Governments cause high inflation: Their thieving and redistribution get out of whack. So they print too much money.
High inflation is bad. It brings all sorts of discomforts. You can't use money to store wealth. Credit is all but impossible to give or get. Fears of financial insecurity cause popular upheavals.
But the governments that cause inflation can, and usually do, make it worse. They try to impose price controls and currency controls. When they do, goods flee the country and the markets go empty. It happens fast, and I'm going to tell you exactly how.
In 1983, Bénin in West Africa had high inflation, price controls, and currency controls. I lived next door in Togo. It had the same currency but not price controls, and it had an unregulated black market for money changing. In the "street of banks," the money changers walked around with fat rolls of banknotes and were proud to call Togo "Africa's Little Switzerland."
The markets of Togo's big, coastal city, Lomé, were overflowing with goods -- meat; fish; vegetables; a little girl selling only shoestrings, another selling only chocolate bars; eggs; live animals; pharmaceuticals sold on a platter in the open air next to hand axes and coconuts; second-hand clothes from Europe and the United States that the locals called "dead yovo clothes," because they couldn't imagine live white people giving such precious things away; batteries; bolts of cloth; furniture; spices; palm butter; Chinese mosquito repellent; electric fans; and charcoal. You could buy anything really.
I visited Cotonou in the neighboring Marxist El Dorado of Bénin (formerly The Kingdom of Dahomey). Bénin should be the same as Togo. It has the same tribes, languages, colonial history, geography (including approximate size and topography), and weather. But in Cotonou, the market was pitifully empty. There was just nothing to buy. I, being used to Togo, assumed that there was a holiday, or a coup d'état, or a plague that emptied the market. I began to ask questions of the bereft market people and ended up conducting a little investigation on both sides of the border between Togo and Bénin.
I learned about the Marxist government in Bénin and the inflation and weak currency and price controls. But why would that empty the markets?
The market people knew why. The key to prosperity and wealth (until everything ran out and the government abandoned Marxism in the late 80s) was to buy goods in Bénin at the official prices and smuggle them out of the country. If you bought goods, you smuggled them to Togo to sell at market rates. Then you went back to Bénin where you might buy more goods at the official prices to smuggle out of the country and, if you were well connected, you might change the West African currency (CFA) for US dollars or French francs at the official rate. And back to Togo you went with goods for the market and hard currency for the street of banks.
Some people got rich this way. Eventually they had to risk their skins to do it, after the government of Bénin closed the borders. But not before there were almost no more hard currency or goods in Bénin.
Variants of this story have played out all over the world at various times, famously in Germany and Brazil, and now in Zimbabwe where inflation is "illegal," the government is printing Z$200,000 notes, and the people are suffering severe shortages of food, fuel, and medicine.
Let's hope (against hope) that Mugabe is the last hyper-idiot of hyperinflation.
Monday, August 27, 2007
CSI Pyrenees: Frenchy The Bear
Some of you may be eager for the latest news of the Slovenian bears in the French Pyrenees. The news is good or bad depending on who hears it, but everyone will agree that it's odd.
In 2006, the French government released a Slovenian brown bear named "Franska" (or "Frenchy" in Slovenian) in the French Pyrenees. Some shepherds were angry and raised hell.
The same year Palouma, another imported bear was found dead at the foot of a cliff. The Greens thought the circumstances suspicious. The shepherds applauded her death.
Now, in August of 2007, Franska died. An investigation and autopsy revealed that:
1 She was old. Franska was supposed to be a sexy, young female. Her job was to breed more bears. But in fact, she was way beyond breeding age. A Slovenian fraud perpetrated on the French? One thing is sure; she didn't die of old age.
2 She had been shot in the derriere by a shotgun, but that was not the cause of death either, because--
3 She was hit by a truck while crossing the road and killed instantly.
"What a joy and what a relief for the keepers of livestock!" said the president of the Association for the Preservation of Pyreneean Heritage of the High Pyrenees.
"Such sad news.... We will immediately ask the government that she be replaced," said the president of the Association of Bear Country.
