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Home | Blog | The Fun is Over in Venezuela and Argentina

The Fun is Over in Venezuela and Argentina

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01/31/2014

Venezuela and Argentina are the Greeces of South America,  says this Economist article.  Which may make Chile the Germany of South America, but fortunately for the Chileans, they're not in a monetary union with Argentina. Most economies are in peril worldwide, but while Colombia, Uruguay, Chile, and even Peru, have been holding relatively steady, the great socialist experiments in Argentina and Venezuela will soon come crashing down. This paragraph from the Economist article about Venezuela tells you all you need to know about the ability of Venezuelan politicians to solve the crisis:

The government blames the crisis on private businesses and “irresponsible” use of hard currency by ordinary Venezuelans. It has ordered drastic cuts in dollar allowances for travellers, especially to popular destinations like Miami. Remittances to relatives abroad have also been slashed. In a bid to curb runaway inflation, it has introduced a new law restricting companies’ profits to 30% of costs. Long jail sentences await transgressors.

More laws. That'll solve it. For some Austrian perspectives, see: Inflation, Shortages, and Social Democracy in Venezuela by Matt McCaffrey Economies are Not Destroyed in a Day and How the Fed Causes Booms and Busts in South America by Nicolás Cachanosky. Argentina’s Politicians Should Read Mises by Iván Carrino

Ryan McMaken (@ryanmcmaken) is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

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