The Suicide of Venezuela
joelhirst.wordpress.com
joelhirst.wordpress.com
Instead of trying to fix that his government kept appointing people with degrees in Marxist Studies. Bad decisions were chronically made and the country decayed.
The infrastructure will continue to decay unless the voters find technocrats they trust. Eventually buildings are going to start collapsing.
They had a lot of money from oil, almost no taxes (or no taxes at all??), and still had a larger poverty rate that similar but oil-less countries of South America (that still had its own issues such as corruption, terrorism and drugs)
It has nothing to do with skills. Chavismo is a fundamentally broken agenda. Socialism (the real deal, not capitalist welfare states) does not work. Nationalizing industries does not work. Price controls do not work. Central planning does not work. The most skilled leader in the world couldn't make this program work.
And no discussion of this monster is complete without mentioning the political prisoners, extrajudicial killings, and pro-government militias spreading terror just like the Brown Shirts. And look at the company they keep. Iran, Cuba, North Korea, Russia, China, and the various Chavez-imitators in Latin America.
Chavez was an evil man.
I wish the discussion here would elevate beyond this libertarian propaganda level.
Central planning has worked well for exactly zero countries around the world.
Yeah, sure. As if we didn't have "too big to fail" in the last years. Maybe a history book could refresh your memory.
Can you describe the difference between leaving a broken corporation (as a consumer or employee) and leaving a broken nation state?
My point is not to advocate central planning, I'm a big fan of markets. I just think some defenses of them are very disingenuous and poorly thought-out.
[1]: http://www.daviddfriedman.com/Libertarian/Machinery_of_Freed...
Corporations themselves are also in practice intimately intertwined with government. They depend directly or indirectly on procurement, but also the legal system. The more complex regulations, the bigger the economy of scales a corporation can use. There are also specific laws that make competition illegal in some fields like telcos and friendly tax regimes for big players only.
You may note corporations are the biggest defenders of free markets when it suits them, then quickly turn the page when they require some special subsidies, bail-outs or laws to hobble their competition.
Socialism is not nationalization of industries, price controls and central planning. What you describe is a very specific form of authoritarian socialism which people (as in masses, not individuals) only seek in deep desperation.
Actual socialism, as in workers control of the means of production, ie. workers owning and managing their own workplaces, does not require centralized power.
1) In this piece, Joel Hirst makes a reference to Ayn Rand as though she had something relevant to say about Venezuela, civilization, or for that matter, anything. That alone raises a red flag for me. He's declaring himself on the side of the Objectivists. Who is John Galt? The embodiment of selfishness and much of what is wrong with capitalism.
2) Joel Hirst is a "Fellow in Human Freedom" at the George W. Bush Presidential Center. http://www.bushcenter.org/people/joel-hirst.html I'm not sure there is a single title in America that denotes greater intellectual fraudulence or moral bankruptcy than that. You can trace a straight line from Kissinger, the Argentine Junta and Reagan's Contras down to George W. Bush and his fellows in human freedom. So Joel is firmly on the side of oppression in Latin America. Remember that when you read his fairly shallow analogy between Venezuela and fallen civilizations.
I do not support Chavez or his politics, but I do recognize that America and US allies have presented very few palatable choices to the peoples of Latin America, and the Joel Hirsts of the world will not save the Amazonian peasants with their visions of John Galt.
The issue with Atlas Shrugged is that the villains were kind of real, it's the "heroes", and their motivations, that were pretty unbelievable. For that matter, the ordinary bystanders were kind of given the short shrift too.
When the US went in meddling, it's not like we messed something good in those places, they were going down anyway, due to many varied issues (see Mexico, Venezuela or Peru, proud anti-imperialists) and arguably where we did mess around, like Chile and Argentina, Colombia, Panama things are better off than in the places which languish in Garcia-Marques's feudal time warp.
It's almost as though LAm, tied somewhat spiritually to Spain (or the Iberian pen.), followed down Spain's footsteps to relative irrelevance.
