Venezuelan Government regulates street vendors and their prices. Next: The Buhonero Police?

June 29, 2010

The ability of the robolution to amaze and awe is truly remarkable. Bizarre has now become a normal word in Venezuela as the Chavez Government does nothing that could be construed as being normal.

Take the term “informal” workers. They represent the more than half of the Venezuelan population who have casual jobs, selling stuff in the streets and trying to make a living. Nothing organized or regulated about them. Periodically, the Government tries to move them from one place to the other, they are banned from certain places, but somehow they survive, resurfacing somewhere else. Informal workers, called “buhoneros’ in Venezuela, used to be pro-Chavez, but they seem to support him less and less. I tried to depict some of their activities and smarts in the reappearance of Oligarco Burguesito, who met Nero Buho the street vendor to talk about the end of the swap market.

But Nero’s life, if he existed will become rougher starting today, as the Government issued a decree, essentially forbidding that street vendors sell foodstuffs at a price different than the regulated price and as long as they maintain the required hygiene and health standards necessary.

Moreover, these “informal” workers will have 30 days to comply with the decree and those found to be in violation of the decree will have their merchandise confiscated.

Where do I start on this? It has so many weird edges that it is actually quite hard to know the beginning. I have a thousand questions. For example, who the hell is going to supervise this? Will Chavez create the “Buhonero Police” to check it all out?

But even before that, where do you find the street vendors? I mean, these are street vendors, they are all over the place, do they have to register now? Doesn’t that turn them into some sort of “formal” workers? What if they move from one place to the other?

But what happens, for example, if one of these street vendors barters rather than sell one kilo of merchandise for another? Does this apply to fair pricing in barter too?  Didn’t the Government want to promote barter? How do you regulate barter in the end? Isn’t that an essential part of the communal law recently passed by the National Assembly? What differentiates a communal vendor or barterer form an informal worker? Is he regulated by this? Who has to register? Where? How does this all work?

And once you get beyond these nitpicking details, everyone is legit, everyone has registered, do they all become “formal” workers? Does the unemployment rate become negative then? Because if informal employment is more than 50% and unemployment is 7 or 8%, like INE says, then we would have -40% unemployment or something like that.

And in the end, when the poor now formalized, “informal” worker has his stuff confiscated by the buhonero police, can he appeal? Can he get his stuff back? Can the buhonero cops become street vendors too? How many buhonero cops do you need to supervise this? Who will train them? Is this an massive employment program in the end?

Does it apply to trucks that come from the interior to sell their goods in the cities too?

Will buhoneros have to have prices marked on all items? Do they need to get cash registers? Do they have to print official tax office receipts? Collect Value Added Tax? Pay it? Pay income taxes?

In the end, this sounds as bizarre and harebrained as so many other things the robolution has ever created or improvised.

But hey, eleven years running and they are still running things…

20 Responses to “Venezuelan Government regulates street vendors and their prices. Next: The Buhonero Police?”

  1. m_astera Says:

    I would assume the buhoneros are already paying off any police that might hassle them and probably aren’t willing or able to pay more mordita than they already are paying. Also, the money or goods they are bribing the cops with isn’t going into government coffers.

    Where I’m going with this is that my first assumption is always that government wants more money and is looking for ways to get it, but it’s hard to see how the upper echelon of government is ever going to see any money from this. The most likely result should anyone actually try to enforce it is a bunch of pissed-off street vendors.

    It sounds like an idea the Cubans came up with.

  2. m_astera Says:

    What is the official price for a perro caliente?

  3. Gringo Says:

    My guess is that this will turn out the way that scheduled electricity blackouts in Caracas did. After a very negative reaction from the “barrios populares” to the prospect of scheduled blackouts in Caracas, Thugo backed off. (Cutting off electricity in Valencia would not result in an angry mob within minutes of Miraflores: very practical decision.)

    As m_astera points out, regulating street vendors would piss off a lot of people. Thugo will back off from this, perhaps after a cop or two gets tarred and feathered by a gang of buhoneros.

    Or, this will simply result in higher bribes being paid to the cops.

  4. loroferoz Says:

    Can you expect a Socialist to get it once and for all?

    Price setting (regulation in euphemism) DOES NOT WORK! It creates scarcity and a black market, INVARIABLY.

    The buhoneros sell their stuff because it cannot be found at the stores (which do not care to sell at the set price), and oh, of course, they sell above the set price. They take some risks, and that also ups the price somewhat (from the price a store would sell the stuff if it were free to do so).

    “Or, this will simply result in higher bribes being paid to the cops.”

    Higher prices from the buhoneros, aggravated buhoneros, hated cops, a black market of confiscated merchandise, more corruption with the permits.

    The law of unintended consequences IS divine retribution and poetic justice for the arrogant. Swift, terrible and ironic all in one.

  5. Kepler Says:

    Miguel,

    I am preparing a post about the issue of the “unemployment” rate. The INE counts buhoneros as employed. That’s why we are supposed to be better off than Spaniards.

