It's important to understand what's gone wrong in Venezuela

That Venezuela was a middle income country that is now descending into chaos and penury is true. But the important thing to note is why this is happening. We're now seeing food riots in those parts of the country which were supposed to be benefited by the policies being followed:

“There have been 37 presidents of this country and none of them led us to this,” an elderly woman yelled at a policeman. The officer replied: “We are suffering too. But there’s no food here. Go home.”

Veronica Gonzales, 46, a computer technician, said that police and the colectivoswere in league with black marketeers known as bachaqueros, or leaf-cutter ants, who queue at shops and then sell the produce at inflated prices. “They are all a mafia,” she said.

What is striking is that the riots — sometimes half a dozen a day in the capital — are in working-class slums far from the middle-class areas where support for the opposition has traditionally been strongest. The opposition, which controls congress, is trying to push through a referendum to remove Mr Maduro but that will take time and hungry people are more concerned about procuring food.

To put an end to the vast queues and black marketeers the government recently started distributing food directly to local community councils.

It is not socialism that has caused this. And no, we don't mean in the sense that true socialism has never been tried so we can't say that it is at fault. Socialism is where it is not the capitalists but some more communal group which owns the productive assets. Both the Co Op and Waitrose in our own food market are socialist enterprises. One is owned by the customers, the other by the workers in it. They both seem to work just fine within the strictures of market competition and the price system.

And it is that which Venezuela has got wrong: that market and prices thing. As Mises pointed out and Hayek developed we simply do not have any method of coordinating anything as complex as an economy without making use of those prices and the market. Actually, as the only Soviet economist, Kantorovich, to win the Nobel concluded himself, we have to start with market prices before we can do anything else.

This disaster is because people think that prices are just arbitrary numbers we can assign near at random. Not so: they are the vital information about who wants what and which resources and where should be devoted to producing those things.

This has obvious implications for us in our rather better position. We're not in favour of more council housing for example, thinking that private ownership produces a better result. But that is a minor point compared to the important one, that whatever we do with housing or rents we must let the price system work: that means no rent control. Similarly we're not worried whether people prefer to work in a socialist workers' cooperative or a more capitalist firm. But we must run our welfare system by redistributing income rather than ruining the price system with a minimum wage.

The end result here, the thing we must all remember, is that there are indeed variations among various parts of the spectrum between capitalism red in tooth and claw and yes, even workable socialisms. Those working socialisms must be voluntary, of course, but we can see them working right here at home. How collective action is organised is very much less important than the insistence that all must be subject to the strictures of the market. Which is what Mises and Hayek were saying: markets not planning indifferent to prices.

For the truth is that non-market systems simply do not work as economic systems. And working, being able to sate at least some human wants and desires, is the main thing we want from an economic system. Thus, whatever else we do we must be market based.