We did mess up in a few places, due to realpolitiks, but I don't think things would have turned out better without our intervention --I don't see it realized in the places we didn't intervene down there.
If someone asked me what Venezuela should do, I would say "get rid of price controls and stop the inflation." The inflation would be a little painful because it would mean the government would have to stop printing money to pay its bills, but the pain will continue to deepen until they fix the economics.
Essentially the opposite approach was taken in China (fixed undervalued exchange rates), which led to staggering levels of growth.
EX: Japan went from 2T to 3T in just 2 years. That's completly unsustainable.
Venezuela instead tried to fix the value of its currency at a far too high level.
Many people also don't believe in anthropogenic climate change, but have certainly been introduced to the concept.
Or they like the way things are, because new housing would driver their property values down.
― Upton Sinclair
Same could be said about Venezuela under Chavez and Maduro, and 'electricity and running water' are still a problem there.
He was re-elected in 2000, in an election the Carter Center found satisfactory[1].
He was once again elected in 2006, in an election EU observers found to be free and fair[2].
After three elections, I'd say the good people of Venezuela deserve to live in a filthy dump.
[0]: https://en.wikipedia.org/wiki/Venezuelan_presidential_electi...
[1]: http://www.cartercenter.org/documents/297.pdf
[2]: http://eeas.europa.eu/eueom/missions/2006/venezuela/index_en...
Democracy has its failures, but people getting what they voted for isn't one of them.
https://freedomhouse.org/report/freedom-press/2013/venezuela
https://freedomhouse.org/report/freedom-press/2015/venezuela
You are blaming the victims. They have seen the error and they're trying to correct it.
In the last elections for parlament, government party crashed and burned. They're trying to apply a constitutional procedure to revoke Maduro that's being sabotaged by executive power.
I'm blaming the victims who welcomed their executioners.
>They have seen the error and they're trying to correct it.
A drunk driver might swerve before impacting a semi. What of it?
They might not posses the clairvoyance that you were gifted with.
What if you had been born in Venezuela? Would you be so happy to see the disaster?
But Ms Rousseff and her left-wing Workers’ Party (PT) have made a bad situation much worse. During her first term, in 2011-14, she spent extravagantly and unwisely on higher pensions and unproductive tax breaks for favoured industries. The fiscal deficit swelled from 2% of GDP in 2010 to 10% in 2015.
http://www.economist.com/news/leaders/21684779-disaster-loom...
Before Chavez, Venezuela was nominally a democracy, with two parties, AD and Copei, but in practice, for 2–3 generations, both parties colluded to keep state power in the hands of party officials, see https://en.wikipedia.org/wiki/Punto_Fijo_Pact – several of the presidents immediately preceding Chavez were hugely corrupt (even doing prison time for it), and the Venezuelan people were entirely fed up with the longstanding political order, which was why Chavez as an outsider was so popular. The general economic problems throughout Latin America in the 1980s – cf. https://en.wikipedia.org/wiki/Latin_American_debt_crisis – and the https://en.wikipedia.org/wiki/Venezuelan_banking_crisis_of_1... didn’t help.
I find Chavez’s particular brand of populism deeply problematic, but he doesn’t exist in a vacuum, and Venezuela’s main challenge at the moment isn’t lack of “high school economics” understanding.
Where on the world did price control ever work?
Was it ever applied isolated from other factors?
There are a lot of things economists don't know, but price controls -> shortages is one of the things that is well established (the exception is when the price limit is higher than the price of the object, and thus has no effect).
I'm actually liquidating all my California assets, as the INCENTIVE to operate rentals has been destroyed.
Have a read of this:
"Due to Rent Control, S.F. Has 31,000 Vacant Housing Units As Frustrated Landlords Give Up"
The Bay Citizen -- "In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago."
The reason? The city's pro-tenant, outdated rent control laws that make it difficult to raise rents or evict a tenant.
"Increasingly, small-time landlords are just giving up, like one who has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades.