    As you said, there is not a chance there can be an effective control over this in Venezuela. Waste of policemen when they should be first trying to pull down the murder rate to just “horrible heights” as in 1998 (and not “the most horrible by far in South America” as now).

  6. Roberto N Says:

    This is part of a purposeful strategy to control food, and thereby the masses.

    They don’t have to reach every buhonero, they just need a few examples and some fear.

    This will move the sale of food at unregulated prices into a black market.

    So for now we have the $$ black market, and next is the food black market.

    The buhoneros will try to keep selling as they do, and face more harassment and more mordida. They’ll go underground. Some will quit, of course, and have to find something else.

    What follows?

    They recently passed a law that contemplates penalties for illegal electrical and gas hookups. Imagine how that will play in La Bombilla or Plan de Manzano. I don’t think they are stupid enough to try to enforce this until after 26S, but one can hope.

    CESNA (’nuff said)

    They have sanctioned communes that can issue their own scrip, and are promoting barter.

    The new set of Comuna law also envisions complete horizontality of the new socialist enterprises, no one is cacique; son todos indios.

    These won’t pay taxes either, because they will re-invest profit into their local communities. Hmm, I wonder how many of these will be “profitable”.

    The Asamblea has a 3 month lame duck period after elections, and a replacement waiting in the wings.

    What we are seeing is the application of total regulation and control over society. Micromanaging of the highest order. Step by step Esteban wants to corral Venezuelans into living in Animal Farm, where of course some will be more equal than others.

  7. island canuck Says:

    Kepler: Re unemployment.

    How does one count buhoneros?

    It would seem an impossible task.

  8. Kepler Says:

    They say “economía informal”, not buhoneros. Not that I give much
    credit to those numbers, they are probably a good Venezuelan massage of very
    badly performed surveys.

    http://www.ine.gov.ve/hogares/SeleccionHogares.asp

    Still, even if we believe what they say, the government is saying there about 45% of Venezuelans “working” are doing so in the informal sector.

    I guess it goes like this: en qué trabaja Usted? Está inscrito en el IVSS?
    Or the like. So the economía informal comprises street vendors and taxi drivers and lorry drivers and the like.

    I can’t find anymore another document at the INE site where I could read “work force per state and profession”. The numbers were very funny: like 30% of those employed in transportation (is everybody moving things around Venezuela? I suppose containers and further imports :-) and about the same amount were “profesión no especificada” (which I suppose is code for misiones, Chavista bodyguards, high level illegal workers, drug dealers, vendedor de empanadas and all the rest)

  9. island canuck Says:

    Kepler:

    Have a look at this info at The Blog de Economia y Finanzaz

    http://algodeeconomia.blogspot.com/

    Desempleo e Informalidad en Venezuela. Mayo 2010 –
    ¿Sin Chamba? Me voy a trabajar por cuenta propia

  10. Kepler Says:

    Thanks, Canuck. Those are good graphs. I will link to that post now as well.

    One of the things we need to do, most in Venezuela, is to put things under perspective.

    Most Venezuelans hardly know anything about what is happening outside.

    You don’t really get real knowledge of the world by watching Televisión espanola (which is much more than what most Venezuelans can do) or foreign films in general.
    Even the news in Britain or Germany, in Spain or Italy, are always portrayed for the national public. A big crisis in Spain (and Spain is in deep deep shit and Spain is worse off than a Europe in trouble) is like a boom in Venezuela.

  11. loroferoz Says:

    “Step by step Esteban wants to corral Venezuelans into living in Animal Farm, where of course some will be more equal than others.”

    A lofty goal which was already half-finished by the time he took possession in 1998. State owned oil production accounted for over half our exports, economic rights were at a moment’s notice from being abrogated in Venezuela, and the agents of the State already had wide discretion over citizens and companies. Now, go figure.

    However, expect that this will only result in corruption and waste and the amassing of ever greater fortunes by his cronies, and general degradation in standards of most everything relating to Venezuelans’ life.

    This raises a number of questions: Do Venezuelans have the capacity for enduring abuse, oppression and murder of Africans and Arabs? I hope not; but the behaviors of the government and of street criminals tell a different story. Can we go ALL of the way to national failure? I also hope not; but there’s little in the way of alternatives to reaching social collapse and civil war. Will we go the way of Cuba? I am hopeful here; Chavez has not been able to crush Venezuelans with raw terror like Castro; he also hasn’t got a sexy executioner with a sexy nickname and really good mugshots such as Castro had. Yes, he got Oliver Stone, but that one works as long as the Revolution can be made to seem “normal and peaceful” and somehow at risk from the CIA.

  12. m_astera Says:

    I agree that a major motive is control of the food supply, which is why I mentioned the Cubans. Thugo seems to get a lot of credit here for being clever; funny, he has never given any indication of that when I have watched or listened to him. Maybe I’m not paying enough attention?

