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Eskimos Running Out of Ice

May 17, 2010, 7:15 am

At least, that is, when the government is managing the ice supply:

Venezuela's economy is in trouble despite the country's huge oil reserves. Blackouts plague major cities. Its inflation rate is among the world's highest. Private enterprise has been so hammered, the World Bank says, that Venezuela is forced to import almost everything it needs.....

This is not the way it was supposed to be. Venezuela is one of the world's great energy powers. Its oil reserves are among the world's largest and its hydroelectric plants are among the most potent.

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Category: Capitalism & Libertarian Philospohy, Government
  • morganovich

    i can literally not think of any government policy that would derail an economy faster than fixing prices to mandate selling at a loss.

  • Max

    Ahhh, and don't forget that they are currently nationalizing iron production capabilities and el jefe has already planned the next coup: Transportation companies near the capital...

    I wonder where he will stop or how far he comes before the card house crashes? On the other side, one can hope (for the poor people in Venezuela) that it is not too far ahead...

  • anon

    "i can literally not think of any government policy that would derail an economy faster than fixing prices to mandate selling at a loss."

    Sounds like what HCR will do (and certain progressive states are doing) to health insurance companies.

  • me

    It's the nature of a government to restrict thing. So when it is in control of everything then everything becomes restricted. Yet we keep thinking government can fix the problems it created.

  • William Newman

    morganovich writes "i can literally not think of any government policy that would derail an economy faster than fixing prices to mandate selling at a loss."

    That's a respectable entry in an economy-derailing contest. But I think if that's literally the strongest entry you can think of, it just shows that you're not very evil.

    How about various kinds of forfeiture laws? E.g., I'm dimly remembering a remark that at least some of the historical patterns of vigorous heresy prosecutions were under legal systems where the accuser had an official right to the convicted heretic's stuff. (Or witchcraft, not heresy? I can't remember for sure.) Also, before the industrial revolution or so, all sorts of less-formal forfeiture incentives were very strong, with people devoting enormous amounts of energy and wealth to intriguing at cour in order to get granted their rivals' stuff.

    So I nominate a policy of people having to forfeit their stuff to the accuser when they're convicted of something suitably underspecified: e.g., convicted of exploitative pricing, or convicted of not advancing the economic welfare of the people. Now, Kelo v. City of New London is actually recognizably close to the second, and I concede that it hasn't derailed the economy fast. But note that the Kelo arrangement is decorated with a lot of procedural indirection and friction, and it'd be easy to streamline it. E.g., institute a policy allowing anyone to file suit directly to take over a property by arguing that the property is blighted.

    For extra credit, tweak the incentives to help destabilize other things too. E.g., we might encourage "one man, one vote, once" by revising the policy slightly to "allow anyone *who* *is* *a* *member* *of* *the* *ruling* *party* to file suit to take over the property. Or we might encourage violence by allowing properties to be taken over not only because of a economic verdict like "blight," but alternatively because of a pattern of violent protests against the previous owner.

    ("You got your witchcraft policy in my voodoo economics policy!")

  • agesilaus

    All you have to do is look at Rhodesia for another example, one that run into the end game.

  • Bill

    Was it Milton Friedman who said, "If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."

  • Esteban

    Just wait 'til we legalize the army of illegal Mexicans. Latin America is a diseased place, addicted to socialism. With the exception of Chile and to an extent, Panama, the whole region is disastrously run and sick with collectivist ideas. Unfortunately, this mentality is seeping northward...