Venezuela suffering through meat and sugar shortages

[mosdef]

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Maybe eventually the black market will become the de facto market for all these goods and the whole scheme will collapse?

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Even if the black market is chugging along merrily, the large cost of risk of being imprisoned or killed for participating still prevents it from operating as a surrogate for a real free market.

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The increased risks inherent in black markets drive up prices. A similar principle is at work as in the illegal drug markets.

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Yeah, but that risk/cost is added to the equation through violent government means, so it's an imposition on the "free" market the same way that the government price controls are.

[IsaacW]

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Maybe eventually the black market will become the de facto market for all these goods and the whole scheme will collapse?

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Even if the black market is chugging along merrily, the large cost of risk of being imprisoned or killed for participating still prevents it from operating as a surrogate for a real free market.

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I agree, and I didn't intend for my original statement to be an optimistic one. Price controls are very, very bad if they set a maximum price that is too low.

Incidentally, I really like the idea in Economics in One Lesson that all of these things come about because people consider only the primary consequences of an action and don't look deep enough into the problem.

[BCPVP]

If you like Economics in One Lesson, you might also like Frederic Bastiat's, That Which is Seen and That Which is Not Seen

[00gene]

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So you're saying socialism doesn't work? Bizarre.

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Government controlled prices = socialism now? News to me.

[NeBlis]

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So you're saying socialism doesn't work? Bizarre.

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Government controlled prices = socialism now? News to me.

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Of course it is! Price controls and central planing are major tenants of socialist government. Stop trying to sound cool and wright something substantive about why you think price controls work (if in fact that is your position).

NeBlis

[Al68]

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So you're saying socialism doesn't work? Bizarre.

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Government controlled prices = socialism now? News to me.

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American Heritage New Dictionary of Cultural Literacy, Third Edition

socialism:

An economic system in which the production and distribution of goods are controlled substantially by the government rather than by private enterprise, and in which cooperation rather than competition guides economic activity. There are many varieties of socialism. Some socialists tolerate capitalism, as long as the government maintains the dominant influence over the economy; others insist on an abolition of private enterprise. All communists are socialists, but not all socialists are communists.

[00gene]

Some governments control prices.

Prices are controlled in socialism.

Therefore, some governments are socialist. You can't go the other way; a system with controlled prices is not immediately socialism.

[Al68]

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Some governments control prices.

Prices are controlled in socialism.

Therefore, some governments are socialist. You can't go the other way; a system with controlled prices is not immediately socialism.

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OK, if you're claiming that they're only "partly" or "moderately" socialist, I can't argue with that. But the policy of regulating prices is a "socialist" policy. Is there a different word that we should use?

[Zeno]

So Hugo is not turning out to be a wise economist.

Is that a fair statement?

Perhaps we should give this man more time to prove his economic agenda. Whatever it is.

-Zeno

[Al68]

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If you like Economics in One Lesson, you might also like Frederic Bastiat's, That Which is Seen and That Which is Not Seen

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That's the same guy who predicted that if polititians continued to collect taxes to fund their social programs ("pillage"), eventually they would even evolve a "moral code that glorifies pillage". Sound like anyone we know of?