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The fundamental issue is fairly simple. Chavez was pushing a sort of ethnic nationalism for the mestizo majority. But his supporters just didn't have the technical skills to run an advanced economy.
Instead of trying to fix that his government kept appointing people with degrees in Marxist Studies. Bad decisions were chronically made and the country decayed.
The infrastructure will continue to decay unless the voters find technocrats they trust. Eventually buildings are going to start collapsing.
>Chavez was pushing a sort of ethnic nationalism for the mestizo majority. But his supporters just didn't have the technical skills to run an advanced economy.
It has nothing to do with skills. Chavismo is a fundamentally broken agenda. Socialism (the real deal, not capitalist welfare states) does not work. Nationalizing industries does not work. Price controls do not work. Central planning does not work. The most skilled leader in the world couldn't make this program work.
And no discussion of this monster is complete without mentioning the political prisoners, extrajudicial killings, and pro-government militias spreading terror just like the Brown Shirts. And look at the company they keep. Iran, Cuba, North Korea, Russia, China, and the various Chavez-imitators in Latin America.
Chavez was an evil man.
Chavez was more like the poison pill or the neck around the rope. The next question is how did Venezuela drove itself to a point where people elected him?
They had a lot of money from oil, almost no taxes (or no taxes at all??), and still had a larger poverty rate that similar but oil-less countries of South America (that still had its own issues such as corruption, terrorism and drugs)
Two things:
1) In this piece, Joel Hirst makes a reference to Ayn Rand as though she had something relevant to say about Venezuela, civilization, or for that matter, anything. That alone raises a red flag for me. He's declaring himself on the side of the Objectivists. Who is John Galt? The embodiment of selfishness and much of what is wrong with capitalism.
2) Joel Hirst is a "Fellow in Human Freedom" at the George W. Bush Presidential Center. http://www.bushcenter.org/people/joel-hirst.html I'm not sure there is a single title in America that denotes greater intellectual fraudulence or moral bankruptcy than that. You can trace a straight line from Kissinger, the Argentine Junta and Reagan's Contras down to George W. Bush and his fellows in human freedom. So Joel is firmly on the side of oppression in Latin America. Remember that when you read his fairly shallow analogy between Venezuela and fallen civilizations.
I do not support Chavez or his politics, but I do recognize that America and US allies have presented very few palatable choices to the peoples of Latin America, and the Joel Hirsts of the world will not save the Amazonian peasants with their visions of John Galt.
Venezuela is being run by Atlas Shrugged villains. If there was ever in history an appropriate time to reference Atlas Shrugged, it's there.
The problem with LAm was not so much US interventionism -the problem was that LAm was sitting pretty vis a vis most of Europe (aside from the UK/France), at the turn of the last century. They had natural resources and they could have exploited them to their advantage, but they didn't. You had a few "caudilloes" a great peasant population which did not have a tradition of education and generational social climbing (you must remember they were very far flung and rural).
When the US went in meddling, it's not like we messed something good in those places, they were going down anyway, due to many varied issues (see Mexico, Venezuela or Peru, proud anti-imperialists) and arguably where we did mess around, like Chile and Argentina, Colombia, Panama things are better off than in the places which languish in Garcia-Marques's feudal time warp.
It's almost as though LAm, tied somewhat spiritually to Spain (or the Iberian pen.), followed down Spain's footsteps to relative irrelevance.
We did mess up in a few places, due to realpolitiks, but I don't think things would have turned out better without our intervention --I don't see it realized in the places we didn't intervene down there.
I think the reference was actually pretty good. And I disagree with most of Objectivism, or whatever you want to call it.
The issue with Atlas Shrugged is that the villains were kind of real, it's the "heroes", and their motivations, that were pretty unbelievable. For that matter, the ordinary bystanders were kind of given the short shrift too.
I don't think he's trying to. It's more of a warning for the rest of us
Shortages are the natural result of price controls.
If someone asked me what Venezuela should do, I would say "get rid of price controls and stop the inflation." The inflation would be a little painful because it would mean the government would have to stop printing money to pay its bills, but the pain will continue to deepen until they fix the economics.
Sadly, the concept that capital controls are deleterious is foreign to entirely too many people, and not just in Venezuela.
The high fixed overvalued exchange rates were the main problem, not price controls. It exacerbated Venezuela's Dutch disease, killing off all export industries apart from oil.
Essentially the opposite approach was taken in China (fixed undervalued exchange rates), which led to staggering levels of growth.
Does anyone else see parallels between what's happening there and some of the housing development in SF/ democratic cities? Of course, the rest of our economy doesn't have these price controls, so we're doing fine. What scares me, is the lack of basic economic education in the US, and what that means for the future of the US. There's a lot we can learn from what's happening in Venezuela.
I think many people in SF have been introduced to the law of supply and the law of demand, they just don't believe in them.
