Wednesday, March 29, 2017

Fixed Prices, Central Control, and Inevitable Scarcity

From the April 2013 Yale Economic Review, an article about the economic conditions in the USSR in the years leading up to the dissolution of the Soviet Union.
"These negative trends worsened in the USSR’s final years, 1989 and 1990, during which the country witnessed declines in output, huge shortages and fears of a complete economic and political collapse. According to a 2002 paper by Leon Aron, in 1989, the average citizen spent 40 – 68 hours a month standing in line, reflecting the difficulty to acquire even the most basic consumer goods in Russian markets. In April 1991, less than one in 8 respondents to an opinion poll said that they had recently seen meat in state stores, and less than one in 12 had seen butter."
Venezuela, the Soviet Union, or any country you like, when you move to central government control and price fixing, you get scarcity of those products and services under control and long lines/wait times.

As I said in the comments on the previous post, I don't believe anything can stop us from going to nationalized single payer for health care so we will get to see what nationalizing 1/7 of the economy looks like from the back of the line.

Meat Queue in The USSR -- Long Lines and Limited Products

 Next post: Fixed Prices, Central Control, and Inevitable Black Markets


Old NFO said...

Yep, and sadly the free cheese crowd doesn't 'get' it... dammit!

Ted said...

........ well single payer health care for the populace. The ruling class has opted out of the system and may or may not be able to access better care. Or at least that's their plan. It may not actually work out that way.