Venezuela

Revealed: The Final Stage of Socialism is a Shortage of Toilet Paper!

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BoingBoing.net

For Marx, capitalism would give way to socialism, which would give way to communism, and the withering away of the state and all forms of repression and oppression. Perhaps one of the reasons that things never work out that way is that the revolution craps out during the socialism phase. Literally.

Venezuela has been going through a prolonged shortage of all manner of consumer goods for several years. Especially toilet paper, which is so scarce that black-market rates are more than five times as high as supermarket prices, according to Fusion, and hotels are telling guests to bring their own toilet paper and soap.

The Cato Institute's David Boaz writes at Business Insider that such shortages happen first as tragedy and then as farce:

In 1990 I went to a Cato Institute conference in what was then still the Soviet Union. We were told to bring our own toilet paper, which was in fact useful advice.

Now, after only 16 years of Chavista rule, Venezuela has demonstrated that "Socialism of the 21st Century" is pretty much like socialism in the 20th century….

Shortages, queues, black markets, and official theft. And blaming the CIA. Yes, Venezuela has truly achieved socialism.

But what I never understood is this: Why toilet paper? How hard is it to make toilet paper? I can understand a socialist economy having trouble producing decent cars or computers. But toilet paper? And soap? And matches?

More here.

Reason on Venezuela.

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  1. Castro….Maduro….Jong-un….and all of their predecessors always had plenty of toilet paper.

    Because, never forget the one true element in all of this: Socialism is for the people, NOT the socialist.

    1. Socialism is not for the people, its for *The People*.

    2. Venezuela continues to be the gift that keeps on giving as an example of what happens when governments try to defy basic economic theory. When you arbitrarily set your exchange rate lower than what anyone will pay for your currency you create a shortage. When you arbitrarily subsidize oil way below the market rate, you get massive smuggling into neighboring countries to earn a profit. When you arbitrarily set the price of toilet paper below what anyone is willing to sell it for, you end up with no toilet paper (see also exchange rates because no one can import products legally at the prices they are forced to sell them at). I’m branding this economic system as “Shitty Panties Derponomics”.

  2. But what I never understood is this: Why toilet paper? How hard is it to make toilet paper? I can understand a socialist economy having trouble producing decent cars or computers. But toilet paper? And soap? And matches?K

    It’s hard to get people to produce toilet paper and soap when you insist that they sell it a price below the market rate elsewhere.

    Price controls result in shortages if the maximum price is set too low.

    1. Or if the owner is a good little socialist who refuses to admit that their precious ideology ain’t working:

      Montilla says bigger hotels can circumvent product shortages by buying toilet paper and other basic supplies from black market smugglers who charge up to 6-times the regular price. But smaller, family-run hotels can’t always afford to pay such steep prices, which means that sometimes they have to make do without.

      Camacho says she refuses to buy toilet paper from the black market on principle.

      “In the black market you have to pay 110 bolivares [$0.50] for a roll of toilet paper that usually costs 17 bolivares [$ 0.08] in the supermarket,” Camacho told Fusion. “We don’t want to participate in the corruption of the black market, and I don’t have four hours a day to line up for toilet paper” at a supermarket?.

      Literally — “I won’t give my guests toilet paper because that would mean participating in a capitalist marketplace.”

      1. Alternatively she’s aware that she’s speaking publicly and doesn’t want to get a visit from the policia for the crime of hoarding.

        They really aren’t that far away from shooting such people.

        1. A la Indiana Pizza, best to remain silent.

        2. Despite the irrefutable failure of socialist economies, the amount of people proclaiming the virtues of socialism in that country is astounding. I really believe that they must be fearing for their life, why else could they believe that unless Venezuelans are the stupidest people to ever walk the earth.

      2. I logged in specifically to make the same comment. Calling it a “black” market needs to stop – it is THE market, and if the hotel doesn’t want to pay the market price, then they can go out of business.

        I can understand the need to keep customers and employees from stealing supplies, but there are ways for cheap hotels to circumvent the problem. Vending machines may be a start, or purchasing at the front desk.

