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Venezuela is a failed state at this point. I'm more than happy to personally take them as an example of why spending big on social programs doesn't produce long
by matt_wulfeck 10y ago
Venezuela is a failed state at this point. I'm more than happy to personally take them as an example of why spending big on social programs doesn't produce long-lasting social benefits. I understand many people will find a point of disagreement here.
This is especially true when corruption is rife. In countries with high corruption, it seems the very best thing to do is to limit as much as possible how much money flows from the top, which is another way of saying limit federal government spending.
- joshred 10y agoYeah, but what about the other states that spend on social programs and ended up successful? This is like throwing out a carton of eggs because one of them broke.
- drzaiusapelord 10y agoHaving social programs and being a Socialist government are two very different things. We can have Social Security here in the States and not be Socialist. Nordic "socialism" is just taxing the rich to give to the poor. What Venezuela did was textbook Socialism which, like Communism, is a path to economic, social, and political failure as well as massive human rights violations.
- currysoup_t 10y agoI think you'll find textbook socialism are very different to what you think socialism and communism are. Do the workers in Venezuela own the means of production?
- drzaiusapelord 10y agoI think you'll find it easy to play up No True Scotsman to help with your cognitive dissonance here. The reality is that every practical implementation of socialism uses the government as a proxy of ownership of the means of production. Venezuela is Socialist. Socialists need to own up to it. No more No True Scotsman guys, we've been playing this game since the rise of Communism. Its time to admit that certain economic systems just don't work. How much more historical proof and human suffering can you possibly need? You sound like those people who deny the moon landing. There will never be enough proof for you it seems.
- stale2002 10y agoOK then, which countries in the world are or have ever been socialist? The point isn't that the "textbook" definition of socialism is bad. The point is that every single real world attempt at getting to socialism has been bad, so why wouldnt future attempts run into the same problems?
- AsyncAwait 10y ago> The point is that every single real world attempt at getting to socialism has been bad, so why wouldnt future attempts run into the same problems? The problem is that "every single real world attempt at getting to socialism" has been inspired by the same ( bad ) implementors, using the same ( bad ) mechanisms, without anyone trying to implement socialism from scratch by going back to the source of the ideology as opposed to looking at other dictators who used the premise of socialism to get into power without actually caring about socialism itself. Venezuela is a corrupt place with socialism being implemented as a means to launder money as opposed to implement social safety programs, it's the same as the "Democratic" Republic of Korea or Congo. Capitalism wouldn't really help a corrupt country like Venezuela, but Socialism was making some good progress in another Latin American country... Nicaragua, weren't it for the Contras. The rest is history.
- Retric 10y agoI would call Norway socialist. Not because the government owns everything, but because society distributes a large fraction of all earnings. Note, defacto tax rates are what's important. Greece may have a high nominal tax rate, but nobody actually pays it. The US has a 15% tax rate on capital gains irregardless of what the nominal top tax rate is. Further, the US pretends Social Security is not an income tax. By comparison the USSR, China, and North Korea all pay / paid some lip service to communism, but if you look at the people at the top it was not even close to communism. PS: The real world is complicated. If you promote revolution you generally don't get whatever the revolutions talking points where.
- milcron 10y agoNorway is more of a social democracy than a democratic socialism, but I take your meaning. Agreed, China has not been communist for some time now.
- metaphorm 10y agoI think you should read a textbook on Socialism before you make comments like this
- dragandj 10y agoWhich one do you recommend?
- damptowel 10y agoVenezuelan politics was textbook incompetence, you have idiot savants in every political outlook.
- cseelus 10y agoSweden, Norway and to some degree Germany could be mentioned as successful examples.
- matt_wulfeck 10y agoGermany (as one example) has a social expenditure of 25% versus USA at 19%[0]. Switzerland is 19.4%. [0] https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG
- sgnelson 10y agoIt's not just how much, it's also what, who, how, where, and why.
