Venezuela’s populism comes with a price its people can’t afford (full version)

Yet that isn’t the reason for Venezuela’s collapse. Shortages of staple goods have become so chronic that the government requires food companies to divert huge stocks of their supplies of milk, pasta, oil, rice, sugar and flour to state-run supermarkets. It will make the problem worse, with long queues and rationing. A book published in 2010, called Left Behind: Latin America and the False Promise of Populism by Sebastian Edwards, explains what’s happening. He identifies a cycle of populism (a political movement that pitches the interests of “the people” against corporations and foreign investors) with four stages. First, expansionary policies secure growth in output and real wages, while price controls keep inflation down and imports fill temporary shortages, paid for with international reserves. More…