        If a hotel doesn’t provide TP, some customers are just going to use the towels.

        1. Don’t most bathrooms down there have bidets? I know when I lived in the Caribbean, a huge percentage of hotels I stayed in had bidets. The further south you got the higher the percentage. I assumed Venezuela would too.

          1. They have water shortages too…

        2. Yes, when you get down to fundamentals you have to ask yourself why such expressions as “black market” and “smuggling” even exist. There would be no such concept as a black market and no such concept as smuggling in a free society. Invariably, someone will bring up “human trafficking” and such, conflating crimes against people with people freely exchanging goods and services.

          1. In a free market, “smuggling” would be called something like “shipping”.

        3. Calling it a “black” market needs to stop – it is THE market

          That can be said of all “black markets”. I don’t have a problem with the term. It has a fairly specific meaning.
          The problem is that the distinction is necessary at all.

          1. Governments have deliberately encouraged the use of the term “black market” so that it can equate something that is truly evil–slavery, sex trafficking–with something that is not–untaxed cigarettes or booze, marijuana, general labor.

            1. And toilet paper is not illegal in Venezuela. So there can be no “black” market in it in Venezuela. If the only thing illegal is the price, the whole concept of illegality can be ignored.

              1. I guess you could shift my “untaxed” to “not sold in the governmentally-approved way” and you’ll have something that applies to both the U.S. and Venezuela. Cigarettes and booze aren’t illegal here.

                Yet.

            2. Well, to me all they have succeeded in doing is making me not think of black markets as a bad thing, I guess.

      3. She’s not opposed to black market TP in her facility. After all, where does she think the guests are getting the TP that they bring?

        What she’s opposed to is cutting into her profit margin to buy TP, when she has a perfectly good pretext for making her guests absorb this cost for her.

        She’s actually a good little crony capitalist. The kind every socialist hellhole needs.

        1. I would imagine not having TP for your guests might give you fewer guests, cutting into your profit margins.

          For the cost of even one unoccupied room a night, you could buy a lot of TP.

          1. I would imagine not having TP for your guests might give you fewer guests, cutting into your profit margins.

            It would unless all of your competitors had a similar lack of toilet paper, then it becomes par for the course.

    2. “It’s hard to get people to produce toilet paper and soap when you insist that they sell it a price below the market rate elsewhere.

      Price controls result in shortages if the maximum price is set too low.”

      Excellent reality check. Someone in Nick’s position shouldn’t need such a reminder in basic economics. Tighten up, Reason!

      1. That was David Boaz at CATO who said that. Nick was just quoting him.

    3. As mentioned below, even that is not necessary. All you need is for the black market price (true market price) to be higher than the state-set price. Instant arbitrage for anyone who can get their hands on TP at state-set prices.

  3. Is that Rowan Atkinson?

    1. Its an earlier incarnation of him, one of his ancestors.

      1. ++

        Does look a bit like Captain Blackadder.

  4. I suspect a lot of it is the difference between things you want (fancy food, fancy clothes) and things you need (toilet paper). Even medical care has an elasticity that toilet paper doesn’t.

    If it takes an hour to see the doctor, people will postpone trivial visits (sniffles, minor cuts and scrapes). If good booze becomes scarce, people wille conomize and settle for ordinary booze more often. But everyone has to use toilet paper, and it’s hard to economize usage. If toilet paper availability drops by even 1%, people will notice and start hoarding, exacerbating the perceived shortage.

    1. and it’s hard to economize usage

      Sure it is–you buy the cheap stuff. My work uses the kind that you fine at only the finest maximum security prisons and nursing homes.

      1. I actually like a little abrasion in my TP. Helps with the cleaning, IMO. YMMV, of course.

      2. Note I said “usage”, as in amount, not quality. My company also uses stuff so thin that I’ve seen single ply stuff thicker than this double ply.

