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Robert Mugabe Exerts Downward Pressure on Prices
Zimbabwean dictator Robert Mugabe's predictable response to the soaring inflation caused by his ruinous, kleptocratic economic policies: a decree commanding lower prices. But as The New York Times observes, "not even an unchallenged autocrat can repeal the laws of supply and demand." The state-ordered bargains were snapped up by Mugabe's cronies, tipped off to which stores would be visited by price inspectors. And since farmers, manufacturers, and distributors cannot sell products at a loss indefinitely, food, gasoline, medical supplies, and other necessities have disappeared as a horrendous economic situation continues, incredibly, to get even worse. In response, Mugabe is nationalizing more and more industries, asserting that the problem is greedy businessmen. Although Mugabe's policies won't find many defenders in the U.S., they reflect the same mentality that leads American politicians to denounce (and legislate against) "price gouging" and "windfall profits."
|8.3.07 @ 11:57AM|#
Although Mugabe's policies won't find many defenders in the
U.S., they reflect the same mentality that leads American
politicians to denounce (and legislate against) "price gouging" and
"windfall profits."
Well, no, but I'm that was fun to write.
|8.3.07 @ 12:01PM|#
And also to address the 100,000% inflation rate, they will be
printing more money.
I hope Zimbabwean's can afford the wheelbarrows they'll need to
carry their cash in.
|8.3.07 @ 12:03PM|#
"Although Mugabe's policies won't find many defenders in the
U.S."
Are you sure?
This would be a good time to get into the cigarettes-for-diamonds
trade.
|8.3.07 @ 12:06PM|#
"Mugabe's policies...reflect the same mentality that leads
American politicians to denounce (and legislate against) 'price
gouging' and 'windfall profits.'"
Yep, and people who want burglars arrested have the same mentality
as Hitler against the morally bankrupt peoples. Godwin-ized
already!!
SIV|8.3.07 @ 12:06PM|#
joe,
Is the mentality not the same because of some different grasp of
economics by American politicians and Mugabe?
|8.3.07 @ 12:16PM|#
SIV,
There's a big ideological difference, sure, and also a basic
common-sense difference.
Noticing the difference between windfall profits for a limited time
in certain sectors or locations vs. inflation-driven price
increases across the entire economy is a pretty significant
difference.
Perry|8.3.07 @ 12:17PM|#
Hey - replace Mugabe with Chavez and you can probably reuse that
exact same article.
How about that for productivity.
|8.3.07 @ 12:18PM|#
Well, no, but I'm [sure] that was fun to write.
I don't see how you can deny the similarity. They're both based
upon blaming "greedy businessmen".
|8.3.07 @ 12:24PM|#
I hope Zimbabwean's can afford the wheelbarrows they'll need
to carry their cash in.
If not, will Mugabe impose price ceilings on wheelbarrows? And if
so will there be any available or will the price cap eliminate any
incentive anyone would otherwise have to produce them?
|8.3.07 @ 12:31PM|#
"not even an unchallenged autocrat can repeal the laws of
supply and demand."
Pretty please tell me that this was on the same page as another
article demanding free universal health care.
Jennifer|8.3.07 @ 12:34PM|#
Noticing the difference between windfall profits for a
limited time in certain sectors or locations vs. inflation-driven
price increases across the entire economy is a pretty significant
difference.
Strikes me more as a difference of degree, not of kind. The
"windfall profit" argument is usually used against gas and oil
companies these days. Well, demand for petroleum is growing faster
than supply, which means prices are going up. That price increase
comes from normal supply and demand, but the government has
arbitrarily decided that it's a "windfall profit" instead. (The
implication being, of course, that the government should decide
what is the right and proper price for anything.)
|8.3.07 @ 12:34PM|#
NAL,
One concerns itself with how markets function during a particular
crisis of limited duration brought out by an outside force, with
the goal being to make it easier for people to ride out a hard time
until the market gets back to normal, while the other treats the
ordinary functioning of markets, itself, as the problem to be
solved.
|8.3.07 @ 12:39PM|#
Jennifer,
On the policy level, the difference can be one of degree - a minor
intervention vs. a large one, if you're inclined to view politics
in terms of points on a line - but on an ideological level, the
difference is between being skeptical of non-market forces that
create massive shocks in the markets vs. being opposed to the
market system itself.
