Venezuela may put People before Profits but they have no Toilet Paper

Posted by PITHOCRATES - May 18th, 2013

Week in Review

The American left wants to have the economic system they have in Venezuela.  Where they put people before profits.  To prevent evil corporations from getting rich.  While exploiting their workers.  And overcharging their customers.  You see, that kind of thing just doesn’t happen in Venezuela.  Because they put people before profits (see So, Venezuela Has a Toilet-Paper Shortage (Don’t Laugh. Seriously.) by Jordan Weissmann posted 5/16/2013 on The Atlantic).

Venezuela is now suffering from a government-induced toilet paper shortage. The situation has become politically dire enough that the government has promised to import 50 million rolls to calm shoppers.

For those familiar with the Bolivarian Republic’s less-than-sterling economic record of late, this won’t come as a surprise. The country, while relatively wealthy by developing-world standards, has been suffering through a chronic shortfall of everything from groceries to asthma inhalers, resulting in desperate lines of shoppers and a healthy black market trade in kitchen staples like flour.

In the United States about the only toilet paper shortage people are familiar with is when they drop trou in a public restroom without looking to see if there was toilet paper first.  Why do people do this in the United States?  Because we take toilet paper for granted.  And always expect it to be there.  Because we are not socialists.  We’re capitalists.  And being a capitalist means you never have to see an empty shelf when buying toilet paper.

So why do socialists have such a difficult time buying toilet paper?  Because they put people before profits.  Which sounds good but is only code for dictatorship.  Where the dictator lives well.  As there is always enough for the privileged few.  But to sustain this privileged position a dictator has to steal from his people.

In 2003, then President Hugo Chavez slammed currency controls into place to prevent money from fleeing the country while government seized land and corporate assets. Those rules have made it harder to buy imports. Meanwhile, price caps meant to make basic staples affordable to the poor are so low that, for many products, they don’t pay for the cost of production.

Nobody’s going to make toilet paper if they’ll lose money selling it.

Price caps make things cost less than the prevailing market price.  Which encourages people to over consume.  Just as Nixon’s price controls led to gas shortages in the United States.  While at the same time the price caps force suppliers to sell below the prevailing market price.  Which is often below their costs.  So while people are clearing shelves off suppliers are not replenishing those shelves.  Leading to shortages.

To buy imports you have to first exchange your currency for the currency of the country you’re buying from.  For U.S. companies accept the U.S. dollar for its exports.  Not the bolívar fuerte.  Venezuela’s currency controls prevent Venezuelan businesses from exchanging their currency.  Making it impossible for them to buy the imports they need.  So they have to throttle back production.  Making it more difficult to restock those empty shelves.  Forcing the people to go without toilet paper.  While Hugo Chavez died a billionaire.

This is what happens when you put people before profits.  You make it possible for a charismatic dictator to impoverish the people he champions.  Which is impossible under laissez-faire capitalism.  For businesses can buy the imports they need.  And they can sell at a price that covers their costs.  Which keeps the shelves in capitalist countries overflowing with the goods people want to buy.  While wannabe dictators can’t seize land and corporate assets.  But have to work for a living.  Like everyone else.

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The Soldiers in North Korea are Busy…helping the Farmers with the Spring Planting in Hopes of Avoiding another Famine

Posted by PITHOCRATES - April 27th, 2013

Week in Review

The Sixties radicals hated capitalism.  And the profit incentive.  They sang songs about love.  And revered communist leaders.  For they wanted to replace capitalism in America with communism.  Where no one owned anything.  But everyone owned everything.  It would be utopia.  This is what the Sixties radicals believed.  And what they wanted in the United States.  A system where they put people before profits.  So it would be like in that John Lennon Song.  Imagine.

Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people
Sharing all the world…

The Sixties radicals loved the former Soviet Union.  Because the Soviets hated capitalism.  And embraced socialism.  Putting people before profits.  These radicals loved Che Guevara.  One of Fidel Castro’s trusted lieutenants.  Who wanted the Soviets to launch their nuclear weapons on America.  (Remember this the next time you see a college student wearing a t-shirt emblazoned with his image.)  They liked Chairman Mao in China.  And Ho Chi Minh in Vietnam.  And every communist leader in Central America and South America.  For these communist leaders hated capitalism.  And put people before profits.  Just like in North Korea.  Who unlike the former Soviet Union (now Russia) and China, did not lose the faith and embrace capitalism.  No.  In North Korea they still put people before profits (see NKorean soldiers put down arms to help plant crops by JEAN H. LEE, Associated Press, posted 4/24/2013 on Yahoo! News).

The North Korean side of the Demilitarized Zone is a hive of activity — not of fighting, but of farming.

Beyond the barbed wire, ruddy-faced North Korean soldiers put down their rifles Wednesday and stood shoulder to shoulder with farmers as they turned their focus to another battle: the spring planting.

As neighboring nations remain on guard for a missile launch or nuclear test that South Korean and U.S officials say could take place at any time, the focus north of the border is on planting rice, cabbage and soybeans. In hamlets all along the DMZ, soldiers were knee-deep in mud and water as they helped farmers with the spring planting…

Last month, Kim Jong Un enshrined the pursuit of nuclear weapons, along with building the economy, as key goals for the nation.

Col. Kim, at the lookout point along the DMZ, called nuclear weapons “the lifeblood” of North Korea. “If we don’t have nuclear weapons, we’ll continue to be threatened by outside forces.”

For the moment, however, the labor of many North Korean soldiers is turned to the land. Spring is arriving slowly this year in North Korea, pushing back the crucial planting season by a month. Impoverished North Korea struggles to feed its 24 million people, with the U.N. estimating that two-thirds of the population cope with chronic food shortages.

Farmers in Panmunjom-ri, the North Korean village inside the DMZ, were busy planting rice, cabbage, soybeans and radish in fields surrounded by barbed wire and anti-tank barriers.

Elsewhere, faces flushed and still in their uniforms, men and women soldiers waded into muddy paddies and bent down with fistfuls of spinach to plant.

Around them, red banners fluttered in the wind. One read, “At a breath,” a phrase urging North Koreans to work hard. The other read, “Defend to the death.”

This is what you get when you put people before profits.  A nation with nuclear weapons.  And recurring famine.  Where the army has to pitch in during the planting season.  Because they are still farming in North Korea the way they were a hundred years ago.  By hand.  Meanwhile the United States grows so much food that they use some of it to make ethanol to put into their cars.  This is what you get when you put profits before people.  So much food that you can use it for fuel.  And where even the poorest people suffer from obesity problems.

You see, when you put profits before people you are putting people first.  For to earn a profit you have to please the people.  You can’t order them to buy your products.  Like the North Koreans can order their army to plant food.  You have to make a product the people want to buy.  And only when you please the customer can a business make a profit.  While the ruling regime in North Korea can kill hundreds of thousands of their people in a famine and they still live the good life.  Because when you put people before profits you can do pretty much anything you want to do.  Because the only people that truly matter are the people with the army to enforce their rule.

But south of the border it’s different.  In South Korea life is good.  And they suffer no famines.  Because they embrace capitalism.  Some people live better than others.  Such as those in Gangnam.   The area of three districts in Seoul, South Korea.  Immortalized in the video Gangnam Style.  A lifestyle that simply does not exist in North Korea.  Unless you’re high up in the ruling regime.  Because when you put people before profits only those with an army behind them can afford to live the good life.

So if you want to see the difference between capitalism and socialism/communism look to the Korean peninsula.  Where you will see a vibrant South Korea full of happy people.  And an Orwellian North Korea where the people live in fear and are often cold and hungry.  Because they put people before profits.  Where it’s easy to imagine they have no possessions.  Because they have little.  Well, the people don’t.  But the ruling elite certainly lives Gangnam style.  Like all dictators do.

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