FAIL! - Blackouts in Venezuela - It's a Knowledge Problem

From Yahoo! News:

Despite having some of the world's largest energy reserves, Venezuela is increasingly struggling to maintain basic electrical service, a growing challenge for leftist President Hugo Chavez.

The OPEC nation has suffered three nationwide blackouts this year, and chronic power shortages have sparked protests from the western Andean highlands to San Felix, a city of mostly poor industrial workers in the sweltering south.

Shoddy electrical service is now one of Venezuelans' top concerns, according to a recent poll, and may be a factor in elections next month for governors and mayors in which Chavez allies are expected to lose key posts, in part on complaints of poor services.

The problem suggests that Chavez, with his ambitious international alliances and promises to end capitalism, risks alienating supporters by failing to focus on basic issues like electricity, trash collection and law enforcement.

"With so much energy in Venezuela, how can we be without power?" asked Fernando Aponte, 49, whose slum neighborhood of Las Delicias in San Felix spent 15 days without electricity -- leading him to block a nearby avenue with burning tires in protest.

It's a knowledge (and incentive) problem.  Markets are inherently complex animals and their functioning depends on an inordinate amount of information and bits of coordination to piece that information together.  Even the smartest person in the room can't possibly possess the proper amount of information to "get things done" by himself.  That, along with not having the proper incentives, is why central planning fails to provide non-public goods.

Comments

[Ironman]

So, why not create a new kind of information market to deal with today's crises?

http://tinyurl.com/3qyfwo

Not that Hugo Chavez would ever entertain the idea, certainly not while he's attempting to create his own grander version of Cuban impoverishment, but perhaps someone out there could.