“Nationalization. Price controls. Shortages. Forced allocation. Currency inflation. More seizure. Punishment. Mass shortages. Hyperinflation…. All to stamp out private property and profit/loss exchange.”
The Progressive intellectual class does not quite know what to think about the carnage in Venezuela. They see the results and speak only of bad government–and even in this case lower oil prices for a government dependent on oil revenue.
The latest example comes from the New York Times (December 18, 2017). Yesterday, the so-called “newspaper of record” published a 12-page Special Report, “As Venezuela Collapses, Children Die of Hunger,” vividly detailing the total chaos and mass misery (outside of the government class) of a country that should be one of the most prosperous in the world.
This article’s pictures of malnutrition and death are followed by three titles:
‘Venezuela has the largest proven oil reserves in the world. But in the last three years its economy has collapsed.’
‘Hunger has gripped the nation for years. Now, it’s killing children’
‘The Venezuelan government knows, but won’t admit it.’
The formal article begins:
Venezuela has been shuddering since its economy began to collapse in 2014. Riots and protests over the lack of affordable food, excruciating long lines for basic provisions, soldiers posted outside bakeries and angry crowds ransacking grocery stores have rattled cities, providing a telling, public display of the depths of the crisis.
Why, why? The reader surely wants to know.
“Economic mismanagement” is the Times‘ short answer, exacerbated by lower oil prices and the government’s refusal to accept international aid. In the article’s words:
… many economists contend that years of economic mismanagement set the stage for the current disaster. The damage was masked when oil prices were high, giving the government large resources. But when oil prices began a steep fall at the end of 2014, scarcities became common and food prices skyrocketed. Inflation could reach 2,300 percent next year, the International Monetary Fund warned in October.
The scandal is that the government is not facing up to the problem and asking for, and accepting, foreign aid.
President Nicolás Maduro has acknowledged that people are hungry in Venezuela, but he has refused to accept international aid, often saying that Venezuela’s economic problems are caused by foreign adversaries like the United States, which he says is waging an economic war against his country.
A hint of the real underlying problem comes in this paragraph that mentions, almost in passing, the form of government that is responsible for the continuing carnage (emphasized in bold red):
The Venezuelan government has used food to keep the Socialists in power, critics say. Before recent elections, people living in government housing projects said they were visited by representatives of their local Socialist community councils — the government-aligned groups that organize the delivery of boxes of cheap food — and threatened with being cut off if they did not vote for the government.
Socialists! As in Socialism. Tell us more! (The authors do not)
And why not Marxism? It is an open secret that President Nicolás Maduro is a Marxist, no?
One would expect a great newspaper to connect the simple dots to vilify socialism/Marxism and praise its opposite. If not in this essay, then in an editorial.
Nationalization. Price controls. Shortages. Forced allocation. Currency inflation. Seizure. Punishment. Mass shortages. Hyperinflation…. All to stamp out private property and profit/loss.
It always seems to end this way, with worsening conditions leading to more, not less, government.
Enter Ludwig von Mises and his description of the socialism/Marxism’s “planned chaos.” How about Ayn Rand’s novel Atlas Shrugged, where a once rich country (the US) spirals into poverty and chaos via interventionism turning into authoritarianism.
A very teachable moment is at the Times fingertips.
It still amazes people how many defenders there are over government-owned mineral rights. All the arguments about nationalizing the oil “for the people” really just give it to the political class and keep real capital from coming into the country. As Economides writes in “The Color of Oil” p. 106: “It would be difficult for the casual visitor to believe that oil reservoirs beneath run-down San Tome in Eastern Venezuela produce 1 million barrels of oil per day; by contrast, it is not difficult to see the results of oil wealth in Midland, Texas.”
Great quotation…. What page is that one…. Need you to write a follow-up post on this subject!
And it is not difficult to see the results of western enforced “sanctions” whose only purpose and intent is to destroy the lives of people living in a nation. Say what you like about whether or not Chavez was right doing what he did, but it was not Chavez’s work that crippled the nation through “sanctions” that destroyed a nation’s ability to grow. Before you throw your axes, knives, spears, and hate at Venezuela’s government, take a long look at the pitiful acts of your own government. Personally, I find it disgusting to think it would intentionally starve people to break a form of government that it did not like. If that’s fine with you, and you can look at yourself in a mirror and be happy, so be it.
Tom, I agree that the effectiveness of sanctions is suspect, but to say that their “only purpose and intent is to destroy the lives of people living in a nation” is an obtuse position. There is a political class of people that has appropriated the financial and mineral resources of the country. There are insiders buying high yield bonds with insider security that their high yield bonds won’t be put at risk. The starvation of the Venezuelan people is not a US foreign policy goal…. This crisis has been brought about because free market prices are restricted from their full use. Rationing, price controls, and ridiculous subsidies for certain products are disrupting what would be solved in a market economy.
Cause and effect might be reversed. Chavez and socialism/Marxism came before any decision to cut trade from the US side. And what if the aid is used just to justify continued exploitation? Statism is the cruelty from beginning to end…. Do you like Marxism in energy or elsewhere?
Are you kidding me?
Chavez nationalized everything in sight. What followed was as predictable as day following night.
“Economic mismanagement is the Times‘ short answer”
In the NYT’s defense, socialism and economic mismanagement are synonyms.
Food shortages came along with socialism *cough , comunism*; with Chavez. Situations got worst because of low oil prices: that’s all.
My people is starving and not because of the USA sanctions THAT IS ABSOLUBTLY TRUE