Socialism's failure to delvier the goods in Venezuela

Reuters/NY Times:

Venezuelan construction worker Gustavo Arteaga has no trouble finding jobs in this OPEC nation's booming economy, but on a recent Monday morning he skipped work as part of a more complicated search -- for milk.

The 37-year-old father-of-two has for months scrambled to find basic products like cooking oil, beef and milk, despite leftist President Hugo Chavez's social program that promises to provide low-cost groceries to the majority poor.

"It takes a miracle to find milk," said Arteaga, who spent two hours in line outside a store in the poor Caracas neighborhood of Eucaliptus. "Don't you see I'm here slaving away to see if I can get even one or two of those (containers)?"

Venezuelan consumers are increasingly facing periodic shortages of basic food products as the economy shows signs of overheating amid record revenues from an oil boom.

The shortages have increased skepticism of Chavez's economic policies and provided a political backdrop to campaigning this month for a referendum on a new constitution that he says is needed to make Venezuela a socialist state.

Businesses say price controls on staple foods are so low they discourage investment and force stores to sell at a loss.

The government says the problem is caused by growing demand by poor citizens who benefit from social programs, exaggerated media hype and food hoarding by unscrupulous businesses.

Supermarket shelves remain stocked with aged whiskey and imported wine, but for up to 25 percent of staple food products this year supplies have been irregular, according to public opinion and economic research group Datanalisis.

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This is a typical and classic failure of command economies. They forces rationing on the market place rather than allow the law of supply and demand provide a more rational means of rationing. Chavez is making the same mistake as Mugabe in Zimbabwe, only he has oil revenues to cover the mistakes for a time anyway. But, even a dictator cannot revoke the law of supply and demand.