Thursday, August 02, 2007

Pay me another toldja 

On July 17 I wrote a post titled "Starvation Comes Next",
It is probably only because people understand so little economics that Robert Mugabe will not be thought of as the perpetrator of democide. Just as surely as a bullet or machete, purposefully emptying your country's stores will kill your people.

...the bakers will stop making bread, and the farmers will stop bringing produce to market. Of course it could be that Mugabe is creating a pretext to nationalize industry like he has the farm system. I doubt that will go well for him either. The only question that remains is how many will die, and when will Mugabe leave.
From this morning's New York Times,
Robert G. Mugabe has ruled over this battered nation, his every wish endorsed by Parliament and enforced by the police and soldiers, for more than 27 years. It appears, however, that not even an unchallenged autocrat can repeal the laws of supply and demand.
Damn! There goes that Nobel.

One month after Mr. Mugabe decreed just that, commanding merchants nationwide to counter 10,000-percent-a-year hyperinflation by slashing prices in half and more, Zimbabwe�s economy is at a halt.

Bread, sugar and cornmeal, staples of every Zimbabwean�s diet, have vanished, seized by mobs who denuded stores like locusts in wheat fields. Meat is virtually nonexistent, even for members of the middle class who have money to buy it on the black market. Gasoline is nearly unobtainable. Hospital patients are dying for lack of basic medical supplies. Power blackouts and water cutoffs are endemic.

Manufacturing has slowed to a crawl because few businesses can produce goods for less than their government-imposed sale prices. Raw materials are drying up because suppliers are being forced to sell to factories at a loss. Businesses are laying off workers or reducing their hours.

The chaos, however, seems to have done little to undermine Mr. Mugabe�s authority. To the contrary, the government is moving steadily toward a takeover of major sectors of the economy that have not already been nationalized.

Of course not all starve. Dan Drezner points out correctly that the price caps mean some other rationing mechanism, in this case being a friend of "government price inspectors". But as the economy declines, Mugabe becomes less and less able to deliver these goods even to his friends. Already he is having to resort to enslaving producers to deliver bread and other staples. This will only increase. And as that happens, some other political leader is going to step up and offer a reform program that liberalizes prices ... while maintaining enough graft to pay off that leader's supporters.

Bruce McQuain thinks Venezuela could be next.