Bad government policies create black markets, strange ones sometimes

Sex, Dollar Bills, and the Venezuelan Black Market

…prostitution is legal in Venezuela, but trading U.S. dollars isn’t. Bloomberg:

Prostitutes more than double their earnings by moonlighting as currency traders in Puerto Cabello. They are the foreign exchange counter for sailors in a country where buying and selling dollars in the streets is a crime — and prostitution isn’t. Greenbacks in the black market are worth 11 times more than the official rate as dollars become more scarce in an economy that imports 70 percent of the goods it consumes.

Venezuelans are living in a two-tiered society, in which those with access to dollars can buy goods that are unavailable to others, as Steve Hanke, professor of applied economics at Johns Hopkins University, points out. And what are these fabled luxuries? Flour, cooking oil, toilet paper, and even drinking water, all of which are now scarce in Venezuela.

Socialism promises abundance, happiness and equality but delivers on none of those things except perhaps equality…of misery.  Black markets become necessary for people to meet basic needs.  Socialism is best described as rule by a criminal gang.

The principles of basic economics are scarcely learned by most people.  Well, it is the study of the allocation of scarce resources, and knowledge is apparently a scarce resource.

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