In the beginning, there were arbitrageurs, those that perform a risk free operation, whereby you take advantage of differences in prices, to buy a good cheaper that you can sell it somewhere else and make a profit. These types of arbitrage opportunities may arise because of geographical differences, or due to the presence of borders or even long distances. Arbitrage is as old as markets have existed, people are always looking for profit opportunities and if they involve no risk, they become very attractive. In general, arbitrage reduces the difference in price between the two items, making markets more efficient. If prices are more expensive in Caracas for say lettuce, those that produce lettuce will take their product to Caracas, as long as transportation costs are less than the difference and local prices will drop.
Arbitrage is at least as old as Rome, one of the first few markets that had some level of organization. Since then, arbitrage became common in finance, when numerous ways to arbitrage markets were implemented. Of course, the more these arbitrage opportunities, the smaller the differences become, but sometimes arbitrage is possible only if you have capital, a technological advantage or some legal advantage. As examples, people do arbitrage in minute and temporary differences in currencies, but they do with such large capitals that the profit is significant. Others arbitrage, for example, the price of shares that trade in local exchanges and those that trade abroad; local brokers have the advantage of direct access to local trading, while having accounts abroad to sell or buy the shares they buy or sell locally. There are costs involved, but sometimes those opportunities arise. As another example, organizations arbitrage the price of the stocks that are part of a stock index, against the purchase (or sale) of the individual stocks, whenever this is possible.
And then, there are bachaqueros…
Bachaqueo is an activity that, until recently, was nothing more than the geographical arbitrage of gasoline. Over the years, Colombia has always had higher gasoline prices, not only because its price has always been at international levels, but also because it imposed higher taxes than Venezuela on it. Meanwhile, on this side of the border, gasoline has always been cheaper at the wholesale level, because Venezuelan politicians have always set the price below international prices. There has always been a feeling that this was some form of “birth right”.
While many people think that the origin of the term bachaquero is somehow due to the town of Bachaquero in Zulia State, the truth is that the term arises from the large ants near the border, called “bachacos”, which cut leaves from plants and bring the pieces back to their nests, mostly at night, forming a long caravan. These bachacos can carry more than their weight, are very strong and can remove all leaves from a plant in one night.
And the origin of the term bachaqueo and bachaquero for gasoline smuggling arose because when price differences were small, bachaqueros, mostly in the border between Zulia State and Venezuela, would cross the border at night, each person carrying a drum of gasoline on their back, heavier than each of them, all in a single caravan, either to bypass the authorities, or to go precisely using the path where the authorities had been bribed.
Of course, as the difference in price between the two sides became wider, the business became more organized. As chips were introduced to control traffic even more, the bachaquero caravan was replaced with long lines of drums, long lines of 350 trucks and more modernly, long lines of gasoline trucks, controlled by Mafias on both sides of the border. I posted this picture a year ago:
However, as shortages became more prevalent and the Bolivar depreciated even further, the term bachaquero and bachaqueo was extended. It became a fully conjugated verb, as more and more people at all levels of society saw the opportunity for arbitrage, not only between Venezuela and Colombia, but also within Venezuela with those items that are hard to get.
Venezuelans at all levels, have become the ultimate arbitrageurs, finding that arbitrage is very profitable in the presence of widespread distortions and shortages, with gasoline, food, pharmaceuticals, you name it.
And as the Government began demonizing bachaqueros and bachaqueo, very successfully I must say, people have started buying the story of how bachaqueo is the source of our problems.
But not only has the Government created the distortions that gave rise to these arbitrage opportunities, whether legal or illegal, but it has been doing it ever since it began controls in 2003:
-It was arbitrage (Bachaqueo?) when the Government began selling bonds in US dollars in order to relieve the pressure in the parallel market in 2004. People would sometimes buy these bonds, turn around and sell them and immediately sell the dollars in the then legal permuta market, making a profit. There was some risk, but it was minimal. And the Government did it over and over again.
-It was arbitrage (Bachaqueo?) when people asked for their CADIVI dollars and immediately turned around and sold part of their dollars in the parallel market in order to pay for their trip or part of it. And this certainly was not legal.
