7 votes

Lukashenko imposes ban on price increases in Belarus effective immediately

7 comments

  1. [7]
    Adys
    Link
    Announcement is very recent. I initially was going to post this as a text post as the only source I could find was Belta. Belta is Belarus' state media (more info). This is "straight from the...

    Announcement is very recent. I initially was going to post this as a text post as the only source I could find was Belta. Belta is Belarus' state media (more info). This is "straight from the horse's mouth", but they're still propagandists.

    Original source (in Russian), or in English: "officially" translated by Google Translate.


    There's another reason I'm posting this: I'M SUPER CURIOUS what's going to happen here. This has been tried before in the context of hyperinflation, and obviously it's a stupid idea. But it's not obvious to me why it wouldn't work in the context of small scale inflation, especially if the measure is temporary.

    If price freezes can stave off hyperinflation for a period of weeks or even months, what happens when the inflation is somewhat mild?

    Anything relying on imports will be affected and it will become less and less affordable for businesses to sell those. But that can be offset by government measures as well (similarly to how some EU governments are paying their citizens' gas bills right now). Over time of course the delta becomes too much and if black markets get involved, then governments lose out on the tax revenue etc making everything worse. BUT IN THEORY…?!

    Anyway, yes, theory. My suspicion is that prices will subtly increase anyway, because Belarus doesn't sound organized enough to have a reliable way to enforce this. And if this happens, it would work like a release valve… which actually would be a good thing?

    I don't envy having to deal with this clown, but damn am I curious to see the results of this experiment. I don't think the outcome is as clear as the knee-jerk reaction demands it to be.

    5 votes
    1. [6]
      vegai
      Link Parent
      I'm pretty sure economists have known for a hundred years at least what happens when you do this and it's never good for the people. Lukashenko is obviously an idiot who is ruining his country.

      I'm pretty sure economists have known for a hundred years at least what happens when you do this and it's never good for the people. Lukashenko is obviously an idiot who is ruining his country.

      1 vote
      1. [5]
        Adys
        Link Parent
        Known - yes. Actually ran the experiment? I don’t believe so! Economics is like science except you can’t run most of the interesting experiments.

        Known - yes. Actually ran the experiment? I don’t believe so!

        Economics is like science except you can’t run most of the interesting experiments.

        7 votes
        1. [2]
          vegai
          (edited )
          Link Parent
          Didn't communists and other autocrats of various kinds make these mistakes all over the place in the 1900s? I admit, I don't actually know but more have a hunch. edit I underestimated the breadth...

          Didn't communists and other autocrats of various kinds make these mistakes all over the place in the 1900s? I admit, I don't actually know but more have a hunch.

          edit I underestimated the breadth of knowledge here, see https://en.wikipedia.org/wiki/Diocletian from year 284.

          3 votes
          1. Loire
            Link Parent
            Diocletian's Edict on Maximum Prices was actually from 301 and it's startlingly similiar to Lukashenko's in that it was based on moralizing about the economic factors (blaming the inflationary...

            Diocletian's Edict on Maximum Prices was actually from 301 and it's startlingly similiar to Lukashenko's in that it was based on moralizing about the economic factors (blaming the inflationary pressures on greed and "speculators") as well as being completely ignorant of economics. Perhaps more understandable in the 4th century. Lukashenko doesn't have that same excuse for his ignorance.

            3 votes
        2. [2]
          noble_pleb
          Link Parent
          Actually, yes. The entire global monetary system was an experiment in such artificial price control as USD was tied to gold standard. It was only after the Bretton Woods system collapsed (in 1975,...

          Actually, yes. The entire global monetary system was an experiment in such artificial price control as USD was tied to gold standard. It was only after the Bretton Woods system collapsed (in 1975, Nixon's time probably) that currencies were freely traded on the exchanges. But then again, the new system (some experts say) is an even more dangerous experiment than before as there is no backing except a word or promise!

          1. Adys
            Link Parent
            I’m not really convinced the two situations compare. Either way, we will see. I don’t envy Belarusians.

            I’m not really convinced the two situations compare. Either way, we will see. I don’t envy Belarusians.

            1 vote