“Vacancy rates are going up because owners have decided to take their units off the market,” said Ross Mirkarimi, a progressive member of the Board of Supervisors. He attributes that response to “peaking frustrations in dealing with the range of laws that protect tenants in San Francisco that make it difficult for small property owners to thrive.”
Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing."
MP: As we know from basic economic theory, rent control laws are doomed to fail with many predictable unintended consequences in the long run: fewer new rental units are built or made available, many apartments are removed from the market, a decline in the quality of housing, lower rental rates for long-term tenants but much higher rents for new tenants, inefficient use of housing space, etc. In other words, rent control laws guarantee that there will be less affordable housing in the long run, not more.
PRICE CONTROLS CAUSE SHORTAGES.
When there is no incentive to produce a good or a service, 2 things happen:
1) the SUPPLY of the good or service will drop (no incentive to produce)
2) if the DEMAND stays the same or goes HIGHER (San Francisco demand for rental units) -- the price will go up for the reduced SUPPLY of the good or service.
That's why SF has high rents.
Huge demand. No investment in affordable rentals. ZERO.
Thus, SUPER HIGH rents.
Same in NYC.
- See more at: http://mjperry.blogspot.com/2011/05/because-of-rent-control-...
Maybe this can be fixed by introducing the radical idea that artificial shortages created by greedy owners who want to drive prices up but can't is wrong and should be punished.
Without price control, your local utilities could extract monopoly rent. Pay up, or you can't take a shower. Shortages happen only when the price control is extreme enough to push the price below the cost of supplying/rationing the product.
If water costs $x per acre-foot to supply, and demand will cause the lake/river/well to run dry when the price drops below $y per acre-foot, but the monopoly makes the most profit selling at some much greater price $z, then the monopoly rent is $z-max($x,$y) and there will be no shortage if a cap greater than max($x,$y) is set.
Something has to limit demand, as there is not unlimited supply. If prices are not allowed to rise to where demand slows (to a fair and equal exchange of value), and nothing else increase the cost of acquisition (awaiting queues, covenants/agreements, paperwork, background checks, etc), then the only way to limit demand on a limited supply is simply running out of supply.
Price controls don't work. They may not completely destroy the supply, but they will at least debilitate it, functioning in a way many come to accept as normal - not realizing the resulting damage.
Prices must be set somehow, and there are many markets where setting them via regulation is a good thing. Taxis are a perfect example: since they're often used by travellers who are unfamiliar with a city, having a clear system determining the price is beneficial.
I think it's important to keep those examples of (mostly) beneficial price controls in mind, since obviously the examples where price controls fail spectacularly are more salient, and hence there may be a misleading bias in how price controls are perceived.
For example, in many countries, professional lobbies (lawyers, doctors) influence their set price to what they deem "fair" which means it's in their interest as providers.
This is different from the government setting a maximum price on soap and milk, which is in the interest of the buyer but not the seller.
Taxis are special again, as they often exist in a state of government-controlled monopoly (i.e. taxi licenses are restricted).
Printing unlimited money, supporting cuban dictatorship with oil billions, digging deeper in social division and looting public treasure... you can believe in whatever society model you want, but persistence in error to the point of leading the country to misery is irresponsible.
For a lot of people, Chávez was a measurable improvement over his predecessors.
My point is, from the perspective of an average voter, replacing a corrupt bunch with another corrupt bunch is a pointless exercise, so might as well send in the strongman. That's pretty much the standard scenario in which democracy dies (Weimar, fascist Italy, II French Republic, all the way back to Julius Caesar).
If the new one just don't destroy the economy, or recover from inflation / unemployment, it has done more good than the previous one.
The upvote/downvote buttons are obviously some kind of in-joke at YC, because otherwise this problem would have been fixed a long time ago.
I upvoted because it's a legit point of view that doesn't deserve to be silenced.
BUT...