-And it was arbitrage (Bachaqueo?) when people asked for foreign currency to study abroad and as they received the money, immediately turning around, sell the dollars and with a fraction of them, pay for the whole education.
-And my imaginary friend Oligarco Burguesito was a bachaquero, as were raspa-cupos (credit card scratchers), importers who over billed, my “Buhonero del Aire” (Airborne street vendor) friend who would go to Miami, come back with a suitcase full of veterinary pharmaceuticals, which he would sell at exorbitant prices because of shortages.
-And, of course, the ultimate crooked arbitrageours and bachaqueros, were those “insiders” that in 2012 alone requested dollars for imports that never arrived and made US$ 22 billion in profit, importing nothing, according to former Minister Giordani.
And I could go on…
But you get the point, few Venezuelans have not participated in some form of bachaquerismo and now is not the time to get outraged over it. The Government is now demonizing them and carefully chose the Barrio “La Invasión” in the border between Tachira State and Colombia to make the point and blame these poor Colombians for the shortages created by the Government’s stupid economic policies. Promoting hate and xenophobia in the process, all in the name of obtaining votes.
And it wants to make believe that closing the border between ten Tachira municipalities and Colombia will solve the problem, as if the organized bachaqueros used the Simon Bolivar bridge or formal roads to take their stuff to Colombia.
Or for that matter, to Guyana, Brazil or the Caribbean islands. (Take a Peñero full of rice sacks which cost Bs. 400 in Venezuela to Aruba and sell them each at Bs. 8,000 and you make more than the salary of a high Executive in bank in Venezuela, in just one trip)
In fact, it is well known that the large volume traffic, where millions (or billions) of dollars are made, goes through dozens of dirt roads mostly between the Venezuelan and Colombia’s Guajiras, through Zulia, not Tachira State. And those roads, or well developed “trochas” are controlled by the Venezuelan military, the Colombian military, the indians, the paramilitary, etc, but if you pay a bribe at each stop, you can get your trucks through.
It takes a few trucks to take the estimated 70,000 to 80,000 barrels of gasoline through the Colombian border.
And individual bachaqueros move only a fraction of that.
And I have yet to hear the Government jail or charge a single military officer for allowing these large scale bachaqueo to go through the border. And Maduro totally avoided this question in his “press conference” with the international press last week.
In the end bachaqueros are economic agents. If economics is about the allocation of scarce resources to satisfy the unlimited needs of the people, bachaqueros have become the ultimate agents of arbitrage, allocation and distribution of goods in Venezuela.
In one of the few finance courses I ever took, the first slide said: “When Governments create or change rules there is an opportunity for arbitrage or profit”. Bachaqueo and Bachaqueros are just the result of an absurd and infinite number of rules and controls imposed by Chavismo on the Venezuelan economy since 2002.
Blame Chavismo, not them.
And certainly don’t blame the poor Colombians from La Invasion, who have been cheated, abused, denied due process and pushed into rivers like animals, like the picture above, forced to leave what they called home for the last ten years. All under the supervision of the “Bolivarian” Armed Forces and Police. Símón Bolivar would be ashamed of the both the name and the actions.
And so am I.
The Devil's Excrement 
May 17, 2016 at 10:19 pm
[…] this video we can see how yesterday's looting in #Merida was done by collectives and “bachaqueros” [or arbitrageurs] not by students. pic.twitter.com/ZsgzeYOfG7 [What you didn't see during the looting of a […]
May 17, 2016 at 5:21 pm
[…] this video we can see how yesterday’s looting in #Merida was done by collectives and “bachaqueros” [or arbitrageurs] not by students. pic.twitter.com/ZsgzeYOfG7 [What you didn’t see during the looting of a […]
May 17, 2016 at 2:06 pm
[…] this video we can see how yesterday's looting in #Merida was done by collectives and “bachaqueros” [or arbitrageurs] not by students. pic.twitter.com/ZsgzeYOfG7 [What you didn't see during the looting of a […]
May 17, 2016 at 9:42 am
[…] this video we can see how yesterday's looting in #Merida was done by collectives and “bachaqueros” [or arbitrageurs] not by students. pic.twitter.com/ZsgzeYOfG7 [What you didn't see during the looting of a […]
February 25, 2016 at 6:29 am
very nice cute
September 8, 2015 at 1:18 pm
For the scientifically literate among us, consider this analogy for the phenomenon of smuggling:
“Osmosis is the spontaneous net movement of solvent molecules through a semi-permeable membrane into a region of higher solute concentration, in the direction that tends to equalize the solute concentrations on the two sides.”
