If their economy wasn’t centrally planned and controlled by the government, it would be more resilient
I don't want to appear pro-Chavez, many of his actions were despicable. But understand that "free-market" in their case means an economy controlled by USA. Chavez came into power precisely because the free-market economy before him failed to raise wages even as the GDP increased. It also failed to diversify.
Economically, Venezuela has two problems: over-reliance on oil and corruption. In 2017, we can consider it proven that neither central planning, nor free-market have succeeded alone in solving these problems. They are mostly orthogonal to the organization of the economy.
Politically, it has one problem: they don't like USA. Look at Saudi Arabia. They are centrally planned and they are extremely dependent on oil. But things go well economically. You just have to let US companies install themselves there and don't call yourself a socialist.
Why can't a free market diversify Venezuela's economy? Well when you have the world's biggest proven oil reserves (yes, more than Saudi Arabia since a few years) and an underdeveloped oil sector, where do you expect investments to flow?
You can redirect some of these investment by giving the government an amount of control over what the oil industry does, by putting quotas in place, this kind of things. But then, you are opposed by "the free world".
Venezuela is a shitshow, to put it bluntly. But the shallow analyses which focus purely on ideology instead of the physical reality on the ground is asinine, bordering on propaganda (Vox tends to swing randomly between center-left progressivism and center-right neoliberalism). Is the government of Venezuela incompetent? Probably as incompetent as most. Are they dealing with an unprecedented economic collapse caused by structural factors? Yes. On the other hand, most people don't actually know how the Venezuelan economy is structured. They just know "socialism bad" and "capitalism good". It's tiresome because the same structural deficiencies at play in their economy today was there decades ago, when they weren't "socialist".
It should be noted what happens to countries whose economies collapse because their place in the world economy no longer exists and then seek to renormalize via the accepted capitalist channels (like the IMF and the like). The entire country gets sold off to foreign interests and they spend the rest of their decades financing a debt they can never pay off.
As for the repressiveness of the Venezuelan state, it's not surprising. The violence of a state is directly proportional to how threatened it feels. When a state is failing, it is going to be violent. Cf. Spain and Catalonia at the moment.
There were plenty of petro-states which didn't see the kind of economic devastation Venezuela did when oil prices plummeted. The key difference was that other petro-states had a robust private sector, which not only meant they had more private savings that halped the economy absorb the shock from low oil prices, but also meant they were more diversified.
The drop in oil prices should never have led to mass malnutrition. Venezuela even with low oil prices is a middle income country. It was socialist policies like price controls that led to the long food lines and empty supermarket shelves.
>>An exacerbating factor is that the same forces that tried to coup Chavez in 2002 are of course still politically active and, rationally given their interests, using their economic connections to exacerbate the economic collapse through various means. The United States recently freezed some Venezuelan government finances which is obviously intended to further destabilize the government.
This is what the Venezuelan government is blaming its economic problems on, but there is actually no evidence at all that the intervention of the US government is anywhere near enough to be responsible for any significant portion of the economic decline of Venezuela.
There are no significant sanctions on Venezuela and the US imports much of its oil from the country.
Price controls aren't really a Socialist policy - the Socialist policy in this case would be the gradual change from the production of commodities to the production only of use-values, lacking their exchange value dimension. If price controls are a Socialist policy, then it doesn't take much for Socialism to come about - but that's clearly not what Socialists are talking about when they talk about Socialist policy. Marx, for one, wasn't in favour of price controls to my knowledge. Nor were the other Socialist economists and theorists. I'm not sure where you're getting the idea from other than the oft-repeated myth that Socialism is merely when the government "does stuff".
>>I'm not sure where you're getting the idea from other than the oft-repeated myth that Socialism is merely when the government "does stuff".
When Venezuela's economic ministers say things like "the law of supply and demand is a lie" to justify price controls, I assume it's motivated by their socialist ideology, and blame the policy on that ideology.
They can't be very good Socialists then; Marx was a supporter of the law of supply and demand, and its functioning is extremely obvious to anyone familiar with the idea of markets, even without training. Marx didn't deny it nor did his contemporaries or predecessors.
