Ten years ago it was at the forefront of the Chavista ‘Bolivarian’ Revolution, however, since he’s died, I’ve heard of how Caracas is the most violent city in South America, there’s endless shortages and endemic corruption, although Chavez was bad, he did at least make some attempts to say the least, to alleviate poverty, so how has Venezuela got to this point, where this is how much you get from a weekly shop.
Hardly a debate here, the place is falling apart, oil isn’t worth anything anymore, they had a chance to use oil profits to do something for their country but threw it all away to support political revenge and corruption.
Yep. It’s like those Star Trek planets with one real industry…Venezuela was hideously vulnerable to a slump in oil prices.
It should - over the long term - promote diversification in economic development. But that’s not a short term fix.
It was probably capitalism’s fault. They should have made poverty illegal, the Republican obstructionists insisted it should remain legal due to their market fundamentalism.
If only they were to raise the minimum wage and build more bridges, everything would turn around.
Ayn Rand.
The Venezuelan economy has been dominated by oil forever; well long enough that it made up over a majority of of exports back in 1990 and currently sits at 95% of exports today. With record high oil prices, the government effectively turned the state oil producer into a supplier of social services. So what Venezuela needed was restricted oil supplies with high prices per barrel to keep the ship stable.
To allow the state oil company to “break even” they need oil to sit at ~$117. You may have noticed it’s currently sitting around $50.
Since the country went all in on oil, they’ve nothing left to trade with the world and the government is scrambling. Government debt is exploding, the state oil company can’t borrow any further, the country is poor as dirt to begin with, while monetary controls and a plunging currency are making everything expensive as all hell.
A socialist’s paradise. What could possibly be wrong ?
The Chavez government battled politically with the state oil company in the early years after his election, which left a lot of resistance to investing in modernization of the oil company’s assets. Much of the country’s oil is very sludgy and requires a great deal of refinement, which is why it tends to be profitable only at high price points.
Also, over the years, the government has imposed price and currency controls, seized private farms to create collective agriculture and seized foreign factories (generally after the foreign manufacturer has closed them, citing the government’s price controls). This has meant that little is now growing or being made, and there is no longer much foreign money sloshing around.
Others have mentioned the collapse of oil prices, which began about two years ago. That certainly hasn’t helped, but Venezuela was going down the tubes years earlier, even when oil prices were at their peak.
The problem is that Hugo Chavez was a socialist who pushed socialist policies. Not Bernie Sanders style anti-choice-of-deoderant socialism. Real socialism, which used to be called communism until the whole human race figured out how evil and destructive communism is. Chavez seized industries and property en masse, imposed price controls, and used violence, mass arrests, and censorship to silence opposition to his policies. Just like what happened to every single country in history that tried communism, in other words. He was also insane, as totalitarian dictators are wont to be. After he died, he was replaced by Maduro (also insane), who continued the communist policies and got the same results. So the economy has mostly vanished, millions of Venezuelans have been plunged into extreme poverty and some face starvation, inflation is skyrocketing, and the governments’ human rights abuses keep expanding. The only good thing is that the world gets further proof that socialism/communism is the worst idea in human history.
Oh, and we get to mock idiots like Noam Chomsky, Michael Moore, and Sean Penn who showered Chavez with praise.
It’s evolving into what will probably because yet another ex-communist country that will become a regional ally of the US down the road…sort of like Vietnam and, perhaps, Cuba. 
Socialism. The system of government where everyone is equally miserable. Aside from the political and enforcer classes.
I don’t think the definition of socialism is: subsidize everything with oil profits that will magically last forever. Pretend socialism isn’t socialism.
The right word you are looking for iscommand economy. Not even China or Vietnam are following that nowadays (they do intervene with the markets but not constantly as a command economy does) and Maduro is immature to relax the command economy they set up in Venezuela.
When even Cuba is relaxing their command economy it is not hard to realize how dumb the current president of Venezuela and others currently in power are.
One defense that Communism always had was that no country has ever actually tried Communism, so you can’t point at the failed Communist states and say, “See, Communism doesn’t work.”