        1. That is intended to discourage bathroom breaks.

          1. But it encourages the few that are taken to take extra long.

      3. Then you just have to use 3 times as much.

        1. Actually, my employer finally figured out that part.

          They tried the cheap, thin stuff only to find that people had to use so much of it to clean themselves (while avoiding soiling their hands) that the company was actually spending more on toilet paper.

          They switched to a better grade.

    2. This is key, the inelasticity means that black market prices will shoot up rapidly whenever there is a slight shortage, which makes it easy to turn a profit on by hoarding.

    3. But everyone has to use toilet paper, and it’s hard to economize usage.

      I’m wondering if you’ve ever had a female living in the same house as you. My ex-GF could rip through a roll a day.

  5. My guess is that the shortage is a function both of its necessity and its ubiquitousness. Everyone has to have it. So, the prospect of a shortage (especially in the absence of a market clearing mechanism) is going to mean everyone is going to try to make sure they have it for themselves. At the same time, It’s almost impossible to monitor toilet paper use. And it’s not like a lot of people are going to know you “exceeded your ration” of TP.

  6. “Why toilet paper? How hard is it to make toilet paper?”

    It’s probably very hard. Rolling and perforating those fragile pieces perfectly can’t be easy. I watched films coating process on a sturdy glass fabric, and handling that was a pain in the ass. I can’t even imagine how fine the balance of forces must be for toilet paper.

      1. fta:

        The production of virgin toilet paper has spawned two current controversies: the destruction of trees, and the use of chlorine dioxide to bleach the paper. While virgin paper processing does necessitate the destruction of trees, they are a readily renewable resource and paper companies maintain large forests to feed their supply. .Despite this, some activists have proposed that toilet paper be manufactured only from recycled products and suggest that consumers boycott toilet paper made of new materials.

        1. I only buy artisanal toilet paper for $11 per roll.

          1. Market niche?

            1. It’s definitely a niche…

              1. Nobody wants to hear about your niche, Sweet’n’Low. Especially not at lunch time.

          2. Artisanal toilet paper destroys the most trees.

            1. It’s actually is advertised as “There’s a whole tree in every roll.”

              1. A carefully hand grown, organic tree.

                1. “hand grown”

                  No I’m curious about how exactly that works.

        2. Paper companies are quite good at managing forests. They probably are responsible for more land being forested than it otherwise would be. And recycling paper uses plenty of nasty chemicals.

        3. Chlorine dioxide doesn’t have even the hypothetic environmental problems other chlorine-based bleaches have. It doesn’t produce halogenated organics.

      2. Yea, this doesn’t sound easy at all. It requires a significant capital investment as well as strict engineering controls by people who give a damn. Your average Glorious Socialist Worker would probably not qualify.

    1. But, but, but – full employment! We just need to get all those out of work socialists into the factory with a magnifying glass and a tiny needle!

    2. Rolling and perforating those fragile pieces perfectly can’t be easy.

      It doesn’t have to be rolled and perforated, though. In China it comes folded and cut, like facial tissue.

  7. Finally! A Marxian discussion!

    1. Just curious, is there some reason you prefer “Marxian” over “Marxist”? Is it a language thing, or is there some deeper reason behind it.

      1. It sounds like they come from a red planet!

  8. All this is, is a case of strange coincidences and bad luck. You guys are reading too much into this.

  9. Thus the expression, “Capitalism is on a roll.”

  10. What a shitty story.

  11. 50 cents a roll in the “black” market? That is still a bargain.

    1. Not when the ‘pre-socialist utopia’ price was 8 cents a roll.

      1. Since it’s Opening Day, I thought Lee Elia still has the best response.

        For the fuckin’ nickel-dime people who show up? The motherfuckers don’t even work. That’s why they’re out at the fuckin’ game. They oughta go out and get a fuckin’ job and find out what it’s like to go out and earn a fuckin’ living. Eighty-five percent of the fuckin’ world is working. The other fifteen percent come out here. A fuckin’ playground for the cocksuckers

        1. I don’t even know who that is, but I like the cut of his gib.

          1. Manager for the Cubs who famously shit on Cubs fans because they were booing and heckling his team.

    2. I suspect it is $0.50 USD. Probably need scientific notation for Venezuelan bol?vars.

    3. John Wayne toilet paper: Tough as nails and doesn’t take shit off of anybody.

  12. Ah.. memories of basic training. The drill sergeants would give one roll of toliet paper for two empty tubes. Luckily AAFES carried Charmin.

