Test Tube Markets

February 13, 2007

The Globe and Mail reports that president Hugo Chavez’s government has threatened to take over food distribution chains (e.g. supermarkets) in Venezuela.

Industry and Commerce Minister Maria Cristina Iglesias said the decree would help curb supply problems that have caused severe shortages of meats, milk and sugar in recent weeks.

Oh boy.

Shortages of items ranging from milk to coffee have occurred since early 2003, when Mr. Chavez began regulating prices for 400 basic products as a way to counter inflation and protect the poor.

This is the problem I was hinting at with my Cold Compassion post. Protecting the poor is certainly a good thing, however, the policy that was designed to help the poor will do the exact opposite. This social experiment has been carried out so many times now that the results are completely predictable. Compassion should be reserved for measuring outcomes. In the case of Venezuela the outcomes make me want to cry.