Suggesting the debacle main cause is low oil prices and justifying evil with previous evil... is not quite right. My tocayo is printing money as if there is no tomorrow. Actually, at this pace, there will be no tomorrow, almost there is no today.
* Edit, some of those guys appeared in countries with no history of democracy, but I think the point stands.
Venezuela was uniquely mismanaged even with high oil prices, but the billions raining from the sky covered up things enough to keep things on a regular third world level.
The current narrative is to blame Venezuela's fuck up on the left, but for me it was the fault of the entire political elite through the 20-30 years that preceded Chavez (and I'm anything but leftist btw)
Hmmm, it seems we've seen at least the initial stages of this scenario play out in some other oil-rich nation of the Americas recently... It's on the tip of my tongue...
They're both essentially populists.
Driving out professionals and putting cronies in to run infrastructure. People who don't care about "capital equipment maintenance" and things get run into the ground.
Political oppression.
Controlled economy, setting prices which create black markets.
Over reliance and lack of contingency planning vis a vis petroleum prices.
Overreliance on being "anti-imperialists" to be the antidote to their ills.
Etc, etc.
"I helped Uganda recover after a 25 year civil war" "I helped return democracy to Mali."
So it's reasonable to discuss what's behind these claims, which sound quite "big" at the first, and a little differently once the background is known.
Shouldn't both the claims and his background be allowed to be discussed?
Sure, but it's still a DH1 level response.
In retrospect, I suppose it could have been intended to be just a neutral statement of fact, but it doesn't look at all to me like an 'ad hominem' attack. Unless you have outside knowledge of 'acqq' and are interpreting this in a context not visible to others, I think you are projecting a prejudice that does not exist.
They do a lot of good things too though.
He tweeted a link to this blog post, blaming Venezuela's collapse on "commies": https://twitter.com/joelhirst/status/723921894479675392
He also wrote an op-ed for Fox News Latino blaming Chavez's death on Cuban doctors: http://latino.foxnews.com/latino/opinion/2013/02/28/cuban-me...
Am I supposed to mindlessly parrot 'oh, he's related to the GWB center, baaaaaaaaaad'?
I'm not sure what your point is. Well, I do see what you're trying to do, but it's not honest or relevant.
When Chevron pays Barbour, Griffith & Rogers $80,000 to tell everyone that global warming doesn't matter, (https://www.opensecrets.org/lobby/firmsum.php?id=D000021679) you don't cry about bias.
If Hirst says communism is bad, it's because he's being paid to say so.
If you want to understand how and why USAID works, read "Confessions of an Economic Hit Man" by former Ashland Oil CEO John Perkins.
https://en.wikipedia.org/wiki/Lord_Vetinari#Vetinari.27s_gol...
This is neither. This is the slow rot that comes from not being able to take care of yourself, like a mentally disabled person, except it's an entire nation. They can't fix it and they can't stop it. And there's no recovery to be had.
What lessons can we learn from the leadership of the country over the past 18 years?
One, maybe don't trust someone who tries to take over the government by force, rather than by popular decree. Two, maybe don't have unlimited presidential terms or rule-by-decree. Three, maybe don't try to force economic, industrial or social change. Fourth, maybe don't let your country's leadership be best friends with countries that have terrible human rights violation records, and especially if they kick Human Rights Watch out of the country and are constantly criticized by other organizations. Fifth, maybe it's time to revert controversial social and economic policies if your country actually stops producing crime data (and it's not because the crime rate is so low). And sixth, though this is controversial, it would be nice to have a national constitution that puts safeguards in place that will root out institutional corruption by the coordination of an organization which isn't appointed by an executive.
I don't know much about politics, though, so take that with a grain of salt.
http://www.worldatlas.com/articles/the-world-s-largest-oil-r...
