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[smjjames]

So you're telling us that taking farms away from people who knew how to farm and giving it to people who had no idea what they were doing caused no problems at all.

Please excuse me if I find that extremely hard to believe.

I was talking about what happened in Zimbabwe, in response to Reelya.

Except that Reelya is saying that taking farms away from people isn't what happened in Zimbabew.

[Reelya]

No, they did take away farms, and there were some problems obviously. But it's not the cause of the crisis that Zimbabwe went through, that's very strongly related to the attempt to control inflation through price controls. Because the exact same thing has happened in many different places that did price controls throughout the 20th century, of all political stripes.

Price controls is the common factor to those cases. "Handing over farmland to black folks" is common to  exactly one place that had the hyperinflation-related shortages. Occam's Razor suggests the Price Controls were the real culprit.

And the fact is famines do not cause hyperinflation. They never do. So a mere decline in agricultural output is not a cause of hyperinflation, which was the main problem in Zimbabwe. Agricultural declines only cause imports to skyrocket, i.e. a one-off price spike, not a runaway process.

The reason that you never hear about this is that there's little political mileage in merely pointing out than a known mechanism caused the problems, they always want to blame some nebulous political concept instead of well-known economic principles.

[Wolfhunter107]

Care to actually name some of "all of these other places"?

[Reelya]

Venezuela, current price control regime.

Soviet Union in the 1970s

Those are two well-known examples.

Additionally, Egypt is currently experiencing a massive inflation surge. And guess what? They've been trying to enforce price controls for a few years now.
http://www.voanews.com/a/egypt-puts-price-controls-on-fruit-vegetables/1762413.html
http://www.tradingeconomics.com/egypt/inflation-cpi

Here is a full list of what the Cato Institute lists as "troubled currencies" i.e. those at risk of hyperinflation:
https://www.cato.org/research/troubled-currencies

Nigeria is on there, you can also google articles saying they tried price controls, and inflation only got worse after they did that.
http://allafrica.com/stories/201107280822.html

South Sudan also enacted price controls, after which inflation went turbo mode:
https://radiotamazuj.org/en/article/south-sudan-forms-panel-consider-price-controls
http://www.tradingeconomics.com/south-sudan/inflation-cpi

So in all Cato's troubled currency examples (except Syria which "war zone"), inflation became much worse after they started pushing price controls.

