Venezuela

Venezuela: The Chaos of Destroying Market Prices

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Tim Worstall at Forbes (after noting the possibility of an inflation rate this year as high as 200 percent in Venezuela) makes a subtle, vital, and too-little-understood point even among many in non-socialist-hellholes, fingering a key mechanism by which socialist central planning leads to shortages and misery: assuming prices are meaningless or worse just tools for haves to harm have-nots:

markets, and the prices in them, are far from being just some random numbers that the plutocrats assign to things in order to strip the poor of their incomes. They're actually signals: signals of who is prepared to produce what, for what remuneration, and who actually wants stuff at what cost? It's actually how we coordinate production and consumption in fact. It's long been proven that we don't have any other effective method of such coordination (Hayek's Nobel was in large part for this, there have been other proofs since) so, markets and prices are what we're left with….

Because prices perform that coordination service for us we can't go around setting them at random…. If we set prices below market ones then people just won't produce what people want. We thus end up with empty shelves and shortages, as Venezuela famously does today of just about everything. And think how badly you've got to screw up to get a shortage of something as simple as toilet paper, which is something they've managed.

Worstall goes on to call, in an un-libertarian move that's alas still more savvy about economics than are Venezuela's destructive Chavistas, for redistribution, if you need redistribution, that is just redistribution, not destruction of the entire market mechanism.

You know, taxing some and giving to others. It's not ideal, but a welfare program that was just and only a welfare program would be better than either complete destruction of the market economy as in Venezuela or the complicated roundrobin tangle of cross-class and cross-generation taking, giving, managing, and skimming we see in the U.S.

Nick Gillespie from earlier this month on Venezuela's self-imposed economic crisis.

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  1. Worstall goes on to call, in an un-libertarian move that’s alas still more savvy about economics than are Venezuela’s destructive Chavistas, for redistribution, if you need redistribution, that is just redistribution, not destruction of the entire market mechanism.

    “But you can’t just give people money! They might spend it on the WRONG THINGS.”

    -/the progressive/puritan fusion.

    1. Yes, this is the Catch-22 of the situation. If you’ve got it in your head that you know better than the market what the “right” price should be for everything, you necessarily think you know better than everyone else how they should spend their money. Because that’s exactly what “the market” is – the outcome of everybody deciding for themselves how to spend their money. These people simply are not capable of just giving poor people money and letting the poor decide for themselves how to spend that money. They simply must tell everybody else how to run their life. Telling them that all they need do to help the poor is to give them some money and then leave them the hell alone is like telling an alcoholic that they could stop being an alcoholic if they just stopped drinking alcohol.

      1. “They simply must tell everybody else how to run their life. ”

        It was and always will be about power over others. Bending them to their will.

        “They simply must tell everybody else how to run their life. ”

        That’s what it’s all about. Everything else is rationalization for their lust for power.

        “Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.”
        ? George Orwell, 1984

    2. “But you can’t just give people money! They might spend it on the WRONG THINGS.”

      Such as, Heaven Forfend, their wants, needs and desires…

      1. “Such as, Heaven Forfend, their wants, needs and desires…”

        If it is “free” money, it will not be used to advantage.

        1. Possibly not.

          But I would trust the judgement of the poor recipient over the judgment of the $80k/yr civil servant.

          1. Aresen|4.14.15 @ 11:47PM|#
            “Possibly not.
            But I would trust the judgement of the poor recipient over the judgment of the $80k/yr civil servant.”

            Suffice to say the Sevo family has a close familiarity with trying to help the folks in the “under-served” districts of SF.
            (most) Every damn time the money is handed out, absent any sort of commitment on the part of the recipient, the result a month or two down the road is zero.
            I do not disagree that the civil servant ought to find a more proper job, such as delivering pizza for example, but it’s becoming obvious to me that you can’t hand out “free money” and expect any sort of real return on it.
            I don’t care if you want to spend your money on dope, but don’t ask for charity or taxes to do so.

  2. Comrade Maduro (he of no alt-text) wants to make socialism work, but the wreckers and capitalist pigs won’t let him.

    Maybe he needs to talk to comrade Castro and figure out what it takes to make comrade Obama kiss his ring. I mean, I’m sure the Venezuelan stuff is equal to the Cuban stuff. Get that graft goan, comrade Maduro, you can drive a bus, you can get comrade Obama kissin your stuff, no?

    1. You’re a fucking idiot.

      Obama put a headlock on the asshole Chavistas with an EO.

      I know – you’re a fucking gullible type that thinks only Team Red can be capitalist. GO TEAM RED! GO GO GO!

