What an utter and complete disaster. More socialist government control is not the answer to this unmitigated managerial disaster. They need to recognize that they will have to let go of command and control of the economy and private property and let the people who know how to run businesses run their businesses. Further nationalization and confiscation will not improve things.
It's a country with enviable natural resources. It's not like they don't have arable land or suffer from prolonged droughts and they did not suffer a civil war recently but they do suffer from government hubris and an economic death spiral. Complete national economic mismanagement.
One can only hope the country does not fundamentally collapse and people try to escape at any cost. It's not like Brazil is economically up to absorbing the exodus.
Of course, this will be blamed on the imperialist gringos and the failure of their "socialist" policies will not be recognized.
>There has been little rain in Venezuela in the past three years, and a crippling deficit last year in particular—a predictable effect of El Niño, the global climate cycle that periodically warms parts of the Pacific Ocean, causing deluges in Texas and Florida, warm weather in eastern Canada, and desiccation in Indonesia and parts of Latin America. As a result, the water behind Venezuela’s dams, which supply around two-thirds of the country’s electricity, is at a historic low. At the Guri Dam, the nation’s largest hydropower facility, the water is reportedly within five metres of dead pool. At this low level, the worry is that air will get into the dam’s inner workings along with the water, producing vibrations in the metal turbine blades that can rattle the structure to death. If Venezuela’s reservoirs run dry and its dams stop working, its grid will, too.
While the drought is not helping, there's no reason the country with the largest oil reserves in the world should have to shut down their economy in a drought; other counties have backup oil plants.
Mismanagement is why oil production drops every year and there is no refining capacity.
The US regularly has droughts, floods, fires, a freeze killing all the oranges, all sorts of natural disasters. Yet it doesn't do much more than ripple the food prices, because the market just routes around the problems.
Socialism is orthogonal to command and control economics, private property rights, and corruption. There are just as many countries that do it right as do it wrong (same with capitalism). Let's be honest with the root cause: populism, corruption, resource curse, nepotism, military appeasement all play a role in this much much more than socialism.
The two major problems right now are price controls and seizure of private property by the government. Price controls cause shortages, and if anyone does manage to bring good to market, the government seizes them.
It doesn't matter if Ghengis Khan becomes the leader of Venezuela.....if he fixes those two things, the economy will rebound quickly.
But Sweden isn't nationalizing/socializing all aspects of the economy nor controlling monetary exchange rates nor demonizing businesspeople as tools of the gringos, etc.
> But Sweden isn't nationalizing/socializing all aspects of the economy nor controlling monetary exchange rates nor demonizing businesspeople as tools of the gringos, etc.
Ya, the word is kind of arbitrary and meaningless. Does 67% state owned Statoil make Norway socialist? Does universal health care make a country socialist? Do high taxes on the rich make a country socialist?
Venezuela isn't even a self proclaimed socialist country, let alone one without capitalism. All of its dysfunctions are fairly basic...it looks a lot like what happened in Zimbabwe.
I'm sorry, did Norway just yank the oil company from its owners and just take it without compensation? Do they continuously assign any bad news the doings of Americans and the traitors among them who sympathize with Americans?
Zimbabwe has a tortured history with lots of corruption, colonialism, despotism, nepotism, racism, ethnicism etc. The economic system is the least of its problems.
PS who di Venezuela associate with if not Cuba, Bolivia, Ecuador, etc? That should tell you their implicit leanings (if not their explicit rhetoric).
Even if a socialist country yanked a private company away from its owner, it would be "theft", nationalization without compensation is not a core socialist tenant.
> Do they continuously assign any bad news the doings of Americans and the traitors among them who sympathize with Americans?
Again, not something defining or unique to socialism.
> Zimbabwe has a tortured history with lots of corruption, colonialism, despotism, nepotism, racism, ethnicism etc. The economic system is the least of its problems.
Zimbabwe is far from Somalia. Yes, economic system issues were one of their primary problems, arising from problems like corruption, colonialism, etc...:
Yet, Lots of socialist countries nationalize companies or resources without compensation or at ridiculous fractions of value.
A fever in and of itself does not tell you the malady affecting someone, taken in conjunction with other symptoms the individual symptoms inform the cause. Same with nationalization and or price controls, blaming gringos, etc.
Socialsit have been using this excuse forever. Its never "real" socialism. Nationalising everything is socialism. It has been a major aspect of socialist thought for a very long time.
True, there are other strands of socialsit thought but usually all countries that become socialist try to do command and control and not anarcho syndicalism or something like that.
