
The Suicide of Venezuela - wwilson
https://joelhirst.wordpress.com/2016/04/23/the-suicide-of-venezuela/
======
wmil
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.

~~~
marcoperaza
> _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.

~~~
RodericDay
Central planning clearly works fairly well internally for millions of
corporations around the world (see: Theory of the firm,
[http://www.economist.com/node/17730360](http://www.economist.com/node/17730360)).
It will never be so simple as "privatize everything for best results".

I wish the discussion here would elevate beyond this libertarian propaganda
level.

~~~
ksdale
Corporations have pretty excellent feedback in the form of profits that result
from voluntary transactions with customers. The success of a state is measured
in many ways, many of which are disagreed upon and/or take decades to measure.
On top of that, no one interacts voluntarily with a centrally planned state in
the sense that if the state supplies all of something that is necessary,
people will buy it, regardless of the government's prowess in delivering the
goods. A corporation will quickly go out of business or change tack if it
can't sell goods profitably. I'd say to make your analogy work better we'd
have to have central planning where citizens can opt out pretty easily and
that opting out causes the government to actually change.

~~~
iwwr
Large companies resemble governments in some ways since they have people not
directly connected to 'market validation' mechanism: administrators,
bureaucrats, people dedicated to keeping thing going etc. Internally, the
larger a company is, the more it begins to look state-like and socialistic.

Corporations themselves are also in practice intimately intertwined with
government. They depend directly or indirectly on procurement, but also the
legal system. The more complex regulations, the bigger the economy of scales a
corporation can use. There are also specific laws that make competition
illegal in some fields like telcos and friendly tax regimes for big players
only.

You may note corporations are the biggest defenders of free markets when it
suits them, then quickly turn the page when they require some special
subsidies, bail-outs or laws to hobble their competition.

------
vonnik
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](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.

~~~
Eliezer
Venezuela is being run by Atlas Shrugged villains. If there was ever in
history an appropriate time to reference Atlas Shrugged, it's there.

~~~
vonnik
Fine. But what I'm saying is that "Atlas Shrugged villains" is not a
particularly useful allusion, for a couple reasons. Rand neither invented nor
perfected those villains' depiction in literature. Orwell did it better and
sooner. Second, any criticism of the populist kleptocracy currently in power
in Venezuela needs to take into account the bourgeois kleptocracy that came
before it, or it is criminally incomplete. Randians and Bush fellows in human
freedom have keen eyes for the former, and are conveniently blind to the
latter.

------
ktRolster
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.

~~~
crdoconnor
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.

~~~
Retric
China peak growth was far slower than several other Asian countries post WWII.
That was intended as steady growth was intended to reduce political
instability. But, it also slowed down there overall growth significantly.

EX: Japan went from 2T to 3T in just 2 years. That's completly unsustainable.

~~~
crdoconnor
All the Asian tigers suppressed the value of their currencies by loading up on
US treasuries.

Venezuela instead tried to fix the value of its currency at a far too high
level.

------
pascalxus
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.

~~~
Shivetya
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

~~~
LanceH
They are worse than socialist because they destroy other's ownership for
personal gain.

------
tim333
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.

~~~
jacobolus
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](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](https://en.wikipedia.org/wiki/Latin_American_debt_crisis)
– and the
[https://en.wikipedia.org/wiki/Venezuelan_banking_crisis_of_1...](https://en.wikipedia.org/wiki/Venezuelan_banking_crisis_of_1994)
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.

~~~
catnaroek
I have no idea why this got downvoted. This is literally what happened there.

~~~
rbanffy
One should never attribute to anything else what can be blamed on any left-
leaning government. At least not on Hacker News.

~~~
catnaroek
Don't get me wrong, I'm no Chávez sympathizer by any stretch of the term. But
people don't vote for populist outsiders just because they're stupid (although
lack of education certainly plays a role here). They do so when they lose
faith in established political parties.

~~~
rbanffy
The demise of Venezuela cannot be attributed to a single cause. Incompetent
management of the economy, oil prices and relentless sabotage by internal
economic interests (supported by external ones) all contributed to the current
situation. And probably a hundred more causes could be found in less than an
afternoon.

~~~
narag
Venezuela is highly polarized so it's very difficult to get a fair and
balanced outlook of what's happening there. But it's impossible to deny the
evidence of stubbornly incompetent and corrupt management of public finances.

Printing unlimited money, supporting cuban dictatorship with oil billions,
digging deeper in social division and looting public treasure... you can
believe in whatever society model you want, but persistence in error to the
point of leading the country to misery is irresponsible.

------
mc32
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.

------
jazzyk
“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.

