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Reality vs. Socialism

Back in July I wrote about the global socialist rebound, part of which involves the emergence of post-Chavez Venezuela. The new president, Nicolas Maduro, has doubled down on socialism and its fatally bad economic model, where daily life is dictated by shortages of everything from bread to electricity.

Last year Maduro dictated "fair" pricing on electronics products, and enforced those prices by sending the military in to the stores. This was only one of many horror stories out of the socialist experiment called Venezuela. Here is what the Heritage Foundation's Index of Economic Freedom has to say about the rule of law:

The judiciary is dysfunctional and completely controlled by the executive. Politically inconvenient contracts are abrogated, and the legal system discriminates against or in favor of investors from certain foreign countries. The government expropriates land and other private holdings across the economy arbitrarily and without compensation. Corruption, exacerbated by cronyism and nepotism, is rampant at all level of government. 

  On a scale from 1 (worst) to 100 (best) for property rights protection, Venezuela scores a five (5). This is slightly worse than Zimbabwe.

Destroyed property rights and 60-percent inflation create a recipe for shortages of everything and anything. To combat both, government has expanded its “fair pricing” policy to food. Producers explain that the "fair" prices make it impossible to cover production costs, but socialists are not bothered by economic reality. Therefore, it is hardly surprising that the Associated Press reports on a new, bizarre regulatory incursion by the government into the country's shattered remains of a free market:

Venezuelans could soon have to scan their fingerprints to buy bread. President Nicolas Maduro says a mandatory fingerprinting system is being implemented at grocery stores to combat food shortages by keeping people from buying too much of a single item. He calls it an "anti-fraud system" like the fingerprint scan the country uses for voting.

This makes it easy for government to give socialist voters a higher ration of bread. That aside, though, it is rather obvious that this system will not solve any shortage problems whatsoever. All it will do is drive more people over to the black market, where prices are high enough to make production profitable. 

The Venezuelan president, of course, has a solution for that as well. AP again:

Last week, Venezuela began closing its border with Colombia at night in an effort to cut down on smuggling, which Maduro has said diverts nearly half of Venezuela's food. As of January, more than a quarter of basic staples were out of stock in Venezuelan stores, according to the central bank's scarcity index.

Instead of pondering the question whether or not all these problems would go away with the demise of socialism, President Maduro evidently believes that when socialist theory says that a square peg can fit into a round hole, then the peg will fit, regardless of what reality has to say about it.

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Friday, 20 October 2017
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