Monday, October 25, 2010

Venezuelan economics (amv)

From Mankiw's Blog:
[T]his picture shows the kind of things you find when you go to a Mercado Bicentenario in Venezuela (which is the new name of a chain of private markets -Cada and Exito- recently expropiated and now runned by the Government). This one is from Mercado Bicentenario, in Centro Comercial Ciudad Tamanaco (CCCT), a mall, in Caracas, Venezuela:

It says:

Description of the product: Diana Oil.

Fair Price: 4,73 Bfs.

Capitalist Price: 7 Bfs.

% of savings: 32%

I think the poster should be extended by one of the following no-free-lunch restrictions:
either by:
Please don't be surprised to find your demand unsatisfied. For prices below the market level there is just not enough supply for everyone.
You pay the difference by taxes. Please check your recent payroll.
The difference is paid by those who import Venezuela's natural resources. We could have invested such rents in education and infrastructure. Instead, we want to consume them today. Who cares about our children?! Vote Chavez!