That's because price controls create unrealistically low official prices for basic commodities, meaning that you can profit by hoarding then selling on the black market, which creates further shortages and causes more inflation (since it becomes a seller's market). And then the original price is even cheaper so the profits from the hoard->black market cycle become ever increasing. It's basically a cycle that reinforces itself since the "store price" can never be adjusted based on supply and demand.

~~~

EDIT: Let me give an example with some numbers.

Say a country grows 1 million apples a year, and inflation has risen such that it's $1 an apple. But the government decides that's too high for poor people to get any apples, so they enact a price control where the legal price of an apple is 10 cents.

But the problem is now demand for apples massively increases, so the stores run out, and people start hoarding their apples, perhaps freezing them. So there are now less of the 1 million apples actually being eaten than before. And since people were willing to pay $1 for an apple when there were 1 million to share, when there are less to share, they're now willing to pay more that $1 on the black market, so even though no more or less apples are produced, the effective price of an apple now exceeds the original pre-control price. Add to that, that low official prices discourage producers: some apple trees are no longer viable, so supply itself drops, further driving up prices.

[Sergarr]

No, they did take away farms, and there were some problems obviously. But it's not the cause of the crisis that Zimbabwe went through, that's very strongly related to the attempt to control inflation through price controls. Because the exact same thing has happened in many different places that did price controls throughout the 20th century, of all political stripes.

Price controls is the common factor to those cases. "Handing over farmland to black folks" is common to  exactly one place that had the hyperinflation-related shortages. Occam's Razor suggests the Price Controls were the real culprit.

And the fact is famines do not cause hyperinflation. They never do. So a mere decline in agricultural output is not a cause of hyperinflation, which was the main problem in Zimbabwe. Agricultural declines only cause imports to skyrocket, i.e. a one-off price spike, not a runaway process.

The reason that you never hear about this is that there's little political mileage in merely pointing out than a known mechanism caused the problems, they always want to blame some nebulous political concept instead of well-known economic principles.

Price controls are traditionally associated with socialist/communist regimes because all countries of this evil block have done those. Subsequently, any country that enacts price controls is likely to be moving towards socialism/communism. It's not a big secret, then, why people blame communism directly.

I keep noticing you're trying to shift all negative remarks away from communism, for some reason. Why? Do you see any value in trying to deflect blame from a political concept directly underlying beneath one of the most thoroughly evil regimes to ever exist, that has once threatened the very existence of human civilization in its attempts to spread and inflict the curse of communism on everyone who wasn't wise or strong enough to resist, and that countries even now, after they threw the communists away, struggle to heal the damage that they have suffered at the red bloody hands of communist fanatics?

South Africa does have price controls on "coal, petroleum and petroleum products, and utilities". So it wouldn't be unprecedented for the idiots in charge to start expanding them to food, as well, "for the good of the people".

Maybe. Or maybe it will actually be for the good of the people. Problem is that, from what I've gathered from other posts by you, is that you only see things from what I interpret as a neo-liberal capitalist viewpoint. It's not that you shouldn't view things from that perspective, but that you should also look at issues from many perspectives.

I'm seeing things from the perspective that has shown significantly bigger accuracy in predictions over all other perspectives. I don't see value in looking at issues from perspectives other that this perspective of most likely truth.

Historically, price controls have been consistently shown as inferior to regulated non-monopolized market mechanisms, and, conveniently enough, Reelya has provided a list to prove it.

[Reelya]

Because understanding the actual mechanism helps to understand what happened.

The common criticism "communism did it" almost always points the blame at some mechanism that had nothing to do with the problem.

e.g. they usually say something like "collectivism in Venezuela is the cause of the economic problems" when "collective enterprises" make up basically 0% of Venezuela's economy. There are some experimental collectivist enterprises but they make up an absolutely tiny proportion of Venezuelan GDP, so it clearly fails as an explanation of why the economy as a whole is in the shit. It's a catchphrase that misleads the reader.

Note that almost none of the countries trying this same tactic at the moment and experiences skyrocketing inflation are actually socialist in the slightest, they're just grasping at straws to stabilize their currencies. So decoupling the understanding of the mechanism itself from the "label" on the countries helps to understand why it's a bad thing to do.

And the fact that people blame "black farmers" for Zimbabwe's specific crisis of this type is indicative that people basically don't know how the mechanisms involved work. It's misattribution.

[IronyOwl]

btw, the main reason for the decline in food crops in Zimbabwe was actually price controls not handing farms to black folks:
http://www.irinnews.org/news/2010/08/10/more-food-production-not-enough

Even this source claims land redistribution was responsible for the country's "economic malaise" down at the bottom. If you want to argue the country should be miserably poor but well-fed by the existence of black farmers, this is a good article. If you want to argue South Africa will definitely not collapse into ruin and decay within a few years after implementing black farmers, you have chosen the wrong article to illustrate that.

It also claims some experts blame the maize slump on things other than price controls, and that:

The "more recent decline is due to the structural change precipitated by land tenure policies, lack of investment funds domestically and externally in agriculture sector, and overriding economic deterioration."

"Structural change precipitated by land tenure policies" might not explicitly mean grabbing more white land, but it sounds an awful lot like the government mucking about in land ownership/renting. It also mentions economic deterioration, so even "poor but fat" doesn't work so great as an argument anymore.

It also claims that total land farmed was up for various reasons, but productivity per area was down. It doesn't offer any explanations for this, but "price controls" sounds like a strange solution.

Price controls are also responsible for:

- hyperinflation in Zimbabwe

Hyperinflation in Zimbabwe may have been caused in part by all manner of things, but its absolutely absurd heights were caused by the government having no self control whatsoever. A quick glance at wikipedia places its estimated height at 79.6 billion percent in one month. I would love to see what kind of price controls can accomplish a meaningful chunk of that.

[Reelya]

Because price controls set up the situation of food hoarding and shortages. Just having high inflation doesn't really do that by itself. It's like a bubble problem, things are semi-stable as long as you keep feeding the bubble, but feeding it makes it worse too (and price controls inadvertently feed the problem). Although it seems the DRC war was the precipitating factor. I found evidence that Zimbabwe's inflation rate was already skyrocketing in the years before the land redistribution. It had already hit 38% by 1999 for example. And food shortage riots already existed at least as far back as 1998, which is well before the land redistribution laws existed.

Basically, I think any reduction in farm production could only amount to a limited amount of inflation, as a production cut will push up real prices, but not past the cost of imports (import substitution caps how much the real-adjusted prices can rise due to local production shortages). If imports themselves are suffering from hyperinflation then that's not credibly related to a production shortage.

~~~

The main problem with the idea that South Africa will turn into Zimbabwe is they're completely different:

- Agriculture accounts for 2.5% of South Africa's GDP. It made up 40% of Zimbabwe's exports before the crisis.

- South Africa has pretty low inflation, 6.8%, whereas even before the land redistribution, Zimbabwe was running 31.5% inflation in 1998 and 38% inflation in 1999. Since the land redistribution was only ordered in 2000, it's clear that inflation was already strongly rising before that policy was enacted.

- South Africa has a positive balance of trade, whereas the Zimbabwe government was running large deficits in order to pay for a foreign war.

Basically, South Africa's economy is much less dependent on agriculture than Zimbabwe's was and they don't have the pre-existing inflation, deficits and war funding problem that Zimbabwe had. It's a completely different situation.

[Arx]

I sent the Land Expropriation Act back to parliament for further consideration, in particular to enable more public participation.

Here's the speech in question (transcript; you don't hef to leesun to oua behlovèd prresidènt speak, ehehehee).

