Inflation is so bad, Venezuelans don’t even bother to count their money. Instead, they carry hundreds of bills in gym bags to make basic purchases. Such is the latest triumph of Bolivarian socialism.
When it’s time for shoppers to pay up, shop owner Humberto Gonzales gingerly takes salty white cheese off his scale, and heaps on a stack of bolivar (the Venezuelan dollar) notes instead. “It’s sad,” the owner told Bloomberg. “At this point, I think the cheese is worth more.”
There’s a great deal of evidence supporting Gonzales’ view. While the bolivar was once one of the world’s strongest currencies, its value has plummeted thanks to socialist policies. The largest bank note, worth 100 bolivars, now carries about as much value as a dime. A few weeks ago, the government asked five currency companies to design bigger bills: a 500, 1000, 5000, 10,000, and perhaps even a 20,000-bolivar note (which would be approximately worth $20).
Steve Hanke with the Troubled Currencies Project estimated that Venezuela’s inflation rate is 808 percent — and that was in 2015! The government has not kept records, so Hanke had to use black market exchange rates to calculate it. In fact, Venezuela’s inflation rate leaves those of Ukraine (57.5 percent) and Syria (27.7 percent) in the dust. Yes, that Ukraine with Russia occupying the eastern quarter or third of the country. Yes, that Syria in the middle of a bloody civil war.
In other words, there is statistical evidence that socialism does more harm to a country than foreign invasion or civil war. And Gonzales’ scale provides even further proof.
Not that this is any surprise to those following Venezuela in recent months. At the end of last year, The New York Times reported that the country’s murder rate for 2015 might be the world’s worst. The country has been running out of food, and that sparked riots. One of the countries with the richest oil fields on the planet started importing oil from the United States. In July, more than 50 animals starved to death at a zoo in Caracas, Venezuela’s capital.
And yes, what happened — and is still happening — in Venezuela can happen here. As Forbes‘ Tim Worstall pointed out, when socialist governments set artificial prices for goods rather than letting the free market do its job, you either set the price too low and have shortages like Venezuela, or you set the price too high and end up with surpluses like the U.S. in agriculture. You need free markets to learn what the price should be, and socialism prevents it from working.
Venezuela is merely the latest example of why socialism does not work, and if politicians like Bernie Sanders do not pay attention it could very well be American dollars on those scales in a few decades. Pay attention, millennials — you’re already on the hook for the Baby Boomers, don’t make it even worse.