Venezuela’s “Fair Prices” Are Anything But Fair

Prices are an economic mechanism that transfer information from consumers to producers and vice-versa. They are the essential component for decision-making, financial planning, savings, investment, innovation, and consumption. When state intervention obstructs the price system’s vital role in the economy, it creates distortions that muddle the transfer of information. Individuals’ and entrepreneurs’ decisions can no longer be taken under the natural process of the free market. The unfettered price system allows consumers to make choices based on a great number of factors. If the market provides similar products, the consumer will choose the one that best satisfies his needs. More…