>I assume it's motivated by their socialist ideology, and blame the policy on that ideology.
The North Korean statesmen have made disparaging remarks about democracy, but they claim to be democratic. Yet we would both agree not to blame democracy for what is happening in North Korea. Is there any evidence that Venezuela is actually implementing Socialist policy any more than the DPRK is implementing democratic policy?
>>“It is impossible, within the framework of the capitalist system, to solve the grave problems of poverty of the majority of the world’s population,” the Venezuelan leader said. “We must transcend capitalism. But we cannot resort to state capitalism, which would be the same perversion of the Soviet Union. We must reclaim socialism as a thesis, a project, and a path, but a new type of socialism, a humanist one which puts humans and not machines or the state ahead of everything."
Socialism is always one execution away from utopia.
I don't think that what politicians claim is a sound method to understand the definition of something, especially when we _do_ have the definition already (again, what Marx described).
Just because Chavez made claim X, that doesn't mean that the original definition is somehow altered.
And remember, your original claim was that price controls are socialist, which still doesn't make sense; pivoting to something Chavez said doesn't correct this.
I am no fan of what Venezuela or Chavez is doing, and I don't support their policies.
If you want an example of something that is more faithful to what Marx described, take a look at the Mondragon Corporation, https://en.wikipedia.org/wiki/Mondragon_Corporation which is a competitive worker cooperative based in Spain. Notice that this has nothing to do with the government.
Oil Prices in 2012: https://www.eia.gov/todayinenergy/detail.php?id=9530
Food Shortages in Venezuela in 2012 Source from NYT:
http://www.nytimes.com/2012/04/21/world/americas/venezuela-f...
#First_Dutch_Disease #Second_Dutch_Disease #Third_Dutch_Disease
But what about free markets? Why don't they just have free markets? This alternative is just pure rhetoric hardly explicated in its material form: Sell the country off to international corporations, saddle your country with unmanageable debt, and beg the international financial system to keep you alive so long as you have resources worth extracting.
Honestly, it would be fine if people were just forthright in proposing those policies. It's always dressed up in the language of freedom and liberty in the most dishonest way. Venezuela is failing now, I can point to several other nations that did exactly what they were supposed to according to the interests of Capital, and they aren't looking so hot either.
That's not true at all. The previous government was socializing the economy, starting with nationalizing oil in 1976. From Wikipedia: "The election of Carlos Andrés Pérez in 1973 coincided with the 1973 oil crisis, in which Venezuela's income exploded as oil prices soared; oil industries were nationalized in 1976. This led to massive increases in public spending, but also increases in external debts, which continued into the 1980s when the collapse of oil prices during the 1980s crippled the Venezuelan economy. As the government started to devalue the currency in February 1983 to face its financial obligations, Venezuelans' real standards of living fell dramatically. A number of failed economic policies and increasing corruption in government led to rising poverty and crime, worsening social indicators, and increased political instability."
"After Pérez initiated such liberal economic policies and made Venezuelan markets more free, Venezuela's GDP went from a -8.3% decline in 1989 to growing 4.4% in 1990 and 9.2% in 1991, though wages remained low and unemployment was high among Venezuelans.
Some state that "neoliberalism" was the cause of Venezuelan economic difficulties, though overreliance on oil prices and a fractured political system without parties agreeing on policies caused much of the problems."
Though after dismissing a lot of Chavists as conspiracy-theorists, I have seen some outrageous mistranslations and downright lies about Venezuela from the anti-Chavist side, taken uncritically by western media as factual, I am now very careful about sources there. There is a very active propaganda on both sides there.
In a country with the largest oil reserves in the world and an underdevelopped oil industry, I doubt that free market forces would naturally tend to diversify the economy. On the contrary it would lead to increased investments there. I would like to remind that under Chavez, his centrally planned economy was criticized for hindering the oil sector development.
The other ranking where Venezuela is high is corruption. That is the problem you want to solve first. High corruption, under free market or centrally planned economy, is not going to lead to good outcomes.
Forget the economic model, it is the justice and democratic model that is important.
That said, Venezuela is far from a centrally planned economy.