Wednesday, 27 August 2014

Venezuela proves Hayek right again

Writing in the Road to Serfdom, Hayek pointed out that socialism inevitably ends up in tyranny. In his book, Government Against the Economy, George Reisman outlined the process in detail.

Socialist controls creates higher costs and partial  shortages, which inspire partial price controls and/or rationing, which creates more shortages and more controls, which creates even greater chaos in the production and distribution of goods, which leads to more shortages and universal controls, which leads to the seizure of production and distribution and even greater shortages and more and more controls – an inevitable and unsustainable process leading inexorably to bankruptcy, to starvation and to the tyranny and terror necessary to maintain the now-utterly corrupt system against those forced within it.

The process lasts either as long as a country has something to loot – or until its citizens wake up.

Venezuela continues to perform today’s demonstration of this tragic process.

Image: Wikimedia CommonsNot only has Venezuela imposed price controls, it now seeks to “cure” shortages by cracking down on shoppers. “Venezuela’s food shortage is so bad the country is mandating that people scan their fingerprints at grocery stores in order to keep people from buying too much of a single item,” Fox News reports.
   

The Guardian offers some background: “In 2008, when there was another serious wave of food scarcity, most people blamed shop owners for hoarding food as a mechanism to exert pressure on the government’s price controls, a measure that former president Hugo Chávez adopted as part of his self-styled socialist revolution.” (Nicolás Maduro, right, is the current president.) Of course, price controls spawned a black market where common items go for exorbitant prices.
   
Today’s left continues to pretend that they can strip away people’s economic liberties without harming their civil liberties. The fact that Venezuela now wants to fingerprint grocery shoppers to counter the “hoarding” caused by price controls is merely the latest reminder that economic liberties are civil liberties.TFR76_Cover_Web-Edition

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