The government announced an export ban on meat to stop the increase in prices and to prevent further declines in domestic consumption. What would Adam Smith say about such a policy?
In an attempt to tame price increases and promote the consumption of a product greatly ingrained in the Argentinian culture, the government of Argentina decided to establish a 30-day ban on the exportation of meat. The measure was implemented after the upsurge in the price of beef by nearly 70% in a year caused a significant reduction in domestic consumption. Allegedly, the president considers that people from Argentina should not pay the same price for meat as in “France, China, or any latitude in the world.” Even though other factors like inflation and the devaluation of the country’s currency play a role in both the increase in prices and the reduction of consumption, the government recurred to a policy already employed several times with disastrous consequences
To read the rest of the article, please visit here