The Liberty Papers

Robert Mugagbe’s Zimbabwe is quickly turning into a textbook lesson on why price controls never work:

Bread and other essentials all but vanished from shops and supermarkets in Harare yesterday after President Mugabe ordered a 50 per cent cut in prices.

Price inspectors and police, sometimes armed, descended on supermarkets in the Zimbabwean capital to enforce price controls. Their intervention followed the order issued by Mr Mugabe last week in an attempt to get to grips with rampant inflation.

The result was chaos. Bags of sugar burst open in struggles between shoppers who had streamed into supermarkets. Computerised checkouts jammed, unable to cope with the rapid price changes. There was further confusion when officials forced their way into storerooms and declared stock items to be “illegal hoarding,” and ordered all goods to be moved on to supermarket floors.

At one store where the manager tried to restrict sales to two of each item, one worker was seriously injured in the mayhem. Annual inflation reached 4,500 per cent in May, the result of nearly three decades of economic policies devoid of prudence or forethought.

Economists estimate that the real figure is closer to 10,000 per cent. Prices are more than doubling every month as suppliers and retailers struggle to keep up with the decline of the currency, which at lunchtime yesterday traded at Z$260,000 to £1.

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Mr Mugabe, however, asserts that inflation is the fault of “profiteering” by retailers in league with the British Government to oust him.

Last Tuesday the Government published an edict cutting the price of 26 essential items by up to 70 per cent. Two days later another edict imposed price controls on a much wider range of goods. “Reports are that some businesses are resisting this order,” said Obert Mpofu, the Industry Minister. “We will arrest them.”

Mr Mugabe’s attempt to crush inflation reflects a growing sense that economic collapse will bring about the end of his 27-year rule.

One could only hope.