In this analogy:
Solvent Molecules = Cheap Subsidized Goods
Semi-permeable Membrane = Border
The only possible way to prevent smuggling of subsidized goods is to make the border impermeable (in this case, nearly impossible), or equalize the solute concentrations by Colombia subsidizing the price of goods, equal to Venezuela, or Venezuela ceasing its subsidies.
September 4, 2015 at 9:29 am
The plan seems to be working. In the news there is no mention of lines for buying anything, no mention of bachaqueros, nothing about shortages.
Everything is now fine in the country.
September 6, 2015 at 8:06 am
The alphabrutized Zombies are in line, hoping to get their piece of chicken and whatever tigrito or enchufe the Gobielno throws at them.
The Boiling Frog Bolibanana experiment working to perfection.
September 4, 2015 at 7:20 am
Worth watching Holguin’s public declaration from yesterday: bit.ly/1PEvYdO
Here’s a question: if as she says, it’s legal to freely buy/sell Bolivares in Colombia, at whichever rate, why in no other countries of the world you don’t see Bolivares being negotiated at similar rates to those of Cucuta? The only rate accepted is the official, if any at all. Are the exchange laws of other countries different? I wonder, is Colombia subject to an international exchange regime that limits other nations to restrict currency prices to those established by the nation in discussion?
September 4, 2015 at 10:17 am
No banks handle bolivares anywhere worldwide, including in Colombia. Seriously, what makes you think the official exchange rate would ever be accepted?
It’s not illegal for people to exchange currencies among themselves, in Colombia or elsewhere, and that’s what they are doing.
Alexis
September 4, 2015 at 10:54 am
No other country accepts it, because there is no market where you can obtain the Bs. readily to make it possible. Most countries allow currency exchange places to trade currencies with fairly wide spreads. They are regulated as to the way they can operate, but few countries impose limitations on the price of the currencies themselves. Colombia can do it because near the border there is trade in both currencies and that is the readily available market not present anywhere else in the world.
September 4, 2015 at 1:44 pm
Well, here’s a practical example attached to my question: El Doral, Florida , where many Venezuelans live and visit and thus you’d expect currency exchange at 600 Bs/USD to be available publicly. Have you ever seen an exchange office buying or selling currency at 600 Bs / USD in El Doral? Is it legal first of all? Would it be legal in say, Aruba, to sell above the rate imposed by Venezuela?
Yes, market needs do play a role but I think Colombia’s law allows for this while maybe some other countries’ don’t?
Or am I just “sinking in a glass of water?”
September 4, 2015 at 1:49 pm
Yes it would be. Venezuelan law is only valid within Venezuela. If you are licensed to do exchange in Aruba I am pretty sure there are no limits on what you can charge.
Aruba Bank, for example, posts it exchange rates and as you can see the spreads vary. I am sure according to markets.
September 4, 2015 at 1:49 pm
https://www.arubabank.com/content/exchange-rates
September 4, 2015 at 1:53 pm
Read this one:
http://www.frommers.com/tips/money-and-currency/thats-ridiculous-exchange-rate-rip-offs-how-to-avoid-them
or this:
https://transferwise.com/blog/2012-10/one-real-exchange-rate/
September 3, 2015 at 1:26 pm
I thought as we china gave VZ so much money and loan ,VZ should send more soldiers to attend our 70th anniversary parade. Actually less than ten soldiers is not the right way to pleasure creditor.
