A headline in The Times:
President Maduro of Venezuela caps prices to curb black market
As PJ O'Rourke remarked in Eat the Rich:
It's no use trying to fix prices. To do so, you must have a product that can't be replaced, and you must have complete agreement among all the people who control that product. They're greedy or they wouldn't have gotten into the agreement, and they're greedy so they sneak out of it. This is what was wrong with Paul Samuelson's idea about crop restrictions in Chapter 1, and this is why the members of OPEC are still wandering around in their bathrobes, pestering camels.
Any good drug dealer can tell you that to ensure a monopoly, you need force. To ensure a large monopoly, you need the kind of force only a government usually has. And it still doesn't work. ...
The government of Cuba, with force aplenty at its disposal, decided that beef cost too much. The price of beef was fixed at a very low level, and all the beef disappeared from the government ration stores. The people of Cuba had to hassle tourists to get dollars to buy beef on the black market, where the price of beef turned out to be what beef costs.
When the price of something is fixed below market level, that something disappears from the legal market. And when the price of something is fixed above market level, the opposite occurs. Say the customers at suburban Wheat Depot won't pay enough for wheat. The U.S. government may decide to buy that wheat at higher prices. Suddenly there's wheat everywhere. It turns out that people have bushels of it in the attic. The government is up to its dull, gaping mouth in wheat. The wheat has to be given away. The recipients of free wheat in the Inner City Wheatfare Program hawk the wheat at traffic lights, and what they get for it is exactly what people are willing to give.
There is indeed a tragedy in the fact that the President of Venezuela knows less economics than the humour correspondent for Rolling Stone.
The underlying point being that supply, demand and prices are not an optional part of our universe, they are how we humans interact with it. The only choice we have is whether we make such interactions safe, legal and commonplace or dangerous, backstreet and rare.