    1. When I was in basic training, for a time there was a shortage of toilet paper. Or so they said. In any case, before going, we had to go to the supply room and pick up a couple, three sheets.

  13. Why toilet paper?

    If a business is forced to sell a good for less than it costs to make, they are going to stop making it. Incentives matter.

    1. or what prolefeed said.

    2. “If a business is forced to sell a good for less than it costs to make, they are going to stop making it. “

      This.

      Toilet paper is an undifferentiated product: ‘Branding’ does not increase its market value and any manufacturer can produce a variety of grades to suit different people’s price/comfort preferences.

      As such, it is more of a commodity than a product and the profit margin is thin.

      So when a socialist decrees that ‘everyone needs toilet paper’ and fixes the price to prevent the Greedy Capitalist Manufacturer from ‘gouging’ the people, the frozen price prevents the producer from passing along the increasing costs of inputs. The manufacturer produces at a loss and either changes to another line of business or goes broke and produces no toilet paper at all. Scarcity ensues.

      (Note that, even for a government owned manufacturer, the same inability to cover costs means that the manufacturer eventually goes out of business.)

      It is precisely because the socialist decrees that the cost of the ‘essential’ item has to be controlled that it becomes unavailable except through the black market.

      The same, incidentally, applied to grocery stores in the old Soviet Union, which were notorious for having empty shelves.

    3. Even that is not necessary.

      All that is necessary is for a price differential between the state-set price and the black-market price to exist.

      Once that happens, people with access to TP at the state set price will buy it up and sell it on the black market for a profit.

      So instantly, you will see shortages of TP in the state-run stores. EVEN if the state set price still allows for a profit margin.

  14. They could produce all the toilet paper in the world, but if the price is set to be artificially low then there will be shortages. That’s just how the economy works.

  15. Why, it’s because those evil Koch brothers are keeping all of the toilet paper for themselves! We need toilet paper redistribution!

  16. Remember the good old days when they envied us for our blue jeans?

    1. Oh, they envied us for our TP then too.

  17. But what I never understood is this: Why toilet paper? How hard is it to make toilet paper?

    I was watching an episode of How It’s Made in the Science channel which featured toilet paper-manufacturing and let me tell you: It’s HARD.

    A toilet paper-making company will either buy trees (which means contending with wood prices and their logistics) or trash paper to recycle, which means contending with recycled paper prices and its logistics.

    You then have to convert the cellulose or the recycled paper into pulp, for processing. That requires LOTS of water (which has a cost), bleaching chemicals and heat. So you have energy costs to add. Then there’s the machinery that turns the pulp into a mush that can be gathered into screens which then passes through rollers at high speed, to make the sheets. You get my drift.

    Without Market Prices, you cannot coordinate these inputs for the required output. How can you know how much in raw materials you need to spend if you don’t know the actual demand for toilet paper? Without Marker prices, you don’t know how much to spend in making rolls of toilet paper and you cannot know how many to make (almost all production was centrally-planned and not based on sales and least of all on a P&L.) Ergo, you will always have shortages.

  18. If only the fools had listened to Sheryl Crow’s prophetic warning.

    Although my ideas are in the earliest stages of development, they are, in my mind, worth investigating. One of my favorites is in the area of forest conservation which we heavily rely on for oxygen. I propose a limitation be put on how many squares of toilet paper can be used in any one sitting. Now, I don’t want to rob any law-abiding American of his or her God-given rights, but I think we are an industrious enough people that we can make it work with only one square per restroom visit, except, of course, on those pesky occasions where 2 to 3 could be required. When presenting this idea to my younger brother, who’s judgment I trust implicitly, he proposed taking it one step further. I believe his quote was, “how bout just washing the one square out.”