- in Socialism, there is an Elite group who get special rewards and at the very top, the money from the country's resources (Kim in N. Korea; Chavez; and Maduro, who recently sent hundreds of millions of gold out of the country to 'pay the country's debts')
- in Capitalism, there is an elite at the top who get special rewards
There are 3 kinds of people who want Socialism:
1) those in the citizenry who want the elite to share the money more, and manage the country so that it produces benefits more equally;
2) those in the elite who want the perks that come at the top of society and want to force the wealthy to spend their wealth on helping everyone
3) those in the elite who know Socialism fails but there's plenty of time to loot the country before that happens
In capitalism, the elite don't lie to you and say "we're doing this all for you." It's understood that if you add value (like Facebook, Tesla, Google) you get handsomely rich.
In socialism, at least part of the elite know damn well that the removal of incentives in Socialism (redistribution of wealth) will eventually cause an economic crash, and they lie to the population "this will all work!" to get the votes to redistribute wealth.
Meanwhile, they have time to ship gold out of the country.
The crux is there will ALWAYS be a jealousy-inspiring Elite. This is true in Communism, Socialism, and Capitalism.
When Barack Obama said ‘There’s Little Difference Between Communism and Capitalism. Just choose from what works' to an audience of Argentinian youth a few weeks ago, he may have been referring to this issue.
No system will result in equally shared wealth. Those at the top will do anything to retain their perks.
In Communism, the leadership kills those who threaten the leadership.
In Socialism, the leadership jails those posing serious threats to leadership.
In Capitalist democracies, we have mind-bending, emotionally-charged elections, and peaceful transfer of power.
Norway fares better than Russia, Russia better than Venezuela. Can't say about Saudi Arabia.
"In 1995, Venezuela adopted the Andean Price Band system to replace a similar national scheme in place since 1991. The Andean system applies to imports of certain agricultural items (including meat, dairy products, sugar, and various cereals, fats and processed foods) originating outside the region. Its stated objective is to stabilize the domestic price of those products in a manner consistent with the implementation of the Common External Tariff by all Andean Group countries. The system operates by adding an ad valorem levy to the CET rate whenever a reference price falls under a floor, or subtracting from such rate if the reference price exceeds a ceiling; floor and ceiling prices are linked both to the moving average and the spread of prices prevailing in world markets during the previous five years. As under this system applied rates could increase, in principle, beyond bound levels, questions arise about the predictability of such a form of border protection which exhibits many of the properties associated with variable levies.
"In May 1995 customs clearance fees were abolished. Since April 1992, tariff surcharges have been applied to imports of 15 ten-digit NANDINA agricultural products, including certain types of cheese, maize and mineral waters. According to the authorities, these surcharges were to be eliminated by January 1996.
"Since September 1994, a VAT-type wholesale and (luxury) consumption tax has been applied at rates ranging from 12.5 to 32.5 per cent on all goods, except some basic foods; on services; and on royalties from the exploitation of all types of intellectual property rights. Additional internal taxes on alcoholic beverages exclusively affect imported items; details of applied rates were not available to the Secretariat at the time of completion of its report."
https://www.wto.org/english/tratop_e/tpr_e/tp26_e.htm
"While the oil boom appeared to be a tremendous blessing to Venezuela, it did have some negative consequences, such as chronic inflation and, paradoxically, an increasing indebtedness. These problems were exacerbated when, in the mid-80’s the price of oil began to plummet, due to OPEC members’ breaking of their production quotas. By 1998, the price of oil had reached a new historical low of $3.19 per barrel (in 1973 prices). This decline in oil prices had a significant impact on Venezuela’s economy, particularly on per capita income, which had been in a steady decline between the mid-80’s and the present."
It’s a testament to the Norwegian political system that they ultimately listened to his message and followed his advice.
https://encrypted.google.com/search?hl=en&q=Farouk%20al%2DKa...
Governments which don't respect property rights can flourish under absolutely ideal conditions, your petrostate idea, yet even that is fleeting even if the conditions remain good. Its doomed the moment they do not.
So its not ideological, its simply fact, void property rights and you destroy your economy because trust is gone and when trust is gone people will not waste effort on what will be stolen from them
The problem with that statement is Vz never had real private property rights. Nothing really changed when Chavez came to power other than who was doing taking away.
