6 ms·

Sincere question: HOW? I mean, even if we assume a socialist economy is terribly inefficient, like operating at 50% of the efficiency a capitalist one, it still

by nnq 10y ago

Sincere question: HOW? I mean, even if we assume a socialist economy is terribly inefficient, like operating at 50% of the efficiency a capitalist one, it still should be enough for sustaining a resource-rich country. WTF they are doing so wrong?! Are they under intense internal or external sabotage? Corruption is so bad? I mean, this is not some mid-African country with >50% of the population illiterate, bunch of horrible tropical diseases, plus children running around with guns and AIDS... A country like Venezuela should "kind of work" even with corruption and inefficient socialism! What the heck is going on there?

tim333 10y ago
The main thing is they don't believe in market prices at the moment. For example the official USD Bolivar rate is 10:1, the market rate is 1010:1. So you need some mining equipment imported? Either spend ages on sweet talking / bribing officials to get $ at the official rate or break the law. Result: oil production screwed. See also official food prices below production costs, empty stores and hunger. As an aside here's an article on how things have gone in Venez vs Chile since 1975. http://humanprogress.org/blog/5-ways-capitalist-chile-is-much-better-than-socialist-venezuela http://humanprogress.org/blog/5-ways-capitalist-chile-is-muc...
ufo 10y ago
A big factor is that oil prices tanked in 2014.
- justincormack 10y ago
  no, it was in a very bad way before that.
  - topspin 10y ago
    This is 100% correct; the "oil prices" narrative is a very effective Media fig leaf deliberately used to obscure the clear consequences of command economics in Venezuela. The start of the nightmare in Venezuela began while Chavez was still alive. The oil price collapse has just made a terrible situation into a genuine atrocity; an entire generation of young is being stunted physically and mentally by the leftist politics of Venezuela. Actual starvation is being inflicted in the name of economic `justice.' http://www.dailymail.co.uk/news/article-3794086 http://www.dailymail.co.uk/news/article-3794086
  - dragonwriter 10y ago
    You're both right: lots of things were bad in Venezuela before 2014, but oil prices tanking in 2014 are a big factor in how bad they are now.
  - ufo 10y ago
    Sure, but they got into an even worse spot now.
marcoperaza 10y ago
>I mean, even if we assume a socialist economy is terribly inefficient, like operating at 50% of the efficiency a capitalist one, it still should be enough for sustaining a resource-rich country. That's a hell of an assumption. One of the things you're failing to consider is that when resources are allocated by fiat instead of by markets, corruption becomes much more pervasive and suffocating. Also, all of the people who have the skills and experience to get things done leave for somewhere they can be rewarded for their efforts instead of demonized. >I mean, this is not some mid-African country with >50% of the population illiterate, bunch of horrible tropical diseases, plus children running around with guns and AIDS... Except it actually isn't too far from that. People don't seem to recognize just how fragile civilization is. Look at Cuba. It was once the richest country in Latin America. Today it is one of the poorest thanks to communism.
- adventured 10y ago
  Interestingly, the parent comment didn't consider near total collapse of production, rather than just a mere ~50% style reduction in efficiency. What actually has happened throughout history's many attempts at Socialism, is production collapse. That's exactly what we've seen in Venezuela.
hansjorg 10y ago
High corruption and a very thin fabric of society. Before Chavez came to power an almost apartheid system, which was fine with the (small) elite and of course with the large majority of US commentators. Over ambitious social programs, an owner-class hell bent on sabotaging and completely backed by the US. What do you do when it all starts to slide? Tighten the screw. When that doesn't work, tighten it again. Recipe for disaster.
- marcoperaza 10y ago
  There's no way you can pin this on anyone or anything but Chavez, his allies, and their policies. They've ruled Venezuela for 20 years and steered it from flawed prosperity to total ruin.
  - hansjorg 10y ago
    Why did Chavez come to power? Who was prosperous?
    - AnimalMuppet 10y ago
      Valid points (at least, they would be if you actually stated them). But: > > an owner-class hell bent on sabotaging and completely backed by the US reeks of conspiracy-theory paranoia, at least in the absence of actual evidence.
metaphorm 10y ago
> A country like Venezuela should "kind of work" even with corruption and inefficient socialism! What the heck is going on there? its not just a little corruption. it's absolutely stunning batshit off the charts rampant corruption.
- MrZongle2 10y ago
  "Well, let's say this Twinkie represents the normal amount of corruption in a socialist country. Based on this latest report, it would be a Twinkie thirty-five feet long, weighing approximately six hundred pounds."
Gusfoo_2 10y ago
> WTF they are doing so wrong?! The short version is that they fired all the technicians and replaced them with the party faithful. And then went nuts driving the PDVSA around like a combination of a gift horse and a war horse.
RevHaze 10y ago
From their perspective, the industries are there to support the people. The oil industry was making money while the government didn't have enough money to keep expanding social programs, so they nationalized the oil industry. They didn't know how to run the oil industry though, so yields fell through the floor and they couldn't produce or attract foreign investment back into the country due to concerns that as soon as the infrastructure got back up and running the government would just nationalize again. Also see Zimbabwe's 2000 plan to redistribute farming wealth.