So maybe go back and inform yourself about the history of socialist tought.
Also stop trying to sell Sweden as Socialist. Those countries are normal capitalist wellfare states, just like France, Germany or any other western state.
Wait...what is your list of socialist countries? You don't include the Nordic model countries of Sweden, Norway, Denmark? Or governments with socialist aspects (Japan, Australia, etc...too many count). Thankfully, Wikipedia maintains a list:
Venezuela doesn't even make the list since they aren't "officially" socialist (only four countries are, Laos, Vietnam, Cuba, China). So what is your criteria then? What is a socialist state? Is it just anything that nickik declares as socialist? Zimbabwe had price controls and they practiced land redistribution as well as nationalization. Would you try to spin them as socialist? Or just really corrupt?
First of all, anybody can edit wikipedia and on issues like what definitions of words to use its extremely difficult to coordinate. So using wikipedia as a source of authority is actually no very useful. Their are to many definitions and often people with a particular opinion edit, then other people who disagree edit it again.
One of the main issues is that their is the divide between countries that call them selfs socialist, and countries who are attempting a socialist model. Just as we understand that the "Democratic People's Republic of Korea" of North Korea is not actually a democratic or a Republic.
I define purely by economics system. So that means that North Korea actually has a socialist system but they no longer claim to be communist. China in turn calls itself socialist but their economic system has moved pretty far in the last 20 years (China is somewhat special because their are huge internal divides between special economic zones and some of other parts).
So I think that truly socialist in terms of economic policy, you basically only have North Korea and Cuba (Cuba could be different now, Im not very up to date). Venezuela never really went to the end but they certainly when pretty far. I don't know enough about Lao or Vietnam to make an educated comment about their economic policy.
For me a socialist government is one that is actively trying to get full control over the means of production. The more a government tries to attempted this, the more socialist they are. Lenin and co in 1917-1921 probably had the 'best' run. Within a very short time they nationalist banks, all major industry, all export, transportation and many others. The only thing they really failed to nationalise is the farmland because it was to difficult. It took Stalin to do that in 1928.
The definition of socialism as 'worker owned means of production' has been interpreted as 'means of production owned by a worker lead party' from a very early time. The follower of this definition have been by far the most successful socialist. The other interpretations had far less success.
As for Zimbabwe, yes the ZANU is a socialist party and the began to nationalise under the banner of socialism.
Actually the word 'capitalism' has always been much less defined. It was defined by socialist to define them self against something but it hard to say exactly. The terms usually referred to systems where labor did not own most of the capital. That is definitely true in all western systems right now, and thus they are all capitalist systems.
You can never really say its a real capitalist system. Thats why people use other words such as 'free-market capitalism' or 'welfare capitalism'.
There are many socialist aspects to our government here in Australia - public healthcare, public schooling, etc. People who bang the 'socialism bad hur dur' drum generally don't observe the working socialist policies already doing well in society. As you said, corruption is the issue at play.
I think a few people misunderstand socialism in LatAm. In LatAm socialism pretty much means businesses are American puppets, Americans are bad, being a puppet is bad so let's redistribute business and industry to the people and let the people run it. The professional class are bad (with the exception for physicians who are expected to live like other poor people) and farmworkers and laborers are the ultimate ideal (there is a terrible feudal-agrarian mindset which permeates)
These are welfare aspects, not socialist aspects. Socialism is public ownership of the means of production. When you tax on the high end of the income scale, and distribute those taxes as welfare, healthcare etc on the lower end, that's not socialism - it's welfare with capitalist economy as an engine (actually producing the income that you redistribute). The factories and the service providers are still privately owned.
So Australia, Sweden etc are not socialist in any meaningful way. Venezuela, OTOH, was actually going that way, with an ongoing large-scale nationalization of private businesses:
People in America scream "socialism!" whenever they hear the words "universal healthcare", so the standard in the states, at least, is really low. E.g. "Bernie Sanders is a socialist" is a common refrain even if he isn't dressed in a mao suit advocating nationalization of all private industries...that he is advocating taxing the rich more is enough.
you need to read something deeply before give an oppinion about socialism, in Colombia 4000 children dies starving in the last 4 years and CNN and FOX dont say anything couse Colombia is a right wing country, and offcourse, this must be pass silent.
Such a sad situation there. While traveling around latin America, especially Panama and Mexico, I met many Venezuelans who had left to find new lives. The stories they told of their families back in Venezuela were heartbreaking. It seems many of those with means to leave have already left. This also helps create a brain drain which further increases the problems there.
