Argentinean Senate Introduces Sweeping Soviet-Style Economic Plan
Dictatorship-Era Law of Supply Not Interventionist Enough for Kirchner
In yet another aggressive move against private enterprise, Argentinean officials introduced a new bill to the Senate on August 5: the New Regulation of Production and Consumption Relations.
This legislation aims to replace the current governing Law of Supply by establishing limits on prices, production levels, and profit margins, and has already received harsh criticism from certain industries.
The Kirchner administration’s goal with this proposal is to “prevent abuse and the misappropriation of the value-chain surplus.”
The existing law has been in place since the military dictatorship of 1974, which established prison sentences for business owners convicted of “induced shortages.” The principal difference with the government’s new proposal is that it provides further state control over the market in the form of price controls. Once signed into law, it will legally codify the government’s current agreement with suppliers and distributors of products subject to the Careful Prices program.
“It is essential to observe the behavior of the price system and the extent to which economic concentration allows certain economic groups to abuse their dominant position,” reads the proposal.
In addition, the bill further defines the state’s role in “defending the interests of consumers in order to make the price and quality of services consistent with offers proposed by companies.”
Total Market Control
Article 2 of the bill would grant the Commerce Secretariat the authority, when “strictly necessary,” to “establish profit margins, reference prices, and maximum and minimum price limits at any stage of the economic process.” It will also be granted the authority to dictate policies governing the trade and distribution of production, and command the continued production of certain items.
The same article allows the secretariat to assign “volumes of production, manufacture, sale, or offering of services.”
Under Section E, it is granted the power to request “all documentation regarding the commercial transactions of businesses or economic agents” and allows the agency to “order the annulment of concessions, privileges, tax regimes, or special credits.” It further grants the Commerce Secretariat the ability “to seize, appropriate, and even sell goods and services that are scarce or in violation, without prior expropriation proceedings.”
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