For Venezuela’s economy, the ascent into socialist paradise did not turn out quite as planned: in fact, under the Maduro regime, the country with the world’s biggest petroleum reserves somehow reversed course, and crashed through every single circle of economic hell, and now that its hyperinflation has hit levels that would make even Mugabe and Rudy von Havenstein blush, all that’s left is barter.
And, as Fabiola Zerpa explains as part of Bloomberg’s fascinating “Life in Caracas” series, i.e., watching economic and social collapse in real-time, in Venezuela, a haircut now costs 5 bananas and 2 eggs.
Read on for what really happens when money dies, coming to a banana monetary regime near you in the near future.
In Venezuela, a Haircut Costs 5 Bananas and 2 Eggs
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The other day, I made a baguette-for-parking swap. It worked out brilliantly
I had time but, as usual, no bolivars. The attendant at the cash-only lot had some bills but no chance to leave his post during the fleeting moments the bakery nearby put his favorite bread on sale. The deal: He let me leave my car, and I came back with an extra loaf, acquired with my debit card. He reimbursed me—giving me a bonus of spare change for my pocket.
That’s how we make do in our collapsing economy. If somebody has lots of one thing and too little of another, an arrangement can be made. I’ve exchanged corn meal for rice with friends from high school, eggs for cooking oil with my sister-in-law. Street vendors barter, too, taking, say, a kilo of sugar as payment for one of flour. There are Facebook pages and chat-room groups devoted to the swap-ability of everything from toothpaste to baby formula.
Amid widespread food shortages, street vendors are selling small portions of groceries. Photographer: Carlos Becerra/BloombergA barber in the countryside cuts hair for yuccas, bananas or eggs. Moto-taxi drivers will get you where you need to go for carton of cigarettes. The owners of one of my favorite Mexican restaurants offer a plate of burritos, enchiladas, tamal and tacos in return for a few packages of paper napkins. At a fast-food joint near my office, the guy working the register let me walk away with a carry-out order of chicken, rice and vegetables without paying the other day, relying on my promise to come back with the 800,000 bolivars.
Acting on that kind of trust was unheard of just a few years ago. Charity is also something new. I didn’t grow up with the traditions of canned-food drives and volunteerism that are common in the U.S. Now parents from my kids’ school collect clothes for the poor, and neighbors gather toys for a children’s hospital. My friend Lidia, a property-rights lawyer, delivers homemade soup to the homeless.
I like to think of all of this as a noble expression of solidarity, as evidence of the decency of my fellow caraquenos at a time of mind-numbing shortages of basic goods and exploding inflation. I know that in most cases the motivation is necessity, even desperation. But that’s all right. Handing that freshly baked baguette to the parking lot attendant made both of us smile, even if for just a second.
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For more true stories on daily life in Venezuela read:
I wonder how the relatively wealthy transact basic bill-paying for things like tuition and other household bills when inflation is running so hot.
Went online couple a of months ago to see about buying some land down there (blood in the streets, dirty capitalist pig that I am). Didn’t see anything I’d call a bargain. Maybe the well to do aren’t being affected.
From what I’ve read, they’re doing better than before.
That’s usually the way it is for the elite when a country goes socialist or communist.
So, what is the best monetary system?
Monetary system or asset system?
The two tend to get confused with each other.
As for monetary, it’s whatever one you live in since that is the one where you have to do your financial transactions (barring, of course, collapsed and dysfunctional ones, which is where asset systems are the ruler of the day).
Gives new meaning to the term banana republic.
I noticed that in the story nobody traded gold, silver, or other PMs. Why is that? Because you can’t eat gold?
Good observation. I would say that barter is the most honest form of commerce. I wonder if that could be true.
If you study any collapsing economy over history, the immediate stages after a collapse is generally a bartering system since…no – you cant eat gold. Often the economy will continue to crumble until new power structures are formed (even neighborhood to neighborhood) and at such time a new economy is often set up by those power structures, sometimes by force, but it is at this time when a trade of monies and not goods is used again and at this time that gold becomes useful. It also serves as monies to introduce new products into this “closed” economy from outside sources (even black market) given that outside sources dont “need/want” 5 bananas or 2 eggs and eventually products to create/produce further bartering become scarce resources relative to the population size of the economy..
(on bartering) – Eventually bartering goes by the wayside due to (power / control / ease) people being unable to carry 5 bananas and 2 eggs everywhere they go to pay for a haircut, hence the development of coins (gold) and then eventually interest bearing (thieving) notes – which you are probably aware of….
(on population) The growing/harvesting of barterable food products and the creation of useful tools via some sort of manufacturing process (even as simple as forging tools) takes time, energy and base materials … (as mentioned) these become scarce and must be brought in from other places to continue to support the lives of those dependent upon the resource.
This really is the rub … The ability to create both food and tools in mass allowed for a population boom well beyond that of a bartering economy to support … so one needs to have something available for trade to bring into their “closed” economy to continue production and gold would be tradeable for goods (even bitcoin as it has been seen for the wealthier Venezuelans) brought in from the outside to continue to have the ability to support the size of the population. Obviously there is more to this but I am quite certain there has been a dramatic reduction (or will be seen soon enough) in the ave lifespan in Venezuela over the next decade as the repercussions of this collapse will have lasting effects. (note: there is always many microeconomies that comprise the macro)
I wonder how many bananas a blowjob goes for…
probably no more than a couple of bananas,especially if she has a kid–very sad–