It's the difference between mandating that cars come equipped with
seat belts vs. forbidding people from driving on the road.
On the specific point you're bringing up about "windfall profits"
for oil companies, you've got a point.
|8.3.07 @ 12:46PM|#
joe,
I'd say that this is a cautionary tale about the use of
anti-business rhetoric. Remember, even if the leaders of whatever
group trashing business are mostly capitalistic, the rhetoric can
still help to undermine the capitalist tendencies of the hoi
polloi. That's bad, and it's one reason the government needs
to tone down the negativity against corporations and businesses in
general (both parties are guilty of this, incidentally).
Grotius|8.3.07 @ 12:47PM|#
Even if we don't like "windfall profits" would the government be nimble enough to do anything about them anyway?
|8.3.07 @ 12:56PM|#
One concerns itself with how markets function during a
particular crisis of limited duration brought out by an outside
force, with the goal being to make it easier for people to ride out
a hard time until the market gets back to normal...
I'm sure that's the intention (well, that and looking tough on
corporate greed) but the results will be essentially the same as a
price cap--increased demand for the already limited resource in
question.
|8.3.07 @ 1:03PM|#
Pro Libertate-
Thats a really good point about the dangers of anti-business
rhetoric. Every dictator in history has been a big-business basher,
and its no coincidence.
Grotius|8.3.07 @ 1:06PM|#
Cesar,
Every dictator in history has been a big-business basher, and
its no coincidence.
Was Pinochet a "big business basher?"
|8.3.07 @ 1:09PM|#
Grotius-
You're right, I'll rephrase that. Either a big business basher or a
supporter of massive corporate welfare, for the most part.
|8.3.07 @ 1:14PM|#
That's fair, pro-Lib.
NAL,
If we look back to the Florida laws restricting price-gouging in
Florida, there is absolutely no indication that they are
restricting the supply of everything.
Cesar,
Well, once you add "...or a supporter of massive corporate
welfare," you kind of undermine your point about dictators being
anti-business.
FYI, Hitler declared that businessowners were "fuhrers" in their
workplaces, and it was the rightful order for their workers to
unquestioningly obey their workplace fuhrers, just as much as any
other fuhrers.
Grotius|8.3.07 @ 1:16PM|#
joe,
Well, in no way was Hitler's Germany one of unfettered capitalism.
The Nazis believed in economic planning and the like and had
definite ideological notions about how an "Aryan" business culture
would work.
|8.3.07 @ 1:20PM|#
Grotius,
No, of course not. It was a very different version of the
pro-business right, more like Bismarck, only moreso.
The point here is that Cesar's initial statement is dead wrong, and
dangerous. Business-loving ideologies can be dangerous and
totalitarian, too. You can't just assume that dictatorship and
totalitariansim are the sole preserver of one or the other side of
the political spectrum.
Mike Laursen|8.3.07 @ 1:20PM|#
I hope Zimbabwean's can afford the wheelbarrows they'll need
to carry their cash in.
It won't matter. There won't be anything in the stores to buy.
|8.3.07 @ 1:21PM|#
Well, once you add "...or a supporter of massive corporate
welfare," you kind of undermine your point about dictators being
anti-business.
Dictators may not always be anti-business, but they are almost
always anti-free market. I'm sure you have been reading here long
enough to understand the difference.
|8.3.07 @ 2:38PM|#
Although Mugabe's policies won't find many defenders in the
U.S., they reflect the same mentality that leads American
politicians to denounce (and legislate against) "price gouging" and
"windfall profits."
