Also price controls. If you work for government, let's say your minimum wage is 1000 bolivars a week. (Just a nice round number). The official exchange rate me

Also price controls. If you work for government, let's say your minimum wage is 1000 bolivars a week. (Just a nice round number). The official exchange rate means you're earning 100 bucks a week, unofficially you're earning about 10 cents. Government caps bread prices at 10 bolivars per loaf, to make sure capitalists aren't gouging people. Oddly enough, people stop baking bread, as it costs them more money to bake the bread than the revenue they make when they sell it. Extend that to almost every other necessity of life that has been price controlled, and you can see why there are massive shortages. EDIT: This works to some extent in a closed economy, with no imports and a surveillance state. Once you start relying on imported goods to produce, you're in trouble. Your foreign suppliers want hard currency and will laugh in your face when you tell them what you think the exchange rate is.