But like Dagny Taggert I found there was nothing to push against – it was all a gooey mess of resentment and excuses.
-- Margaret Thatcher
In this case, they managed to run even out of petro-money. Takes some skill.
First, on even a moderate scale, you quickly find out that democracy is not well suited to make the zillions of decisions needed to run an economy. Voters will be making too many decisions about things they know too little about.
So, they have to delegate the power. Under capitalism, government powers are somewhat limited, so delegating has some checks and balances. But under socialism, you have to delegate power over every aspect of the economy, which is basically everything.
In other words, you've just delegated arbitrary power, which has a bad history.
Even if that all works out, now you have an information flow problem. Prices no longer reflect supply and demand, so how do you deal with shortages and surpluses? What if you have 10000 people applying to be "beer taster" and zero people applying to be nurses?
If you look at socialist countries throughout history, and classify them into "nice moderate progressives" and "plain old dictatorships" on the basis of outcomes, then that's not a valid distinction: it's just retroactively repainting the lines on the ideological landscape to fit your views.
An ex post facto difference is none at all.
Venezuela has not had democratic ownership of the means of production. Venezuela is a state capitalist entity with either a centrally administrated or command economy depending on how you want to look at it.
If people elect representatives who try to run the economy as if it were a diesel engine, is that democratic control? Or does it mean a plurality of worker's owned corporations?
Furthermore, "state capitalist" is about as pitiable a phrase as "late capitalism". Venezuela is populated by Communists and run by Communists who ran their political campaigns on Communist promises, therefore, Venezuela is a Communist country.
Capitalism is a form of economic organization based on markets, private property, the accumulation of capital, and exploitation in the "neutral" sense of extracting property from investment. Capitalism comes in many different forms just as socialism does. Just because welfare capitalism and laissez-faire capitalism are distinct does not mean capitalism as a concept is devoid of content. Just because "market" and "private property" are abstract terms that need to further instantiated to be analyzed does not mean capitalism isn't a coherent concept.
State capitalism is when the state owns all the property and administers or directly controls the means of production through a bureaucracy, exactly like a corporation at the scale of a nation.
> This is too broad and abstract to be actionable, let alone analyzable. What is "democratic" control?
Well that's why there are so many different flavors of socialism. A lot of socialists would say you cannot simply elect socialism into office. Are they wrong? You're the one who wants to lump all people who call themselves socialists together, even though that sort of reasoning leads to absurdities like considering both North Korea and the United States of America democratic countries. If defining socialism as an empirically verifiable condition of the relationship between people and the means of production is too abstract to be analyzable, lumping everyone together based on intent and self-labeling is even worse.
Yes, that's the point.
When a phrase, concept, or ideal is so broad and abstract as to incorporate anything and exclude little, then when it is time to analyze the results, you can (in)validate all of it based on the whims of the people in power. It's really a neat trick.
The Norwegians got it right. If you discover oil create a sovereign wealth fund and invest the revenues outside your own economy. [1]
[1] - http://www.spectator.co.uk/2008/04/why-hasnt-britain-got-a-s...
I was under the impression that this phenomenon does not hold for so-called developed countries, like Norway and the UK. I could be mistaken.
The long and short of the dutch disease is that if you introduce a revenue source that is independent of the rest of your economy and pour all of the money into your economy, it will cause your currency to appreciate, making every product made in your country less competitive. So even while your country keeps getting richer through oil revenues, all the rest of your economy stagnates or decays, until you import most of what you consume and are wholly dependent on your oil revenues.
Note that this is not limited to oil. The Spanish went through this in the 16th and 17th centuries because of silver imported from the new world.
For most of the first half of the 20th century, the Saudi Arabia of the world, in terms of oil extraction, was the United States.
But the situation was moderated by a few factors, at least as I see it:
1. The US had an industrial capacity (though much of that developed over this period), largely in the northeast. Much of the oil production was in economically underdeveloped regions of the country, particularly Texas and Oklahoma.
