US Vice President Kamala Harris plan If elected, she would institute price controls on food and grocery products in the United States — a surprising proposal for a Venezuelan who has experienced firsthand the severe shortages and economic chaos that price controls have caused.
I have lived through much of the past 25 years of the disaster known as Venezuela’s Socialist Revolution, only to be fleeing the country a few months ago. Over the past 20 years or so, the late socialist dictator Hugo Chavez and his successor Nicolás Maduro implemented price controls in the same style as the policy Harris reported on, each time more disastrous than the last.
The prospect of being able to buy things “cheaper” through price controls may seem appealing — especially with the Biden inflation that all my American friends are suffering from — who doesn’t want to save a few dollars here and there? But nearly two decades of price controls in Venezuela ultimately led to severe shortages, rationing, corruption, and all-around unpleasant experiences and misery.
Get ready for the “joy” of the bread procession!
Do not exceed your coconut intake limit.
The black market is terrible! pic.twitter.com/sU9IqvBXmN—Breitbart News (@BreitbartNews) August 15, 2024
The situation worsened, and the Maduro government still Governments that officially enforce price controls have quietly largely abandoned them, without publicly stating why, perhaps finally realizing how devastating price controls can be.
Venezuela’s price control disaster is a 20-year-old story that began in early 2003. At the time, Hugo Chavez Established Strict price controls and severe profit margin limits were imposed on products such as meat, poultry, cheese, sugar, coffee, beans, milk, etc. The plan seemed to “work” for a time, but it didn’t last long, and by the late 2000s serious shortages of the regulated products had developed. CommonplacePrice controls combined with inflation to make a kilogram of onions more expensive than a kilogram of meat.
In fact, it’s very simple: Who wants to manufacture and sell goods at a loss? If so, how long could you sustain that? Not for long.
By 2011, Chavez Doubled Price controls: President Chavez added water, fruit juices, soap, bleach, dishwashing liquid, detergent, toiletries like shampoo soap and deodorant, toilet paper, and even diapers to the list of items already subject to price controls.
The new price control system aimed to punish “capitalist” traders who “speculate” against the public by imposing further disciplinary measures if they flouted the profit margins established by the socialist regime. President Chavez said the regulatory system was a new mechanism for the “transition to socialism” and a socialist economy that would put an end to the “vices of capitalism.”
Hugo Chavez died in 2013, but unfortunately the price controls did not die with him.
If Chavez doubled price controls before his death, Maduro tripled what he inherited. The rest, as you already know, is strict. ID-based Rationing of regulated items and Fingerprint scanner This is a socialist absurdity that would lead to even stronger regulations.
FILE/Customers walk through the public market in the Quinta Crespo neighborhood in Caracas, Venezuela, Dec. 11, 2022. Half of Venezuelan households do not earn enough to cover their food basket and live in extreme poverty, according to the 2023 Living Conditions Survey released Wednesday, March 13, 2024. (AP Photo/Matthias Delacroix, File)
As an example of how bad price controls have become, in 2015 Maduro government officials Complex A mathematical “formula” for setting regulated prices for eggs that were by all accounts unrealistic and unsustainable. I vividly remember my mother telling me not to throw away the cardboard packaging the eggs came in, because without it, no one would sell the eggs at the local market. Because eggs were over-regulated, they ended up costing much less than two cardboard boxes.
Price Regulation Toiletries As a result, I had to get some of them through off-market “dealers.” These transactions often took place on street corners near my old apartment, and felt like I was doing something shady and illegal, like buying drugs. But instead, I was buying a bar of soap to wash my hands and take a shower, a luxury back when we actually had running water, but that’s another story.
In late 2018, I went to a toiletries, perfume, etc. store near my house looking for soap and shampoo. At the time, the National Guard was “intervening” in the store, and I could only buy one of any item. After waiting in a long, long line, I ended up only buying something that wasn’t shampoo, but enough for me and my brother to wash our hair.
Price controls also played a role medicineThere were serious shortages of even the most basic medicines, which realistically nobody could produce at a loss forever, leading to inhumane circumstances where my mother couldn’t even get omeprazole for her upset stomach, or antacids while she was undergoing chemotherapy for liver cancer, even though the treatments provided by the Maduro regime were incomplete. Controlled The import of medicines has long been a health crisis caused by socialist misrule, and the importation of certain treatments has been suspended. be criticized Thousands of people, including my mother, have died because they did not receive the life-saving treatment they needed. This situation continues to this day. day.
Since Maduro came to power, antacids have also become harder to come by. Banned They stored it with other items so that protesters could not use it. They could not find antacids, so the only thing they could do was give them water with baking soda.
The rationing of goods through ID and fingerprints also created an informal barter system. For example, I was entitled to a certain amount of diapers and baby food per week. Since I didn’t have a baby in my family, I didn’t need to buy either, but some parents did need them.
A common practice at the time was for me to give away diapers each week to someone else who would then buy what I needed from their ration, and once we were out of sight of the National Guard or police, we would exchange diapers and pay the difference in money.
What was the socialist regime’s “solution” to this? Demanding Parents must present their baby’s birth certificate to purchase diapers.
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If the company had stopped producing toilet paper (at a loss), how would the Maduro regime have responded? Occupy They force your factories to produce toilet paper at gunpoint and leave you at a loss.
Some food companies that produced restricted items such as rice or Venezuela’s typical corn flour have been able to offset some of their losses by producing unrestricted variants or other products, such as mixes of rice and Venezuela’s typical corn flour. Cachapa (Similar to corn pancakes). The Maduro government has responded to this practice by Prohibited Production of the item in question.
As mentioned above, these regulations remain in effect but are not being enforced because the Maduro regime has other pressing concerns, including: negotiation Working with the Biden administration to steal a fake election. toilet paper, eggand other items that were once hard to find are now easily found on the shelves, but they are purchased in capitalist US dollars rather than socialist bolivars.
If you need another example of the consequences of price controls, look at Castro’s regime in Cuba. Announced The Cuban government introduced new price controls in July as part of a declared “war economy” aimed at “saving socialism” in a country torn apart by six decades of price communism.
Argentina is a so-called socialist country. Man beating his wife Alberto Fernandez too Claimed During Fernández’s disastrous term in office, he claimed price controls would help curb inflation, but in reality they did not. President Javier Milley Eliminated Argentina’s inflation rose dramatically in January as price controls and other policies were implemented to eliminate micromanagement of the socialist economy. Reduction As a result, every month.
Christian K. Caruso is a Venezuelan author documenting life under socialism. You can follow him on Twitter. here.
