At socialism’s core is the inability to calculate prices. Prices ebb and flow, but this dynamism is troublesome for governments that want to control the economy. (And the people.) It doesn’t matter if a government says that a loaf of bread is $1 when it is really worth $2. In the real world that loaf of bread will sell for $2.
But as reality sets in central planners all too often seek to crush natural market dynamics (they are as natural as the seasons and the tides) through authoritarian means. This creates even more warping in the economy as the loaf of bread in question becomes contraband instead of just food and then sells for even more.
Of course the folks with the guns (the government) get a “piece” of the bread action just as they try to suppress the reality of the market.
But that’s socialism for you.
Venezuela’s inflation rate, already by far the world’s highest, spiked from 4,966 percent to nearly 18,000 percent in just March and April — a trend that, if it continues, could push the country’s annual rate to more than 100,000 percent by year’s end, economists say.
The 17,968 percent rate registered at the end of April already surpassed the 13,864 percent rate predicted by the International Monetary Fund for all of 2018.
“What we’re seeing at this point is a giant jump in inflation,” Steve Hanke, a professor at Johns Hopkins University and one of the world’s top experts on inflation, told el Nuevo Herald.
That and “the pretense of knowledge.”