The other defense is that no two people have the same definition of either Communism or Socialism. Anyone you argue with can simply cry “strawman!” for any argument you make against either one, since clearly you’re talking about something different from them.
But I think that we can say that autocratic populism ain’t a winner.
Either way, the country has been in decline for years, due to theft, corruption and mismanagement from the top. One supposes it doesn’t matterthat much whether you call it socialism or not, but Chavez certainly did, and was thoroughly embraced by prominent leftists as such.
There is a lot of people in this world who think that, when inequality occurs, the solution is to “Bring them down!” They see a child with dwarfism standing next to another one who’s very tall and their solution is “orf wiv 'is legs! Down wiv de beanpoles!”
Therefore, populist politicians often promise to bring them down. Some even mean it. Chávez actually went and did his damnedest best to bring them down, scaring away foreign investment, a lot of the educated people, and burning down the economy.
I’ve been hearing terror stories for years, both from the expats and from foreign workers who were expelled from the country within the first months of Chávez’ reign.
Sure, a corrupt, incompetently-administered centralized economy represents a fine example of a progressive form of capitalism, just like slavery, subprime lending, and payday loan sharking represent the best of traditional free market capitalism.
I don’t think that’s it.
I think the socialist/communist mentality is that a country’s wealth is something that just naturally exists, such that the prime focus is on dividing up the pie. If there is too much income inequality, then it follows that the guys who have it better are just leeches who are taking more than their fair share, and we need to redivide the pie in a more equitable manner.
The notion that in aggregate the people with more than their “fair share” are people who actually create more wealth than the guys at the bottom, and that knocking them off their pedestals will therefore shrink the entire pie is an alien concept to this worldview.
Here is a pretty good Youtube video showing basically what the OP is asking. It shows the trajectory of how Venezuela got from their pseudo prosperity to the crumbling mess it is today, right on the brink of complete collapse.
If it’s TLDW (it’s only 4 minutes, but that might be too long), the short answer is corruption and just flat out stupidity on the part of Chavez, first nationalizing everything then, when the price of oil was high running insanely high deficits and wasting astronomical sums of money that, once the price of oil dropped basically gutted the economy. Couple that with poor resource management, especially of water and a drought that has the water levels down to the critical point (with a cascading effect of both lack of water for drinking and agriculture and that same lack of water meaning they have had to cut back, extensively on power usage) and the current government seeming even more out of touch and, well, nuts, and you have a country on the brink. Another shining example of Communism at it’s best (it was pretty ironic for years seeming some members on this board, most notably BG touting the great Chavez and holding Venezuela up as a shining example of how great Communism/Socialism really is…all the while, his buddy was sowing the seeds of the countries destruction on a host of levels. He’s lucky he died before the bottom dropped out completely).
Wow; did BG really tout the government of Chavez as a good thing?
I remember when he took over; I had done a bunch of work there as a consultant in the mid 1990s in trying to help their industries compete in the US market. They were close; their product was good and cheap enough that they could ship to the US and still make a decent return. There was a lot of promise.
Then he got elected and I got calls from 3 different engineers I had worked with that were trying to find jobs in the US. They told me that 90% of the people with educations were trying to emigrate as Chavez fired them when he nationalized the industries and gave their jobs to the poor. The brain drain was incredible and it was pretty clear to me that the country was doomed.
I argue with my sister a lot about capitalism, socialism and communism. Capitalism has pulled more people out of poverty that any other economic system by a mile. I am all for a strong safety net, single payer healthcare, a robust state funded education system, even basic income. With all that though, the closer we can stay to a capitalist economic system with the bare minimum of regulation and a simple progressive tax scheme, the better. State control of the economy and over regulation just do not work as there are too many perverse incentives.
While there are undoubtedly people who hold to this worldview, I absolutely disagree that it is representative of a “socialist/communist” mentality.
That’s fine. The problem comes when we turn it around and *automatically *assume the wealthy to be wealth creators, or that their wealth is automatically proportional to the value they provide to society. This is clearly not the case.