Here's an article from "The Economist". 20-Aug-2011. Note: Hugo has made inflation illegal. He is a true genius! The article is below. ---------------------------------------------------------------------------------------------------------------------------------------------------EIGHT years after Hugo Chávez’s socialist government imposed strict price controls on basic goods, Venezuela has the world’s highest inflation rate to show for the effort. By mid-2011, food prices in Caracas, the capital, were almost nine times higher than when the controls were introduced, according to the Central Bank; wages had risen by 40% less. Last year consumer prices increased by 27%—compared with an average in Latin America of 6%—and they are still rising. With a presidential election due next year, something had to be done. So President Chávez has used legislative powers granted him by the last parliament to decree a Fair Prices and Costs Law, which in effect makes inflation illegal. According to the decree’s preamble, it is the “flagrant abuses of monopoly power in many sectors of the economy” that have led to “constant price rises for no other reason than the…exploitation of the people”. So the state will now set “fair prices” across the whole economy (only banks are exempted) by determining the cost structure of every type of business. The government says the bureaucracy required to do this will be ready by November. Businesses deemed to be charging “unfair” prices will be fined or temporarily shut down. In this section Dilma tries to drain the swamp In her prime A flash in the PAN »Medieval policies Turning back Reprints The private sector, already hemmed in by many controls, is predictably angry. But there are critics on the left too. Heinz Dieterich, a Mexican-German academic who until recently was a prominent supporter of Mr Chávez, called the law the product of “hallucinations”. The medieval notion of the “just price” (associated with St Thomas Aquinas) was a “phantasmagoric projection like God or the Holy Spirit”, Mr Dieterich wrote. Venezuelans have been here before. A similar scheme was applied during the 1984-89 government of Jaime Lusinchi, a social democrat. During its first three years of operation, annual inflation rose from 16% to 40%, eventually topping 100% after the controls were lifted. Just as in the 1980s, the other main effect of Mr Chávez’s price controls has been to reduce the availability of staple goods. In recent months the scarcity indices prepared by the Central Bank and private polling organisations have once again revealed widening gaps on the supermarket shelf. Hardest to find is cooking oil, but chicken, powdered milk and cheap varieties of cheese, along with sugar and meat, are also scarce. Although things are not nearly as bad as in early 2008, the trend is negative, and the new law seems bound to exacerbate it. The retailers worst hit by supply problems are government chains specifically established to provide a reliable source of cheap food. In 2008 the government overcame the shortages by spending over $7.5 billion on food imports. But thanks to incompetence and corruption, vast shipments of food rotted before reaching the shops. With prices for Venezuela’s oil exports high, the government will doubtless ramp up imports again rather than see shortages turn into an electoral liability. It is as well for Mr Chavez that nobody has managed to apply a “just price” to oil.