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> Oil accounts for half of the Venezuelan government’s revenues ...Who thought that was a good idea?

by k_sh 10y ago

pweissbrod 10y ago
Those that own the oil fields
- jcoffland 10y ago
  The state owns the fields.
  - jessaustin 10y ago
    Then GP's explanation makes even more sense. Why would the state treat all enterprises fairly, when its interests are concentrated in particular industries?
Analemma_ 10y ago
Nobody, but the Resource Curse seems to be one of those iron laws that happens inexorably even if people are aware of it (cf. principal-agent problems pushing prices upward), unless very determined action is taken to avoid it (like Norway), and that kind of action wasn't going to happen under Chavez.
- ars 10y ago
  > unless very determined action is taken to avoid it (like Norway) Norway is not immune. It's the current popular thing to say, but Norway will fall victim to it just like everyone else does. Look at some charts on their exports: 60%+ is energy. Look at their industry: Basically non-existent, except energy. Look at where young people are making their living: Energy. If (when?) the oil runs out (or people stop buying it) their economy will implode - the fund they setup will not last long enough (they have enough for about 10-20 years). No one is developing skills in any other fields, it will take a generation or more to transition, and in the meantime everyone depends on charity (i.e. the fund) - and that's toxic to any economy because people become used to it. So what you wrote about "Iron Law" is correct without the qualifier you added for Norway.
  - milcron 10y ago
    Still, they're certainly doing better than many other oil-rich nations.
    - ars 10y ago
      That's true, but it's not exactly a high bar. They gets lots of credit for being aware of the problem, but less credit for thinking they are doing better than they actually are. It's too bad oil will be worth less eventually - otherwise they could just force themself to leave it in the ground, but the way things are going they had best convert it to cash as soon as possible. It makes me wonder if it's economically long-term better for them to pretend not to have oil and develop their economy, vs. selling the oil. Long term, which will give them more total cash?
marcoperaza 10y ago
Under Chavez and his successor Maduro, Venezuela has pursued a socialist policy. I'm talking about straight up nationalization of industries, wealth confiscation, and such. The result was economic catastrophe, capital flight, and brain drain. Venezuela is basically hollowed out. It's not that they aren't taxing everyone else, it's that there is very little profitable industry left but oil. They turned one of the richest countries in the region into a rapidly deteriorating third-world hell hole.
drzaiusapelord 10y ago
Socialists. I really was getting tired of hearing from the usual anti-US types on how wonderful Venezuela was back in the early 2000s and how Chavez stands up to the US and such, meanwhile it was led by what was pretty much a strongman with socialist policies and industry nationalization that quickly destroyed their wealthy oil-rich country. Now we're selling them oil so they don't starve in the streets. Curious to see how well Putin, the CCP, Assad, Khomeini, and other heroes of the anti-US left and their respective countries hold up in a decade or two. Considering sites like HN and Reddit are full of the anti-US left, so its almost impossible to have this conversation, but I'm glad to know that Chavez is gone and things are probably going to get fixed there as Maduro loses influence. On top of Cuba slowly drifting away from autocratic authoritarian communism due to normalizing relations with the US. I hope the anti-US left can see some wisdom in getting communists and socialists out of power and putting in a democratic process thats open to all those who want to participate in free markets and protecting property rights, speech, and human rights in those countries. Downvote away.
- tptacek 10y ago
  Everyone sees their own ideological nemeses in the HN user base, which is both a sign that things are working well, and a reason for us all to avoid ideologically-charged political discussions as much as we can. I promise, the "anti-US left" sees HN as stuffed to the gills full of US apologists as well.
  - drzaiusapelord 10y ago
    My comment is tagged with 'flagged' and set to the lowest score. Obviously these forums lean young and college students which subscribe generally to College identity politics which is very far left. Meanwhile, extremely low effort posts of "Shut up, Socialism works, there's nothing to see here," are voted up uncritically. Tell me again how these forums aren't biased?
    - deleted 10y ago
      [deleted]
    - 10y ago

> Oil accounts for half of the Venezuelan government’s revenues ...Who thought that was a good idea?

by k_sh 10y ago

> Oil accounts for half of the Venezuelan government’s revenues ...Who thought that was a good idea?

pweissbrod 10y ago

Those that own the oil fields

jcoffland 10y ago
The state owns the fields.
- jessaustin 10y ago
  Then GP's explanation makes even more sense. Why would the state treat all enterprises fairly, when its interests are concentrated in particular industries?