~~~
coldcode
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.

~~~
jazzyk
"Socialism" is rarely actual socialism. There are usually good intentions in
the beginning, but then "some animals become more equal than others".

~~~
coliveira
Capitalism is also rarely actual capitalism. It is frequently just a system
where friends help each other to continue increasing their fortunes. This is
true specially in third world countries.

~~~
slantaclaus
Capitalism + Nepotism = Capitalism

------
acqq
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:

[http://www.cfr.org/staff/b16446](http://www.cfr.org/staff/b16446)

~~~
djrogers
Interesting that you would think working for humanitarian relief organizations
in struggling countries would somehow make his viewpoint _less_ valid.

~~~
nerevarthelame
Understanding USAID's direct involvement in the destabilization of Venezuela's
government (during the years the author worked there) is pretty critical
information in understanding his viewpoint. See:
[https://www.rt.com/news/wikileaks-venezuela-us-
chavez-358/](https://www.rt.com/news/wikileaks-venezuela-us-chavez-358/)

~~~
vasilipupkin
i would be careful with using RT as a source of information. Its pretty much a
Russian government propaganda organ

~~~
JBReefer
Name one way on which it's _solely_ a propaganda organ?

------
solarengineer
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...](https://en.wikipedia.org/wiki/Lord_Vetinari#Vetinari.27s_golden_rule)

------
peterwwillis
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.

~~~
powera
You have a very unusual definition of tragedy, if you feel <something bad has
happened so it can't be a tragedy>.

------
apo
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...](http://www.worldatlas.com/articles/the-world-s-largest-oil-reserves-
by-country.html)

~~~
Rodeoclash
Also see:
[https://en.wikipedia.org/wiki/Resource_curse](https://en.wikipedia.org/wiki/Resource_curse)

------
dingo_bat
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.

------
youngButEager
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.

------
janus
Argentina dodged that bullet. It was heading the same way.

~~~
gtirloni
Hopefully Brazil will too.

------
pessimizer
Oil prices dropped. Venezuela is a petrostate. To date the problems there from
the dawn of Chavez is strictly ideological.

~~~
guard-of-terra
Not every petrostate is born equal.

Norway fares better than Russia, Russia better than Venezuela. Can't say about
Saudi Arabia.

~~~
jacobolus
Norway fares better in large part because one Iraqi geologist managed to
convince the nation to sock away its oil profits in a national trust instead
of spending the money wantonly.

It’s a testament to the Norwegian political system that they ultimately
listened to his message and followed his advice.

[https://encrypted.google.com/search?hl=en&q=Farouk%20al%2DKa...](https://encrypted.google.com/search?hl=en&q=Farouk%20al%2DKasim)

------
cplease
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._

------
slantaclaus
Venezuela feels the Bern!!

------
guard-of-terra
"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.

~~~
cubano
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."

~~~
guard-of-terra
I'm not arguing with that.

WRT "who cares how much they have to suffer" \- surprisingly few people do.

A lot of people are ready to give some free advice, but I doubt you are lining
up to provide material aid.

In the end those people will have to figure out their lives because no help
will come.

~~~
ktRolster
_I doubt you are lining up to provide material aid._

I would if there were a way to help.

~~~
guard-of-terra
Find a random Venezuelan online and send some funds (skype credits, bitcoin
and plain old money should do).

It doesn't have to be much by your standards.

When the same thing was happening in ex-USSR, wages fell to $10/mo due to
inflation and you could feed a family for a week on $10.

~~~
JumpCrisscross
> _Find a random Venezuelan online and send some funds (skype credits, bitcoin
> and plain old money should do)._

Nice try, Maduro.

In all seriousness, if you want to help give those willing but unable to leave
the means to do so. Sponsor their visa, send them travel money, help them find
a job and a home in Ameeica, _et cetera_. Everyone benefits when more
productive people are in more productive environments.

------
lazyjones
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.

~~~
pmelendez
"harsh sanctions against Venezuela."?

I don't know if you have lived or ever visited Venezuela, but the ones that
got born there would tell you a very different story... Talking about economic
war is even more disingenuous when you take in consideration all the money
that Venezuela received (and gave it away) during the first decade of this
millennium. What is happening is the collapse that many of us were predicting
since 10 ago, unfortunately few listened and now we are paying the karma

~~~
brbsix
I bet you didn't make many friends 10 years ago. Let me guess, they didn't
welcome you in open arms when you were proven correct? People aren't generally
too kind when it comes to revealing painful truths.

