For economy czar of crisis-hit Venezuela, inflation 'does not exist'
By Brian Ellsworth
CARACAS Jan 7 (Reuters) - Venezuela's new economy czar Luis Salas is tasked with controlling what is believed to be the world's highest rate of inflation, but comes to the job with an unusual perspective: that inflation does not really exist.
President Nicolas Maduro on Wednesday tapped the 39-year-old sociologist as vice president for the economy amid soaring consumer prices and chronic product shortages, signaling a move toward orthodox socialism in the OPEC nation struggling under low oil prices.
Essays written by Salas describe scarcity and spiraling prices as the result of exploitation by businesses rather than government policy, offering an academic underpinning to the "economic war" explanation that Maduro uses to describe the current malaise of recession, runaway prices and widespread product shortages.
"Inflation does not exist in real life," he wrote in a 2015 pamphlet called "22 Keys to Understanding the Economic War." "When a person goes to a shop and finds that prices have gone up, they are not in the presence of 'inflation.'"
Salas has argued against the idea that excessive printing of money causes inflation - an almost universally accepted tenet of macroeconomics. He insists prices rise primarily because corporations seek excessive profit margins.
The appointment of Salas appears to signal a break with the Socialist Party's promises for market-friendly reforms last year, which ended in aborted efforts to liberalize cumbersome currency controls.
His designation augurs a further tightening of state controls in a country where supermarket lines routinely stretch for blocks and looming debt payments have left investors increasingly concerned about default.
Maduro last year said inflation would reach 85 percent in 2015 but the central bank has not published monthly figures since the start of last year. Unofficial private estimates now put the figure close to 200 percent. Continuación...