Coffee has been grown in Venezuela since the late 1800s, but today a minimum-wage employee in Venezuela can afford only 5 cups of coffee a month on their wages, with nothing left over.
The trouble with Venezuelan socialism, just like all attempts at socialism, is that it misallocates resources. Now, after years of a fictional economy, reality is hitting Venezuela hard. The government is attempting to literally paper over the problem by inflating the currency, and as always that is making things worse.
Terrible reports are coming out of Venezuela. Parents are giving away their children, and the government has killed hundreds of poor young men in an arbitrary fashion.
Every time a socialist country falls into chaos, socialist sympathizers in the West say, “that’s not real socialism.” Unfortunately, Venezuela is the perfect example of real socialism, and it is failing just as other socialist nations have.
Kathryn Krawczyk writes in The Week:
Five million Venezuelan bolivars is the equivalent of $1.45. It’s also roughly a minimum-wage worker’s entire monthly salary in the South American country.
Thanks to stunning inflation, it now takes 1 million bolivars to buy a cup of coffee in a Venezuelan cafe, Bloomberg reports. That’s one-fifth of Venezuela’s monthly minimum wage, and a 10,000-bill stack of Venezuela’s most common bank note, the 100-bolivar bill.
To illustrate Venezuela’s rampant inflation, Bloomberg has tracked the price of a cup of coffee since December 2016 on its Cafe Con Leche index. One dose of caffeine cost 450 bolivars when the index launched two years ago, but 43,378 percent inflation in the last year has led to today’s astronomical price.
Read more here.