Kupens for Caracas

We're in the 21st Century and Hugo's looking admiringly at instituting a barter economy - a prehistoric economic system. No, I'm not making this up.

It's Hugo's way of introducing state rationing by the back door.

Daniel has the post: The barter economy: Chavez ain't no Milton Friedman

The summary of the video. Chavez proposals are such:

1) Part of the production of anyone should be given to a community center. That is right, given, so as to satisfy the needs of others. How those need are evaluated and met is of course not explained (Milton et al. call this "taxes" and others even called this "taxation without representation")

In the video, Chavez says, "and no, here we wouldn't be producing [goods] to earn money".

2) The rest of the production must be bartered [Trueque]. That is, you go to your local market and you do not get money but coupons that are worth only in your area. Chavez is very explicit here, he even describes the area where he is when he says that the coupons will be only valid "in this mountain, up to such river".

And he even explains that the "currency" (the kupens?) can't be used to buy a beer at the town fair". Of course, the cops aren't going to take funny-barter-"money" for the beer.

3) These coupons not only are only valid in your area, but they lose their value over time, with what he calls "oxidation" which is nothing less than negative interest. That is, if you decided to accumulate your coupons (Milton et al. call this savings) they would lose their value and you would lose everything. In other words you are forced to consume on the spot: when you reach the local market with your crop of XYZ you MUST go back home with a load of UVW.

In other words, we are seeing a president of a XXI century country propose to go back to an economical system which had been even overcome long ago, even by the Incas: they might not have had real currency or writing but they had the quipus and efficient central planning with extensive intra regional trading.

Here's the video in Spanish:


That's the kind of backwards crap you get from a-charismatic-leader-helping-the-poor-offering-free-health-care-education-adult-literacy-and-job-training-initiatives-that-help-millions-of-Venezuelans^tm.

Ron White would have a great time with Hugo's kupens!

And about Milton Friedman, Milton Friedman's Nobel Prize address has a message for today (h/t Larwyn)

(technorati tags Venezuela, Hugo Chavez Milton Friedman economics)