September 3, 2015 at 2:51 pm
Was he even scheduled to attend? I thought it was a last-minute decision.
September 3, 2015 at 4:40 pm
In Kleptozuela we prefer to pleasure creditors with direct Bribes, Millions of dollars, which is what your Chinese corrupt leaders get.
September 3, 2015 at 10:35 pm
Is there really corruption going on with these China-VZ deals, especially at the top level?
From what I and others have been led to believe…and I believe it…is that if you’re in a government position of power in China and you’re corrupt…
Then you’re dead when they find out.
September 3, 2015 at 10:36 pm
I meant to say corruption on the Chinese side.
Corruption on the Venezuelan side is a given.
September 4, 2015 at 12:27 am
we have many corrupted officers in government, however nobody has the balls to receive money from VZ, it is one kind of untouchable money
September 4, 2015 at 12:28 am
we chinese knew he would come months ago
September 3, 2015 at 10:32 am
[…] pretext for the border crisis is bachaqueo (arbitrage) which the Venezuelan regime blames on poor Colombians living at the Venezuelan border […]
September 2, 2015 at 5:20 pm
Regarding gouging/scalping versus “legitimate” reselling:
Laws in the states protect against gouging during national disasters like hurricanes, because supplies are TEMPORARILY interrupted to affected areas. But remember that TYPICAL supplies aren’t really interrupted at all:
Best example is the over-purchasing in ANTICIPATION of an interruption in supplies, PRIOR to a hurricane landing.
People over-buy and “hoard” 99% of the time (although “hoard” is hardly a fair term to intelligently prepare for the future)…this increased demand and lower supply (yes, often just perceived) encourages the subsequent gouging (and even justifies it), but laws were put on the books in the states outlawing it.
But ironically, a gas station here can charge $1 a gallon over regular price the day BEFORE a hurricane warning is issued…hell, they can charge $5 more…but it’s only considered illegal or immoral when you “officially” enter the crisis timeframe.
Now, in VZ, the horrible market conditions can hardly be considered temporary, and can hardly be considered a crisis; this is business as usual, and not just a brief dip in the chart.
VZ DOESN’T HAVE THE FUCKING SHIT IT NEEDS TO OPERATE AS A FIRST WORLD SOCIETY…and reselling is the symptom, not the cause.
So what are bachaqueros and their customers doing, other than simply surviving and playing by the new rules of the game?
September 2, 2015 at 6:12 pm
Just a thought regarding “gouging” and “hoarding”…
Both terms have negative connotations in the English language. But from a purely economic point of view, if the market is allowed to function, when market conditions change suddenly, “gouging” prevents “hoarding”. And for those who anticipate a change, the “hoarding” prevents “gouging”. In both cases, allowing the market to function is still the best way to allocate scarce goods.
The natural behavior of the economic agents involved should not be considered “wrong” or negative.
September 2, 2015 at 7:00 pm
Definitely…
This is a great point, a natural extension of what I wanted to write, except I was typing on the phone, and my forefinger was getting sore.
(Yes, I’m over 21, and can only use one finger typing on the phone.)
Free markets correct these imbalances, and it can strongly be argued that anti-gouging laws aren’t even necessary in the states during national emergencies, since occurrences have been pretty rare anyway.
It’s never been an endemic problem.
September 2, 2015 at 8:02 pm
Very good points Roy & Ira, I think you are onto something.
Most of the negative connotations towards scalpers, hoarders and Bachaqueros are emotional reactions towards either personal negative experiences, like waiting in line for nothing, or towards profits that are perceived as excessive (but only when someone else gets them).
What people do not see is the big picture. How for society (not just some individuals) these economic agents are actually a positive force that somehow partially counter the profound negative impacts of bad economic policies like price controls.
They miss the forest because of the trees.
September 2, 2015 at 7:20 pm
The way I describe things to my American friends (and many Venezuelans as well) is that the country is literally getting smaller every day. Fewer ways to earn a living, fewer things to buy, and even fewer things to eat.
Venezuela: The incredible shrinking country.