    1. I think Sheryl was joking here.

    2. Take one sheet and double fold it.

      Tear off the corner and set aside.

      Slide the sheet over index finger and clean as needed.

      Slide the sheet off, wiping finger in the process.

      Use the corner to clean under fingernail.

      1. Thank you for the Monday Morning Gross Out.

        This will be a new Reason feature to go along with the ‘Friday Nut Punch’.

  19. Hey, did something happen to Citgo? Did they run out of commie gas?

    The station in my town just closed and I drove by another with Valero signs taped over the pumps last weekend.

    1. Venezuela is selling assets on the world capitalist market to get the best price in order to fund the continued shortages in their domestic market.

      1. So go to Cities Service stations in the USA for deals on toilet paper. They do sell stuff besides gas & oil.

    2. Citgo doesn’t actually own the gas stations, do they?

  20. But the bolivarian socialists have done so much for the poor!!

    Which seems to be the last remaining defense for the leftists, and even that isn’t true.

    1. Well, they intend to help the poor. It’s not their fault that markets hinder them at every turn.

  21. So what’s the big deal? I thought everyone knew that the New Soviet Man wipes his ass with his hand?

    1. I found a corn cob in my front yar this weekend, and we’re miles away from a farm. Maybe some environmentalist was trying to send a message.

    2. In Soviet Russia, ass wipes you.

  22. Do they not get Sears catalogs in Venezuela?

  23. I’m sure the Venezuelan central bank – like all central banks – is working overtime to produce toilet paper.

  24. Venezuelans don’t know how to use the three seashells?

    1. +1 Taco Bell

  25. I’m sure Joe will be here any second to tell us how the fake libertarians in Venezuela ruined the real Venezuelan libertarians’ efforts to provide affordable toilet paper to the People.

    1. No no no, he’s not joe. He came here a year ago because Rand Paul interested him. He just happens to have the exact same voice and obsession with politics-as-horse-race as joe, that’s just a coincidence.

      1. If the Venezuelans want toilet paper, maybe they should go win an election!

  26. I had to check, of course.

    Looks like you can buy 18 rolls of topshelf TP at Walmart for $17, or 96 rolls of the cheap stuff for $63.

    $0.50 looks like a bargain, to me.

    1. Most of the cost in North America is shipping, warehousing and stocking the shelves with the product. Stock boys being paid $8/hr and drivers and warehousemen @ $12/hr are being paid vastly more than their counterparts in non-OECD countries.

    2. You can do cheaper than that on Amazon. Quick search shows good quality TP for $0.46 a roll. Can’t find any of the cheap stuff there, but it can be found cheaper. Costco’s usually cheaper than that when it’s on sale too.

  27. “But what I never understood is this: Why toilet paper? How hard is it to make toilet paper?”

    If it’s anywhere near as difficult as a pencil then it’s amazing they lasted as long as they did.

  28. This shortage is due to the failure of Venezuelans to use both sides of the TP. In Marxist paradise, you go back to the days when you’d only eat or shake with one hand as the other may be contaminated.

  29. I am saddened the original article did not answer the question “Why toilet paper?”

    I suspect it has something to do with the absence of market pricing, and not only because of misallocation, but also because consumers do not get correct signals about scarcity without a market price. As someone else noted upthread, a rumor of a shortage will cause people to start hoarding, thus exacerbating the shortage. That can’t happen with market pricing, because a true shortage would cause prices to rise, everywhere, not just on the black market. You get a direct signal about scarcity from the market price, and there is no way to profit by hoarding once the price goes up.

    I suspect that what happens under socialism is that people connected to the regime gets first dibs on the toilet paper at the state-set price, and since they aren’t paying true prices, have no reason to conserve. Probably a lot of this is also diverted into the black market.

    You should still eventually get a market price in the black market if there is enough supply, though which would eventually expose whether there is really a shortage or not.

    Unless, once insiders start profiting off the shortage, they purposely keep production down to keep it going. (Ding, ding ding!!)

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