by nnq 10y ago

tim333 10y ago

The main thing is they don't believe in market prices at the moment. For example the official USD Bolivar rate is 10:1, the market rate is 1010:1. So you need some mining equipment imported? Either spend ages on sweet talking / bribing officials to get $ at the official rate or break the law. Result: oil production screwed. See also official food prices below production costs, empty stores and hunger. As an aside here's an article on how things have gone in Venez vs Chile since 1975. http://humanprogress.org/blog/5-ways-capitalist-chile-is-much-better-than-socialist-venezuela http://humanprogress.org/blog/5-ways-capitalist-chile-is-muc...

ufo 10y ago

A big factor is that oil prices tanked in 2014.

justincormack 10y ago
no, it was in a very bad way before that.
- topspin 10y ago
  This is 100% correct; the "oil prices" narrative is a very effective Media fig leaf deliberately used to obscure the clear consequences of command economics in Venezuela. The start of the nightmare in Venezuela began while Chavez was still alive. The oil price collapse has just made a terrible situation into a genuine atrocity; an entire generation of young is being stunted physically and mentally by the leftist politics of Venezuela. Actual starvation is being inflicted in the name of economic `justice.' http://www.dailymail.co.uk/news/article-3794086 http://www.dailymail.co.uk/news/article-3794086
- dragonwriter 10y ago
  You're both right: lots of things were bad in Venezuela before 2014, but oil prices tanking in 2014 are a big factor in how bad they are now.
- ufo 10y ago
  Sure, but they got into an even worse spot now.

marcoperaza 10y ago

>I mean, even if we assume a socialist economy is terribly inefficient, like operating at 50% of the efficiency a capitalist one, it still should be enough for sustaining a resource-rich country. That's a hell of an assumption. One of the things you're failing to consider is that when resources are allocated by fiat instead of by markets, corruption becomes much more pervasive and suffocating. Also, all of the people who have the skills and experience to get things done leave for somewhere they can be rewarded for their efforts instead of demonized. >I mean, this is not some mid-African country with >50% of the population illiterate, bunch of horrible tropical diseases, plus children running around with guns and AIDS... Except it actually isn't too far from that. People don't seem to recognize just how fragile civilization is. Look at Cuba. It was once the richest country in Latin America. Today it is one of the poorest thanks to communism.

adventured 10y ago
Interestingly, the parent comment didn't consider near total collapse of production, rather than just a mere ~50% style reduction in efficiency. What actually has happened throughout history's many attempts at Socialism, is production collapse. That's exactly what we've seen in Venezuela.

hansjorg 10y ago

High corruption and a very thin fabric of society. Before Chavez came to power an almost apartheid system, which was fine with the (small) elite and of course with the large majority of US commentators. Over ambitious social programs, an owner-class hell bent on sabotaging and completely backed by the US. What do you do when it all starts to slide? Tighten the screw. When that doesn't work, tighten it again. Recipe for disaster.

marcoperaza 10y ago
There's no way you can pin this on anyone or anything but Chavez, his allies, and their policies. They've ruled Venezuela for 20 years and steered it from flawed prosperity to total ruin.
- hansjorg 10y ago
  Why did Chavez come to power? Who was prosperous?
  - AnimalMuppet 10y ago
    Valid points (at least, they would be if you actually stated them). But: > > an owner-class hell bent on sabotaging and completely backed by the US reeks of conspiracy-theory paranoia, at least in the absence of actual evidence.

metaphorm 10y ago

> A country like Venezuela should "kind of work" even with corruption and inefficient socialism! What the heck is going on there? its not just a little corruption. it's absolutely stunning batshit off the charts rampant corruption.

MrZongle2 10y ago
"Well, let's say this Twinkie represents the normal amount of corruption in a socialist country. Based on this latest report, it would be a Twinkie thirty-five feet long, weighing approximately six hundred pounds."

Gusfoo_2 10y ago

> WTF they are doing so wrong?! The short version is that they fired all the technicians and replaced them with the party faithful. And then went nuts driving the PDVSA around like a combination of a gift horse and a war horse.

RevHaze 10y ago

From their perspective, the industries are there to support the people. The oil industry was making money while the government didn't have enough money to keep expanding social programs, so they nationalized the oil industry. They didn't know how to run the oil industry though, so yields fell through the floor and they couldn't produce or attract foreign investment back into the country due to concerns that as soon as the infrastructure got back up and running the government would just nationalize again. Also see Zimbabwe's 2000 plan to redistribute farming wealth.