In a Venezuela Ravaged by Inflation, ‘a Race for Survival’
nytimes.com
nytimes.com
> Eschew flamebait. Don't introduce flamewar topics unless you have something genuinely new to say. Avoid unrelated controversies and generic tangents.
This is particularly difficult to avoid on these controversial topics, but we have to try because the quality of the discussion when we do this is way below what this site exists for.
Well-managed capitalism is much more efficient than socialism in inducing people and organizations to develop and upgrade their production capabilities. One of its unfortunate side effects is much larger inequality than socialism. Still, history has shown that over the long run, capitalism tends to be better even for the poor. Most poor people in the US still live better than many average people in certain countries (Example: a small fraction of people in India own a car; many poor people in the States do).
On the other hand, pure capitalism is clearly not the most efficient system because it perpetuates the status quo, suffers from negative externalities, and underdevelops certain resources, especially those that require a long lead time and mostly yield social rather than private benefits. Prime examples include public infrastructure and talents born in underprivileged families.
Capitalism that works well should maintain these two components that resemble socialism:
1) Long-term public investment to develop shared infrastructure, production capabilities, and talents, and
2) Redistribution to alleviate people from poverty trap and allow people to help themselves and become a contributing member to the community
What is preventing, or perhaps more likely - disincentivizing, people of even moderate means from doing this? It would be a trivial way to add a substantial side income that would simultaneously help out countless people, again as this article emphasizes. I never gave much weight to the stories or failed social systems, but this does seem to be very much a recurring pattern. Venezuela is obviously far from an ideal example, but reality itself is also hardly ideal. If we end up with these sort of collapses when systems are less than ideal -- then that alone is sufficient reason to doubt their viability.
Well that's an easy one.
>price-controlled chicken
Price controls (caps) lead to shortages. It's an Econ 101 concept that's been proved out dozens of times - from the oil crises to the Great Depression.
Its more of a lack of incentive than disincentive. When making profit is essentially outlawed ( https://www.theguardian.com/world/2013/nov/15/venezuela-army... ), what would motivate people to work and generate stuff?
Q. How can we eliminate the Sahara desert?
A. Establish a socialist republic in the area and wait a bit for the shortages of sand.
According to those standards there probably hasn’t been a true socialist society or state yet.
The often mentioned Nordic model isn’t socialism by any narrow definition because it still involves free market capitalism and private ownership of the means of production.
Hmm, I just did a quick google search... this Quora question [1] seems to have some consensus that Venezuela is actually closer to a dictatorship that has some socialist aspects and some capitalist aspects.
I don't know many details about the Venezuela situation, so I can't say too much more at this time.
[1] https://www.quora.com/Is-Venezuela-a-socialist-or-communist-...
Every real-world implementation of socialism (in the true sense of the word, not the Nordic / social democracy kind of system) to this day seems to either have had some features of a dictatorship right from the start or devolved into a dictatorship over time.
The only instance of socialism I can think of where this wasn't the case is the Allende government in Chile and that unfortunately didn't last long enough (less than 3 years) to see how it would've evolved in the long run.
How much of this race to the ATM etc. would be a problem if the money supply was digital and everyone could use their phone to make purchases.
I would like to propose a thought experiment and solicit opinions on whether situations like this can be mitigated by using a LOCAL digital (crypto) currency.
Suppose the prices are marked up constantly but there is also a constant increase in the money supply available to the public.
A user of an app could choose to view the prices in their preferred currency (eg dollars) while using the underlying currency so everything would seem more stable.
Then it becomes an engineering problem of storing the amounts as two integers: 1. The number of cents 2. The power of 10 to which to raise the price.
I would love to get feedback on the following: how to get the new money into the hands of the people?
What if there was a system that automatically calculated eg the median amount people spent on food, and issued (a percent of) that amount the next day as Basic Income to everyone in ther account?
Automatically issuing Basic Income based on Local CPI would organically allow people to prioritize necessities such as food before other transactions.
Of course, unilateral issuance of money by the government (eg to pay debt) would rob people of the savings power in that currency. But they could buy non perishable assets as investments and a store of value, including bitcoin.
Under such a system, the currency would then still be usable as a medium of exchange, which can be decoupled from its role as a store of value.
However, if the newly issued money was solely issued to pay the foreign debt, it would not be available for the local population to use. This is the real problem with austerity. The currency is devalued on global markets, making imported goods more and more expensive. Runaway inflation is exponential.
