Price controls don't work

Yet another example of a political “solution” that ignores the laws of economics and goes predictably wrong – Mary O’Grady in the Wall Street Journal explains:

“To understand how things got this bad, look at coffee. It was once plentiful in Venezuela. But in 2003, with consumer-price inflation threatening to damage Mr. Chávez's popularity, the government imposed price controls. That drove down the incentive to grow coffee while increasing the incentive to export to Colombia whatever was grown. Voila! Less coffee for sale in Venezuela.”

No wonder Hugo Chavez’s experiment with “21st Century Socialism” is going so poorly.