Many people also don't believe in anthropogenic climate change, but have certainly been introduced to the concept.
what happens in US cities is not comparable because your not stuck there. the many suburbs of cities like SF do have affordable housing its just not located where some want to be. IOW, NIMBYs aren't socialist, they just aren't social with people they don't want living next door
Dunno if it's suicide so much as being killed by Chavez / Maduro. If they could just get someone mainstream who understands economics to at least a passing high school exams level then things could turn around.
Killed by collapsing oil prices, just like other big oil-dependent nations. (Russia, Nigeria, Saudi Arabia, ... or in the US, look at Alaska, Louisiana, etc.)
Before Chavez, Venezuela was nominally a democracy, with two parties, AD and Copei, but in practice, for 2–3 generations, both parties colluded to keep state power in the hands of party officials, see https://en.wikipedia.org/wiki/Punto_Fijo_Pact – several of the presidents immediately preceding Chavez were hugely corrupt (even doing prison time for it), and the Venezuelan people were entirely fed up with the longstanding political order, which was why Chavez as an outsider was so popular. The general economic problems throughout Latin America in the 1980s – cf. https://en.wikipedia.org/wiki/Latin_American_debt_crisis – and the https://en.wikipedia.org/wiki/Venezuelan_banking_crisis_of_1... didn’t help.
I find Chavez’s particular brand of populism deeply problematic, but he doesn’t exist in a vacuum, and Venezuela’s main challenge at the moment isn’t lack of “high school economics” understanding.
That's been working so well in Brazil...
Venezuela has free, fair, open elections. Why shift blame?
Right into the arms of Wall Street...
Some of the main issues are:
Driving out professionals and putting cronies in to run infrastructure. People who don't care about "capital equipment maintenance" and things get run into the ground.
Political oppression.
Controlled economy, setting prices which create black markets.
Over reliance and lack of contingency planning vis a vis petroleum prices.
Overreliance on being "anti-imperialists" to be the antidote to their ills.
Etc, etc.
If you are interested in possible bias and the background of the author, he worked for USAID from 2004 to 2010 first in Venezuela then in Uganda, before he was a humanitarian relief worker with World Vision and Food for the Hungry:
He's also a Fellow of the George W. Bush Presidential Center: http://www.bushcenter.org/people/joel-hirst.html
He tweeted a link to this blog post, blaming Venezuela's collapse on "commies": https://twitter.com/joelhirst/status/723921894479675392
He also wrote an op-ed for Fox News Latino blaming Chavez's death on Cuban doctors: http://latino.foxnews.com/latino/opinion/2013/02/28/cuban-me...
He can only be described as a conservative neoliberal (wow what a strange moniker that is). Go and check. He cites Ayn Rand and Peggy Noonan. He's a fellow at the George W. Bush Presidential Center.
If you want to understand how and why USAID works, read "Confessions of an Economic Hit Man" by former Ashland Oil CEO John Perkins.
Interesting that you would think working for humanitarian relief organizations in struggling countries would somehow make his viewpoint less valid.
I guess this would be a DH1 response..
http://paulgraham.com/disagree.html
I sometimes feel that Lord Vetinari (Patrician of Ankh Morpork, Discworld) got governance right, thought I often find myself yearning for "things to improve".
https://en.wikipedia.org/wiki/Lord_Vetinari#Vetinari.27s_gol...
I don't find this tragic, or suicide. Tragedy requires some kind of eventual catharsis or recovery. Suicide is intentionally causing your own death.
This is neither. This is the slow rot that comes from not being able to take care of yourself, like a mentally disabled person, except it's an entire nation. They can't fix it and they can't stop it. And there's no recovery to be had.
What lessons can we learn from the leadership of the country over the past 18 years?
One, maybe don't trust someone who tries to take over the government by force, rather than by popular decree. Two, maybe don't have unlimited presidential terms or rule-by-decree. Three, maybe don't try to force economic, industrial or social change. Fourth, maybe don't let your country's leadership be best friends with countries that have terrible human rights violation records, and especially if they kick Human Rights Watch out of the country and are constantly criticized by other organizations. Fifth, maybe it's time to revert controversial social and economic policies if your country actually stops producing crime data (and it's not because the crime rate is so low). And sixth, though this is controversial, it would be nice to have a national constitution that puts safeguards in place that will root out institutional corruption by the coordination of an organization which isn't appointed by an executive.
I don't know much about politics, though, so take that with a grain of salt.
You have a very unusual definition of tragedy, if you feel <something bad has happened so it can't be a tragedy>.
And this from the country with more proven oil reserves that's any other - including Saudi Arabia.
http://www.worldatlas.com/articles/the-world-s-largest-oil-r...