- fulafel 10y agoUsing social expenditure in % of GDP to measure its "cost-effectiveness" is problematic, as there's wide agreement social spending has a big impact on GDP. (Structure of the spending is the other big variable of course)
- brownbat 10y agoThe Nordics are awkward examples if you follow their trajectory back to the 70s, with periods of socialization and liberalization in the mix: http://www.cityam.com/article/1394655511/forget-nordic-socialism-welfare-didnt-make-scandinavia-rich http://www.cityam.com/article/1394655511/forget-nordic-socia... We pretend there are clean examples, but everything is pretty messy, and we rarely get any pure test cases for any economic philosophy. Macro is black arts. "Avoid price controls" and "don't print boatloads of money" seem like reasonable guidelines. Beyond that, who knows? Corruption's bad but hard to stop. Moving risk around is (sometimes)* bad but hard to stop. Shrug and try not to do anything too extreme. * Insurance is a beneficial example.
- adventured 10y agoHow many nations fall into that category? There are only roughly 28 nations on earth with a GDP per capita over $20,000 for example. I happen to find what the six or so best managed welfare states in Europe have accomplished, to be impressive. However, for every Sweden in Europe, there are two Bulgarias. Or there's France, which has seen economic stagnation for nearly a generation. Most of the well-managed welfare states have seen zero or near-zero economic growth for nearly a decade at this point, while their debt has exploded vastly higher as they try to fake-maintain their present standard of living by stealing from the future.
- bdamm 10y agoHow is this different from the US practice of issuing ever more treasury bonds to pay back the maturing treasury bonds? My point is that borrowing from the future is not limited to welfare states (unless you consider US to be a welfare state.)
- varjag 10y agoLook this is pointless argument. Same way we could argue that small government, sovereign citizen, libertarian meritocracy leads to Somalia. There is a continuum of social systems that can work, and whether it works mainly depends on confounding factors. History, culture fit, geography, neighbours. E.g. Sweden's been an empire most of its history; Bulgaria has been a colony. Check their performance in historical cohort perhaps? Sweden vs Turkey and Bulgaria vs Tajikistan? Chavez' Venezuela system is well beyond the "habitable range" of governance. To present it as some condemnation of West European welfare states is ridiculous.
- damptowel 10y agoWell, how many fall in the opposite category? Isn't it pretty much a bell curve? And their debts are so high because they had to bail out a deregulated finance sector, which caused a recession and major spike in unemployment, how is that a fault of a welfare state? You might as well argue the financial sector "stole from the future" by creating a decade long downturn. Quite the opportunity cost there.
- legulere 10y agoIn Germany the publicly owned savings banks (Sparkasse) and credit unions (Volks-, Raffeisen- and Spardabanks) weren't affected by the financial crisis, only the large private banks were. Does that mean we should declare private banks as a failed system?
- jessaustin 10y agoYes? If what we've seen from the banks is success, one would hate to witness failure.
- marknutter 10y agoGermany wasn't being propped up by a single resource that was seized by the state. They are far more reliant on a capitalist system than Venezuela ever was during Chavez' reign. The comparison is absolutely silly.
- ZoeZoeBee 10y agoThe Large Banks are a failed system, evidenced by when they failed and were bailed out and the illegal practices of HSBC, Wells Fargo, Deutsche Bank, JPMC, Goldman etc
- rayiner 10y agoThat's probably reading too much into it. The #1 problem is the resource curse, which happens also in capitalist economies that are singularly dependent on resource extraction. Imagine West Virginia without federal subsidy amounting to 25% of its GSP. The second problem is nationalizing companies. The government sucks at operations--that's been proven time and time again. But Venezuela's example really tells us nothing about market-oriented welfare states, like the US and much of the EU.
- SilasX 10y agoWait, what? There are numerous countries with the resource curse; the typical result is, "wow, they're not growing as fast as they could"; it's not "so devastated that people have to hunt for rats in the street". Even Saudi Arabia -- which does redistribute oil wealth like Venezuela and is far from the enlightened Norweigian policy -- is smart enough not to draw down the seed corn. And are you seriously claiming the only thing stopping West Virginia from this kind of downward spiral, is free highways from Uncle Sam?