The government would have to BALANCE printing money to satisfy foreign interests with issuing money to its own citizens (eg as UBI to all citizens - which even Ron Paul himself suggested as a better alternative to bailing out the banks).
In other words for every X amount you print to satisfy foreign debts you issue 2X to your own citizens, so they can still buy necessities.
This is not ideal -- but it does allow a country to soften the blow of austerity. Incurring such debts is the underlying problem. They should just default, like Iceland. And issue a new currency to all their people. They still keep paying their debts, even as the price of oil plummeted and they do not have enough real assets to back their foreign promises anymore.
By defaulting on their debts, they can once again get control of their own money supply, which is probably far more valuable to each citizen than the country's credit rating -- paying debts on the verge of bankruptcy isn't doing any of the citizens any favors.
That's the real mistake of the Maduro government in my opinion.
Disclaimer: my company is building a technology to power all the things I said for communities -- doesn't have to be countries. Cities like Detroit or even a remote unbanked village in Africa should be able to have their own local currency and run their own monetary policy, and hopefully using DIRECT democracy rather than representative democracy which can lead to stuff like this. Much of the economic analysis and fundamentals should be automated and available to every citizen, making them informed enough to choose what they want to do, instead of watching their leaders mess it up.
PS: Why is this being downvoted? Do we just have to say "socialism -- so bad -- sigh" and move on without any substantive analysis of possible real solutions to existing problems?
This is called (hyper)inflation. They already have that, no new app required.
If all people have to run to the ATM faster than they take a piss so they can buy food then making payments digital is an immediate improvement.
But that's just the first part. Did you read the part about issuing 2X the amount of currency to your own people for every X you issue to pay back foreign interests?
I want substantive feedback on my UBI proposal!
Money is not wealth, its a token of exchange for wealth. Your proposal is akin to educating a country by "issuing" degree certificates at a certain rate, completely ignoring if anyone is learning anything.
Did you actually read the rest of my post? I asked about something completely different.
You seem to be saying people who don't have enough money at a given moment should starve. The difference with your example of degree certificates is that they are not basic necessities needed for survival.
No, I'm saying that if the food (wealth) doesn't exist, no amount of money (tokens) can buy it. You are postulating that the problem is lack if tokens.
http://www.independent.co.uk/news/world/americas/cia-venezue...
- problem is not that a country has some socialist policies
- problem is not that a country has a party with "socialism" in its name in the government
- problems definitely start to appear when a country has an autocratic government, whether it was originally "socialist" or "bolivarian" or whatever; an autocratic government then typically adapts some sort of "socialism" in its name in order to justify the autocracy, the choking of free markets, the political redistribution of resources, ad-hoc top-down responses to the economic problems that eventually come up, and the suppression of free media to hide the increasing problems.
Venezuela is a cautionary tale of a wide spectrum of economic policies, not only the recent ones as the media would like us to think.
Well, that's my interpretation of the situation? It seems like the common way for this kind of situations to arise. The political ideology that the rulers choose as costume for their kleptocracy seems only marginally relevant.
e.g. You worry about the cops being corrupt; you don't worry much about a local restaurant owner being corrupt because you can just eat somewhere else.
This is why small government, freedom and individualism are very simple and effective antidotes to corruption.
Unless, you mean to describe juntas as "small"? (I wouldn't, since in those cases the military takes on many more tasks than it normally would...)
Source: I studied abroad there in 2001-2002 and I witnessed the overthrow of Chavez and learned a lot from the people in addition to studying the economics of the situation afterwards.
> I would leave my house at 8:30 in the morning with a pathetic excuse for a breakfast in my stomach: a bread roll and a glass of sugared water (milk was a luxury at the time, and all food was expensive). The dollar, which was illegal at the time, came to be valued at 120 Cuban pesos. Anyone caught carrying that currency risked a long time behind bars.
What people often don't understand is, by the way, that the supposedly "more socialist" countries in North Europe, like Sweden, Norway, Finland and Denmark, are in fact in many ways more market driven and have very free economies, compared to e.g. "non-socialist" Southern Europe. But of course, in all countries the politics meddles with the economy.
What you mean is that some European countries have a welfare system paid by a highly effective capitalist economy.
(I think it's cultural difference between US and rest of world where the US considers socialism ~= communism)
"Hugo Chavez declared the oil belonged 2 the ppl. He used the oil $ 2 eliminate 75% of extreme poverty, provide free health & education 4 all" - Michael Moore
https://english.stackexchange.com/questions/8540/what-is-wha...