Please don't say "will" when it's by no means a definite. The Land Expropriation Act was accepted by Parliament in May 2016, and last I checked the country wasn't burning down any more than usual. It's back to Parly for more public participation:

Two months later‚ Zuma put the brakes on the Bill after he received petitions about the process followed by Parliament.

(Times Live)

And it's not like the bill sets things out so that the government can take land and declare that it was worth R5. And even so, it's possible to appeal to the courts. And the ANC spends so much time on infighting and scandals that I don't think they could turn the country into a proper dicatorship even if they were actually trying (the Guptas might be, but that's another story). Zuma's term ends in 2019 and he hasn't a hope in hell of getting the constitutional amendment that would allow him a third term. The EFF would literally riot (in Parly! They'd probably throw chairs), the DA would have a fit, and all the other opposition parties would condemn it in variously strong terms.

South Africa does have price controls on "coal, petroleum and petroleum products, and utilities". So it wouldn't be unprecedented for the idiots in charge to start expanding them to food, as well, "for the good of the people".

I'm not sure you understand how our government works. It's difficult for Northerners to grasp sometimes, but South Africa is a functioning democracy. The idiots in charge are not dictators. You'd think after Obama people would realise a black man can become a politician without wanting to become a dictator or part of a dictatorship, but I digress. The point is that they can't simply try to control the price of food. The last time Zuma and his circus troupe decided to let politics interfere with the economy, the Rand dropped an obscene amount against the dollar overnight and their pet finance minister was replaced after 8 days, IIRC. After that, our newly reappointed highly competent and honest finance minister more-or-less waged war against them for a few months over some complicated issues and ultimately came out victoriousish we think.

[ChairmanPoo]

Why would South Africa be starving in 5-10 years just because more landowners are suddenly black? Makes no logical sense to me. Arguably mismanagement maybe, but I'm sure they can find qualified people if they look hard enough.

Private property is sacrosanct for a reason. Forceful expropriation of land with no compensation by the state always ends up in famine and starvation, or at least a severe loss in agricultural sector resulting in its inability to feed the people of the country by itself. That's what happened in USSR, that's what happened in Zimbabwe, that's what is going to happen in South Africa.

That is not so. There's precedent. Early XIX century Spain had a lot of land in the hands of big landowners and the Church, who underutilized it. After expropiating it from them the goverment managed to improve agricultural output, renewed the state's finances, and was even able to renew the army and win a succession war which up to that point had been looking dire for them.  I don't know the circumstances of South Africa, but the point is that depending on the circumstances it can be good or bad. There's not a blanket on the matter.

Also: pretty much every country has mechanisms to expropiate private property.

[Sheb]

Why would South Africa be starving in 5-10 years just because more landowners are suddenly black? Makes no logical sense to me. Arguably mismanagement maybe, but I'm sure they can find qualified people if they look hard enough.

Private property is sacrosanct for a reason. Forceful expropriation of land with no compensation by the state always ends up in famine and starvation, or at least a severe loss in agricultural sector resulting in its inability to feed the people of the country by itself. That's what happened in USSR, that's what happened in Zimbabwe, that's what is going to happen in South Africa.

That is not so. There's precedent. Early XIX century Spain had a lot of land in the hands of big landowners and the Church, who underutilized it. After expropiating it from them the goverment managed to improve agricultural output, renewed the state's finances, and was even able to renew the army and win a succession war which up to that point had been looking dire for them.  I don't know the circumstances of South Africa, but the point is that depending on the circumstances it can be good or bad. There's not a blanket on the matter.

Also: pretty much every country has mechanisms to expropiate private property.

There are other exemple of land reform working well, like post-war Japan or Taiwan. Small farmers tends to be more productive than big ones per unit of land (after all, they're willing to sink unlimited amount of labor in their own plot). The issue is more "how is land reform done" than whether it is done. In this case, I'd be more worried about the ANC using the opportunities to hand large tracts of land to themselves, the way ZANU-PF did in Zimbabwe. But then, if Arx says it's not as bad as it sounds, I trust him.

[Arx]

It is fair to say it sounds concerning, but the particular article Ser cited makes it sound worse than it is, I'd say. There's a lot more context than "corrupt ANC passes land theft bill", especially when it hasn't yet been passed.

[Sergarr]

* Sergarr animates the thread

Migrants are being sold at open slave markets in Libya

Migrants from west Africa being ‘sold in Libyan slave markets’

'Old slavery mentality' is making a comeback in lawless Libya, migrants say

Absolutely fantastic. You can just feel the democracy and human rights blossoming with the evil tyrant dictator Gaddafi deposed by light-blessed pro-Western forces of good.

[Loud Whispers]

* Sergarr animates the thread

Migrants are being sold at open slave markets in Libya

Migrants from west Africa being ‘sold in Libyan slave markets’

'Old slavery mentality' is making a comeback in lawless Libya, migrants say

Absolutely fantastic. You can just feel the democracy and human rights blossoming with the evil tyrant dictator Gaddafi deposed by light-blessed pro-Western forces of good.

How the fuck did I miss this

[redwallzyl]

Well theirs always the, to the shores of Tripoli, option.