[legulere]

Venezuela is simply suffering one of the worst cases of Dutch Disease in the world. The oil prices don't keep up with the spending. With a destroyed economy there is more opportunity for a dramatic system change.

This happened before in Venezuela in the 80s/90s and eventually led to Chavéz getting into power.

[0x27081990]

If their economy wasn’t centrally planned and controlled by the government, it would be more resilient

[Iv]

It would also be more vulnerable to the influence of the US behemoth, the oil-hungry giant that considers south-America its sphere of influence.

I don't want to appear pro-Chavez, many of his actions were despicable. But understand that "free-market" in their case means an economy controlled by USA. Chavez came into power precisely because the free-market economy before him failed to raise wages even as the GDP increased. It also failed to diversify.

Economically, Venezuela has two problems: over-reliance on oil and corruption. In 2017, we can consider it proven that neither central planning, nor free-market have succeeded alone in solving these problems. They are mostly orthogonal to the organization of the economy.

Politically, it has one problem: they don't like USA. Look at Saudi Arabia. They are centrally planned and they are extremely dependent on oil. But things go well economically. You just have to let US companies install themselves there and don't call yourself a socialist.

Why can't a free market diversify Venezuela's economy? Well when you have the world's biggest proven oil reserves (yes, more than Saudi Arabia since a few years) and an underdeveloped oil sector, where do you expect investments to flow?

You can redirect some of these investment by giving the government an amount of control over what the oil industry does, by putting quotas in place, this kind of things. But then, you are opposed by "the free world".

[danharaj]

This same thing happened under a more liberal capitalist government before. That's literally how Chavez got into power. The biggest difference between then and now is the severity of the oil price drop. An exacerbating factor is that the same forces that tried to coup Chavez in 2002 are of course still politically active and, rationally given their interests, using their economic connections to exacerbate the economic collapse through various means. The United States recently freezed some Venezuelan government finances which is obviously intended to further destabilize the government.

Venezuela is a shitshow, to put it bluntly. But the shallow analyses which focus purely on ideology instead of the physical reality on the ground is asinine, bordering on propaganda (Vox tends to swing randomly between center-left progressivism and center-right neoliberalism). Is the government of Venezuela incompetent? Probably as incompetent as most. Are they dealing with an unprecedented economic collapse caused by structural factors? Yes. On the other hand, most people don't actually know how the Venezuelan economy is structured. They just know "socialism bad" and "capitalism good". It's tiresome because the same structural deficiencies at play in their economy today was there decades ago, when they weren't "socialist".

It should be noted what happens to countries whose economies collapse because their place in the world economy no longer exists and then seek to renormalize via the accepted capitalist channels (like the IMF and the like). The entire country gets sold off to foreign interests and they spend the rest of their decades financing a debt they can never pay off.

As for the repressiveness of the Venezuelan state, it's not surprising. The violence of a state is directly proportional to how threatened it feels. When a state is failing, it is going to be violent. Cf. Spain and Catalonia at the moment.

[CryptoPunk]

>>This same thing happened under a more liberal capitalist government before. That's literally how Chavez got into power. The biggest difference between then and now is the severity of the oil price drop.

There were plenty of petro-states which didn't see the kind of economic devastation Venezuela did when oil prices plummeted. The key difference was that other petro-states had a robust private sector, which not only meant they had more private savings that halped the economy absorb the shock from low oil prices, but also meant they were more diversified.

The drop in oil prices should never have led to mass malnutrition. Venezuela even with low oil prices is a middle income country. It was socialist policies like price controls that led to the long food lines and empty supermarket shelves.

>>An exacerbating factor is that the same forces that tried to coup Chavez in 2002 are of course still politically active and, rationally given their interests, using their economic connections to exacerbate the economic collapse through various means. The United States recently freezed some Venezuelan government finances which is obviously intended to further destabilize the government.

This is what the Venezuelan government is blaming its economic problems on, but there is actually no evidence at all that the intervention of the US government is anywhere near enough to be responsible for any significant portion of the economic decline of Venezuela.

There are no significant sanctions on Venezuela and the US imports much of its oil from the country.

[ue_]

In my view it is a sign more of the fact that Venezuela thought it could depend so much on oil that it failed to diversify rather than a failure of its mode of planning, though that's not without criticism, one would have hoped they learned from the disaster of the USSR's Five Year Plan.

Price controls aren't really a Socialist policy - the Socialist policy in this case would be the gradual change from the production of commodities to the production only of use-values, lacking their exchange value dimension. If price controls are a Socialist policy, then it doesn't take much for Socialism to come about - but that's clearly not what Socialists are talking about when they talk about Socialist policy. Marx, for one, wasn't in favour of price controls to my knowledge. Nor were the other Socialist economists and theorists. I'm not sure where you're getting the idea from other than the oft-repeated myth that Socialism is merely when the government "does stuff".

[CryptoPunk]

Venezuela's socialist policies made the entire economy dependent on the wisdom of the state. When the state erred, it meant a much more systemic collapse than would otherwise have happened. If the private sector had been allowed to retain a significant role in the economy, the economy would have had more decorrelated economic forces, which would have made a systemic collapse less likely.

