Economics Politics & government

[2609] Income equality. Isn’t it wonderful?

Since coming to power 14 years ago, Mr. Chávez has manufactured dependency on a scale unseen elsewhere in the post-Soviet world. He has nationalized farms, steel mills, cement factories, telecoms and the assets of foreign oil companies. His government subsidizes everything from oil to milk. Government spending, much of it on cheap housing, has risen at a blownout rate of 30% in the past year alone.

The result? Chronic shortages of everything from oil to milk. A 24% inflation rate. A homicide rate that in 2011 clocked in at 67 per 100,000 people-nearly five times the rate in Mexico. Latin America’s lowest growth in GDP per capita over the past decade, despite record-high oil prices. Constant devaluations. The diversion of an estimated $100 billion in recent years to a slush fund controlled exclusively by Mr. Chavez. Rolling blackouts. A credit rating on a par with Ghana’s and Bolivia’s. The steady degradation of the country’s once formidable oil company, PdVSA.

The only bright spot, according to the BBC, is that Venezuela “now boasts the fairest income distribution in Latin America.” Isn’t that wonderful? [Bert Stephens. Chávez and the 47%. The Wall Street Journal. October 10 2012]

Politics & government

[2291] Of Chavez’s socialism

Socialism’s end in theory is admirable but what is true in theory is not necessarily true in practice. In practice, socialism always requires authoritarian power to make it work. A system of public ownership needs everybody to surrender their individual sovereignty to a central planner, voluntarily or otherwise.

And so, it is unsurprising to have Hugo Chavez assumes dictatorial power so that he can continue to forward his socialist agenda. He is the central planner in Venezuela but some Venezuelans disagree with him. That disagreement comes in form of an election. After seeing a democratic result unfavorable to his socialist government, he convinced the outgoing Chavez-friendly legislature to allow him to rule by decree for the next 18 months.[1]

The socialist agenda is bigger than democracy, so it seems. Always be careful about giving any socialist too much power, or any for that matter.

Maybe one should be more sympathetic to socialism. Maybe one should argue instead that it is Chavez the dictator who is corrupting the system while hiding behind socialist facade.


Yet, having socialists all around defending Chavez makes that separation as real as socialist dream. And a socialist dream is a pipe dream.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — CARACAS, Dec 17 (Reuters) – Venezuela’s parliament gave President Hugo Chavez decree powers for 18 months on Friday, outraging opposition parties that accused him of turning South America’s biggest oil producer into a dictatorship.

The move consolidated the firebrand socialist leader’s hold on power after nearly 12 years in office, and raised the prospect of a fresh wave of nationalizations as the former paratrooper seeks to entrench his self-styled “revolution.” [Venezuela assembly gives Chavez decree powers. Jack Frank Daniel. Reuters. December 17 2010]


[1141] Of eeriely familiar rhetoric in Venezuela

In Venezuela, Hugo Chávez the socialist, while going on a fool’s errand:

Mr. Chávez champions these ideas, which will take effect in January, as ways to combat inflation, which in recent weeks crept up to 20 percent, the highest in Latin America. Officials blame ”hoarders” for shortages of basic goods and price increases for food on the black market. Mr. Chávez says the renaming and redenominating the currency will instill confidence in it. [Venezuela to Give Currency New Name and Numbers, NYT, March 18 2007]

Isn’t that familiar?