Price Controls Won’t Die! The Example of Interventionism in Venezuela

The New York Times report, With Venezuelan Food Shortages, Some Blame Price Controls, shows that bad ideas live on and on. Those who read our recent post of Mises’ explanation of price controls will have no difficulty understanding what’s happening in Venezuela: the lines, the shortages, the call for more price controls, rationing, and nationalization of business, all as a result of the initial inflation caused by government money creation. The parallels are uncanny. It’s as if someone made it up, but it’s real.

Each intervention into the market economy beyond enforcing property rights and the rule of law always creates unintended consequences that must either be “fixed” with more central planning (leading eventually to complete socialism), or by abandoning the interventions (allowing free markets). Economic laws are universal; if we ignore them, we do so at our own peril.