Saturday, February 17, 2007

Some economic ideas die hard

Doing the same thing over and over and expecting a different result indicates, they say, insanity. Oil-rich Venezuela has implemented price controls. The results appear to be the same as previous attempts:

Shortages of basic foods have been sporadic since the government strengthened price controls in 2003 after a debilitating strike by oil workers. But in recent weeks, the scarcity of items like meat and chicken have led to a panicked reaction by federal authorities as they try to understand how such shortages could develop in a seemingly flourishing economy....

With shoppers limited to just two large packages of sugar, a black market in sugar has developed among street vendors in parts of Caracas.
It is not within the power of governments to repeal the law of supply and demand. Yet, they try over and over again.

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