Sep 28 2007

So, how are those Zimbabweans doing under Mugabe’s price controls?

Published by at 11:10 pm under Price controls,Supply/Demand

Hungry Zimbabweans Try to Eat Giraffe
http://www.statue.com/images/giraffe-statue.jpg
A while back we blogged about Robert Mugabe’s order to freeze all prices in Zimbabwe in order to halt the country’s hyperinflation. At the time we were studying equilibrium price and how it results in allocative and productive efficiency, meaning that neither too much or too little of a particular product is produced given the availability of resources and manufacturing technology.

A few months after the price controls took affect, the question remains, how are the people of Zimbabwe fairing? I think the headline above answers this question rather clearly. From the article:

Police stopped villagers from slaughtering and eating a giraffe that strayed into the outskirts of the capital amid chronic food shortages caused by an economic crisis, the official media reported Saturday.

The adult giraffe was believed to have wandered from nearby farmland. Wildlife authorities took the giraffe away after police kept a crowd from killing it “for the pot,” the state Herald reported.

Zimbabwe is suffering shortages of meat and basic foods in an economic meltdown that has left it with the world’s highest official inflation—nearly 7,000 percent. Independent estimates put real inflation closer to 25,000 percent and the International Monetary Fund forecast it reaching 100,000 percent by the end of the year.

A government order to slash prices of all goods and services by about half in June has left stores across the country empty of meat, cornmeal, bread and other staples and crippled transportation services.

The National Society for the Prevention of Cruelty to Animals said this month that it was launching a campaign to raise awareness about the moral and ethical issues surrounding cases of pets being slaughtered for meat.

Ironic, isn’t it, that a government agency is seeking to educate the people of Zimbabwe on how to treat animals better, when it’s the government itself whose poor understanding of market economics that led to the hunger and desperation driving people to try and eat a giraffe… Another sad yet poignant illustration of how markets work and command systems don’t. It’s a bad time to be a 17 foot tall mammal with horns in Zimbabwe.

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About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

17 responses so far

17 Responses to “So, how are those Zimbabweans doing under Mugabe’s price controls?”

  1. Marline Hoenigon 30 Nov 1999 at 1:00 am

    I’m still studying from you, however I’m enhancing myself. I actually love studying every little thing that is written in your blog.Preserve the stories coming. I beloved it!

  2. Nick Beedeon 06 Oct 2007 at 3:19 am

    I agree that this is ironic, but while I was reading this I was thought about how this irony could parallel with other situations. In 9th grade I had a debate on capital punishment, and there was an argument that talked about how, through the government killing people, society would increase homicide activity. This was called the Brutalization effect, where the theory was that, because the government could kill people for justice's sake, then civilians can too. I related this theory with this article because the irony was similar, even though the Brutalization effect is only a theory. The government, looking for the best interest in the people, ironically had their plan backfire and make the situation worse. Through attempting to decrease homicides, homicides increase (*note*: not proven to be real). Through attempting to educate society on how to better treat animals, animals become less well treated.

    Also, directing the attention on economic reasons as to why this is a supply/demand and price controls issue:

    "A government order to slash prices of all goods and services by about half in June"

    With reference to a Supply/Demand Curve, this is a supply/demand issue because the original equilibrium price is now higher than the government-implemented price ceiling, the quantity demanded as drastically increased and the quantity supplied has decreased, causing a shortage in supplies.

  3. SamueLamon 07 Oct 2007 at 6:06 pm

    Wow, 100,000 percent that’s a scary number. People really need the food and so treating animals “kindly” is not really an option . Main sources of food are nonexistent, and so wild animals and pets have to be used as a substitute. Since much of the food is not available, put together with inflation, the prices of the available ones are very high. If you weigh the cost and benefits of going to a store to buy a piece of meat and hunting and eating a giraffe, eating the giraffe gives a higher benefit. The giraffe meat probably doesn’t taste as good as the meat from the store but it doesn’t cost money. It requires a lot less work to kill the giraffe instead of working for money and you get more meat to feed your family. I’m pretty sure if the government officials were in the same position as the people, they wouldn’t put as much emphasis on the problem of eating pets and wild animals (but I do wonder what giraffe taste like).

