When government imposes policies, especially draconian policies like price ceilings on food, there are always unintended consequences. Rather than admit failure of the policies and repealing of the failed policies, the answer always seems to be more policies. To wit.
After the media, it's those sinister industrial food producers Chavez wants to bring to heel, predictably blaming them for the widespread shortages of meat, rice, and milk that have plagued the Venezuela in recent years. The country's largest food producer, Empresas Polar, was briefly occupied by government forces this week and threatened with wholesale expropriation if it didn't lower prices on rice—just days after the government took over the American company Cargill for the same reasons. So why are these companies failing to produce? Because, as every economist outside of the Miraflores palace knows, price controls create shortage:
Chavez's clash with the food companies, demanding they produce cheaper rice, came less than three weeks after he won a referendum on allowing him to run for re-election and marked his first nationalization in seven months.
The move shows he is likely to continue his combative style as the OPEC nation, faced with tumbling oil revenues that form the backbone of its economy, slowly begins to feel the effects of the global economic crisis... [Chavez] accuses the food industry of skirting price controls and failing to produce enough cheap rice. The recent moves to tighten the government's grip over food supplies are criticized by the private sector and many economists who say it could contribute to food shortages.
Full story here.
Via Instapundit
This reminds me of another episode of "hoarding" from Roman History I recently ran across regarding policies of the Roman Emperor Diocletian. Diocletian, in an effort to stem inflation, instituted what amounted to price ceilings. The ceilings had the effect economists would expect: shortages. By taking the profit out of selling, businesses sold less (that's what hoarding means). Diocleatian responded by making hoarding illegal. So people quit their businesses altogether. This, in turn, was made illegal. All of these "crimes" were punishable by death.
Hugo Chavez should heed these words: those who do not appreciate history are doomed to repeat it.