Two Hyperinflations In Less Than Ten Years Did Mugabe In

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

Robert Mugabe’s 37-year reign of lawlessness, corruption and incompetence has just come to an end.  Mugabe is toast, thanks to a “soft coup” engineered by Emmerson Mnangagwa (aka: “the Crocodile”), who was Zimbabwe’s Vice President until he was dismissed earlier this month by Mugabe. Now, with the support of the military, the Crocodile will probably serve as Interim President until elections are held. What really did Mugabe in?  Two episodes of hyperinflation in less than 10 years did the job. 

The first episode occurred during the 2007-08 period. It was then that Zimbabwe suffered the second most severe episode of hyperinflation in recorded history. As shown in the table below, the annual inflation rate peaked in November 2008 at 89,700,000,000,000,000,000,000%

This year, Zimbabwe once again experienced a bout of hyperinflation. This second episode began on September 14, 2017. At present (11/15/17), the annual inflation rate is 323%, as shown in the chart below.

Zimbabwe’s hyperinflation episodes finally produced enough outrage to enable the Crocodile to outsmart Mugabe. 

Next stop, Venezuela? Will inflation prove to be the catalyst that unseats Maduro?

Comments

silverer Thu, 11/16/2017 - 08:26 Permalink

Will inflation prove to be the catalyst that unseats Maduro?

If not being able to afford your designer sneakers doesn't do it, perhaps a lack of affording food to stay alive will.

otschelnik Thu, 11/16/2017 - 08:27 Permalink

Zimbabwe is also the poster child for land redistribution, a policy which has failed in every country its ever been applied in. In the USSR it was applied against the 'kulaks,'  in Zimbabwe it was applied to against the whites. 

Cloud9.5 otschelnik Thu, 11/16/2017 - 09:28 Permalink

John Locke had it right.  The right to life, liberty and property is the corner stone of a functioning society.  In a true market business failures are a part of the natural cycle.  When entities become powerful enough to suspend the business cycle then the economy goes off the rails.  We are where we are because the convergence of money and politics has suspended the business cycle.  We now have institutions rather than businesses and those institutions have become too politically powerful to fail.In the past, a failed business provided the bones to build a new start up.  Now zombie businesses with political connections never die.  They become energy sinks bleeding more and more energy out of the system.  Tainter talked about this process in his Collapse of Complex Societies.  The oligarchs are picking winners and losers.  In the process they are destroying property rights.   The middle class was destroyed on the altar of globalization.  The elites offshored our technology and our production.  The working class became the dependent class.History proves without a doubt that a reset is inevitable.  For a brief period during the reset we will experience the highest level of freedom.  What will follow will be a much more decentralized system.  With that decentralization will come a reduction in population.  Labor will once again become valuable and property rights will once again be established.   

In reply to by otschelnik

Cloud9.5 LawsofPhysics Thu, 11/16/2017 - 12:57 Permalink

I think we are two blind men trying to grasp, pun intended, the elephant in the room.  Every organization attempts to grow.  It matters not whether that organization is a business, the state or the church.  In the natural process, one generation earns it. The next generation spurns it and the last generation burns it.  Now we have corporate entities that never die.  They become monopolies in their spheres of influence.   They either buy up or burn down their competition.  Then hubris, complacency and egotism rule.  What follows after that is collapse.

In reply to by LawsofPhysics

MoreFreedom Cloud9.5 Thu, 11/16/2017 - 14:12 Permalink

I agree.  It's also important that government not be meddling in the free markets,  but the greed  motive for doing so is very strong, on both the part of politicians in that it generates campaign cash by rich business owners looking for government favors, and for business owners that want governemnt to make them rich rather than earning it in a free market. But what politicians continally tell us, is that "we need reasonable regulation."   The only "reasonable regulation" is the free market, with disputes in business sorted out in courts via the common law, rather than politicians and bureaucrats continually chaning the rules via administrative law.

In reply to by Cloud9.5

Red Fred Thu, 11/16/2017 - 09:58 Permalink

Old age and a scheming ambitious wife, who has his ear, are threatening to do the 93 year old Mugabe in. The hero of Africa has not gone yet. Inflation be damned.  

dlweld Thu, 11/16/2017 - 15:04 Permalink

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Rhodesia (now Zimbabwe) in Africa was doing just fine (rich, prosperous, breadbasket of Africa) with the white race doing the planning and administration that it seems to do so well - but, nope, can't have that race doing that, so the West forced out Ian Smith as leader and replaced the Zimbabwean white race, that was in charge of the planning, adminstration and government, with blacks. Now Zimbabwe is a starving basket case. I suspect any of the formerly well fed, now famine ridden Zimbabweans, of any race, would love to have competent, honest (white) government again.