Tuesday, September 19, 2006

Price controls lead to arrests and shortages

The socilist dictatorship of Robert Mugabe in Zimbabwe arrested top food producers there for violation of "price control" laws. Mugabe's corrupt regime has been printing money at a rapid pace devaluing the currency as they do. The decline in the value of the Zim dollar means that the cost of goods denominated in Zim dollars has to rise.

But the Mugabe regime has forbidden prices rises for bread. Producers say the legal retail price of bread is below the cost of producing it. One result of the price controls is that many shops have run out of bread entirely. State-owned media reports the arresting officer saying: "We have charged them with increasing prices without authority from the Ministry of Industry and International Trade and we expect them to appear in court tomorrow."

Of course as anyone with any knowledge of economics knows price controls only creates shortages.