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Price controls cause shortages

Example #2379:

Zimbabwe's government announced sweeping price cuts in a bid to curb inflation Tuesday and said it set up a unit drawn from all its security agencies to enforce the cuts.

But most businesses -- including gas stations ordered to reduce the price of scarce fuel by more than two-thirds -- ignored the government's directive. There were no reports of security agents arresting business managers on the first day of the ordered cuts.

Far from cutting prices, retailers have been struggling to keep up with the falling value of the Zimbabwean dollar, in some cases curtailing their hours of business to give employees time to put new, higher prices on goods.

Industry Minister Obert Mpofu announced price cuts of up to two-thirds on a range of basic goods and services, from commuter transportation to bread, sugar, meat, milk, corn meal and even newspapers, state radio reported Tuesday.

The result?
On Tuesday, shops in central Harare seemed to be defying the new directive. Instead of cutting prices, some supermarkets simply emptied their shelves of goods such as sugar, salt, flour cooking oil, beef and fuel that would be subject to the order.

"We have been instructed by management to remove some of the products from the shelves for now," an assistant at a leading chain store said as shoppers scrambled to buy bathing soap.

At another store there were long queues as people stocked up, saying they feared basic goods would now be in even shorter supply.

Zimbabwe's government must be among the most incompetent gang of morons ever to rule a country. After years and years of stupid policies that have devastated the economy, still they keep at it -- seemingly thinking that their absolute physical power can change the rules of supply and demand. They seem to have some sort of institutional learning disability.

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