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Emperor
Mugabe
The
Financial Times (UK)
June 30, 2007
http://www.ft.com/cms/s/935d38d2-26a5-11dc-8e18-000b5df10621.html
President Robert Mugabe,
Zimbabwe's ruinous president, is no student of economic history.
Last Wednesday he ordered factories and shops to slash prices by
50 per cent - returning them to the level of Monday, the week before
last. The Emperor Diocletian - famous for miserliness and his persecution
of Rome's Christian minority - tried this trick in AD301. Like Zimbabwe,
Rome had a hyperinflation. To halt it Diocletian decreed that all
prices should halve and then set maximum prices for many basic goods
(from 2 denarii for Egyptian beer up to 150,000 for a lion). Violations
were punishable by death. But Diocletian kept minting coins. "Then
much blood was shed for the veriest trifles; men were afraid to
expose anything to sale, and the scarcity became more excessive
and grievous than ever," is how Lactantius, a historian of
the times, described the result of fixing prices while continuing
to increase the amount of money.
Mr Mugabe need not even
debase the coinage to achieve the same calamitous effect: he has
the printing press, a more efficient tool of monetary destruction.
Nor need he bother with the death penalty when bully boys linked
to his Zanu PF party can be dispatched to punish opponents. But
the misery of Zimbabwe's citizens will be no less. Even during a
hyperinflation, paper money is useful: it is a medium of exchange,
it lets a complex economy function. But if goods cannot be sold
for a fair price then nobody will sell them; they will turn to barter
instead, and trade what little they can scavenge or produce for
bread. Then Zimbabwe's inflation will enter a different, dangerous,
final phase. Once the monetary economy collapses the government
will have no way to pay its civil servants or its soldiers. The
Emperor Diocletian survived his hyperinflation, ruled for 21 years
and then retired to Croatia to grow cabbages. Zimbabwe's people
can only hope that Mr Mugabe's own supporters dispose of him in
time to restore some economic sanity to their suffering country.
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