All of us in the developed world need to study and educate others on what the policies in Venezuela have done (no, it wasn't the weather, the evil corporations, oil prices or whatever other excuse of the week they claim). We need to ensure other countries do not go down this route.
Especially concerning to me is the popular support of Chavez/Maduro and these policies:
Jeremy Corbyn, Britain's Labour party leader tweeted: "Thanks Hugo Chavez for showing that the poor matter and wealth can be shared. He made massive contributions to Venezuela & a very wide world"(1)
In Spain, a political party gaining major support helped create the disastorous policies in Venezuela (2)
Please, those of you who support these types of policies - educate yourself on their effects. And take a look at the reverse, how well the average Chinese person has done as their economy has gone from control to free enterprise (3).
People vote with their feet. How many Panamanians and Mexicans are emigrating to Venezuela? How many people moved away from the special economic zones in China? How many of the desperate poor in Florida take rafts to go to the communist paradise of Cuba?
A clarification on your point: specifically socialist economic policies (gov control of enterprise) are to blame. It's not as if the government decided to tax the rich to provide social welfare and then the country went into a downward spiral.
The main issues I think have been rampant government corruption under Chavez's cult of personality and the papering over of economic problems with oil money. There are many stories of Chavez basically buying votes with oil revenues. Having a huge source of essentially free money let the government operate like a sports star fresh out of college, buying expensive houses and cars, until the money dries up and they promptly go broke.
While the specific policies in Venezuela have definitely been a disaster, I don't think its prudent to use that as an argument in the "control to free enterprise" debate. Despite the existence of free enterprises, it is well within the power of the Chinese government to take over any enterprise when it wishes to.
Your post comes off as a ridiculous attempt to shape opinions. Just knowing the CIA has spent decades trying to destablize the Venezualian government instantly makes me suspend my judegements of who can be blamed for their current situation.
Yeah, it's possible that chavez's attempts at socialist policy created this. But having the intelligence agency of the most powerful nation in the world spend decades trying to fuck up your government might possibly have an impact, too.
You are reaching. We can easily observe Vehezuelan policy decisions and their effect was easily predictable in advance. We don't need imaginary nefarious actors to explain this
You mean socialism didn't turn out to be a grand utopia where no one is poor and the government efficiently distributes resources? I'm totally shocked! Maybe they should nationalize a few more industries and throw more capitalists in prison
Graft, corruption, and mismanagement will ruin any system: capitalism, socialism, or communism (assuming we can even agree on the definitions of those systems).
The more one centralizes power, the more opportunity there is for graft, corruption, and mismanagement to do a lot of harm.
Let's avoid a stupid "definition of terms" fight and just talk about why the USSR was such a complete disaster for a few minutes, whatever you want to call their system.
That system was one that centralized a lot of power. What jobs people did, what prices things sold at, where people could love, how much of what they would try to make or grow, and also who could say what, what ideologies were allowed, what kind of media people could see, what foreign ideas were allowed in.
It turns out that that's a pretty rich field for graft. All the graft opportunities that were available in other countries, plus a big slice of economic control, plus a big slice of ideology control made for some powerful government officials, and they could use corruption to turn that power into personal gain.
Socialism requires that the government has more resources and thus more power. Therefore socialist governments are more likely to become corrupted and mismanaged.
How is this any different from capitalist oligarchies? In that case, the power and resources are not aggregated in a single government, but split over many private individuals.
It's a matter of degrees. At least in most capitalist countries the press, no matter how emasculated, still functions as a check on corruption to some degree.
Communist/socialist countries tend to control the press, and hush up exposés of corruption, which makes it much worse.
The Obama administration has secured 526 months of prison time for national security leakers, versus only 24 months total jail time for everyone else since the American Revolution.
As I said elsewhere, Scandinavia seems to be doing all right, so that's Denmark, Finland, Norway, Iceland and Sweden for starters.
(This is of course social democracy rather than "pure" socialism. But since most social democratic policies, e.g. health care and social safety nets, are called "socialism" by those who wish to demonize them, I think it's fair to put social democracy's triumphs under the same label.)
Despite her being given recognition for reforming the British Economy, it is arguably still up for debate whether her policies were ultimately successful. The Scandinavian countries have continued to preserve many govt. controlled industries without being bankrupt.
The government of the Scandinavian countries is not so much bigger then that of other western nations.
In scandinavia they are not keeping companies alive that are literally consuming money, such a the British coal mines.
