Zimbabwe Regime Tries to Override Laws of Supply and Demand

Things are going just swimmingly in Zimbabwe, where the very government responsible for runaway inflation is attempting to override the laws of supply and demand by mandating that all prices be slashed.

Yeah, that'll work.  Let's check in and see how it's going so far, shall we?

Plain-clothes police sought to enforce Zimbabwe's new price controls by raiding shops yesterday as President Robert Mugabe's regime waged a desperate struggle against soaring inflation.

They roughed up shop owners and staff and arrested 20 businessmen. Shoppers swarmed over supermarket shelves in the capital, Harare, intent on grabbing "bargains".

Ministers claim that the inflation rate of 4,500 per cent - the highest in the world - is solely caused by greedy shopkeepers raising their prices for no good reason. Propaganda tries to portray businessmen as the true authors of the economic collapse - deflecting blame from Mr Mugabe.

But economists say that the prime cause of inflation is the government's huge budget deficit, which it deals with by printing more money. This immense borrowing requirement is, in turn, the result of the wider economic failure caused mainly by the seizure of white-owned farms.

Instead of dealing with the deficit, the regime has imposed draconian price controls. Last week, the authorities ordered shops to cut basic food prices by 50 per cent after retail prices had risen by 300 per cent in only seven days.

. . . . Shelves in supermarkets across Harare are swiftly emptying and police in full riot gear linger outside.

The new controls force supermarkets to sell food at below its cost from wholesalers. Unless the regime relents, there will be food shortages, empty shelves and, eventually, the closure of all shops.

"We won't be restocking. If need be, we might have to close shop rather than stick to government prices," said the manager of one store.

Doesn't anybody understand basic economics in Zimbabwe?