    I would guess that all his clever ideas originate in Cuba, and one won’t find 40-50% of the population of that island selling hard to find items on the streets. As long as the scarce items, especially food, remain available from any source other than the government, the government will not have control of whether one starves or not. That, I believe, is the real reason behind this move.

    Will it work? No. Simply impossible in Venezuela as long as anyone in the private sector has anything to bribe the cops and bureaucrats with.

  13. framethedebate Says:

    Loroferoz, have you been asleep. From your comment “Will we go the way of Cuba?” it appears you have yet to open your eyes. I regret to inform you that for all intensive purposes, Cubazuela already exists. Miami might have “Little Havana”, so renaming Caracas may require a little more thought. In regards to the new regulations meant for the informal workers, one has to wonder if all those evil oligarchs disguised as buhoneros will suffer from the Fatman’s latest efforts. His wrath will be felt throughout society,,,,,rich or poor.

  14. framethedebate Says:

    Incidently. I mentioned some time back that controlling the food supply and destroying the means of production were both objectives (goals) of the Fatman. Due to recent events, I have been rethinking the position I took months ago. It now appears controlling food supplies is not enough. They apparently most be destroyed as well (or, at the least spoiled beyond consumption).

  15. loroferoz Says:

    I might have been asleep. But I don’t see that many hardcore supporters of this charade that tries hard to look like a Revolution with scarce success. I do not see the raw, undiluted, deadly terror dealt by Castro through the hands of photogenic executioners and torturers.

    I see corruption and new oligarchies. I see that the government (through no liberal blemish in its authoritarian nature, though) is unable to force conformity. These guys have gone Adeco faster than the Adecos did.

  16. Roy Says:

    From a Fourteenth Century Chinese parable by Liu-Ji:

    In the feudal state of Chu an old man survived by keeping monkeys in his service. The people of Chu called him “ju gong” (monkey master).

    Each morning, the old man would assemble the monkeys in his courtyard, and order the eldest one to lead the others to the mountains to gather fruits from bushes and trees. It was the rule that each monkey had to give one-tenth of his collection to the old man. Those who failed to do so
    would be ruthlessly flogged. All the monkeys suffered bitterly, but dared not complain.

    One day, a small monkey asked the other monkeys: “Did the old man plant all the fruit trees and bushes?” The others said: “No, they grew naturally.” The small monkey further asked: “Can’t we take the fruits without the old man’s permission?” The others replied: “Yes, we all can.” The small monkey continued: “Then, why should we depend on the old man; why must we all serve him?” Before the small monkey was able to finish his statement, all the monkeys suddenly became enlightened and awakened.

    On the same night, watching that the old man had fallen asleep, the monkeys tore down all the barricades of the stockade in which they were confined, and destroyed the stockade entirely. They also took the fruits the old man had in storage, brought all with them to the woods, and never returned. The old man finally died of starvation.

    Yu-li-zi says, “Some men in the world rule their people by tricks and not by righteous principles. Aren’t they just like the monkey master? They are not aware of their muddleheadedness. As soon as their people become enlightened, their tricks no longer work.”

  17. NicaCat Says:

    Unfortunately, however, it seems that those monkeys were open and able to be enlightened, unlike Venezuelans. So very sad.

  18. loroferoz Says:

    I don’t know where to begin to heap praise on this fable.

    The monkeys basically asked themselves “What does this old man provide except floggings for our fruit?”, “Can we provide for ourselves and be orderly without being whipped” “Do we need to be whipped around to live?”, “Can he whip us all at the same time?”, “Can he whip any one of us if we refuse to go along with him?”, “Can we have what is ours?”.

    They answered “nothing”, “yes”, “no”, “no”, “no” and “yes” and did the sane thing. They stripped the old man of all power, which was awfully easy.

    Enlightenment did not involve revelation. Just thinking critically and coolly about what you get from a bargain, and about the ways you get what you get. They refused a bad bargain and they refused to have anything to do with someone who solved matters with a whip.

    Surely enough, the old man would have been way more successful if he had given the monkeys some kind of flag and had wrapped himself in it’s colors (patriotism) or if he had provided token service while claiming that any monkey that questioned his setup was not socially conscious or egoistic, or counter to the establishment of “social justice”.

    Nevermind that he could have kept whipping them just as hard or harder all along, just to show the unpatriotic and the egoists that “justice” awaited them for their questioning of him.

  19. deananash Says:

    Indeed, Venezuelans can also be free when they decide to simply stop producing for the State. Now, it will take a bit longer, but withdrawing your minds from service will rapidly cause the collapse of society, a la Atlas Shrugged.

    Keep working, but only manual labor. Put your minds on strike. Even better if you only work for cash and avoid all taxes.

    It won’t be easy, it will require GREAT SACRIFICE, but if just 20% of the thinking Venezuelans would take this path, that would probably be enough.

    Besides, you’re never going to be free without sacrifice. Freedom isn’t free. On the contrary, it’s extremely costly. I thank my forefathers every day for their incredible sacrifices. I’m not sure if I would have the same fortitude as they did. I can only hope so.


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