September 2, 2015 at 1:13 pm
Chinese imperialists will soon own the country, if they don’t already.
September 2, 2015 at 2:08 pm
It is one thing to own it on paper. It is another thing to control it. The Chinese will discover they have “bought a pig in a poke”.
September 2, 2015 at 2:47 pm
they have been in country for over a decade. They know whats going on. I think that going forward they will want more control and their own people and firms in place.
September 2, 2015 at 11:40 am
OK, OK, I’m reading all of these new announcements coming out of China of yet another 5 billion dollar loan. Is this, like, real money in the bank, or YOU can buy 5 billion dollars of CHINESE oil equipment on CREDIT to use in the Faja? What is it? Anyone know?
September 2, 2015 at 11:42 am
As usual, only Maduro made the announcement, it is for projects, but nobody knows.
September 2, 2015 at 12:31 pm
One article said that it was to increase oil production from existing mature fields. No doubt it is only for Chinese contractors. In any case, I doubt that the boli-vultures can touch it.
September 2, 2015 at 2:46 pm
BS
September 2, 2015 at 5:24 pm
What is it? Anyone know?
Pure THEFT.
With future oil as collateral.
September 1, 2015 at 11:06 pm
Another way to look at it is that the system is self-destructive and unsustainable and the bachaqueros are helping to defeat the system by using the loopholes to bleed it dry faster than otherwise. If everyone cheats and no one produces anything, the system collapses. It is the work and sacrifice of honest men and women that allows them to keep it going and continue to punish those that make it possible.
September 2, 2015 at 8:32 am
” If everyone cheats and no one produces anything, the system collapses.”
The irony is that this government is intentionally killing production at every level imaginable. I’d like to know how many times I’ve looked at a given situation and asked myself, “why do they do that, it’s killing the incentive to produce?”. Of course, the only logical answer is that they want to kill the incentive to produce.
This government DOES NOT WANT Venezuelan citizens to be productive. A productive person can take care of himself and does not need the government. This government wants every single person to feel the need to rely on the government for his most basic needs.
Understand that, and the insanity of Chavismo suddenly becomes crystal clear.
September 2, 2015 at 9:31 am
Absolutely correct, and following the Cuba game plan from 50+ yrs. ago.
September 2, 2015 at 2:42 pm
it’s not a game plan. They have no game plan. They live for today and not for tomorrow. They dont take into account the future cost and ramnifications of their actions. This is not strategy. It’s mental disorders or does anyone here think that these people are normal in the head? We’re dealing with folks completely fucked in the head from sociopaths and malignant narcissists on down and large swaths of the population are affected. The cancer is spreading as Venezuelans flee their country and bring their bullshit to other countries.
September 2, 2015 at 9:33 am
“Understand that, and the insanity of Chavismo suddenly becomes crystal clear.”
Agree. Exhibit C = Cuba
September 2, 2015 at 2:45 pm
you are clueless about Cuba
September 2, 2015 at 12:24 pm
Great point. This seems like a step beyond populism, for which Guatemala’s Gloria Alvarez proposes a solution: http://www.tuparadadigital.com/2015/05/entrevista-gloria-alvarez-por-luis-chataing-en-venezuela.html
September 2, 2015 at 2:11 pm
That may have made sense when it was conceivable to provide for all the needs of the citizens with oil rents. At current oil prices, they cannot. Ooops!
September 4, 2015 at 9:08 am
Ray Velcoro:
Putting aside your excuse of poor mental health among leaders, are you trying to tell us that in all these years, the Cuban regime wanted Cuban citizens to be productive?
I mean, I know that the Cuban apparatchiks tried, in the 1970s to
increase propaganda abroad via lefty tourismincrease sugar production with their “Venceremos Brigades”.How’d that work out for them — and you?
September 1, 2015 at 5:38 pm
It brings up an old question: Is it immoral to break an irrational law?
The entire economic system created by Chavismo is highly irrational. In fact, it would be impossible for any business to function today without circumventing at least some of the various and conflicting regulations. For most individuals, simple survival requires that they cheat the system in some way or another. About the only possible way to avoid breaking the law is to nothing, lay down, and wait to die.