2. There wasn't a large world market for oil initially. Oil demand was being built up as supply was established. Flooding the market with cheap oil money simply didn't happen. Actually, demand was so low relative to extraction costs that oil prices hit a low of two cents per barrel after the 1930 East Texas Oilfield discovery (see Daniel Yergin's The Prize for an extended discussion of this).
3) WWII. The economic climate from 1930 - 1945 was not one of what we consider conventional growth markets. Initially the problem was the Great Depression, during which global economic activity contracted markedly. Then came the command economy of WWII. In the aftermath, the US was both the sole oil and economic power left standing.
4) By the time other countries were establishing themselves as substantial consumers of oil, the US itself had begun importing oil from Saudi Arabia.
I'm not aware of formal economic treatments of this, though it strikes me that the US experience was significantly different from that of, say, Argentina, Saudi Arabia, or even Russia / the USSR.
this might not be totally true, the Saudi Arabia sovereign wealth fund is almost as large as Norway's (so the saudis have not just dumped all money on their people) and AFAIK it's quite secretive but somewhat diversified between internal and foreign investments, so they will still have money when the oil runs out.
As it is, Britain’s sovereign wealth was effectively distributed to taxpayers to spend or save as they chose, and in very many cases that means it ended up in bricks and mortar, in Britain’s absurdly overpriced residential property market. But it’s too late now: the end of North Sea oil is nigh, we’ve privatised everything, the pensions bill is mounting, the habit of personal saving has been all but lost, the housing market is tottering and the government’s finances are hopelessly adrift. We’re on a course set for us a generation ago; in a generation’s time, as John Hawksworth says, we’ll look enviously at Norway and the Gulf and wonder: where did our oil money go?
I think this is a somewhat lazy analysis that mars an otherwise interesting and thought-provoking piece. I'm not convinced that the government disbursing oil wealth in the form of tax cuts went mostly into higher property prices. I get that real estate is inflated - it's inflated in all major cities in the US too - but I feel like the author takes too large a leap of faith in his logic here. What is the mechanism that links this argument together?
It may be that they have a cultural preference for investing in residential real estate.
Whereas the current dominant system (whatever one wishes to call it) doesn't have this problem, because it provides the elites with more highly nuanced, and much more effective ways of siphoning money, power, and hope from the disadvantaged -- and in covering its tracks whilst doing so.
The US, Canada, Australia, Germany, UK, Japan, France, Netherlands, Sweden, Denmark, Singapore, Italy, South Korea - all utilize the free market system to one degree or another, and none of those are remotely close to being Socialist. Nearly all of most prosperous major economies on a per capita basis, those with the highest standard of living, are free market oriented, and anti-Socialist.
The US has the fifth highest GDP per capita, and one of the highest median household income levels, as well as nearly the highest median disposable household income level; as well as a median household net wealth level higher than Germany or Sweden. For a nation of 330 million people. Let's see Socialism manage that; the closer you get to actually implementing Socialism, the faster you collapse.
Versus: USSR, which struggled to even keep extremely basic grocery store shelves stocked. Cuba. Cambodia. Vietnam. Socialist Germany and Italy of the 20th century. North Korea. Mao's China. Venezuela.
You can't show me one single example of Socialism ever working, not after 200 years of disastrous results from every attempt at Socialism. I've got dozens of extremely prosperous examples of the free market working, it has worked in the US for two centuries.
There is no contest.
Even today, with the affordable healthcare act, the U.S. is one of the least socialist countries in the world, but it's never been completely free of socialism, even in the "better dead than red" era. Take public infrastructure such as power generation as an example. Some sectors are so big and require careful planning decades in advance, and doing things the socialist way (i.e. Taking short-term market interests out of the equation) is often the best way. If we left scientific research entirely to the free market, where would the funding be for curiosity driven, long-term, core science that is typically decades from producing anything remotely commercializable? How would corporations justify the research that led to lasers or carbon nanotubes to a corporate board only interested in the bottom line for the next quarter?
