Costs law tightens State grasp on economy

[naaman fletcher]

The legal instrument, published in Official Gazette 39,715, dated July 18, will govern the operations of all parties to the domestic economy. Under article 3, the law applies to "Venezuelan or foreign individuals and corporations of public or private law, which, based on the performance of their operations inside the national territory, produce, import or market goods, or supply services, for valuable consideration."

While members of the National Executive Office warned that the law is meant to regulate prices of "bare essentials," the legal instrument made no distinctions whatsoever. Article 13 puts in the hands of the National Superintendence of Fair Costs and Prices the possibility of "classifying goods and services (...) based on technical criteria as it deems appropriate. The National Superintendence of Fair Costs and Prices may set several systems for regulated goods and services, either controlled or not controlled, according to the strategic character thereof."

...

n accordance with article 24 of the law, "the National Bolivarian Armed Forces and the National Bolivarian Police shall be ancillary organs of the National Integrated System of Costs and Prices."

...

Further, article 32 empowers the National Superintendence of Costs and Services "to enter into agreements with the organized community, other public agencies or private entities," in order to inspect companies.

http://english.eluniversal.com/2011/07/20/costs-law-tightens-state-grasp-on-economy.shtml


In other words, the price of every single good can now be regulated by the Army, but if the Army wants it can pass off enforcement to "the organized community".


As always with price controls, prices will actually rise as producers stop producing, increasing shortages.