In 2006, the French government released a Slovenian brown bear named "Franska" (or "Frenchy" in Slovenian) in the French Pyrenees. Some shepherds were angry and raised hell.
The same year Palouma, another imported bear was found dead at the foot of a cliff. The Greens thought the circumstances suspicious. The shepherds applauded her death.
Now, in August of 2007, Franska died. An investigation and autopsy revealed that:
1 She was old. Franska was supposed to be a sexy, young female. Her job was to breed more bears. But in fact, she was way beyond breeding age. A Slovenian fraud perpetrated on the French? One thing is sure; she didn't die of old age.
2 She had been shot in the derriere by a shotgun, but that was not the cause of death either, because--
3 She was hit by a truck while crossing the road and killed instantly.
"What a joy and what a relief for the keepers of livestock!" said the president of the Association for the Preservation of Pyreneean Heritage of the High Pyrenees.
"Such sad news.... We will immediately ask the government that she be replaced," said the president of the Association of Bear Country.
Tuesday, August 14, 2007
Palouma the Bear, Fallen For France
This year, the French government released five brown bears from Slovenia in the French Pyrenees mountains. Some Pyreneean shepherds, an endangered species, got angry. As I reported in an earlier Reflection, the French government was forced to release the bears at secret times and places to avoid disruption.
Battle lines have been drawn. According to Reuters, pro and anti-bear graffiti is a common sight along roadsides in the Pyrenees, a region where bears were once common.
In August, hikers found Palouma, one of the Slovenian bears, dead at the foot of a cliff. A wide-ranging investigation into her death has begun. Here are some of the headlines translated from the French press:
--Death of Slovenian bear Palouma probably accidental
--Palouma's death resuscitates debate over Pyreneean bears
--Death of Palouma: "No possibility excluded"
--Pyrenees: the death of a bear
--Palouma, will she be replaced?
--Palouma's autopsy: Nothing suspicious found
--Palouma, fallen for France
A representative of a green party in France says that if Palouma was chased off the cliff then, "it's murder, pure and simple."
Speaking of murder, I was surprised to learn that the tiny number of beleaguered brown bears in France kill about 300 sheep and cattle per year. But wait! Not so fast! These official statistics are wrong, says AVES France (the Association de Protection des Espèces Menacées). According to AVES, whenever a herder claims that a lamb, kid, or calf was killed by a bear, the government gives him the benefit of the doubt and pays an indemnity, hence the inflated statistics. http://www.aves.asso.fr/article.php3?id_article=288.
Senior French songster, Renaud, just released a musical homage to Palouma entitled "Rouge Sang." (Yes, he's one of those one-name guys. No, I'm not making this up.)
Passions among the shepherds have not cooled either. Following a violent demonstration, some of them were recently convicted of crimes and given suspended prison sentences as long as four months.
As the French say, "A suivre..."
Battle lines have been drawn. According to Reuters, pro and anti-bear graffiti is a common sight along roadsides in the Pyrenees, a region where bears were once common.
In August, hikers found Palouma, one of the Slovenian bears, dead at the foot of a cliff. A wide-ranging investigation into her death has begun. Here are some of the headlines translated from the French press:
--Death of Slovenian bear Palouma probably accidental
--Palouma's death resuscitates debate over Pyreneean bears
--Death of Palouma: "No possibility excluded"
--Pyrenees: the death of a bear
--Palouma, will she be replaced?
--Palouma's autopsy: Nothing suspicious found
--Palouma, fallen for France
A representative of a green party in France says that if Palouma was chased off the cliff then, "it's murder, pure and simple."
Speaking of murder, I was surprised to learn that the tiny number of beleaguered brown bears in France kill about 300 sheep and cattle per year. But wait! Not so fast! These official statistics are wrong, says AVES France (the Association de Protection des Espèces Menacées). According to AVES, whenever a herder claims that a lamb, kid, or calf was killed by a bear, the government gives him the benefit of the doubt and pays an indemnity, hence the inflated statistics. http://www.aves.asso.fr/article.php3?id_article=288.
Senior French songster, Renaud, just released a musical homage to Palouma entitled "Rouge Sang." (Yes, he's one of those one-name guys. No, I'm not making this up.)