Analemma_ 10y ago

Nobody, but the Resource Curse seems to be one of those iron laws that happens inexorably even if people are aware of it (cf. principal-agent problems pushing prices upward), unless very determined action is taken to avoid it (like Norway), and that kind of action wasn't going to happen under Chavez.

ars 10y ago
> unless very determined action is taken to avoid it (like Norway) Norway is not immune. It's the current popular thing to say, but Norway will fall victim to it just like everyone else does. Look at some charts on their exports: 60%+ is energy. Look at their industry: Basically non-existent, except energy. Look at where young people are making their living: Energy. If (when?) the oil runs out (or people stop buying it) their economy will implode - the fund they setup will not last long enough (they have enough for about 10-20 years). No one is developing skills in any other fields, it will take a generation or more to transition, and in the meantime everyone depends on charity (i.e. the fund) - and that's toxic to any economy because people become used to it. So what you wrote about "Iron Law" is correct without the qualifier you added for Norway.
- milcron 10y ago
  Still, they're certainly doing better than many other oil-rich nations.
  - ars 10y ago
    That's true, but it's not exactly a high bar. They gets lots of credit for being aware of the problem, but less credit for thinking they are doing better than they actually are. It's too bad oil will be worth less eventually - otherwise they could just force themself to leave it in the ground, but the way things are going they had best convert it to cash as soon as possible. It makes me wonder if it's economically long-term better for them to pretend not to have oil and develop their economy, vs. selling the oil. Long term, which will give them more total cash?

marcoperaza 10y ago

Under Chavez and his successor Maduro, Venezuela has pursued a socialist policy. I'm talking about straight up nationalization of industries, wealth confiscation, and such. The result was economic catastrophe, capital flight, and brain drain. Venezuela is basically hollowed out. It's not that they aren't taxing everyone else, it's that there is very little profitable industry left but oil. They turned one of the richest countries in the region into a rapidly deteriorating third-world hell hole.

drzaiusapelord 10y ago

Socialists. I really was getting tired of hearing from the usual anti-US types on how wonderful Venezuela was back in the early 2000s and how Chavez stands up to the US and such, meanwhile it was led by what was pretty much a strongman with socialist policies and industry nationalization that quickly destroyed their wealthy oil-rich country. Now we're selling them oil so they don't starve in the streets. Curious to see how well Putin, the CCP, Assad, Khomeini, and other heroes of the anti-US left and their respective countries hold up in a decade or two. Considering sites like HN and Reddit are full of the anti-US left, so its almost impossible to have this conversation, but I'm glad to know that Chavez is gone and things are probably going to get fixed there as Maduro loses influence. On top of Cuba slowly drifting away from autocratic authoritarian communism due to normalizing relations with the US. I hope the anti-US left can see some wisdom in getting communists and socialists out of power and putting in a democratic process thats open to all those who want to participate in free markets and protecting property rights, speech, and human rights in those countries. Downvote away.

tptacek 10y ago
Everyone sees their own ideological nemeses in the HN user base, which is both a sign that things are working well, and a reason for us all to avoid ideologically-charged political discussions as much as we can. I promise, the "anti-US left" sees HN as stuffed to the gills full of US apologists as well.
- drzaiusapelord 10y ago
  My comment is tagged with 'flagged' and set to the lowest score. Obviously these forums lean young and college students which subscribe generally to College identity politics which is very far left. Meanwhile, extremely low effort posts of "Shut up, Socialism works, there's nothing to see here," are voted up uncritically. Tell me again how these forums aren't biased?
  - deleted 10y ago
    [deleted]
  - 10y ago