God help Venezuela

Ever since Valley Forge, when George Washington put controls on the price of meat and found that the supply disappeared, politicians have had a hard time understanding why they markets react so negatively to government regulation. President Chavez is repeating George's mistake:

First, President Hugo Chavez announced that he had ordered troops to intervene in the country's rice production.

He accused rice producers of evading a law on controlled prices.

"They are making a mockery of the Venezuelan people," said Mr Chavez.

He said companies were refusing to produce sufficient quantities of standard white rice - which is subject to price regulations - and were producing flavoured varieties instead to avoid government controls.

'No such law'

Polar foods, one of those involved, said there was no law which obliged them to produce a certain quantity of basic white rice.

Within the day there was such a law. The government introduced quotas on 12 basic foods, including rice.