In instances such as Zimbabwe or Argentina, where hyperinflation spirals out of control, how do people feed themselves and pay for the bare necessities? Does the government step in and provide the support needed to prevent mass starvation?
In: Economics
does the government step in…no. The government is literally the cause of the problem.
People get by with a large amount of suffering as money becomes worthless. They feed themselves by trading. Basically a more elaborate version of “I’ll give you my apple for your orange”
Governments are the csuse of the problem so no, they don’t step in to help because people who are part of it live a very good life so they don’t care.
Common people just survive day by day, they don’t have any other option, a lot of people become homeless and there are families who have to turn to food banks to feed their children because their money is worthless.
Argentinean here, you keep changing prices for your work, and you place the money either on trust funds which give you interests to fight inflation or you convert to dollars, it’s not impossible to survive this way, it’s just really annoying, and bad for the country cuz it can’t get better, luckily now things are changing since the new government took office, and inflation is going down hard : )
In Argentina, a lot of people keep money in banks with American dollars. They will move money to their local account to pay bills and buy things. But all their wealth goes into offshore accounts in a safe currency.
If you had 1,000 dollars, and you knew that in a few days you can buy less stuff with those 1,000 (because they will be worth 750). What would you do? Probably enjoy the present and use them in whatever shit you can buy today with a 1,000.
Yes to what other people have said. But also a lot of people just starve and don’t survive. It’s sad but with this kind of economic strife some people just won’t be able to feed themselves/ pay for the bare necessities.
People stop using government issued currency. You either start using another country’s currency, precious metals or start bartering.
Black markets and bartering, mostly.
There’s obviously some tap-dancing around making currencies work, but by and large once you get to the point of hyperinflation actual money takes a back seat.
This happened to a degree in Yugoslavia, its economy never recovered after the oil crisis – I was a kid then, and I remember my parents opening a bank account in Austria (which was technically illegal but lots of people did it & the government didn’t enforce it). You would exchange the money for foreign currency, or spend it quickly. It wasn’t all bad either – if you had a loan the payments became laughable. I remember being given a stack of 100-dinar bills that were quite obviously freshly printed, but already worthless, to play with.
Luckily in that case the government very quickly started tackling the problem head on and the situation improved before things would get so out of hand that you’d have starvation or anything like that. Those measures didn’t save the country in the long run, though – fanatics thrive in situations like these and an economic crisis would be a terrible thing for them to waste & so they milked it hard. Wasn’t the only reason for the final fall of course, but surely a major one.
In Venezuela everyone, every business, even on the side of the street will take dollars via cash, venmo and zelle
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