Before she took over Britain had very litte growth and was called the sick man of europe. Inflations was getting out of control and would have ruined Britain.
Certantly not everything she did was good, but Britain despretly need some of those changes.
If you look at indexes of economic freedom the scandinavian countries are actually quite high. Their are many extremly capitalist aspects of their society as well.
you need to read something deeply before give an oppinion about socialism, in Colombia 4000 children dies starving in the last 4 years and CNN and FOX dont say anything couse Colombia is a right wing country, and offcourse, this must be pass in silent.
This upsets me because it is such an unnecessary and predictable result. The mentality and fiscal politics of a nation matter.
“The Chinese won’t sell to us,” said a taxi driver who watched the crowd haul away all that was inside. “So we burn their stores instead.”
You'll eat tonight, but at the cost of the rest of the output of that store - if you even got the food out before you burned it. While I suppose the time to be philosophical is before the starving crowd gathers in front of the grain store, this is still madness.
Further, the mentality and fiscal politics and a connected world matter.
In the US and all developed nations, our quantitative easing programs are an abstracted, less violent but fiscally equivalent analog to burning a store or selling the future for the present. The consequences of these choices will also come to our door in time.
If they gave me the stick, I'd set interest rates at 3% and hold the line through a recession or depression. Far better that then coming to the end of the line, having no options and no way out.
In the US and all developed nations, our quantitative easing programs are an abstracted, less violent but fiscally equivalent analog to burning a store or selling the future for the present. The consequences of these choices will also come to our door in time.
>If they gave me the stick, I'd set interest rates at 3% and hold the line through a recession or depression. Far better that then coming to the end of the line, having no options and no way out.
It's a good thing you don't have the stick. I'd liken such a policy to the Taylor Rule, which can produce ridiculous results, but even that relies on macroeconomic data at all times. If your policy is such that 3% is the new lower bound, you have just created the lower bound you seek to avoid.
At present, there is no lower bound. Many countries are employing negative interest rates to attempt to stimulate their respective economies. A notable exception is Switzerland, which maintains negative rates primarily to devalue its currency (of course the magnitude of the exception is debatable). While negative interest rates are not well understood, they are utilized.
Central banks have additional tools at their disposal as well, like ON RRP, which means that talking about a single 3% rate is poorly specified. Ultimately though, we are encountering the limits of monetary policy and governments should be considering a fiscal approach, especially with such low interest rates. At a fixed 3%, fiscal policy is less appealing even when absolutely necessary.
Not a single economist in the world would agree to your insane 3% rule. That rule is so absurd that its hard to even argue against it.
Comparing QE to people burning down a store is also totally wrong. You seem to have never picked up an economic book in your life.
Just because economics is not physics does not mean you can just shit all over the thought of millions of smart people who have studied these issues.
If your rule would be applied you would wish that you lifed in the great depression.
I have studied many different school of economics, from 1400 spanish monks to modern day schools. Not a single one would think your "proposle" is anything put insanity.
Price control kills the market. As happened in Venezuela. Not draught or low oil price. But the article hasn't covered this point enough.
At high inflation rate and frozen price of commodities and food, traders are forced to sell bellow cost. Which leads to business closure, leading to shortage.
A simple label like "socialism" is inadequate to explain what is going on in Venezuela or in any other country. Is much better to drill into the details of "poor leadership" and "failed government institutions". All states have these issues to various degrees. In Venezuela they are problems broad and deep.
A command economy, a denial of economic fundamentals, and years of completely failing to take advantage of a commodity boom while it lasted. And populist ideology that led to those.
There are sanctions in place against individual Venezuelan officials for their part in human rights abuses, and a general embargo on arms, but other than that, no. The US is still Venezuela's largest trade partner.
Yep, those countries are doing great, but only because the United States exists. If the United States doesn't exist, China and Russia would have taken over those countries. Their sacrifice-military-defense-for-socialist-programs strategy would have failed spectacularly.
In other word, the United States is basically defending them (and many other countries in Europe). Because the United States defended them, they don't have to spend much on their military, so they have extra money left to spend on their socialist programs.
So again, "Socialism only works until you run out of someone else's money."
It's a country with enviable natural resources. It's not like they don't have arable land or suffer from prolonged droughts and they did not suffer a civil war recently but they do suffer from government hubris and an economic death spiral. Complete national economic mismanagement.
One can only hope the country does not fundamentally collapse and people try to escape at any cost. It's not like Brazil is economically up to absorbing the exodus.
Of course, this will be blamed on the imperialist gringos and the failure of their "socialist" policies will not be recognized.