Another counter intuitive Chavista law passes

[GatoGordo]

The joke of the day: The constituent will go on tour to "promote" the Law of Agreed Prices
Nov 23, 2017 4:00 pm

The president of the Cuban Constituent, Delcy Eloína, announced that this Thursday the agency will be activated throughout the country to promote the Agreed Price Act, a legal instrument approved on Tuesday in order to combat speculation.

In the session on Thursday indicated that the constituents will travel the national territory to participate in days of price control.

The Agreed Price Law is composed of 12 articles that were approved on November 14 and 21 by the ANC.

https://www.lapatilla.com/site/2017/11/23/el-chiste-del-dia-la-constituyente-se-ira-de-gira-para-promocionar-la-ley-de-precios-acordados/

And who agreed to these prices? The retailers? The wholesalers? No! Chavismo agreed to these prices unilaterally.

What can we expect to see now, that all sorts of food is now going to be "nearly free"? The disappearance of these foods! (Just like everything else that Chavismo deemed to be "subsidized". Because nothing says to the seller, "Don't stock these items" like a law that says you will lose money by stocking them.

Milk. Chicken. Pork. Corn flour. Cooking oil. You name it. Anything that Venezuelans routinely use will now become scarce.

Chavismo for yet another win!

[DetlefK]

1. We tried that 1700 years ago in Ancient Rome. And it didn't work.

https://en.wikipedia.org/wiki/Edict_on_Maximum_Prices

However, the reconstructed fragments have been sufficient to estimate many prices for goods and services for historical economists (although, it should be stressed, the Edict attempts to fix maximum prices, not fixed ones).

The Edict on Maximum Prices is still the longest surviving piece of legislation from the period of the Tetrarchy. The Edict was criticized by Lactantius, a rhetorician from Nicomedia, who blamed the emperors for the inflation and told of fighting and bloodshed that erupted from price tampering.

By the end of Diocletian's reign in 305, the Edict was for all practical purposes ignored. The Roman economy as a whole was not substantively stabilized until Constantine's coinage reforms in the 310s.

...

, and the maximum prices in the Edict were apparently too low.

Merchants either stopped producing goods, sold their goods illegally, or used barter. The Edict tended to disrupt trade and commerce, especially among merchants. It is safe to assume that a gray market economy evolved out of the edict at least between merchants.

Sometimes entire towns could no longer afford to produce trade goods. Because the Edict also set limits on wages, those who had fixed salaries (especially soldiers) found that their money was increasingly worthless as the artificial prices did not reflect actual costs.

[Fred Sanders]

2. Wage and price controls are sometimes used to control inflation. Canada and

US even imposed them in the 70's and 80's.

[GatoGordo]

3. Chavista economist predicts end of economic laws of supply/demand

NOBEL OF ECONOMY! Andrés Giuseppe: "Agreed Price Law" is the end of DolarToday
DolarToday / Nov 24, 2017 @ 6:00 pm

he economist and national coordinator of the professionals and technicians of the Congress of the Fatherland, Andrés Giuseppe, said that the Law of Agreed Prices will put din to the effects that DolarToday exerts on the Venezuelan economy. ND

"It is a law that is the preamble to the end of DolarToday in Venezuela, of the effects of that external agent on the Venezuelan economy," said Giuseppe in A Tiempo, a program broadcast by Unión Radio.

The economist said that with this law of 50 items are going to lower prices, because the Government sat down to negotiate with all sectors.

"The law is already being applied. Now what is missing is that respect for the law be imposed (...) If there is no violation of the agreements reached for the creation of this law, the prices will be maintained and DolarToday will end, which is generating an economic genocide in Venezuela with induced inflation, "he said.

He also said that it is necessary for citizens to get involved and participate actively in denouncing businesses that violate agreements. "When Venezuelans start attacking those who break the law, prices will be lowered," he said.

Finally, he said that on Monday an "unconventional anti-inflationary plan to defeat DolarToday" will be delivered to the National Constituent Assembly to guarantee compliance with this law.

https://dolartoday.com/nobel-de-economia-andres-giuseppe-ley-de-precios-acordados-es-el-fin-de-dolartoday/

The only problem being, there was no negotiation. Only dictates. Chavismo would have you believe that they sat across the table from the producers, importers, wholesalers and retailers, and came to a mutually beneficial agreement. But, that's what you get from these clowns. Their chutzpah has no limits.

*DolarToday is the website that monitors the value of the Venezuelan currency at various border spots. Venezuelans cross the border with their suitcases full of Bolivare Fuertes and Colombians exchange them for something of value. Normally food or medicine. Regardless, last year, the highest denomination note was the 100Bs. As of today, the Bs is worth... well... nothing... it takes over 82,000 Bs to purchase the equivalent of ONE US dollar. Anyway, the Chavistas like to blame DolarToday for their economic troubles.