[Marxism] Manufactured Shortages in Venezuela

[Joaquin Bustelo]

Greg sent us article: "the multinationals and industrialists continue their
war on the people by manufacturing shortages of basic essential goods."

I'd be real hesitant to adopt such a voluntaristic view of the workings of a
capitalist economy. Price controls generally don't work very well in a
capitalist economy because of the unintended consequences. This includes
lower production and leakage of product from the "official" channels to
markets where the full value of the commodity is recognized, lowering
"official" supplies even more. Once a shortage begins, it feeds on itself.
People will buy more than they intend to consume, either against future
shortages of for resale. 

In Venezuela's case, you also have leakage of products to neighboring
countries.

A price for 14 cents a gallon for gasoline is really unfortunate in my view.
This is a subsidy to bourgeois and petty-bourgeois layers, and just about
guarantees that huge amounts of Venezuelan oil products will find their way
onto markets in neighboring countries. On the contrary, I'd be tempted to go
the other way and pile a bunch of tax ON TOP OF the real world market price
of gasoline, with my reasoning being that every barrel consumed internally
is deducted from exports and the hard currency income it generates to
develop the country and raise the standard of living of working people. And
I'd also tax imported vehicles, as luxuries, and American gas guzzling
monstrosities especially. 

I know there is a problem with the price of transportation services. But
there has to be a better solution to subsidizing transport for the popular
classes than giving gasoline away to millionaires and smugglers.

Raising living standards by holding down prices while at the same time
injecting more and more money into the economy is not a sustainable policy.
And the harder you work at it, the more opportunities you create for
arbitrage and speculation. 

Venezuela is fortunate to have the resources to be able to import its way
out of many shortages, but I would use this to ease the way out of price
controls as a generalized mechanism. You really can't have a market economy
and pretend you can ignore its laws. There are various ways of distorting
markets ("shaping" supply and demand, so to speak) but all experience shows
that simply decreeing that the law of value is repealed for X, Y and Z
products DOES NOT WORK. 

It is almost always not true that speculators are at the root of the
problem. "Speculation" --and especially arbitrage between official prices
and market prices, is a symptom of imbalances in an economy, not the cause
of them.

José