Vice President Kamala Harris unveiled her first economic agenda – price controls. Reminiscent of the Soviet Union, Harris believes that the government should invade the private sector and determine the price of goods. Kamala believes that corporate price gauging is to blame, particularly at the grocery store. Where have we seen this before and what were the results?
Let’s take a look at Venezuela. Hugo Chávez implemented price controls to combat inflation, but it backfired and caused the nation to experience one of the highest rates of inflation in the world. The government arbitrarily set prices without taking note of demand, supply, or the cost taken on by the private sector. Business was no longer profitable and small moms and pops disappeared. Those that remained could barely operate and experienced severe shortages on basic goods like food. The people panic and began to hoard what they could as they did not know when the goods would be available again.
A black market emerged. People were forced to barter and smuggle goods from nearby nations. People stopped using Venezuela’s currency as it held no weight. People saw the worth of the USD and Venezuela’s currency soon became utterly worthless. The dying private sector was unable to hold on to staff, leading to a mass uptick in unemployment. Inflation spiraled, people completely lost confidence in their government and currency. Hyperinflation ensued, people’s life’s savings were wiped out as even the most financially literate citizen lost everything.
But the government prevailed and insisted socialism was the only way to ensure fairness and equality. The program was initially a success, but as Margaret Thatcher said, “Socialism fails when you run out of other people’s money.” This is precisely what happened in Venezuela and EVERY single nation that implemented price controls.
The same disaster occurred in the Soviet Union under Gosplan. Whether it is communism or socialism, any method that decimates the free market ends in an economic collapse. The business cycle was ignored, as were factors that drove prices. The government knew best and usurped control over the private sector from the farm to the store. Shortages, unemployment, and starvation ensued.
We are all familiar with the Soviet-era breadlines and the hardships that the people endured. There was no innovation, as there was no incentive for entrepreneurship or invention, and the nation was left behind in a time capsule of the past. People lost all confidence and the government effectively suffocated the private sector to death. They took over every aspect of the economy and free market piece by piece until the entire economy shattered.
The examples are endless. PRICE CONTROLS DO NOT WORK. SOCIALISM DOES NOT WORK. This policy is absolute insanity. Do people realize that this is only the beginning of what we would see under a Harris presidency? She is financially illiterate and no one on her team has any working knowledge of how the world functions. Blaming higher prices at the grocery store solely on corporate greed is utterly ignorant. This policy is DANGEROUS and would push the once great democracy of America into the hells of socialism.
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