RL: “The shortages of these goods is occurring because the private sector is refusing to make/import them or make/import enough of them.”
Tulio: I’d need further proof of that. The free market should handle such issues. If one manufacturing of widgets is withholding production that’s an opportunity for another to open up and take his market share.
Well, why isn’t the Venezuelan free market operating as it should then? Does the commenter have any theories on what is causing all of these shortages? If it’s not economic warfare, then what the Hell is causing the shortages? You can’t just shoot down theories you don’t like. You have to shoot them down and then offer another theory instead. What does the commenter think is causing all of these shortages in a capitalist-run economy?
Got any theories?
Hint: The business class is trying to take down Chavez by creating an economic crisis and using that crisis to take out the Chavistas.
Has the commenter studied what happened when the US got together with the Chilean business class to wage an economic war and make the Chilean economy scream in order to create an economic crisis that they could use as an excuse to stage a coup against Allende? If you study what happened during the economic war that was waged on Allende, you will see that what is happening in Venezuela is almost exactly the same thing that was done in Chile.
Further, members of the Bolivian business community are quoted on the record as being furious that Evo Morales came into power and vowed to take him out with any means they had. Reporters asked them how they would take down the Morales government, and the business leaders stated that they would wage economic war, stop or slow down all production, create massive shortages and an economic crisis, and then use that to take down the Morales government.
So with the evidence from Chile 1970-1973 and the recent comments by Latin American capitalists in Bolivia, we see that economic warfare to get rid of leftwing governments is very much part of the playbook for the Latin American ruling classes and business sectors.
There are price controls on a lot of the goods. You can make a modest profit on the price controlled goods, and the government keeps raising the price controls all the time under pressure from business. But ever since those price controls went in, the entire business sector has refused to produce or import any price controlled products. Only some basic products are price controlled. Most things you find in the stores are not price controlled.
They would produce something similar to the price controlled product but not quite the same. Rice was price controlled, but the capitalists started importing some special rice products that were not controlled where they could make a huge profit. Chicken was price controlled, but the capitalists just started producing some other sort of chicken (rotisserie chicken?) that was not controlled that got a much larger profit.
This caused terrible problems for a while, but finally the state said, “Ok, you capitalists do not want to produce these price controlled products, then we the state will import them.” So for quite a few years, the state used oil money to import all of the products that were price controlled. This worked very well for a long time, and the shelves were full. The capitalists produced or imported more expensive high profit goods, and the state imported price controlled staples.
However, this all came crashing down with the oil price crash. The state is now broke and can no longer import all of the price controlled staple goods. And the business sector has refused to produce or import price controlled staples ever since the controls went in. So there’s a big reason for the shortages right there.
If the capitalists import products, they can make much more money smuggling the goods to Colombia or selling them on the black market as opposed to selling them on the shelves of Venezuelan stores, so that’s what they do with a lot of imported goods. And any goods they produce may also be smuggled to Colombia or sold on the black market because you can make a much higher profit that way instead of selling them to legitimate outlets.
Also the capitalists need dollars to import products. So they get dollars from the state to import things. So the businesses are always going to the state asking for these cheap dollars saying they want them to import things that are in shortage. So the government gives them the dollars to import things, but instead of using them to import the products in shortage, they play money games with the cheap dollars on the currency markets in the black market.
Also a lot of capitalists have simply stopped making much of anything and instead are playing games with money by speculating in the currency market in the black market, where huge profits may be obtained by selling cheap state dollars at the black market price.