Well, no, but I'm that was fun to write.
joe, Jacob Sullum was spot on with that sentence. Would you like a
link to a few of the "price gouging" and "windfall profits" bills
introduced, given serious consideration, and enacted into
law in my state?
|8.3.07 @ 2:41PM|#
And since farmers, manufacturers, and distributors cannot
sell products at a loss indefinitely, food, gasoline, medical
supplies, and other necessities have disappeared as a horrendous
economic situation continues, incredibly
predictably, to get even worse.
Fixed that for you, Jacob.
|8.3.07 @ 2:48PM|#
Link away, jh.
I'm sure that's a lot easier than trying to come up with a rational
response to my explanation of the difference.
Seriously, when was the "fixed that for you" bit funny? 2002?
1999?
|8.3.07 @ 2:57PM|#
I'm sure that's the intention (well, that and looking tough
on corporate greed) but the results will be essentially the same as
a price cap--increased demand for the already limited resource in
question.
The statist state I live in passed the only gasoline price-control
cap in the nation. After a few really sucky months at the gas pumps
and the predictable public outcry, it was repealed, only to be
replaced with really vague and ill-defined legislation outlawing
"price gouging" and "windfall profits". These laws, if implemented
during a sharp rise in prices after something such as a Katrina
event, would be temporary price caps that would force gasoline to
be sold well below prevailing market rates by local refiners able
to ship their products to other states.
Anyone want to take a stab at what would happen to the availability
of gasoline should this attempted repeal of the laws of supply and
demand actually be implemented?
Part-time economic stupidity isn't as bad as full-time economic
stupidity, joe, but that doesn't make it good.
|8.3.07 @ 3:08PM|#
Anyone want to take a stab at what would happen to the availability
of gasoline should this attempted repeal of the laws of supply and
demand actually be implemented?
1970s-style gas shortages?
Joe, I have never understood this about certain liberals so maybe
you can help. They want gasoline consumption in this country to go
down to help the environment, correct? So, why do they also want to
keep gas as cheap as possible?
|8.3.07 @ 3:20PM|#
Is Mugabe so well protected that there are no Zimbawean patriots, with terminal diseases, who are willing to try to assassinate the S.O.B.?
|8.3.07 @ 3:28PM|#
Is Mugabe so well protected that there are no Zimbawean
patriots, with terminal diseases, who are willing to try to
assassinate the S.O.B.?
I'm pretty sure Mugabe is pro-gun control, too.
|8.3.07 @ 3:29PM|#
Anyone want to take a stab at what would happen to the
availability of gasoline should this attempted repeal of the laws
of supply and demand actually be implemented?
Since the non-gouging rates in Hawaii are still higher than the
rest of the country, and they would be higher-still in the
aftermath of a disaster, and the suppliers are quite aware that the
"what we can screw people out of this very minute" price doens't
last more than a few days, while the economy as gasoline demand on
the islands will to on after the crisis period pass, even without
indefensible profit-taking what would happen is that companies
would still ship their gasoline to Hawaii, exactly as they did
before.
As a matter of fact, gasoline suppliers make a point of getting
their stations back on line as soon as possible after a disaster,
regardless of whether the owner is a decent human being or a
parasital piece of crap.
But, hey: DEMAND KURV!
|8.3.07 @ 3:31PM|#
Cesar,
One is a long-term concern, and the other is a short-term
concern.
What you've written is like asking, "Homeowners are always
complaining about heating costs, and yet when their house catches
on fire, they want it put out!" Yes. Yes, they do. It's really not
hard to figure out why.
|8.3.07 @ 3:34PM|#
What you've written is like asking, "Homeowners are always
complaining about heating costs, and yet when their house catches
on fire, they want it put out!" Yes. Yes, they do. It's really not
hard to figure out why.
It would be more like homeowners complaining about heating costs,
and then at the same time wanting snow on the ground in time for
Christmas.
|8.3.07 @ 3:35PM|#
So anyway, Joe, I take it you would have no problem with rising gas prices in the future since it would reduce emissions and spur the development of alternatives?
|8.3.07 @ 3:46PM|#
Cesar,
Liberals like me don't like the severe price shocks that seem to be
such an unavoidable part of being dependent on petroleum to run our
economy and go about our lives. The harm those shocks do is one of
the many reasons we want to get off oil.
