COMMENTARY: Americans can look at Cuba and Venezuela for insight

Price controls may seem like an obvious and easy solution to our economic problems, but those who understand their long-term effects know better. To say price controls will solve the hardships of working-class Americans is like trying to cure a headache with a Band-Aid. Here’s why.

In the early 2000s, Venezuela was plagued by poverty. Hugo Chavez, a military figure turned president, implemented an economic plan similar to Kamala Harris’ proposal. Private businesses, large and small, began to disappear. Those not controlled by the government lived in fear of losing everything.

As a child, I didn’t fully grasp the implications, but I saw my family’s fear and heard warnings about “communism.” Streets became more dangerous as Venezuela spiraled into economic collapse. Food shortages and mass starvation led to violence, chaos and a deeply divided country. This reminded my grandparents of Cuba in the late 1950s. Chavez’s and Fidel Castro’s price control policies, like Stalin’s before them, all led to disaster.

When Harris revealed her economic plan, I had the same ominous feeling my grandparents experienced. Her proposal to control grocery prices mirrors the failed policies of communist Cuba and Venezuela. In Venezuela, price caps on eggs and bread initially made them affordable but quickly resulted in their disappearance.

Companies, unable to cover their costs, stopped producing and distributing goods. What was once expensive but attainable became nonexistent. Price controls led to empty supermarket shelves, or they were stocked with one irrelevant product, like the Christmas bread panettone, while basic necessities vanished. People waited in massive lines for scarce items, like milk, knowing they might not see it again for weeks.

In 2003, Chavez imposed price controls on essential items like coffee, milk and pasta, but by 2013, food shortages had increased dramatically. By 2017, 93 percent of Venezuelans couldn’t afford food. The crisis expanded beyond food. By 2011, price controls covered household necessities like soap and toilet paper. Scarcity worsened, leaving families to make do with inadequate substitutes.

When companies can’t afford production because of price controls, imports are cut and goods vanish. Farmers in Venezuela faced equipment shortages, which disrupted crops and broke the supply chain. Mexico had a similar experience in 2021 when price controls on gasoline led to shortages that affected food safety. Two days after the controls were implemented, distributors of natural gas, used by 70 percent of Mexican households, went on strike.

Cuba’s experience is no different. The government imposed price caps on basic food items such as chicken and powdered milk, leading to the worst food shortages since the 1990s. Cubans have been fleeing in record numbers, escaping a deteriorating economy. Shortages in food, medicine and power are devastating the island.

Economists agree that price controls do more harm than good. CNN reported that limiting the ability to raise prices can hurt the economy by discouraging new companies from entering the market. Jason Furman, a former Obama administration official, noted that price controls lead to reduced supply and higher prices or outright shortages.

In August, Donald Trump gave a speech addressing the cost-of-living crisis, pointing out that Harris’ economic agenda continues President Joe Biden’s policies. Under Biden, food prices have soared — meat and poultry by 23 percent, children’s food by 24 percent, and cereal by 26 percent. In his speech, Trump promised to reduce energy prices by half, eliminate taxes on tips and Social Security, and grow the economy through sensible regulation and abundant supply.

Voting for Harris would bring to the United States the same economic collapse that Latin Americans and Eastern Europeans have experienced. Price controls are a failed, communist-style idea. We must prevent history from repeating itself.

Daniel Campo is an air cargo pilot whose family fled Cuba and then Venezuela. He wrote this for InsideSources.com.