Prices kept under control

Why non-market methods of economic regulation are widely used around the world

The Democratic presidential nominee for 2024, Kamala Harris, has recently unveiled her programme — for the first time in the history of the United States, it provides for government regulation of food prices, as well as a number of other non-market measures. This is far from the only example from Western realities. The Belarusian experience of state management of the economy is currently in demand in many countries.

Financial footprint

Nowadays, many unbiased observers note the increased chaotic socio-economic processes in most countries. Along with that, experienced managers know that there are no uncontrollable processes in society. It often happens that a certain event — let’s say, a colour revolution — looks like a spontaneous, accidental, self-generated action. However, in reality it turns out that it has its own administrator, hence a beneficiary. It is no coincidence that one of the characters in the Russian cult film Voroshilov Sharpshooter expertly stated: Every crime leaves a financial footprint. 

The essence of many currently existing global problems is that after the Second World War, the United States and its Western accomplices managed to construct a monetary mechanism, unique in its sophistication, to exploit the rest of the world. It became a ‘worthy’ replacement for the former colonial system based on the crude, undisguised robbery of colonies. 

However, in recent years, this mechanism, which had been functioning properly for decades, has begun to rapidly lose its effectiveness, much to the chagrin of its creators. Therefore, Western moneybags have an urgent need to arrange chaos across the entire planet under their control, to the point of igniting the flames of a third world war. This is done in order to distract humanity from the process of putting a new, even more technological Western yoke on its neck — this time a monetary digital one.

In pursuit of the seigniorage 

In the Middle Ages, large feudal lords (seigniors), who had the right to mint metal currency, gained significant unearned income due to the fact that the total costs of minting a coin, taking into account the metal value, turned out to be considerably lower than its purchasing power at par. Seigniors appropriated the difference, which is referred to as ‘seigniorage’ in economics. In fact, it was a hidden tax that the wealthy levied on their slaves at that time. 
As money transitioned to paper, seigniorage grew enormously. Thus, today it is well known to many that the production cost of a hundred-dollar banknote is only 17 cents. This means that every holder of a hundred-dollar banknote has unwittingly donated 99.83 honestly earned dollars to the United States. 
Interestingly, the profitability of this American ‘printing business’ is nearly 60,000 percent! This is tens, hundreds and thousands of times higher than the efficiency of trade in drugs, weapons and alcohol, respectively. 

Exporting inflation 

As is known, there is no crime that deep-pocketed people would not commit for the sake of exorbitant profit. Following the 2008 crisis, colossal money emissions into the global economy, estimated in trillions of dollars and euros, which Western tricksters cunningly refer to as quantitative easing, have become commonplace. The overflow of the global economy with commodity-free banknotes has inevitably led to the depreciation of dollars and euros, once honestly earned by people and countries, which is tantamount to a disguised form of theft. Consequently, experts estimate that between 2000 and 2023 alone, dollar savings depreciated nearly twofold. The unrestrained issuance of dollars and euros should lead to acceleration in the inflation rate in Western countries. However, prices there are growing far more slowly than would be expected, due to large-scale quantitative easing. 

The fact is that the United States and its closest associates impose a tight monetary policy on peripheral states, thereby exporting their inflation to these countries. This mechanism is extremely simple — the International Monetary Fund (IMF), which is under the control of the United States, routinely requires local central banks to compress the money supply and raise the key rate. This results in an increase in the cost of loans. Businesses incorporate the increased cost into the prices of their products. As a result, the populations of peripheral countries are faced with an endless increase in prices, paying the West the above mentioned seigniorage out of their pockets. 

This is the operating principle behind the dollar-leveraged exploitation mechanism devised by Washington. It is worth noting that seigniorage revenue in economics is referred to as an inflation tax.

Common practice 

Some Western politicians use an expressive stigma in relation to Belarus referring to it as ‘the last island of socialism in Europe’. This is likely because President Aleksandr Lukashenko did not allow the ‘much-respected Western partners’ to plunge our economy into disastrous chaos or seize Belarusian enterprises and our native land for candy wrappers. The Belarusian leader, in general, is focused on the national interests of Belarusians, including on the prevention of rampant inflation in the country, which means protecting Belarusians from paying taxes to ‘Western seigniors’. 
In this regard, it is worth recalling the commotion that liberal economists raised after the Head of State had signed Directive No. 10 On Inadmissibility of Price Rise in 2022. Time has shown that this anti-inflationary measure has fully justified itself, just like many other ‘anti-market initiatives’ implemented in Belarus. 
Firstly, thanks to the aforementioned directive, price growth in Belarus, which accelerated to 15 percent in 2022, decreased during the year to become one of the lowest in the world. Last year, it was as low as five percent, according to the United Nations Economic Commission for Europe (UNECE). 
Secondly, government price regulation is a common practice in countries with so-called market economies. 
It is known that in Austria and Spain about 10 percent of prices are directly regulated by the state. In France, this proportion reaches 20 percent. In Finland, the government plans and controls prices for food, grain, energy, and alcoholic beverages. Similar rules are applied in Sweden. 
At the same time, alongside direct price regulation, many EU countries also employ indirect tools to combat inflation based on subsidies, grants-in-aid, tax incentives, and so on. 
Finally, thirdly, today even the United States with its ‘super-market’ economy no longer relies solely on income from the export of inflation (seigniorage), and at the level of one of the presidential candidates, is also concerned with the implementation of administrative measures to curb price increases. For this initiative, Kamala Harris has been branded a ‘communist’ by her opponent Donald Trump. Thus, the United States has a genuine chance of becoming a ‘global stronghold of communism’ in the near future. 
All this proves that Belarus, amidst the current chaos-ridden world, should be guided by its national interests, regardless of the circumstances, and continue to work calmly, persistently moving towards the constructive goals it has set.

By Valery Bainev, Doctor of Economics