Quick, What Follows Price Controls?The answer, of course, is shortages, as you can see
in this story from Zimbabwe:
Shelves in supermarkets across Harare are swiftly emptying and police in full riot gear linger outside.
The new controls force supermarkets to sell food at below its cost from wholesalers. Unless the regime relents, there will be food shortages, empty shelves and, eventually, the closure of all shops.
"We won't be restocking. If need be, we might have to close shop rather than stick to government prices," said the manager of one store.
The cause of the price controls is inflation, which recently ran 300 percent
in one week. The cause of the inflation is huge government deficits. And the cause of the deficits?
This immense borrowing requirement is, in turn, the result of the wider economic failure caused mainly by the seizure of white-owned farms.
Labels: Price Controls, Shortages, Zimbabwe Inflation