So, we are left with everyone deciding for themselves which laws are too onerous to observe, and which they should respect.
I am with Miguel on this issue. The bachaqueros are responding rationally to an irrational system and serving a function in the process, however inefficient.
September 1, 2015 at 6:43 pm
More importantly, the system created is layer upon layer of controls, none of which work, so the Government is incapable of enforcing laws and regulations. Thus, it is very simple for people to cheat.
September 1, 2015 at 12:43 am
It really seems people talking about these blokes here have never taken time to find out who these guys are and the ways these bachaqueros have to gain the products.
September 1, 2015 at 1:47 pm
Well, I not only live in Venezuela, I live in a small, rural pueblo. If it weren’t for these “blokes” risking their investment, and in some cases, their lives, to move products from the cites to the pueblos, most of us here would do without.
The usual transport systems have largely broken down. Not only is there often not enough product to justify making the trip to the small towns, the transport companies also face shortages of repair parts for their fleets and the never-ending hassle of an alcabala every 30 Km or so.
Thank god for the blokes.
September 1, 2015 at 6:26 pm
What’s an alcabala? A checkpoint?
September 1, 2015 at 6:40 pm
yes
September 2, 2015 at 5:21 pm
A “bajate de la mula point”, to be exact, in Kleptozuela.
You pay and go. They don’t check much.
September 3, 2015 at 10:27 pm
That’s what I thought!
August 31, 2015 at 5:28 pm
Bachaqueros are great for many more reasons, we’ve discussed it ad nauseam on other blogs.
These brave entrepreneurs piss everyone off. And that’s just what Cubazuela needs to wake up the milliuons chavista zombies in line.
Perhaps they need a couple more years in line under the summer sun praying for half a chicken so that they begin to comprehend about “socialismo”, or what happens when your “president” goes to China on a Cuban plane.
September 1, 2015 at 12:40 am
Perhaps you are the one who needs to go to Venezuela to understand what this is about…and without dollars.
It is scalping what is in place in Venezuela.
Capitalists use capital to get things moving, produced.
You have little knowledge about what actual capitalism means…probably because you confused it with feudalism, which is the mentality that always prevailed in Venezuela.
By the way: most of these “brave entrepreneurs” are fervent chavistas. They don’t have a job and if we were to go to a real economy they would very probably not be “entrepreneurs” but employees at a factory or anything else, from teacher to whatever you are doing.
September 1, 2015 at 7:02 am
“most of these “brave entrepreneurs” are fervent chavistas.”
Really? Do you really believe this? As far as I have been able to determine they are from every party walk of life. Kepler, people are going hungry in Venezuela, Chavistas or not. They need to survive. And they try. In some parts of Venezuela, the only job is being a bachaquero.
September 1, 2015 at 1:43 pm
right, why would anyone a chavista or NOT, bother working for minimum wage? i literally invest 400 sell to get 2000 bolivares, and go back in line with 1600 pocket 400, (got my principle back) use the house money of 1600 bolivares buy 4 more products to turn into 2000 each… (by the way with inflation it probably went up) and do it again… but next time with 6400 and pocket 1600 on top of the principle that i had….
in other words
400 bolivares net me 2000 bolivares
2000-400 (keeping my money back) = 1600 to buy more products
1600 buy 4 of the product that i paid 400 for before cause regulated prices dont change
sell 4 products at 2000 bolivares each again now net me 8000 bolivares…
pocket 1600 and use 6400 to go wait in line and buy more stuff….
essentially a loop.
on top of this, i dont have to use my brain that often and i dont have any hard physical labor….
government created this environment, which makes less incentives for real productive people to work, if they do what i described to make more money then working as an engineering…
September 1, 2015 at 7:33 am
The problem with Kepler has always been the same: Mediocre blindness, stuck between the revolutionary vision of Copernicus and the ultimate discoveries of Galileo.
August 31, 2015 at 3:55 pm
“Kepler, if you think that, time to move to Caracas, you will see who gets you the goods.”
