The Death of Money in Socialist Venezuela

Money is good — not just for the goods that it buys, but for what it represents: a standard of value. It is an essential tool in any functioning society. Socialist Venezuela demonstrates what happens when coercive meddling in economic matters destroys money. Francisco Toro of Caracas Chronicles reports in WaPo on a photo a friend sent him from Venezuela:

It’s not a very good picture, really, just a blurry cellphone shot of trash: some wrapping material, an old CD — the detritus left behind after a store was looted last week in San Felix, a city in the country’s southeast.

And yet I can’t stop thinking about it, because strewn about in the trash are at least a dozen 20-bolivar bills, small-denomination currency now so worthless even looters didn’t think it was worth their time to stop and pick them up.

According to the official exchange rate, each of those bills is worth $2. But everything official is a lie where Big Government lacks any restraint.

Prices are rising by over 80% per month. Money must be spent immediately, even indiscriminately, before it loses its value.

It sounds like it’s about prices rising fast, but it really isn’t. It’s about money breaking down. Under hyperinflation, money no longer works. It doesn’t store value. It just stops doing the basic things people expect money to do. It stops being something you want to have and turns into something you’ll do anything to avoid having: something so worthless you won’t even bend down and scoop it up off the floor while you’re looting.

Since you most Venezuelans can no longer use money to acquire food, they have to resort to other means — e.g., looting.

Of course, few stores will think of restocking after they’ve been looted, and virtually none can find the capital to do so. So it looks as though we’re coming to the end of the line: Every last avenue for people to put a meal on the table has been exhausted. A video that went viral recently showed Venezuelans literally running into a cow pasture to stone a calf to death to try to get a meal.

Money is civilization. Socialism destroys money. Therefore, socialism destroys civilization.

Not long ago, Venezuela was the richest country in Latin America. It sits on the world’s largest proven oil reserves. Yet hunger has reduced the population to savagery.

What Hugo Chavez types did there, Bernie Sanders types could do here.

On a tip from J.