  4. Melissa Boeyon 07 Oct 2007 at 9:01 pm

    This is horrible! Giraffes are super cute! 🙁

    However, Sam's right, I think. The people of Zimbabwe are actually pretty smart, they're finding themselves new resources..to eat. They're increasing their supply in a figurative manner, as instead of dealing with limited resources, they're increasing their resources! Pretty cool, you have to admit.

    They're solving their hunger issue, but the government may just be making it worse. They solve the eating-giraffe issue, but the villagers are all either going to 1. die (which would, in an immediate sense, create a surplus to meet the shortage, as the number of consumers would decrease, but this is really bad) or 2. find other methods to meet their needs, to increase the supply of food.

    The question of morality here isn't with the animals, it's with the humans. The government created a shortage with the price slash, and..now..it's their fault. Stop blaming the hungry villagers. 🙁 If there was a shortage of meat in Australia, you can bet they'd eat the sheep.

    (Wow, I get very emotional about governments and giraffes. I apologize.)

  5. emilyyehon 08 Oct 2007 at 11:41 am

    I think it's pretty ridiculous that the government doesn't seem to have a clue that the price ceilings they set are causing these problems. Perhaps the government should put more effort into increasing the supply of food rather than channeling their resources into enforcing the price ceilings.

    Killing giraffes is just a signal to the government that their policies are not working, and more unrest could be in store if they don't do something about it soon. The supply/demand curve is far from fulling the needs of the market.

  6. Taka Onoon 08 Oct 2007 at 12:12 pm

    It's quite sad how the Zimbabwean government even after noticing a 7000% inflation and seeing their citizens starving to death, does not take away the price ceiling. If the Zimbabwean government is worried about their citizens killing a giraffe and not about the status of their economy, the government is looking the wrong way.

    What I still don't understand is why they still place the price ceilings even after all this mess. Plus teaching the citizens of Zimbabwe the morality of killing animals? That's just not in the interests of the people and costs money as well. What could be done is Zimbabwe finally realizing the fact that these price ceilings do not work and allowing more free market policies to be practiced.

    This may go a little off topic but maybe Zimbabwe can invest in a new delicacy: giraffe meat! Most delicacies are the outcome of people who are starving and will almost eat anything. Escargos, Rattle Snake, Alligator, even sashimi was a product of starvation. Although the thought about eating giraffe is pretty abnormal, maybe Zimbabwe can attract some customers interested in eating giraffe gaining some profit. Of course it should taste a little like chicken and hopefully after this crisis, Zimbabwe will not put a price ceiling on giraffe meat.

  7. MondGuon 09 Oct 2007 at 3:41 pm

    I believe the reason why the government in Zimbabwe did not remove the price ceiling related to politics. Because if the government decides to remove the price ceiling, they are indirectly admitting they did the wrong thing, making themselves look "bad" in front of their people and other countries.

    The villagers did not do the wrong thing, with meat resources so scare, they are just simply killing the giraffe for the most basic human needs; food. Morality is not a factor of consideration when food is that limited. Ask yourself, if you had nothing to eat, would you kill a giraffe for survival?

  8. Christina Huon 09 Oct 2007 at 9:53 pm

    Wow. Poor villagers… and giraffe, but, desperate times call for desperate measures. The government should be doing something to solve the food shortage problem instead of enforcing petty laws such as "don't kill the giraffe" when their own people are starving. If the villagers were about to kill a GIRAFFE for food, you'd think that the Zimbabwean government would get the hint.

  9. yunqimokon 21 Oct 2007 at 9:18 pm

    Again, if you look at this from an alien's point of view, you would think that humans are strange creatures. If the Zimbabwe government was so "nice" go to protect the poor giraffes who were getting eaten, then shouldn't they realize that they are saving one species at the expense of another? Humans are starving to death…and they go and worry about giraffes. Maybe this is due to scarcity, giraffes are quite rare but are there are more than enough humans to spare…

  10. Jessica Chiangon 22 Oct 2007 at 12:09 am

    Giraffes have horns? I didn't know that. Okay, I'm going to sound a little inhumane here, but I don't think that the villagers were wrong to try to kill the giraffe. From a biological point of view, we do what we have to do in order to survive; in this case, the villagers needed food and the giraffe just happened to be there. However, the bigger problem still lies in the shortage of food and how the government isn't doing anything to relieve the suffering of the people. If they aren't going to repeal the price ceiling, then at least send emergency rations to the people or something. Perhaps Mugabe needs to take AP Econ and learn that price ceilings aren't efficient!! Hopefully he's realized by now if he didn't already know, that the price ceiling he set is causing the shortage in food.