Every Wednesday I go to the supermarket and as I’m waiting in line I see what I believe are bachaqueros coming out of the loading docks carrying lots of products in numbers larger than those allowed per person. It’s been too many times when I get to the front of line to find out that the product(s) I’ve been waiting for is now out of stock because of no one, but several bachaqueros have taken more than their fare share. This is why I hate bachaqueros.
Ticket scalping is not allowed in many states in the US. It is illegal in several states.
Price gouging [which is what bachaqueros do] is a pejorative term referring to when a seller spikes the prices of goods, services or commodities to a level much higher than is considered reasonable or fair, and is considered exploitative, potentially to an unethical extent. Usually this event occur after a demand or supply shock: common examples include price increases of basic necessities after hurricanes or other natural disasters [I consider chavismo a natural disaster].
Price gouging is illegal in many places.
Still, I don’t blame bachaqueros as they’re the result of poor economic measures taken by the government.
August 31, 2015 at 4:10 pm
First, ticket scalping and reselling are two very different things. Reselling is allowed and these auction reselling sites are very efficient solutions to the problem and have killed scalping.
People are having a very hard time. When you get Bs. 700 for working as a maid a day, but making a line and investing Bs. 400 in goods will net you a Bs. 2,000 profit, I can not blame them. It is human nature, surviving instints at work.
They dont price engage in price gouging, scarcity has raised prices to incredible levels, dont blame them, the market sets the prices.
August 31, 2015 at 10:08 pm
Exactly:
There are legitimate ticket reselling entities in the U.S. who in effect, are also responsible for boosting attendance. Without them, attendance would be drastically reduced, because they MARKET these events, and make purchasing convenient.
They mark up reasonably, it’s called CAPITALISM, but there are laws regarding how much they can mark up–and it ain’t a lot.
Scalping, on the other hand, is VIGOROUSLY pursued as a crime. And you can’t even find a pair of tickets on Craig’s List for sale that’s above 15% or so of stamped price, because they’re shut down by the site for scalping activity.
September 1, 2015 at 12:36 am
Well: scalping is what happens in Venezuela
September 2, 2015 at 11:06 am
Actually, much ticket reselling sell tickets at a loss. For example, if you look at stubhub (a ticket reselling site) for a baseball game in most cities where the team is not a contender, you can buy tickets at well below face values.
August 31, 2015 at 3:06 pm
I am not saying they are heroes. What I am saying is that they are economic agents doing exactly what all economic agents do and they are not responsible fr the problems and should not be demonized.
I am not saying either that the US is an example of anything. (You brought up ticket reselling, not me)
I dont resell money either, so I have no idea what you are talking about that I simptathize with them because I do that-.
My point is that everyone there is a bachaquero. A dysfunctional economy becomes more functional because of them, so they are playing a very important role. Whenever there are opportunities arbitrage works, whether you like it or not. It is human nature.
September 1, 2015 at 1:34 pm
@moctavio described it best in this post, (actually one of the fundamental theorem of Asset Pricing (options), there exists an efficient Market, such that no arbitrage exists)
The easiest way that I can think of, in terms of fixing this problem in venezuela is to lift the regulated prices to market rates, and provide the poor with food stamps to essentially subsidize them……(which makes more sense to me, why have a product at regulated prices for everyone, you really should just have it for the poor anyways (ESPECIALLY GASOLINE!)
although bachequeros eventually would just pay the poor money directly to get said products… but at least the spread in value between them might not be nearly as high….
September 2, 2015 at 2:36 pm
why does Kepler always have to scapegoat the USA? Has this guy ever lived in the US or spent time in the US besides his airport transfers on his way to Europe?
August 31, 2015 at 2:59 pm
Miguel,
The use of extremes is what has enabled Chavismo to stay so long. We do not have to choose between being a commie or a comprador who wants to be more gringo than a gringo.
Sorry, but the USA is not always a model and if there is some sort of regulation even then. Besides, resellers are not paying taxes in Venezuela.