Passions among the shepherds have not cooled either. Following a violent demonstration, some of them were recently convicted of crimes and given suspended prison sentences as long as four months.
As the French say, "A suivre..."
Monday, August 13, 2007
Racism and Fine Merlot
Last week, I drank with a racist.
At a cocktail reception for Harvard lawyers, she told my friend, an Hispanic lawyer, that retiring Hispanic judges should arrange whenever possible for an Hispanic successor. I gently asked her was that not a sort of racism? She made the usual arguments for affirmative action and for proportional representation of her ethnic (or linguistic?) group in the professions. I suggested that the process might taint the reputations of its beneficiaries. To that, she violently agreed. It was just awful how white professionals assumed that brown ones got their positions through affirmative action.
She appeared to be a bright person, so I was surprised that she stepped so swiftly and willingly into my logical trap. (It certainly wasn't original.) Maybe she is not old enough to remember a time when anyone dared challenge affirmative action in polite society. In any case, I waited for the other shoe to drop. I enjoy doing that -- smiling quietly until my opponent in rhetoric begins to make my own arguments for me. She obligingly backpedaled and told me that she did not advocate promoting people who aren't perfectly qualified. I heartily agreed with the sentiment and poured her another glass of Merlot. The wine was good.
Then I asked her if faced with a couple of qualified candidates, one Hispanic and one white and clearly better qualified, what would she do? After long hesitation, "Hire the white guy," she said. So we agreed; no affirmative action, right? Well, no. But she couldn't tell me why not.
Feeling that her side needed bolstering, I guess, she attacked with a dull, ugly weapon: "What do you know about it? What's your ethnic background?" That 'argument' was so pitiful that I again waited for the other shoe to drop, but she waited me out. So I asked in return, "If I'm Hispanic, you will agree with me more thoroughly?" "No," again.
She looked a little deflated, and I wanted to help. "How's this for affirmative action:" I asked, "the old white judge naturally finds a younger white guy to succeed him. There's a better qualified Hispanic candidate, and the judge isn't exactly prejudiced; he just knows and likes the white guy, a nascent good ol' boy." That enthused her. It happens all the time; it drives her mad.
I drank with a racist, and it wasn't so bad.
At a cocktail reception for Harvard lawyers, she told my friend, an Hispanic lawyer, that retiring Hispanic judges should arrange whenever possible for an Hispanic successor. I gently asked her was that not a sort of racism? She made the usual arguments for affirmative action and for proportional representation of her ethnic (or linguistic?) group in the professions. I suggested that the process might taint the reputations of its beneficiaries. To that, she violently agreed. It was just awful how white professionals assumed that brown ones got their positions through affirmative action.
She appeared to be a bright person, so I was surprised that she stepped so swiftly and willingly into my logical trap. (It certainly wasn't original.) Maybe she is not old enough to remember a time when anyone dared challenge affirmative action in polite society. In any case, I waited for the other shoe to drop. I enjoy doing that -- smiling quietly until my opponent in rhetoric begins to make my own arguments for me. She obligingly backpedaled and told me that she did not advocate promoting people who aren't perfectly qualified. I heartily agreed with the sentiment and poured her another glass of Merlot. The wine was good.
Then I asked her if faced with a couple of qualified candidates, one Hispanic and one white and clearly better qualified, what would she do? After long hesitation, "Hire the white guy," she said. So we agreed; no affirmative action, right? Well, no. But she couldn't tell me why not.
Feeling that her side needed bolstering, I guess, she attacked with a dull, ugly weapon: "What do you know about it? What's your ethnic background?" That 'argument' was so pitiful that I again waited for the other shoe to drop, but she waited me out. So I asked in return, "If I'm Hispanic, you will agree with me more thoroughly?" "No," again.
She looked a little deflated, and I wanted to help. "How's this for affirmative action:" I asked, "the old white judge naturally finds a younger white guy to succeed him. There's a better qualified Hispanic candidate, and the judge isn't exactly prejudiced; he just knows and likes the white guy, a nascent good ol' boy." That enthused her. It happens all the time; it drives her mad.
I drank with a racist, and it wasn't so bad.
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