Reading N24’s sad little write-up on the virtual impossibility of finding a Vergatario (rough translation: penis-phone) in Venezuela these days, it strikes me just how soul crushingly depressing the very existence of the problem is. Venezuela is busily reliving a morass of planning-induced multiple production and distribution bottlenecks that was already thoroughly analyzed, discussed, dissected and put to bed in the economics profession roughly 75 years ago. In fact, some of the key citations in this literature are now almost a century old.
Do students even read this stuff anymore? Maybe in history class: the writing is way too old-timey for an Economics curriculum.
It really is dusty, musty stuff by now. Cuz think of it, the role of prices as information lynchpins in coordination mechanisms was already well established back when Maisanta was busy rustling cattle in Barinas. People who’ve cared to find out have had the full complement of analytical tools it takes to understand why the State is never going to be able to keep the market for Vergatarios supplied since roughly 50 years before the cell phone was invented. Yet N24’s hack still informs us that Vetelca has “apparently” faced unmanageable production and distribution bottlenecks as though that was news of some sort.
It’d be nice if it were. It’d be nice if there was something new to learn from the massive economic dislocations, from the colossal waste of it all. It would be comforting somehow to think there was a meaning – or at least that, at the end, the world would know something it didn’t know at the beginning.
No such luck. We’re going to learn about as much from the Nth catastrophic relapse into Central Planning as we would from putting our hands on a hot stove and refusing on principle to lift it.
It’s very simple: distort prices enough and they stop functioning as carriers of the information producers need to coordinate production and distribution decisions efficiently. Soon, shortages develop. Central planners are unable to amass sufficient information to overcome these bottlenecks not because they’re corrupt or bad at their jobs, but because the task isn’t actually achievable in principle. Hugo Chávez can no more keep the market supplied with Vergatarios than he can order the rain to fall upwards.
Now can we please move on? Please? Pretty please?