Perhaps you sympathize with them because you now work in the area of…reselling money and not production…basically gambling.
If you lived in Venezuela and didn’t have access to dollars as you do and you
came to the supermarkets and found nothing, you might understand. If you go to Venezuela as a privileged man, of course you will have the attitude you have now.
I repeat: the government is the culprit of this mess but that doesn’t make these bachaqueros any “service providers”. They are what exists when there are no service providers.
At most they are an extension of the government’s incompetence and a way from the government to do some transfer to those without jobs…for killing their time.
Heroes? My foot. They are, to any effect, only the government’s distributors of goods.
August 31, 2015 at 3:49 pm
@Kepler
The resellers add “value” by moving the products out of the queues, to sell them at market-driven prices. Without resellers, it would be impossible to acquire products for those who do *not* want to wait in line for hours. Therefore, they do provide a service.
Obviously, this economic activity isn’t productive at all (they don’t even move products from a low-demand area to a high-demand one), but this aberration is a natural and obvious consequence of the economic policies.
Alexis
September 1, 2015 at 1:26 pm
I think thats what I consider a Bachaqueros, their job essentially is to wait in line, and buy the product, then sell it at market prices in the streets, so in that sense they do provide a service…..
although there are shortages, but there are only shortages of regulated products, now from my understanding, is that there are enough of the products being sold in the street at Market prices…. (enough might be a bad word, more like you are “ABLE” to purchase said products for market prices in the streets, but you are UNABLE to find said product at regulated prices due to shortages)
August 31, 2015 at 2:25 pm
Kepler, if you think that, time to move to Caracas, you will see who gets you the goods.
August 31, 2015 at 2:24 pm
Ticket reselling has become legal in the US, they resellers are now owned by the clubs themselves.
August 31, 2015 at 1:37 pm
I disagree
The government is definitely responsible for the shortage economy and it is the enabler of this mess but bachaqueros do NOT provide any special service.
They just intervene before anyone else does and do not pay taxes for their revenues. Their access to the products is not based on open bidding but on having privileged access based on violence and other not kosher methods.
Traders in Rome and in ancient Greece were active in a market where there was at least some competition and producers could set up prices most of the time, even if governments did intervene here and there.
Even at the times of Pompey people knew market forces are not perfect.
Bachaqueros might if anything be compared to ticket resellers, with the difference that tickets for concerts and similar events are limited because of physical reasons whereas the products in the context of Venezuela are limited by state intervention. Still, the bachaqueros are not useful, just parasites created by Chavismo.
Tell legislators even in the US that ticket resellers are heroes.
https://en.wikipedia.org/wiki/Ticket_resale#Legal_responses
August 31, 2015 at 8:29 am
I defend the bachaqueros at every opportunity I get:
http://goo.gl/6VXUzS
August 31, 2015 at 8:12 am
Of course Bachaqueo or Contraband are just another excuse. And the result of Kleptozuela’s insane policies and draconian rules.
The real problem is that Millions of incredibly naive, ignorant and under-educated people still believe in such obvious lies, and “economic wars” and the “ultra-derecha” and “Uribe’s paramilitary attacks”..
THAT’s the problem. The stupidity and or ignorance of a severely uneducated population that sees its president fly on some Cuban plane to China, and thinks that’s normal, fine and dandy.
Over 60% of the populace, those who STILL Love Chavez and Chavismo. Asi de brutos somos.
August 31, 2015 at 6:12 am
Thank you so much Miguel for resetting the conversation to fundamental principles of economics and shedding light on the true origins of this mess. The big bachacos are in the current Venezuelan Government. Let us pray for Venezuela so that political change can bring economic rationality.
August 31, 2015 at 4:33 am
Talking about bachaqueros, I hear we have boligarchs who come to Europe to buy Gucci handbags and other expensive goodies, using credit cards loaded with cheap euros, and fly to the USA to sell them there at a “loss”, deposit the dollars in a Miami bank account, and fly back to Caracas. It’s a fancy way to arbitrage the difference between the rate the credit card rate and the black market rate.