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January 24, 2008

That's One Way To Start A Distributorship!

Hugo Chavez recently started a state-owned food distributorship. In the past three days, Venezuelan troops started stocking their warehouses with product. Unfortunately for Venezuela's private-sector distributor, the troops simply confiscated Alimentos Polar trucks and their shipments to do so:

Venezuela's top food company has accused troops of illegally seizing more than 500 tonnes of food from its trucks as part of President Hugo Chavez's campaign to stem shortages.

The leftist Chavez this week created a state food distributor and loosened some price controls, seeking to end months of shortages for staples like milk and eggs that have caused long lines and upset his supporters in the OPEC nation. ...

"Anyone who is distributing food ... and is speculating, we must intervene and we must expropriate (the business) and put it in the hands of the state and the communities," Chavez said during the inauguration of a new state-run market in Caracas.

Hugo's Zimbabwe strategy continues apace. Instead of directly nationalizing these industries, Chavez has looked for excuses to confiscate property a little at a time. With price controls keeping private production low, he has decided to raise prices just as the state enters the market on its own -- and then keeps his cost of production low by simply stealing the product.

It's actually more clever than just the simple theft it is on the surface. By forcing producers to sell below cost for so long, he's weakened the production capability of the private sector so that fewer targets remain. The shortages artificially increase demand and desperation. In raising prices, the root producers now have hope of earning and produce more -- just in time for the state to steal it and take credit for meeting the demand.

What do Venezuelans see from this process? Hugo steals from the rich and gives to the poor, without noting the manipulations necessary for him to succeed in doing so. At least Hugo hopes that's all they see. If Venezuelans start figuring this out, he'll have to have that last flight out of Caracas on standby. (via Memeorandum)


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(T)Hugo Chavez is now stealing food from major distributors in his latest bit of progressive socialism. Price controls didn't work, so it is on to outright theft. At gunpoint, apparently. Venezuela's top food company has accused ... [Read More]

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