In a smoke-filled college dorm room somewhere in this country, several students lament the failures of capitalism and the United States while offering simple, broad brushed idealistic solutions to the world’s nuanced issues. Between tokes they discuss income inequality, the 1%, and how things would be better if we were just, you know, socialist, man. Nathan Steelwater
Venezuela serves as the perfect example of why socialism does not work.
In 1950, the people of Venezuela enjoyed the fourth-largest per-capita income in the world. In 1980, they had the fastest-growing economy in the world and by 2001, Venezuela was the wealthiest country in Latin America. How could a nation with such a robust economy end up with its people starving?
In 1998 Venezuelans fell for the oldest con game in the world – Socialism and elected Hugo Rafael Chavez Frias. Hugo ran on a platform of giving power to the people by ending government corruption and taking the country’s wealth from all those evil capitalists and corporations and giving it to the impoverished masses.
The first thing he did was nationalized thousands of private companies and industries because as Socialism preaches, the government would not only run them better but be able to distribute the profits to the people. And sure enough, by the time he was reelected in 2006 the poverty rate had dropped from around 50% to 32%.
Of course, in order to accomplish this utopia, Chavez had to take control of all branches of power, the executive, legislative, judicial and the military. He and his comrades rewrote Venezuela’s Constitution, stacked the Supreme Court with those loyal to his cause, eliminated Congress and replaced it with a National Assembly under his control which subsequently eliminated presidential term limits.
After his government increased state control over the oil industry, Chávez fired company leaders he didn’t like and replaced them with people loyal to him. At first the people were elated with all that “free” money” and as long as the money kept rolling in they either didn’t realize or refused to see the damage caused by giving Chavez that much control over their country and their lives.
When people started to wake up Chavez had them arrested, if they were lucky and the not so lucky people – well, they were shot in the streets. When the military became uncomfortable with his tactics, Chavez imported agents from Communist Cuba to spy on them. And still the cash kept coming in. Oil was still selling for more than $100 a barrel, so the government kept receiving money and kept handing it out to keep the peons at bay.
Chavez died in 2013 and less than a year after the inauguration of his hand-picked successor, Nicolas Maduro, the inevitable happened – the price of oil dropped and suddenly, that socialist paradise didn’t seem so much like a paradise anymore.
Without oil money or a robust free market to cover the losses, the national economy was on a fast spiral to the bottom. By 2017 the economy had fallen 64%, pushing the world’s fourth wealthiest nation per capital to 131st place. Inflation had ballooned to 2,800% by 2017 and is projected to hit 1 million percent this year. Meanwhile, the press reports that, amid the widespread deprivation, Hugo Chávez’s daughter has somehow accumulated an estimated fortune of $4.2 billion. Imagine that!
Venezuela is suffering one of the worst cases of hyperinflation in history. Since 2014, 2.3 million people, or about 7.5% of the population have fled the country. Those who remain are facing economic conditions usually associated with a civil war. Some don’t have enough water. Food shortages are massive. In some areas, a family needs the equivalent of 22 minimum-wage salaries just to buy a basic basket of food.
The average Venezuelan had lost 42 pounds last year and nearly 400 children starved to death. Caritas Internationalis, a Catholic humanitarian agency, has estimated that number to reach 280,000 by the end of 2018.
The only free market in the country is the black market, so Venezuelans are getting food and other necessities any way they can. Family men find themselves smuggling gasoline and other contraband into Brazil and Colombia. Teachers, doctors and petroleum engineers sell their bodies to get enough money to try and feed themselves and their families. Along with massive power outages, butchers are selling rotten meat at bargain prices to consumers who then treat it in vinegar and lemon juice before consumption.
Formerly respectable people are trafficking drugs. Gangs recruit teenagers by just offering them something to eat. Government officials do business with gangs, drug cartels and terrorist networks.
Venezuela is like a nation-size mafia organization.
There is an old adage about boiling a frog – If you put a frog in boiling water, it will jump out. If you put a frog in lukewarm water and slowly increase the temperature, it will boil to death. Venezuela serves as a cautionary tale about the dangers of socialism and shows us that we must look long-term in our thinking. Venezuela’s socialist policies did not throw the country into collapse immediately; it took a long time for the blunders of socialist theory to do their damage. We should be watchful for those who would take us down similar paths, lest we find ourselves in our own boiling water. Nathan Steelwater