steal” on the day af­ter Thanks­giv­ing, and there will be large crowds leav­ing the stores with smiles on their faces and 50-inch flat-screen tele­vi­sion sets over­flow­ing their shop­ping carts. Shop­keep­ers will of­ten sell an item, such as a toaster or a blender, at less than the cost to him. This “loss leader” is ex­pected to en­tice cus­tomers into the store to buy a cart full of other items, and it usu­ally does. Every­body wins. In the Chavez rev­o­lu­tion, every­body loses. Once the “cus­tomers” clean out the stores, that’s all there is. This is sim­ple Eco­nom­ics 101.

When the gov­ern­ment de­clares a “fair” price be­low the mar­ket price and be­low the cost of pro­duc­ing an item, the in­cen­tive to pro­duce the prod­uct van­ishes. That’s why short­ages are en­demic in so­cial­ist satraps, whether with bread lines in the old Soviet Union, lines for any­thing and ev­ery­thing in Py­ongyang, or the search for toi­let pa­per in Caracas. Even a short­age of bat­ter­ies to power the elec­tron­ics is com­ing in Caracas as ex­porters, im­porters and shop­keep­ers cut their losses and cross Venezuela off their dis­tri­bu­tion lists.

“If you put the fed­eral gov­ern­ment in charge of the Sa­hara Desert,” the No­bel econ­o­mist Mil­ton Fried­man once ob­served, “in five years’ time, there will be a short­age of sand.” With gov­ern­ment set­ting prices for ev­ery­thing from tele­vi­sion sets to toi­let pa­per in Venezuela, the mis­ery wrought by th­ese clumsy in­ter­ven­tions shouldn’t sur­prise any­body. It’s an old story, now in re­runs.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.