Socialist policies make sense in certain areas. Americans are unusual in having turned "socialism" into a dirty word, and most have turned a blind eye to the many benefits it brings them.
Right-wingers don't care about "socialism" (and they certainly don't care about the living standards in any of these countries). It's just a bugaboo, and a stand-in for the comparatively more micro-scale issues they do care about -- things like progressive taxes, rent control, or (domestic) business regulation generally; and of course welfare and entitlements (for persons less advantaged than themselves), generally.
"If you're in favor of, or even not rapidly opposed to ('financial regulation','rent control','zoning',...) then to all intents and purposes, you are the walking reincarnation of Mao, Honecker and Chavez rolled together" is what they're really trying to say when they bring up this cold war stuff.
There are a lot of things that could be said about this -- such as the real effect on "living standards" outside of the former imperial core, a.k.a. the rest the world, since "the current system" forced its way in these countries during the era roughly encompassing 1790-1950. (Hint: by some accounts utterly devastating; in general less than 1850 standards; in some cases abysmally worse). Or say, that small matter of the ecological impact of our wonderful system, and the ever-widening cornucopia of goods, pleasures and experiences it produces -- and the very real, imminent, and starkly negative effects this impact will have on "living standards" across much of the planet, not too far off from now.
Or heck, even that pesky little subject of not just "stagnating", but declining median living standards in the U.S. generally, over the last 20-30 years.
But I wasn't talking about living standards. So it's a completely different subject.
Versus: USSR
Living standards in modern CIS countries "versus" those the peak socialist years (late 50s - late 70s) would make for a very interesting comparison, indeed. (Again, just as a hint: they've largely plummeted, across the board).
Cuba. Cambodia. Vietnam. Socialist Germany and Italy of the 20th century. North Korea. Mao's China. Venezuela.
Aside from the naked cherry picking (by listing only "their" basket cases and failures, never "ours"), listing Italy in the same sentence as the GDR, North Korea and Mao's China, in virtually any context, is just... bizarre.
I don't think so. Will people disappear? Where to?
They'll mostly stay and figure out how to live. People are good at that.
Bullshit.
Maduro is destroying the proud people of that country with his Marxism that is turning him and his cronies into billionaires while completely destroying the economy for the rest of his unpolitically-connected "peasants."
WRT "who cares how much they have to suffer" - surprisingly few people do.
A lot of people are ready to give some free advice, but I doubt you are lining up to provide material aid.
In the end those people will have to figure out their lives because no help will come.
I would if there were a way to help.
It doesn't have to be much by your standards.
When the same thing was happening in ex-USSR, wages fell to $10/mo due to inflation and you could feed a family for a week on $10.
Nice try, Maduro.
In all seriousness, if you want to help give those willing but unable to leave the means to do so. Sponsor their visa, send them travel money, help them find a job and a home in Ameeica, et cetera. Everyone benefits when more productive people are in more productive environments.
No, people will go where they can get food to feed their children. Where there aren't bands of marauders sacking grocery stores every night, and where they can build a life.
See the Trail of Tears in modern US history, or any of a thousand other cities that have risen and disappeared in world history.
Of course, some people will skip the country. And then they will send money to their relatives who stayed. And thus some money will flow in and with them, food and ways of coping.
This is how many countries live. Armenia. Ukraine. Nepal. Tajikistan. They end up exporting work force, but they don't go deserted. Some people go, but most always stay.
I don't know if you have lived or ever visited Venezuela, but the ones that got born there would tell you a very different story... Talking about economic war is even more disingenuous when you take in consideration all the money that Venezuela received (and gave it away) during the first decade of this millennium. What is happening is the collapse that many of us were predicting since 10 ago, unfortunately few listened and now we are paying the karma
Obama has just befriended Cuba, you can hardly call him a man waging a war of aggressive capitalism.
[0] http://www.miamiherald.com/news/nation-world/world/americas/...