Nothing says “Merry Christmas” like receiving a toy that the government seized from toy companies trying to turn a profit in an economy wrecked by socialism. Venezuela yet again is a cautionary tale about why a centrally planned economy will always lead to disastrous results.
Venezuelan authorities have arrested two toy company executives and seized almost four million toys, which they say they will distribute to the poor.
Officials accused the company of hoarding toys and hiking prices in the run-up to Christmas.
We don’t need no stinking law of supply and demand.
Last week, the government issued an order to retailers to reduce prices on a range of goods by 30%.
Business owners say the order is a populist political move, and pushing them towards bankruptcy.
Venezuela’s consumer protection agency, Sundde, said toy distributor Kreisel had stockpiled the goods and was reselling them at a margin of up to 50,000%.
Hyperinflation under Venezuela’s socialist system is so bad that people find it easier to weigh their worthless currency than to count it. This alleged 50,000% profit margin is probably indicative of businesses trying to stay afloat in a system where the rules of economics have been so subverted by the government. It would make no sense for a business to price its products beyond the reach of any potential customers.
“Our children are sacred, we will not let them rob you of Christmas,” it said in a tweet, along with photos and video of thousands of boxes of toys.
Meanwhile the Venezuelan government robs the “sacred” children of affordable food, medicine, and everything else by completely botching the country’s economy. Apparently some children—those of people who make and sell toys—are less sacred.
In late 2013, the country introduced laws allowing the government to fix prices and dictate profit margins.
The same legislation limited profits to 30% – the amount often discounted in the compulsory “adjustments” enforced by Sundde at hundreds of retailers in the past week.
The same measures have been used to fix the prices of basic products such as flour, meat and bread – but supply is limited in a country where many people go hungry.
Maduro has instituted a system to distribute food which some are calling “food apartheid.”
Maduro called the new system “CLAPs” (Local Committees of Supply and Production). The name might be fitting, because those who don’t applaud his government haven’t been getting anything to eat.
Maduro told Venezuelans that the CLAP system would alleviate chronic scarcities and the “economic war” against his government he says is being waged by opposition leaders, business owners and the street-level black market vendors known as “bachaqueros.” The CLAPs would go door to door in Venezuela’s poorest communities selling bags of groceries at huge discounts.
Instead, critics say the system has devolved into a kind of “food apartheid” meant to punish those who oppose Maduro.
Somehow, people in the United States who support the Venezuelan government—Bernie Sanders, Sean Penn, Jamie Foxx, etc.—still retain credibility with a large number of Americans. Totalitarian socialism is an evil system.