Interference with the Structure of Prices. Syndicalism, International Relations, and Development

Interference with prices is another manifestation of state interventionism in the economy, and you will experience it on many occasions and in many contexts in your future entrepreneurial lives. Numerous prices are not the ones the market would freely set. Instead, the state sets them by decree-law, manu militari. Interference with prices occurs when, by commands and regulations, prices or ratios of exchange different from those the market would set are established for the future. Such prices are imposed using all of the coercive machinery of the state. The state coercively sets two types of prices: “maximum prices” and “minimum prices.” My good friend Ricardo Zuloaga, who was Venezuelan, offers this delightful definition of maximum and minimum prices: Maximum and minimum prices are measures destined to give the wrong information to the market—either so that it will not produce what is needed (in the case of maximum prices), or so that it will produce too much of what is not needed (in the case of minimum prices). And all with the laudable, “patriotic,” “democratic” aim of confusing speculators.