Let’s hope somebody learns from it.
The Maduro government, faced with leaping inflation, says it will control prices more tightly, put a lid on profits, and jail businesses that do not fall in line.
Even Karl Marx admitted that the profit system drives down prices. This is because the lure of profit persuades producers to increase the supply of goods and services. And the only reliable way to reduce prices is to increase supply. Price controls and especially profit controls reduce supply and thus drive up prices.
The classic example was the French government in the 18th century. Faced with discontent over bread prices, it put caps on the price of bread. Farmers, unable to sell their grain for a profit, stopped planting. The supply of bread collapsed, prices soared, and peasants starved. That was when Marie Antoinette foolishly said when told there was not enough bread for the peasants: “Let them eat cake.”
It will be difficult to get rid of the Maduro government because, like other crony capitalist regimes, it has so many “private sector” allies being fed by it. Meanwhile millions of innocent Venezuelans have to pay a price in misery for economic ignorance and political grandstanding.