Food Socialism

From, we learn:

At a bustling food market in downtown Caracas, armed officers belonging to President Hugo Chavez’s National Bolivarian Guard marched by boxes of lettuce and tomatoes, checking prices and storage rooms.


“This is the worst it’s ever been, I can’t find any eggs, rice or flour,” Noreli de Acosta, a 55-year-old housewife.  

What is behind it all?

Chavez suffered his only electoral defeat in 2007 when voters narrowly rejected a referendum to change 69 articles of the constitution amid shortages of beef, milk and sugar. He subsequently accelerated the nationalization of farms and food industries. Since taking office in 1999 he’s seized more than 1,000 companies or assets.Capital controls have exacerbated shortages by limiting the amount of foreign currency Venezuelans can obtain to import goods.

Yet, rather than freeing up capital controls, here is what the socialist government is up to:

Last year the government ordered companies such as Procter & Gamble Co. (PG) and Unilver Plc (ULVR) to lower the price of shampoo, soap and other personal care products to contain inflationary pressures. Authorities regulate prices for a wide range of products including chicken, cheese and coffee.
The government blames producers and merchants for hoarding products and this week carried out televised raids of warehouses. Among goods confiscated were 9,000 tons of sugar, part of which was imported by a supplier to the local unit of PepsiCo Inc. (PEP)

Shockingly, Chavez supporters are undeterred:

At a nearby poultry store, display cabinets were half empty and one shopper complained that prices were twice what the government mandated.
Morela Tirado, a 53-year-old housewife, said such shortages are only a small inconvenience and have not undermined her support for the Chavez government.
“So you switch meat for chicken, pasta for rice, what’s the big deal? Nobody is going hungry,” said Tirado. “It’s not that there’s no food, you just don’t always get what you want.”

It's too much of a stretch to say that calls for fat taxes, large soda bans, and veggie subsidies will lead to this kind of outcome.  But, I'd at least hope that situations like this in oil-rich Venezuela at least serve as a cautionary tale for those who think we can top-down engineer everyone's weight, health, and eating patterns.  After all, it is hard to imagine that Chavez and his advisers thought their capital controls, import restrictions, price-caps, and confiscations would lead to such bad outcomes.  These were - I'm sure - well meaning (but short sighted) plans to control the economy in one way, all the while forgetting that interventions in one area cause unexpected disruptions in another.