Free Markets, Free People


Forgive the schadenfreude

I just can’t help it – not that this is surprising or unexpected.

Venezuela’s economy is in trouble despite the country’s huge oil reserves. Blackouts plague major cities. Its inflation rate is among the world’s highest. Private enterprise has been so hammered, the World Bank says, that Venezuela is forced to import almost everything it needs.

This is socialism working again. Yes, yes, we’ll hear the naysayers claim that it “really isn’t socialism”, but of course, it is and, like all other attempts throughout the world and history, it is a dismal failure which has made the lives of the citizens of Venezuela worse, not better. Venezuela’s economy has contracted 3.3% in the past year.

Jose Guerra, a former Central Bank economist, says state intervention in private businesses is hitting the economy hard.

“The government is nationalizing, expropriating, or confiscating,” he says. “They are not creating new wealth; this is wealth that was already created.”

And, as expected, the government is badly mismanaging what it confiscates and nationalizes. Cities endure 4 hour blackouts daily, many during business hours.

This is not the way it was supposed to be. Venezuela is one of the world’s great energy powers. Its oil reserves are among the world’s largest and its hydroelectric plants are among the most potent.

But these days, Venezuela is being left behind: The rest of Latin America is expected to grow at a healthy rate this year, according to the World Bank.

Guerra, the former Central Bank economist, says the government must reconsider its policies — and drop the statist socialist model that Chavez adopted.

“The government has to consider that the socialist point of view is not so good for the economy,” Guerra says. “Chavez believes in the old-fashioned socialism. This kind of socialism is dead, definitely dead, it doesn’t apply to any country in the world.”

Of course it should be “dead, definitely dead” to the world, but it isn’t. Ignorant people like Chavez always believe that the myth of socialism and the supposed “social justice” it promises are workable solutions to what are the inequities and unfairness they see in a capitalist system. And when they finally grab power, they attempt to impose the promises of the myth with predictable results.

Of course, when committed this deeply, you don’t expect such a person to admit they’re wrong, but, instead to double down. Hugo Chavez doesn’t disappoint:

In a recent speech, Chavez acknowledged the economic troubles, but he said he wasn’t worried.

Instead, he spoke of a worldwide capitalist crisis, which he said provided a marvelous opportunity for Venezuela to push a new model.

Oh yeah, given the wreck that was Venezuela’s economy before the “capitalist crisis”, I’m sure there are untold numbers of countries just can’t wait to sign on to the “Venezuelan model” and all it promises:

The grill at Landi Nieto’s burger joint still works: It runs on gas. But customers eat in the dark, Nieto says, if they venture out at all in the first place.

~McQ

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12 Responses to Forgive the schadenfreude

  • Of course it should be “dead, definitely dead” to the world, but it isn’t. Ignorant people like Chavez always believe that the myth of socialism and the supposed “social justice” it promises are workable solutions to what are the inequities and unfairness they see in a capitalist system


    I don’t know if Chavez believes this.  Many of his followers believe this.  So he’s playing to the base who enjoy the strong-arming probably as much or more than what it is suppose to accomplish.

    To me people like Chavez pay lip service to these ideas because promising free candy is an easy way to power.

  • Exactly what would anybody expect from Hugo “Cabeza de Caca” Chavez ?

  • I don’t think that attempts to centralize an economy in the socialist manner work anyway, but when it is done by a buffoon like Chavez it is going to be a particularly bad disaster.  That’s the concern I have with any attempt at consolidating power or control– at some point you are going to wind up with someone like him in power, and all of your plans and hopes go up in smoke.

  • Have to say, right on schedule with the infrastructure failure I anticipated when Chavez started nationalizing the ‘means of production’ and power generation.

    • Sean Penn, on the other hand, has been taken completely and utterly by surprise!

  • Apparently the mining industry isn’t screwed up enough and so…. time for a takeover.

  • At my last job I worked with a few Venezuelans.  They were nearly beside themselves when the constitutional amendment passed making Chavez dictator for life.  In the words of one of my former colleagues, “Venezuela is f*cked.”