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Bread lines recall the glory days of the Soviet empire, in which “socialism” reduced people to beggar status, in a country with a surfeit of natural resources. Shortages and rationing always occur when socialism is adopted, especially the nationalization-of-producers variety favored by the Chavistas and the Castros.

The economic pattern is simple, predictable, and brutal. Socialists demand that producers lower prices for “the people” to a level that ensures losses for the producers. Producers either close their doors, or the government seizes the businesses from them. The leaders put people in place who have little expertise but tons of socialist credibility, and their incompetence leads to massive failures in production. Widespread shortages result, and either the leaders have to enact increasingly brutal methods of repression or the people end up revolting and putting said leaders up against the proverbial wall. And the latter scenario incentivizes the leaders to make damn sure they employ Option One for all it’s worth.

F. A. Hayek described the inevitable downward spiral eloquently in his seminal book The Road to Serfdom. Socialist systems never fail because they don’t have “the right people in charge,” as old socialists like to claim. They fail and turn into repressive tyrannies because all of the incentives for power reward the brutal when the economy fails, as it will always do with central planning and control of production.

Nicolas Maduro is running the Hayek playbook down to the last detail, by the way. If socialism is all about “power to the people,” why does Maduro need to get rid of the people’s branch of government?

Source: Begun, the Chavista food wars in Venezuela have « Hot Air

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