It was not simply that they "nationalized oil" in my example, as the resources we're already state owned. You seem to not be serious with your comments.
Sorry I'm just trying to understand the five year old's argument. "Their economy was mostly oil, they seized assets of oil companies extracting it." Who is "they" in this sentence and how was all this inevitable?
The Chávez administration used high oil prices in the 2000s on his populist policies and to gain support from voters. The social works initiated by Chávez's government relied on oil products, the keystone of the Venezuelan economy, with Chávez's administration suffering from Dutch disease as a result.
When prices collapsed they had all eggs in one basket.
Now what was seized and not discussed in the wiki was oil platforms from foreign companies. Sometimes instead of Chavez paying a debt, he would seize the platform and "nationalize it" so this caused foreign companies to be wary of investing.
We both can agree that the pdvsa is incredibly corrupt and post Chavez politics have been a shit show. Whether this is a necessary result from nationalization is not an easily answered question but I'm glad you actually voiced an opinion on the issue besides just nationalization is bad. Cheers.
First ad hominem attacks don't help your point. Second, Google can help you out with some of your questions. Third, "they" is Chavez and his government. Chavez was socialist, socialism implies that the government takes over production from capitalists.
How was all this inevitable? When a government doesn't like that private companies are making money, and steal their property then replace skilled managers with party cronies, maybe things aren't going to work out so well. Maybe other companies will be afraid to invest in the country. So yea, the country gets a short-term boost from acquiring billions of dollars of assets, then all the profits that used to go to the company go to the state. But then it doesn't grow or handle problems properly because no one has the same incentive to work hard and innovate.
If the price of toilet paper is high in America, there are dozens of companies that are going to compete to get that profit, supply will rise and the price will drop. In Chavez's Venezuala, the toilet paper companies get nationalized, and government bureaucrats do their best to make and distribute enough toilet paper. Or maybe they don't and just report that they are doing a good job.
Here's a short list from 2012 https://www.reuters.com/article/us-venezuela-election-nation... and you can be sure there were many companies that bent over backwards to comply with governmental demands to avoid being nationalized. It turns out the Venezuelan government, like most other governments, is not good at managing production and providing a prosperous economy without a free market. And when regulations mean a company (for example a toilet paper company) can't make a profit to create what they are selling, they can't make enough of it, and soon they won't be able to make any of it.
It's all about human nature and incentives, and yes most 5 year olds understand that.
Yes all socialist governments are doomed to fail. Every leftist thinker has the IQ of a five year old(starting to like this meme). Thank you for adding nothing to the conversation.