When Barack Obama told students in Argentina "Capitalism and Socialism are about the same" -- the part that is true is:
- in Socialism, there is an Elite group who get special rewards and at the very top, the money from the country's resources (Kim in N. Korea; Chavez; and Maduro, who recently sent hundreds of millions of gold out of the country to 'pay the country's debts')
- in Capitalism, there is an elite at the top who get special rewards
There are 3 kinds of people who want Socialism:
1) those in the citizenry who want the elite to share the money more, and manage the country so that it produces benefits more equally;
2) those in the elite who want the perks that come at the top of society and want to force the wealthy to spend their wealth on helping everyone
3) those in the elite who know Socialism fails but there's plenty of time to loot the country before that happens
In capitalism, the elite don't lie to you and say "we're doing this all for you." It's understood that if you add value (like Facebook, Tesla, Google) you get handsomely rich.
In socialism, at least part of the elite know damn well that the removal of incentives in Socialism (redistribution of wealth) will eventually cause an economic crash, and they lie to the population "this will all work!" to get the votes to redistribute wealth.
Meanwhile, they have time to ship gold out of the country.
The crux is there will ALWAYS be a jealousy-inspiring Elite. This is true in Communism, Socialism, and Capitalism.
When Barack Obama said ‘There’s Little Difference Between Communism and Capitalism. Just choose from what works' to an audience of Argentinian youth a few weeks ago, he may have been referring to this issue.
No system will result in equally shared wealth. Those at the top will do anything to retain their perks.
In Communism, the leadership kills those who threaten the leadership.
In Socialism, the leadership jails those posing serious threats to leadership.
In Capitalist democracies, we have mind-bending, emotionally-charged elections, and peaceful transfer of power.
Argentina dodged that bullet. It was heading the same way.
Hopefully Brazil will too.
Oil prices dropped. Venezuela is a petrostate. To date the problems there from the dawn of Chavez is strictly ideological.
Very limited view of what happened there. Vz went down hill the moment that private property rights were lost. When the government started taking businesses, both local and foreign owned, it doomed its economy right then and there.
Governments which don't respect property rights can flourish under absolutely ideal conditions, your petrostate idea, yet even that is fleeting even if the conditions remain good. Its doomed the moment they do not.
So its not ideological, its simply fact, void property rights and you destroy your economy because trust is gone and when trust is gone people will not waste effort on what will be stolen from them
Not every petrostate is born equal.
Norway fares better than Russia, Russia better than Venezuela. Can't say about Saudi Arabia.
Lost me at:
But like Dagny Taggert I found there was nothing to push against – it was all a gooey mess of resentment and excuses.
“The problem with socialism is that you eventually run out of other people's money.”
-- Margaret Thatcher
In this case, they managed to run even out of petro-money. Takes some skill.
It's funny that you quote Thatcher as she did exactly what Chavez did with the UK's North Sea oil money. She spent the cash in our own economy (via tax cuts) which sent inflation and the pound through the roof.
The Norwegians got it right. If you discover oil create a sovereign wealth fund and invest the revenues outside your own economy. [1]
[1] - http://www.spectator.co.uk/2008/04/why-hasnt-britain-got-a-s...
It's not socialism, it's dictatorism. It's graftism. It's simple thievery. It's everyone's worst nightmare that your country is a madhouse that no hospital can cure. You may as well blame mothers for having children who ruined the country. But the country still has oil in the ground but not the will to use it wisely. There is still hope just no idea of how to make it happen.
“The problem with socialism is that you eventually run out of other people's money.”
Whereas the current dominant system (whatever one wishes to call it) doesn't have this problem, because it provides the elites with more highly nuanced, and much more effective ways of siphoning money, power, and hope from the disadvantaged -- and in covering its tracks whilst doing so.
It's socialism as much as a common mugger is Robin Hood.
Venezuela feels the Bern!!
The description towards the end is horrifying and quite frankly, it scares me. In my country (India), we have a population which is very diverse. Maybe because of that reason we have not proved vulnerable to such kind of single-minded stupidity. The impact is constrained to a state and/or time-period. This also ensures that even good ideas do not gain much traction, so we continue in this limbo of poverty and growth, sprawling malls and garbage on the streets, farmer suicides and billion dollar unicorns.
"This is what people will say in a hundred years, a thousand years about Caracas, Venezuela"
I don't think so. Will people disappear? Where to?
They'll mostly stay and figure out how to live. People are good at that.
Sure, and who cares how much they, their children, and their children s children have to suffer during that time, right?
Bullshit.
Maduro is destroying the proud people of that country with his Marxism that is turning him and his cronies into billionaires while completely destroying the economy for the rest of his unpolitically-connected "peasants."
No mention of the harsh sanctions against Venezuela. I wonder why? Perhaps because the conclusion without so much ignorance would have been: death by lost economic war against aggressive capitalist countries.