I think we should work on the alternatives now, so that the option
to switch to them will already be there as gas prices go through a
long-term rise (which they seem to already be doing, if you look
beyond the noise).
|8.3.07 @ 3:54PM|#
I don't mind price shocks because they send an important message to consumers. Namely "sell that big SUV and get a Prius unless you want to feel even more pain in the future".
|8.3.07 @ 3:54PM|#
You know who severe gasoline price shocks fall the hardest on,
Cesar?
Poor people. And working families.
Not to mention the working poor.
And the children.
Don't even get me started on families of poor working children.
|8.3.07 @ 3:57PM|#
Cesar,
It would be nice of people just making it had actuall options, and
not just noticing that one of the new cars they can't afford gets
good mileage.
But, yeah, God bless the Japanese for subsidizing the R&D
necessary to develop the Prius. Actually, it's pretty clear the
American consumer is going to bless them just fine for the next
couple of decades.
|8.3.07 @ 4:00PM|#
It would be nice of people just making it had actuall
options, and not just noticing that one of the new cars they can't
afford gets good mileage.
joe-
You can get a used TDI Golf Diesel for very cheap, which is what
I've done. Its certainly less expensive than Big Shitbox.
|8.3.07 @ 4:22PM|#
Big Shitbox. That's awesome.
I think deisel's got a big future, as a half-step until we get off
fossil fuels entirely. Hybrids, with a turbo-deisel engine.
Plus, biodeisel makes a lot more sense than ethanol.
|8.3.07 @ 4:41PM|#
joe-toss the battery and just give me a clean diesel with big,
honking alternator to send power straight to the electric motors at
the wheels. The battery just takes up room and adds weight.
Diesel-electric. The only way to fly.
Oh, and repeatedly hammering a nail into your head makes more sense
than ethanol, 'less you're a corn farmer or a congresscritter.
Jerry|8.3.07 @ 9:32PM|#
Also, do not forget that the Mugabe cronies can sell ZWDs at official exchange rates.
Goldthwait|8.3.07 @ 9:43PM|#
"I'm pretty sure Mugabe is pro-gun control, too"
Have you ever known a dictator to not be pro-gun control?
|8.3.07 @ 10:46PM|#
You know who severe gasoline price shocks fall the hardest
on, Cesar?
Poor people. And working families.
Not to mention the working poor.
And the children.
Don't even get me started on families of poor working
children.
They also signal entrepeneurs to come into the market and lower the
price, so poor working children can buy gas. Meanwhile, price
controls cause shortages, as they have for the last 4000 years. Shortages hurt
working children, too, if I reckon right.
|8.3.07 @ 11:19PM|#
All your profits are belong to us.
This starvation has been brought to you by Jimmy Carter.
|8.4.07 @ 8:10AM|#
Liberals like me don't like the severe price shocks that
seem to be such an unavoidable part of being dependent on petroleum
to run our economy and go about our lives. The harm those shocks do
is one of the many reasons we want to get off oil.
The price is oil is rather insignificant in the scheme of things.
The "shock" is more perception than reality (admittedly, mere
perceptions can be damaging, if they lead to stupid
policies).
I think we should work on the alternatives now, so that the
option to switch to them will already be there as gas prices go
through a long-term rise (which they seem to already be doing, if
you look beyond the noise).
I suppose "we should work on..." translates into "the government
should fund some boondoggles". Seems kind of pointless. Yes, theory
says that the price of oil will increase in the long run.
|8.4.07 @ 10:54AM|#
Jimmy Carter just wrote an opion article for USA Today on bad health care in underdeveloped nations. Apparently, doctors stopped working in Zimbabwe, because medical professionals are migrating to the US, because we don't subsidize medical schools enough. It's scary that his work still gets published.
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