Venezuelan president Nicolás Maduro–who is Hugo Chávez without the charisma, and with an even more diminished intellect–believes (or would have Venezuelans believe) that the key to economic growth in Venezuela is to have the government occupy stores in the country with military forces, and then compel the stores to sell their products at below-the-center-of-the-earth prices. Apparently, he doesn’t understand–or pretends not to understand–that allowing businesses to make a profit means allowing businesses to have enough money with which to employ people. And apparently, he doesn’t understand–or pretends not to understand–that price controls don’t work, never have worked, and never will work.
At least some Venezuelans understand that the government’s actions are insane:
“I have no love for this government,” said Gabriela Campo, 33, a businesswoman, hoping to take home a cut-price television and fridge. “They’re doing this for nothing but political reasons, in time for December’s elections.”
[. . .]
“This is more like government-sanctioned looting,” said 42-year-old Caracas-based engineer Carlos Rivero. “What stops them going into pharmacies, supermarkets and shopping malls?”
And what incentive is there for businesspeople to build more pharmacies, supermarkets or shopping malls in Venezuela, given the fact that the government can plunder private enterprise anytime it wishes to get a temporary political boost from those who don’t understand that such actions only serve to hurt Venezuelans in the long run? The only thing that the Maduro government has achieved is to drive away business investment, condemn more people to unemployment and poverty, drive down the standard of living in Venezuela even further, and cause even more widespread shortages of needed commodities. I don’t know how it can possibly get any worse in Venezuela, but I am sure that the Maduro government will find a way to show us.
UPDATE: More from Alex Tabarrok, who points out that the Venezuelan government might benefit from reading some Ayn Rand. I know that people on the port side like to look down their noses at Rand, and to be sure, she’s normally not my cup o’ tea, but she called this one. More as well from Juan Carlos Hidalgo, who points out that Venezuela is undergoing hyperinflation (at 320%!) and Maduro has no idea how to stop it. Additionally, it is worth noting that Venezuela’s alleged anti-corruption campaign is incredibly corrupt, a fact which is as depressing as it is predictable.