The Washington Post just published this article and photograph. I realize that this sounds like satire from the Onion, but it really is a real news article:
This photo of Kim Jong Un riding a ski lift is North Korea’s way of flipping off Europe
I’ll explain. Kim is thought to have developed a love for skiing when he went to boarding school (under a fake identity) in Switzerland. One of his pet projects since taking power two years ago has been building a giant ski resort, something that does not immediately serve the world’s poorest country but would be meant as a show of national greatness. So Kim made it a top national priority to build the resort, Masik Pass, and work has been proceeding feverishly.
But Kim’s pet project hit a major snag this August: ski lifts. Kim just could not get his hands on any ski lifts. North Korea doesn’t have the technology to build its own. And the countries that make them all tend to be in the West, where new sanctions imposed in March make it illegal to sell luxury goods to the Hermit Kingdom. North Korea tried offering millions of dollars to Austrian and French companies to import ski lifts, but both said no.
Finally, North Korea tried to import from a Swiss company, offering $7.7 million for the lifts. It would be a logical choice: The country’s well-known history of neutrality at times extends even to Pyongyang. But the Swiss government blocked the deal, calling the Masik Pass resort a “propaganda project.”
Pyongyang was so angry it issued a furious response via official state outlet KCNA, declaring, “This is an intolerable mockery of the social system and the people of the DPRK and a serious human rights abuse that politicizes sports and discriminates against the Koreans.” Yes, you read that correctly: North Korea called Switzerland’s refusal to sell it ski lifts a “serious human rights abuse.”
In the four months since Switzerland blocked the sale, North Korea appears to have somehow acquired ski lifts. It’s not clear how or from where; presumably they’re confident in the lift’s safety for Kim himself to take this lonely ride up the slope. The photo is surely meant primarily to demonstrate to North Koreans that the ski resort is coming along and that the ski lifts have the leader’s confidence. But it’s hard not to also see this as Kim thumbing his nose at Europe, as if to say that he doesn’t need their stinking ski lifts anyway.
North Korean state media called the ski lift a “great monumental structure.” Kim reportedly said that the resort was “at the center of the world’s attention” (it’s a central myth of North Korean propaganda that the entire globe is rapt with admiration and wonderment at North Korea’s every ribbon-cutting) and said it would open as soon as possible.
Prices are not just random numbers that get picked out of thin air. Instead, prices communicate information about supply and demand. So when the supply and/or demand situation changes, it makes perfect sense that the price would change accordingly.
Economic theory predicts that when the government sets the price of something lower than the supply/demand equilibrium, the demand will exceed the supply, which is the definition of a shortage. More than 4,000 years of various examples of price controls from all over the world show this to be the case.
Today, the BBC reported:
Argentina pegs supermarket price rises for two months
February 4, 2013
The Argentine government has put a temporary price freeze on all products sold in the country’s main supermarket chains to try to fight inflation.
Argentina’s commerce ministry has asked consumers to monitor prices in the chains.
It wants them to keep receipts and has set up a hotline for shoppers to call if they spot any price rises.
The inflation that’s referred to in that article is caused by the government increasing the supply of money with nothing of real value to back it up. This makes the money worth less, and causes prices to rise. But that’s not a real price increase. So, as inflation devalues the currency, the government’s price freeze will actually force food sellers to lower their (real) prices.
If it really is a “temporary” measure for only two months, it’s possible that inflation might not be severe enough for the price controls to result in a substantial drop in (real) food prices.
But I am skeptical about these price controls being “temporary.” My guess is that the price controls will last a lot longer than two months, and as time goes on, inflation will devalue the real value of the currency enough so that the (real) prices will fall significantly, which will cause shortages. And then the government will wrongly blame the shortages on the supermarkets and farmers, and instead of getting rid of the price controls, the government will take action against the supermarkets and farmers, which will cause the situation to get even worse.
Of course, I could be wrong about all of this.
Anyway, let’s see what happens in Argentina as a result of these price controls.
For the record, here’s what happened after Venezuela set price caps on food a decade ago:
Since 2003, Hugo Chavez has been setting strict price controls on food, and these price controls have been causing shortages and hoarding.
In January 2008, Chavez ordered the military to seize 750 tons of food that sellers were illegally trying to smuggle across the border to sell for higher prices than what was legal in Venezuela.
In February 2009, Chavez ordered the military to temporarily seize control of all the rice processing plants in the country and force them to produce at full capacity, which they had been avoiding in response to the price caps.
In May 2010, Chavez ordered the military to seize 120 tons of food from Empresas Polar.
In March 2009, Chavez set minimum production quotas for 12 basic foods that were subject to price controls, including white rice, cooking oil, coffee, sugar, powdered milk, cheese, and tomato sauce. Business leaders and food producers claimed that the government was forcing them to produce this food at a loss.
Chavez has nationalized many large farms. Chavez said of the farmland, “The land is not private. It is the property of the state.” Some of the farmland that had been productive while under private ownership is now idle under government ownership, and some of the farm equipment sits gathering dust. As a result, food production has fallen substantially. One farmer, referring to the government officials overseeing the land redistribution, stated, “These people know nothing about agriculture.”
Chavez has seized many supermarkets from their owners. Under government ownership, the shelves in these supermarkets are often empty.
In 2010, after the government nationalized the port at Puerto Cabello, more than 120,000 tons of food sat rotting at the port.
In May 2010, after price controls caused shortages of beef, at least 40 butchers were arrested, and some of them were held at a military base and later strip searched by police.
In their 1848 publication Manifesto of the Communist Party, Karl Marx and Frederick Engels wrote:
“The theory of the Communists may be summed up in the single sentence: Abolition of private property.”
Obama administration congratulates Venezuela after Hugo Chavez’s reelection – here’s why I’m not surprised
After Hugo Chavez won reelection in Venezuela, the Obama administration congratulated the country. A week earlier, Chavez had said that he and Obama would vote for each other, if they were citizens of each others’ countries.
So what exactly do Obama and Chavez have in common? They both love government control of the economy, and are willing to violate their countries’ laws in order to achieve that goal. It is only because the U.S. places much tougher constitutional limits on government power that Obama has not been able to carry out these policies as far as Chavez has.
Some time ago, I wrote this post called Here are 95 examples of Barack Obama’s lying, lawbreaking, corruption, and cronyism. I also wrote this other post called Obama gives award to communist Dolores Huerta, and won’t let anti-communist hero Lech Walesa into White House. Those things reveal a lot of information about Obama’s ideology and goals.
It is only because of the United States’ constitution’s strict limits on government power that Obama has not done even worse things. In Venezuela, where the constitutional restrictions on government power are nowhere nearly as strong as those in the U.S., Chavez has done things which are much worse than what Obama has done.