My friend Mary, who is currently living with her family in Caracas, sent me this gem, which describes an individual's experience at a state run arepera (sandwich shop). Apparently Mr. Chavez, and his Trade Minister, Eduardo Saman, created the place to demonstrate the superiority of socialism and to show how private areperas cheat customers by charging several times the true cost of an arepa.
So let me get this straight--millions of freely chosen, voluntary transactions have occurred over years of sandwich shop operations to arrive at prices that are acceptable to both the producer of the arepa, and the consumer of the arepa, and yet the trade minister knows, knows, that the greedy owners of sandwich shops are cheating their customers. I don't know about you, but I often lay awake at night wondering when the helpless people will finally rise up, and in the name of social justice bring those evil sandwich shop owners TO THEIR KNEES. What a buffoon--the trade minister, I mean. Well, Chavez too.
They should brush up on one of Adam Smith's key insights, taken from the pages of Milton Friedman's book, "Free To Choose". Mr. Friedman writes this: " ... if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another." This simplistic, zero-sum assumption is an insult to the intelligence and the productive capability of all of humanity, and it has been used to prop up tyranny and dictatorship for all time. Mr. Chavez uses it now, and it is being wielded ever more frequently here at home by the Obama administration.
The other interesting aspect of the reporting at the arepera is the descent, not profound but palpable, from the crowded excitement, abundance and variety of food, and honor system of Chavez's visit shortly after the opening of Arepera Socialista, to the dwindling patrons, bare trays, stewed hot dogs, harried staff, and not quite the honor system that exists less than a year later. Such is the descent that always occurs when a trade minister professes to know the sandwich business better than the man who owns a sandwich shop, and the people who buy sandwiches from him. If the Obama administration can be indicted for anything, it is that they are afflicted with the same disease as Hugo Chavez's trade minister--they profess to know what's in everyone's best interest (yours, mine, Arizona's, Israel's) better than each individual knows it for his or her self. They have had some success in enacting policy based on that principle. The degree to which they continue to succeed, or not, in that quest, is the degree to which we may expect the future to be a delicious arepa venezolana, or hot dog stew.
