The late, inordinately great man and economist Milton Friedman once rightly observed “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.”
Where governments run things – shortages abound. Places with unbelievable amounts of natural resources – end up importing those very things when government controls their production.
Communist Venezuela has the world’s largest oil reserves – and it imports oil. (From, amongst other places, the United States.) Why? “The nation’s late president Hugo Chávez often boasted the South American country regained control of its oil industry after he seized joint ventures controlled by such companies as ExxonMobil and Conoco. But nineteen months after Chávez’s death, the country can’t pump enough commercially viable oil out of the ground to meet domestic needs — a result of the former leader’s policies.”
Communist China used to be a huge rice exporter. Now they are the world’s largest rice importer– despite the population’s declining rice consumption. Why? “China’s agricultural sector is declining in competitiveness. Like some other Asian countries, China has implemented state-funded strategies that encourage rice cultivation by guaranteeing minimum purchase prices. After almost a decade of government increases to these prices, they are now well over international market levels.”
Asian countries aren’t the only ones stupidly engaging in price-skyrocketing, shortage-inducing price fixing. And government ownership of production. And many, many other stupid policies. We do a lot of it – and have for decades. Most agriculture-producing countries around the world do it.
Egypt does it. And now because of it, Egypt is all-but-out of sugar. Get that? The entire country – is out of sugar. “Hey Egypt, can I borrow a cup of sugar?” No – you can’t.
It is unbelievable – and dire: “Egypt is in the midst of a sugar crisis. In a country where sugar is used in abundance, to sweeten traditional dishes and flavor multiple doses of Arabic tea every day, a nationwide shortage of the staple has spiked prices and shaken the population — and the politicians.”
Why? Because government is so thoroughly “helping” – currently, all of the country’s sugar cane refineries and four of its six sugar-beet processing facilities are owned by the government. And shocker – the shortages have inexorably ensued.
So now come the black markets, government seizures – and citizens spying on citizens, Soviet-style: “The arrests are part of a widespread police operation targeting dealers of sugar on the black market. The government also set up a hotline last week for citizens to report incidents of sugar stockpiling.…In recent days, authorities have raided sugar factories and distributors, including companies that make Twinkies and Pepsi-Cola, forcing temporary shutdowns.”
That’s great for foreign investment – the government busting in on manufacturers and stealing product. And I’m not sure why you’d want to export them sugar, or anything else for that matter – given that government seizure could very well be the result.
As the entirety of the 20th Century has taught us, the answer to too much government – isn’t even more government. Egypt – and all the rest of us – need much, much less.
Egypt needs to do what everyone else needs to do. If a government owns the means of production – privatize it. If a government is injecting massive subsidies into the market – stop doing it. If a government imposes tariffs on imports – stop doing that.
And we can all get together and do it – together. We can free trade away all of this government inanity. “Yo Egypt – you get rid of that subsidy, we’ll get rid of this one. Hey Brazil – you get rid of that tariff, we’ll get rid of this one.”
Pretty soon, a lot of dumb government will be gone.
So too will shortages so bad – entire nations end up being entirely out of things.
This is a guest post by Seton Motley Founder and President of Less Government
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