“Venezuela is toast,” Fausta Wertz writes today, but that would only be true if Venezuelans could find bread. As the Maduro government imposes more price controls, bakers have begun to discover that they cannot live by bread alone, and need to produce goods with higher prices to make up for their losses along with the bread that causes them. That has caused massive bread shortages, and now Maduro has to go to the next step in the Socialist-collapse playbook — seizures of the means of production, as the Miami Herald reports:
Facing a bread shortage that is spawning massive lines and souring the national mood, the Venezuelan government is responding this week by detaining bakers and seizing establishments.
In a press release, the National Superintendent for the Defense of Socioeconomic Rights said it had charged four people and temporarily seized two bakeries as the socialist administration accused bakers of being part of a broad “economic war” aimed at destabilizing the country.
In order to comply with the rationing imposed by Maduro, 90% of all flour provided to bakeries by the government must be used to make bread, which can then only be sold at artificially capped prices. Predictably, this has led to massive shortages through two different mechanisms.
First, the government controls the production and import of wheat and controls those prices, which means that there won’t be enough to go around in the first place. In 1999, when Hugo Chavez launched his socialist agenda, Venezuelan wheat production per year was consistently just over 517 tons, barely enough for a day’s worth of consumption, but by 2014 even that had dropped to 161 tons. Venezuela has to import almost all of its wheat, but the drop in oil prices and their declining production has cut their ability to get hard currency. As a result, the imports of wheat have declined over the last several years and flour mills have had to shut down for lack of raw material. AFP reported on the crisis thirteen months ago:
Five of Venezuela’s 12 wheat mills, which employ some 12,000 people, have closed, Crespo said. The remaining mills employ another 8,000 people.
An industrialist who requested anonymity said there is currently “only enough wheat for the next 12 days.” …
Jesus Masco, who manages a bakery with 20 employees, says that customers “have no idea” of the difficulties bakers face to remain in business.
He said he used to have a quota of 100 sacks of flour a month.
“But two years ago, the deliveries began to decrease, and now we get 30 sacks if we’re lucky,” he said.
Normally that would lead to wildfire inflation from shortages, which is why the Maduro regime imposed price controls at low levels as a way to maintain their political standing. Thanks to those price controls, the allowed price on the bread doesn’t cover the cost of making it. The only way to stay in operation is to divert some of the flour for specialty items to cover the losses from their staple production.
This puts the Maduro regime in the ridiculous position of having to crack down on the production of brownies and croissants:
The ruling Socialist Party says pro-opposition businessmen are sabotaging the OPEC nation’s economy by hoarding products and hiking prices. Critics say the government is to blame for persisting with failed polices of price and currency controls.
Breadmakers blame the government for a national shortage of wheat, saying 80 percent of establishments have none left in stock.
During this week’s inspections, two men were arrested as their bakery was using too much wheat in sweet bread, ham-filled croissants and other products, the state Superintendency of Fair Prices said in a statement sent to media on Thursday.
Another two were detained for making brownies with out-of-date wheat, the statement added, saying at least one bakery had been temporarily taken over by authorities for 90 days.
Why make brownies with out-of-date wheat? Maybe because (a) that’s all there was, and/or (b) the government didn’t provide it in a timely enough fashion while making decisions about which bakeries would be allowed to operate. That assumes the charges are factual in the first place, of course, and not just some way of getting around the fact that people are being arrested for making brownies rather than the People’s Patriotic Baguettes.
The problem with socialism, as is frequently noted, is that you eventually run out of other people’s money. That leads inexorably to shortage, rationing, lines for consumables, confiscation in the name of the people!!, and horrid poverty for everyone except those in charge of the system. It also leads to absurd outcomes such as governments setting croissant and brownie quotas and accusing those who violate such of sabotage and treason. In the end, political and economic pressures will keep forcing more and more production to close, leading to even more shortages and less hard currency with which to relieve them, and ever-deepening poverty — exactly the kind of dynamic we saw in Russia and eastern Europe between World War II and the fall of the Berlin Wall. The Chavistas are not just determined to ignore history, but to repeat it too.
Hey, we used to crack down on brownies too, but not because they contained flour. For a lighter exit on this topic, here’s a scene from the 1968 Peter Sellers film I Love You Alice B. Toklas, a square-meets-hippie farce that, er, hasn’t aged well. The scene where hippie Leigh Taylor-Young’s innovative recipe gets unknowingly consumed by the squares is somewhat more sophisticated than Reefer Madness, but not by a lot.