  11. Chan Min Parkon 22 Oct 2007 at 8:07 pm

    Talking about how the humans killed the giraffe, this reminds me of how far people are killing to go to fulfill their basic needs for survival. I heard Hitler during World War II surrounded a bunch of people and experimented with them and didn't give them food… and they ended up eating each other… eating people. Anyways so I think what the villagers did was not wrong, they had no other choice. In Econ class when were talking about price ceiling, I didn't know it would be such a big deal, I though maybe a couple firms would close down. Now looking at this article I can see why price ceiling and price floor is a major part of economics and why it is important. Also somebody mentioned how the government is not taking away for price ceiling because they don't want to make themselves look bad in front of their people. However if they really think about the people the government should really take away that price ceiling. Maybe Mugabe should hire Mr.Welker as his economics advisory and learn things from him..

  12. MichaelChowon 23 Oct 2007 at 10:44 pm

    I believe that it is indeed ironic because like mentioned Zimbabwe is trying to educate its people on how to treat animals better, while government policies are making it extremely difficult in protecting the animals. After reading this article I came into agreement with what Chan has to say about this, sometimes people result to acts sometimes not imaginable to fulfill their basic needs of survival such as food. I believe that the acts people are committing in Zimbabwe relating to the hunting of giraffes is cruel yet justified because of its reason. Relating this topic to AP US History which I am currently taking, when the early settlers came to the New World specifically in Virginia they were faced with massive starvation period especially during the harsh winters. One example is how a man cannibalized his own wife, as a result of his hunger. The act was horrifying, but we gain a sense into the struggle this man was faced with at the time. To conclude this little story the man was later on hanged to inhumane actions. I feel a solution for Zimbabwe is for Mugabe to try and undo all his policies on the prices of food. Although he only meant the best for his people he only ended up harming them, through the lack of understanding of market economies.

  13. optional.xuon 24 Oct 2007 at 10:04 pm

    First off, it was pretty funny/pathetic that people have resorted to such things as eating wild animals or pets. It seems that Mugabe's regime has caused the country to revert back to caveman style lets hunt and gather food. The shortages in Zimbabwe obviously need to be corrected, so why aren't they? If people are THAT hungry, why doesn't the state do something? Pretty soon, if they don't do anything about the food shortages, people are going to revolt, and bloodshed will be inevitable. Time for some revolution/reform?

  14. kxc.024on 24 Oct 2007 at 11:09 pm

    David, I don't see how having to eat giraffes and other wildlife animal to keep people from starving is funny. o.O Anyway, to answer a few of David's questions, I think that the government WANTS to do something to help the people but they can't. This isn't a case of Communism where the government is doing really well, while the rest of the people are just rotting away. I think the government isn't doing that great either, which is why they placed the price control in the first place.

  15. Tim Chuon 25 Oct 2007 at 10:30 pm

    Indeed…very interesting. This is exactly why you need smart people (or economically smart) running a country. Obviously Mugabe had no idea that by "helping" his people and keeping the price down, he was actually dooming his country and

  16. Tim Chuon 25 Oct 2007 at 10:32 pm

    oops accidentally pressed submit…

    anyways, he's doomed his country to starvation. If he had the help of an economist perhaps zimbabwe wouldnt be in such bad conditions today. Like David said, theres a good chance this will lead to revolution.

  17. Claire Mon 26 Oct 2007 at 1:36 am

    I really think the government should come up with a solution. Just by stopping the giraffe hunting is not going to make the situation better. They will save the "giraffe" but kill the "people". That is pretty ironic as well. I really don't understand why they are not removing the "price ceiling policy". The situation is getting wrose and worse since the price ceiling is leading to shortage of food and more and more Zimbabwae people are going to starve.