- alphydan 10y ago> The second problem is nationalizing companies. The government sucks at operations--that's been proven time and time again. You mean like Saudi Aramco? That little company with $380bn of revenue (about 4 times larger than google but with the same number of employees?). /s edit: meant to reply to parent
- deleted 10y ago[deleted]
- metaphorm 10y agoVenezuela is a case study in corruption, authoritarian dictatorship, rampant interference from outside states, and a multiple decades long brain-drain due to the aforementioned factors. this should not be held up as ANY KIND OF EXAMPLE whatever re: the efficacy of social safety net programs. it's simply a non-sequitur. the fact that you're even attempting to link them at all speaks poorly as to your own understanding of the situation and reveals your ideological agenda.
- mikeash 10y agoI really don't get it. This sentiment always pops up on here when Venezuela is discussed. In the Chavez era, the ruling party pushed through rule by decree, suffered a military coup, purged the opposition, tried to set up their leader as dictator for life... and the lesson we should take away from the resulting chaos is that big spending on social programs doesn't produce long-lasting benefits?
- metaphorm 10y agoAre you sure you don't get it? This stuff pops up because some of the community here are ideologues trying to score "points" off of this, regardless of whether or not it is appropriate of the situation being discussed. Any excuse to push for more tax cuts.
- mikeash 10y agoI guess I either assume they're sincere, or if not then they should at least be aware enough to realize that it's a bad argument. I realize this assumption may not be very well supported, but it can be hard to adjust.
- tloble 10y agoPropaganda doesn't have to be a good argument.
- matt_wulfeck 10y ago
- forgetsusername 10y ago>Venezuela is a failed state at this point. Remember when the far left held Hugo Chavez up as the paragon of modern socialism? People pleasing in a petro-state is easy when oil is $150+ a barrel.
- rm_-rf_slash 10y agoThat's a good point. It's easy to bring a lot of good to a lot of people when there's a lot of money to be made from a lot of natural resources. It's also easy to let "just a little" corruption ride along as a political price for getting things done. Problem is, "just a little" corruption always becomes "a bit more" corruption and then "way too much" corruption. And while the good and the corrupt engage in battle royale for limited resources, the poor and hungry are soon forgotten.
- jfoutz 10y ago> I'm more than happy to personally take them as an example of why spending big on social programs doesn't produce long-lasting social benefits. Different markets have different needs. I disagree with socialism for all things. There are some things, where i think it's the best system we have. Air quality is a good example. Everybody needs air and it's hard to separate mine from yours. So, collective ownership with collective decisions about how much pollution is to be allowed makes sense to me.
- toddchambery 10y agoThis the ultimate policy question: What is a public good? http://www.npr.org/sections/money/2010/12/10/131784161/what-should-the-government-pay-for-autopsies-lighthouses http://www.npr.org/sections/money/2010/12/10/131784161/what-...
- SEJeff 10y agoI suspect anyone from the Netherlands or Norway/Iceland might disagree with you there. The issue with Venezuela is almost certainly not socialism, but chronyism and good ol' fashioned corruption. Chavez's "Bolivar Revolution" was a farce to get rid of his opponents and seize power as a strongman. In that, he succeeded. When the price of oil was high, it worked. Now, well... His legacy is a once great nation left in ruin, and many desperate people. It is sad stuff.
- minimuffins 10y agoIt's really hard for me to imagine an austerity program making life better for Venezuelans. There's also plenty of history of corrupt right-wing governments with market economies in South American that were just as miserable, so I'm hesitant to say social programs did this. There are plenty of social democratic governments around the world that aren't corrupt failed states.
- mdemare 10y agoPlenty of nations with high federal government spending do fine, plenty of nations with low federal spending do badly. On the whole, high spending is correlated to better outcomes.
- piva00 10y agoSweden spends big on social programs and seems to be producing long-lasting social benefits, what's the difference? Oh yeah, corruption.