      1. BUUUUUUUUTTTTTTPLUUUUUUUUUUGGG

      2. Palin’s Buttplug|4.14.15 @ 10:23PM|#
        “You’re a fucking idiot.”

        You slimy piece of shit, how would you know?
        Fuck off.

      3. Nothing says free market like minimum wage!

  3. Speaking of Banana Republic Economics the Doc(fix) is in.

    WASHINGTON ? Congress has approved legislation permanently changing how Medicare pays physicians in one of Congress’ rare recent displays of bipartisanship.

    The Senate’s 92-8 vote Tuesday sending the measure to the White House let both parties claim victory.

    Passage headed off a 21 percent cut in doctors’ Medicare fees that would have begun taking effect Wednesday. It also let lawmakers finally change a 1997 law that has repeatedly threatened reductions in physician’s payments that doctors have said were pressuring them to stop treating Medicare’s elderly patients.

    The measure also has extra money for health care programs for children and low-income people.

    The House approved the legislation last month. President Barack Obama has said he will sign the bill.

    1. Neither of our statist parties wants to fuck with Medicare.

      Old fucks vote!

    2. I get so fucking sick of ‘progressives’ and ‘conservatives’ who both approve 95%+ of our entitlement culture.

      Fuck them both.

  4. Meh. Give it a couple decades.

  5. This was all a round-about method of outlawing toilet paper, which was unfairly competing with the bolivar.

    1. *polite applause*

    2. Nice.

      I just wish our Paultards would acknowledge the 5 year run of strength Obama has the US Dollar on.

      Oh, I know! The only nigga Team Red likes is a captive GOP plantation ape like Thomas Sowell!

      1. But the Paultards have been acknowledging the strong dollar! Krugman has written several columns about how bad the strong dollar is for the US economy and the balance of trade. I never really have understood the complaint about the trade deficit – we import lots of cheap goods and export lots of little pieces of paper and it all balances out, doesn’t it? And don’t most people prefer to have goods than pieces of paper, don’t most people trade all the paper they can get their hands on for goods?
        .
        (P.S. – I think the preferred term for Paultards is “Krugnuts”.)

      2. “Strong” USD = overvalued USD propped up by a lack of competition

      3. “Strong” USD = overvalued USD propped up by a lack of competition

        1. “overvalued USD”
          So you know what the value should be? Oh, goody! Let’s see it!

    3. Awesome. I tip my hat to you.

  6. Abraham Lincoln or Hugo Chavez: Who is the Real Libertarian TOP MAN?

    1. I’ll go off the board and pick BCE.

      /sarcasm

  7. Sigh, Paul voted for the bill.

    1. That was re the doc fix.

      1. I am shocked that a politician voted for a special interest he is a member of.

        /sarc

  8. “Worstall goes on to call, in an un-libertarian move that’s alas still more savvy about economics than are Venezuela’s destructive Chavistas, for redistribution, if you need redistribution, that is just redistribution, not destruction of the entire market mechanism.”

    Sorry, Nick. No such thing. You screw with the market, it screws you.
    Sevo’s law: “Any time a third party sticks its nose in a free transaction between to consenting moral agents, at least one, and probably both. are going to suffer.”
    What was a trade that increased value to both now at least decreases it to one and likely both.

    1. Sorry, not Nick; Brian.

  9. You’d think that after the 20th century, and particularly after China, it would be clear that markets are the goose that lays the golden eggs.

    1. I have seen progressive commentators bemoaning the ‘growing inequality’ in China.

      1. Aresen|4.15.15 @ 12:17AM|#
        “I have seen progressive commentators bemoaning the ‘growing inequality’ in China.”

        All too common.
        I have a book on the Chinese construction of the railway to Tibet. It’s hard to find a hero in the lot; the Dalai Lama was a slave holder and since has existed on CIA (US taxpayer) largess, while the Chi Coms remain the Chi Coms.
        But the book ends on a ‘cautionary tale’ of the BMWs in Chongqing, since some people still don’t have Buicks!
        Pathetic.

  10. “Worstall goes on to call, in an un-libertarian move that’s alas still more savvy about economics than are Venezuela’s destructive Chavistas, for redistribution, if you need redistribution, that is just redistribution, not destruction of the entire market mechanism”

    There is a legitimate argument that property rights on undeveloped land (at least, at this point where it’s pretty much all been discovered) are justified more by practicality than morality. That is, unlike other forms of property, the owner is not being entitled to it on the basis of being responsible for its creation; they really have no more right than a poor person halfway across the planet. That being the case, it stands to reason that it’s actually moral for the value of land itself to be collected and redistributed.

    It’s like someone died and left a plot of land as an inheritance for a number of kids. While it could be divided, it makes as much sense for one of them to keep it, and pay all of the others an equal share of its value (minus one share for himself).

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