A useful and horrifying note on the ghastly economic disaster that Bolivarian socialism has brought to Venezuela. A laddie has admitted collecting $1 billion – yes, that’s one billion dollars in real money – just to allow other people to steal. That’s the grift on top of the actual crime itself note. No, this isn’t just some example of greed, capitalist or anything else, being allowed to run amok. It’s inherent in the stupidity of that socialism that was imposed – price fixing. If the price fixing didn’t exist then the opportunity to do the stealing – recall, the stealing that required the $1 billion in bribes just to allow it to happen – wouldn’t have been possible, couldn’t have happened.
Worth recalling this when people tell us that rents should be fixed, that the price of labour must be set by government, even, as Sark is finding out, when electricity prices must be fair and reasonable. It’s the price fixing which allowed all of this:
Venezuelan Ex-Treasurer Admits He Took $1 Billion in Bribes
Even when we’re talking about government sums of money that’s still a fair old chunk of change:
A former Venezuelan national treasurer who pleaded guilty to money laundering admitted he took bribes of over $1 billion from businessmen to allow them to conduct illicit foreign-currency transactions even as the once-oil-rich country’s economy collapsed, the U.S. said Tuesday.
In a statement, the U.S. Justice Department said Alejandro Andrade pleaded guilty to one count of conspiracy to commit money laundering under seal last December in federal court in Miami. The statement said that Mr. Andrade, a former bodyguard for the President…
Note that ripping off the Venezuelan government, or the Venezuelan people, isn’t a crime under US law. Money laundering inside the US is. That’s why the charges are as they are.
Note also that he was a former bodyguard – that the politically trusted no-necks get to be Treasurer is a decent enough sign of crony government.
But the thing to really look at is, well, what were they actually doing:
Since 2003, the exchange control system has sold heavily subsidized dollars through state currency agencies or government auctions. But dollars on the black market have fetched at least double and sometimes 10 times more, allowing the well-connected to buy cut-rate dollars and resell them at a huge profit.
That’s the problem with any sort of price fixing. Out there in reality things will cost what things cost. Doesn’t matter what the government says they should cost, they’ll gravitate back to that actual value. Insist that chickens sold in stores must be nice and cheap? There’ll be no chickens in the stores and those outside will cost what chickens cost. Even if you buy up the chickens and put them in the stores at that nice low price people will buy – or steal – them and then sell them on again at the real price.
Insist that the domestic currency is worth some amount? Then fine, insist away. The actual price of it will still be what that market price is. Have special auctions and permissions and licences so that special people can get real money at a low price in the domestic toilet paper money? Then those special people will be those who have bribed their way into gaining that real money for less toilet paper. Which they will then sell and pocket the profit left after the payment of the bribes. Without, naturally, having solved the country’s shortage of toilet paper in the process.
Again, note the admission here. He’s not agreeing that he stole a billion. Nor that the crime was that a billion was stolen. He’s saying that his grift, his bribe taken to allow the greater theft, was that billion in real money. The actual crime must have been vastly greater to allow him that skim. And the why it happened was simply because government tried to set the price. Price fixing always leads to bribery and corruption, to those with the political access stealing from everyone else.
Which is why we don’t want that price fixing that is such a part of socialist messing with markets. It’s an inherently corrupt system. Sure, the capitalists ride high in a free market world but that’s as nothing to how much is stolen from us in a fixed economy.