>>I'm not sure where you're getting the idea from other than the oft-repeated myth that Socialism is merely when the government "does stuff".

When Venezuela's economic ministers say things like "the law of supply and demand is a lie" to justify price controls, I assume it's motivated by their socialist ideology, and blame the policy on that ideology.

[etplayer]

>When Venezuela's economic ministers say things like "the law of supply and demand is a lie" to justify price controls

They can't be very good Socialists then; Marx was a supporter of the law of supply and demand, and its functioning is extremely obvious to anyone familiar with the idea of markets, even without training. Marx didn't deny it nor did his contemporaries or predecessors.

>I assume it's motivated by their socialist ideology, and blame the policy on that ideology.

The North Korean statesmen have made disparaging remarks about democracy, but they claim to be democratic. Yet we would both agree not to blame democracy for what is happening in North Korea. Is there any evidence that Venezuela is actually implementing Socialist policy any more than the DPRK is implementing democratic policy?

[platz]

correct, Socialism according to Marx is not 'the government does stuff'. 'the government does stuff', when the private sector is replaced by government functions, is really State Capitalism (because the state controls the means of production, not the workers). In fact, it was Stalin that declared 'when the state is in charge, we got socialism'. It confused everybody but it's wrong.

[CryptoPunk]

Curiously enough, Chavez had similar things to say about state capitalism:

>>“It is impossible, within the framework of the capitalist system, to solve the grave problems of poverty of the majority of the world’s population,” the Venezuelan leader said. “We must transcend capitalism. But we cannot resort to state capitalism, which would be the same perversion of the Soviet Union. We must reclaim socialism as a thesis, a project, and a path, but a new type of socialism, a humanist one which puts humans and not machines or the state ahead of everything."

Socialism is always one execution away from utopia.

[sremani]

A quick refresher for my liberal friends,

Oil Prices in 2012: https://www.eia.gov/todayinenergy/detail.php?id=9530

Food Shortages in Venezuela in 2012 Source from NYT:

http://www.nytimes.com/2012/04/21/world/americas/venezuela-f...

[0x27081990]

They closed import/export for the private sector. Only federal government handles it. Which led to export just oil (inefficiently if I may add), so when priced collapsed they had to decide if pay debt and face hunger, or fight hunger and face a financial default. Guess which one they decided?

[danharaj]

https://en.wikipedia.org/wiki/History_of_the_Venezuelan_oil_...

#First_Dutch_Disease #Second_Dutch_Disease #Third_Dutch_Disease

But what about free markets? Why don't they just have free markets? This alternative is just pure rhetoric hardly explicated in its material form: Sell the country off to international corporations, saddle your country with unmanageable debt, and beg the international financial system to keep you alive so long as you have resources worth extracting.

Honestly, it would be fine if people were just forthright in proposing those policies. It's always dressed up in the language of freedom and liberty in the most dishonest way. Venezuela is failing now, I can point to several other nations that did exactly what they were supposed to according to the interests of Capital, and they aren't looking so hot either.

[lend000]

> This same thing happened under a more liberal capitalist government before. That's literally how Chavez got into power.

That's not true at all. The previous government was socializing the economy, starting with nationalizing oil in 1976. From Wikipedia: "The election of Carlos Andrés Pérez in 1973 coincided with the 1973 oil crisis, in which Venezuela's income exploded as oil prices soared; oil industries were nationalized in 1976. This led to massive increases in public spending, but also increases in external debts, which continued into the 1980s when the collapse of oil prices during the 1980s crippled the Venezuelan economy. As the government started to devalue the currency in February 1983 to face its financial obligations, Venezuelans' real standards of living fell dramatically. A number of failed economic policies and increasing corruption in government led to rising poverty and crime, worsening social indicators, and increased political instability."

[Iv]

We can continue a bit with the wikipedia:

"After Pérez initiated such liberal economic policies and made Venezuelan markets more free, Venezuela's GDP went from a -8.3% decline in 1989 to growing 4.4% in 1990 and 9.2% in 1991, though wages remained low and unemployment was high among Venezuelans.

Some state that "neoliberalism" was the cause of Venezuelan economic difficulties, though overreliance on oil prices and a fractured political system without parties agreeing on policies caused much of the problems."

Though after dismissing a lot of Chavists as conspiracy-theorists, I have seen some outrageous mistranslations and downright lies about Venezuela from the anti-Chavist side, taken uncritically by western media as factual, I am now very careful about sources there. There is a very active propaganda on both sides there.

In a country with the largest oil reserves in the world and an underdevelopped oil industry, I doubt that free market forces would naturally tend to diversify the economy. On the contrary it would lead to increased investments there. I would like to remind that under Chavez, his centrally planned economy was criticized for hindering the oil sector development.

The other ranking where Venezuela is high is corruption. That is the problem you want to solve first. High corruption, under free market or centrally planned economy, is not going to lead to good outcomes.

Forget the economic model, it is the justice and democratic model that is important.

[ue_]

That's true, I think that Socialists should abandon older and rigid methods of central planning; research has been active within the Socialist community for finding new methods of planning, such as the work of Paul W. Cockshott.

That said, Venezuela is far from a centrally planned economy.