My impression was that price controls and other regulations are so pervasive and unrealistic that you can’t operate a private business without a friend in government to bend the rules for you. I read a pretty good article on it a year or two ago but I can’t find it now.
Whether that counts as socialism or an extortion racket with a veneer of socialism I’ll let you decide.
Edit: This isn’t the article I was thinking of, but it gives you an idea:
Edit2: Better original BBC article:
I think things are quite bad in Venezuela, and they are bad because of very bad, corrupt government, but I don’t really undertstand the badness of that particular example. Kimberly-Clark closed that factory and presumably laid off the employees because (reading between the lines) it was unprofitable in that bad economic environment. For the government to reopen the factory and operate it in order to employ the workers hardly sounds like the worst example of their depradations one can find.
So crony capitalism
That’s the thing though… It is.
Not because it’s necessarily motivated by bad things, but because it doesn’t work. It’s not sustainable. This is the problem that always comes up when you have unrestrained government takeover of private industry without regard to profit. It collapses.
While Venezuela had a nationalized oil industry, they worked with private industry to effectively explore and grow their oil reserves. Chavez totally destroyed this, and as a result, effectively destroyed their primary natural resource, which subsequently destroyed what was propping up the other inefficiencies that their state run practices created.
Here’s an article talking about some of what happened under Chavez.
Ultimately it highlights a problem with putting everything in control of the government… Because doing so depends on the government actually knowing how to manage things effectively.
Certain statist economic policies associated with a project called 21st-century socialism are indeed implicated in many of the economic distortions and damaging incentives ravaging the Venezuelan economy.
But they were also implemented in a highly divided, distrustful, and conflictual society in which the oil-rich state is seen as a means of securing personal wealth.
Chavez’s response to implacable opposition and widespread corruption was to turn to those he trusted in the military and to the promise of social transformation through socialisation of the economy. But his faith in neither was repaid.
But just as capitalism itself was not to blame for the pacted corruption and murderous repression of prior governments that created the popular discontent and personal drive which brought Chavez to power, socialism itself is not to blame for the creeping authoritarianism of a Maduro regime that is now preventing replacement of a failing government and model.
In many ways, the blame game is a red herring, an exercise in cherry-picking to promote greater state intervention or the “free” market rather than any identifiable model. The statist might cite happy Norway before the Gulag, whereas the free-marketeer will surely prefer New Zealand’s peaceful neoliberalisation during the 1980s to the murder and torture of Chile’s under Pinochet.
The lesson is perhaps that there are no clean, textbook models. The real issue is whether a given political economy is producing desirable results for its citizens. Where once that was the case in Venezuela, clearly it is no longer so.
For whom doesn’t it work? The factory workers and their families get to eat. Of course it isn’t sustainable, but people hungry right now don’t care about what happens next year. I’m not arguing that they should nationalize functioning factories, but empty, shuttered ones? What harm can it do?
Look, there’s no easy way to say this: You’re ignorant of the ebb and flow of the Venezuelan economy before Chavez. Things were very bad at various times before he came along. It is a poor country with an in-demand resource and a weak tradition of governmental integrity and competence. There is no example of any country in that state that has not been thoroughly fucked over and over gain. Chavez wasn’t the answer, but the problem was there before he was.
I didn’t mean it as an example of the worst possible deprivations, but as an example of how you can have private property but still have it be effectively a socialist economic system. The government set the prices for the output product and the prices for the input resources and the prices for the labour. When those prices didn’t add up they seized the owner’s capital. All in the name of elevating the worker.
As for how bad it is, when you systematically ignore the prices of things it deeply undermines the economy. I think a socialist economy can work in theory but if you ignore prices it is a very difficult optimisation and coordination problem to solve. The Venezuelan government wasn’t really interested in solving that (resolving the inconsistencies in their various edicts) and was basically out to seize the wealth and give it to their supporters/cronies.
Indeed. If the United States had a Socialist economic system then imagine what things would be like with Trump in control of the economy. It’s bad enough the way it is!
And yet the same group would give more control to this administration, that way women can have no abortions, birth control… maybe the government will find a way to enforce chastity belts that can only be removed with government controlled keys… heh, of course they won’t, that would eliminate their ability to have mistresses and some of their senators from trolling high schools for “dates.”
It’s within the rights of any government to make murder illegal.
Yeah it worked out great the first time they did it. Glad we want to rinse and repeat.
If the argument is that people will break laws, therefore laws should not be made, well, that doesn’t hold much weight.
We could go round and round on this, although it’s outside scope of this topic. And (spoilers) I will not be convinced to change my position.
I am an abolitionist. Just like the abolitionists who preceded me would not compromise on the greatest evil of their time so also I will not compromise on the greatest evil of our time.
I’m not arguing with you at all. My guess is you have a zero chance of ever experiencing an abortion so frankly, I don’t think you have a vagina to stand on.
Abortion was legal when I was conceived but, you’re right, fortunately I didn’t experience an abortion.
Objection. Assumes facts not in evidence.
May I humbly propose that this thread may not be the right venue in which to debate whether abortion is murder?
Seconded.
But they don’t. That’s the problem. You may create a temporary situation where they eat today, but the net effect is that tomorrow they starve… Along with a bunch of others.
The motivation is fine, but the actual effect is that far more people end up suffering.
Well, it does harm because it effectively precludes the natural progression of the system.
It prevents sometime else from buying that factory and don’t something with it, and create new opportunities for workers. Now, in Venezuela, that’s clearly not going to happen, but that’s largely due to their government’s seizure of industry and private assets. No investor is going to put any money into that economy.
Even beyond that, having the government artificially support that factory means that it’s going to screw with competition with OTHER factories… it will make those other factories less viable in the market. It will compound the problem.
No dude, I’m not. You are simply unwilling to see the obvious at this point, because it conflicts with your pre existing ideology.
Facts are stubborn things. Pretending that Chavez doesn’t hold direct responsibility for the destruction of the Venezuelan economy flies in the face of all mainstream understanding of the situation.
Between the two of us, I’m not the one who is arguing for the fringe position here.
Given that this is the intent, I think we’re in violent agreement.
You are. If you think Venezuela’s economic problems are all the fault of Chavez, then you’re ignorant of Venezuela’s economic problems.
Chavez is responsible for much of the current state of the Venezuelan economy. Can I make it more explicit than that?
Then we agree.
Venezuela was certainly no Paradise before he took power… That’s how he came to power.
But his proposed solutions made it even worse.