Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net
Belarus is, in general terms, a nationalized economy, even so, prices there usually rise at hyper-inflationary rates (8.4% in 2007, 14.8% in 2008 and 13% in 2009).
Vietnam is also, in general terms, a nationalized economy, even so, prices there usually rise at hyper-inflationary rates (8.3% in 2007, 23.1% in 2008 and 7% in 2009).
And in Venezuela, the government has also almost always had the habit of owning many businesses, a trend that has increased during the 11-year rule of Hugo Chavez. Even so, prices in Venezuela usually rise at hyper-inflationary rates (18.7% in 2007, 30.4% in 2008 and 29.5% in 2009).
The point is, if the government in these countries supply an important part of the goods consumed by the people, why the big rise in prices? It is a reality that contradicts socialist theories. It was assumed that the fault was in the private sector, but while these nations have economies with strong Statist characteristics, in them, the goods increase in value at vertiginous rates. In fact, in these havens of nationalization, inflation is much higher than that of the capitalist countries, as can be seen if we compare their records with those of the United States, Canada, Japan or the European Union members. Where inflation has only rarely exceeded 3% in the last ten years.
Inflation is a monetary phenomenon that is given mainly by government spending and the amount of money it prints, so when a country is affected by hyper-inflation, the government is the main cause. Removing the private sector from the system is not a guarantee that the general level of prices will stabilize, as evidenced by the cases described above.
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- Some contradictions of the left in Latin America
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