What is for sure true is that power corrupts and concentrating too much in too few hands is bad. Ignorant people like Chavez and Maduro who have simplistic ideas and too much power is really, really bad. Think Mao and Pol Pot.
When the cause becomes more important than the truth, whether it be communism, environmentalism, religion, free markets, etc., then people will suffer if policies are implemented simply to support the cause.
Just saying, “Socialsim is bad” is not helpful because then all one has to do is paint a particular policy as being socialistic to be defeated. There are countries that have what many Americans would call socialist policies that do great. Some do not.
And considering that the nation has no oil wealth, enough language and cultural diversity to make a single language impossible, massive poverty from independence, its achievements are nothing to sniff at.
And they passed Net Neutrality laws after people pushed for it against incumbent telcos having the upper hand at the start of the process.
Don't you think that the first tribes, before the agricultural revolution were not free? And yet they didn't have private property.
Ride the chieftain's favourite horse and see what he'd have to say about ownership...
Not saying that I agree with that, just presenting a different point of view.
If you think some of your government officials don't have the same thirst for power that would eventually lead the country in a path similar to that of Venezuela's, then you're putting too much faith in humanity.
How the dictatorship is supposed to be a means of representing the people's will is left unspecified. This is no problem to the Marxist, because their picture of the way the world works is quite different, and the fact that literally every Marxist socialist government became a brutal and incompetent dictatorship is not interpreted as a flaw of their belief system, but a sign that the will of the people was not properly enforced.
all the fans of socialism always forget, the same problem that doomed Venezuela exists in all nations. Politicians. Politicians who are above the law, who are the one percent, who are there to lead and by that requirement deserve special status. Doesn't matter what you call your government type, they always have more power and less restrictions on their actions.
the difference is that it is implied in a socialist society that there is no private property or very little. as such what is there to aspire too? some quasi socialist countries try to juggle this issue to some success but are they really socialist or truly capitalist with some "socialist" qualities?
when government fails to protect the private property rights of people, to the effort of their work, their physical property, the wealth they create in their businesses, it is only a matter of time before it folds. you can only take until the wealth dries up. once that happens you only have force
https://www.salon.com/2013/03/06/hugo_chavezs_economic_mirac...
The money quote:
> When a country goes socialist and it craters, it is laughed off as a harmless and forgettable cautionary tale about the perils of command economics. When, by contrast, a country goes socialist and its economy does what Venezuela's did, it is not perceived to be a laughing matter - and it is not so easy to write off or to ignore.
And yet, even in the face of overwhelming evidence, the appeal of socialism still somehow permeates to otherwise succesful countries.
Sure, the lines between Social Security+Medicare vs Denmark vs Venezuela aren't so black+white, but it's clear to me that the desire to destroy capitalism continues to be strong.
It is quite scary to me that people can be so delusional even with the overwhelming evidence of the success of capitalism for the poor and the absolute failure of socialism for everybody.
"Thanks Hugo Chavez for showing that the poor matter and wealth can be shared. He made massive contributions to Venezuela & a very wide world."
-Leader of the Labour party in the UK[1]
"These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today"
-Bernie Sanders[2]
[1] -https://twitter.com/jeremycorbyn/status/309065744954580992
[2] - https://www.sanders.senate.gov/newsroom/must-read/close-the-...
Meanwhile the gap between the richest and poorest person has grown immensely, and real wages have stagnated for 30 years.
Sure, everyone has an iPhone, but there's a universe where everyone has an iPhone and almost nobody is underwater. And we actively choose to not be in it every time we subscribe to "our billionaire benefactor" theories.
This definition is problematic, not just because it makes the people pointing it out look like in-compassionate jerks, it obscures the real problems many people in poverty have and makes their causes harder to understand and address. It also gives many an excuse to dismiss the poor because, "the government is giving iPhones to them; they're problems can't be that bad."
You'd be surprised. In 1960 it was easy to find occasional job gigs and make some money. Plus, in the fifties even a simple month's salary got a long way.
I think that's a mistake. The poverty line should track how many people can't afford enough food to supply the recommended amount of nutrients, how many are not reliably protected from freezing to death, how many can't see a doctor when they have an infection, and so on.
In short, the poverty line should track how many people are physically suffering because they don't have enough money.
And the type of poverty we have in the developed world is very different than the type of poverty they have in Socialist countries. Poor in the USA have enough to eat, TVs, etc. Of course life is tough, but of course there's not the kind of suffering you see in Venezuela.
Poor people choose with their feet, and they choose more capitalism! The opposite way is almost absurd to think about.
-How many of the 12% in poverty in Flordia flee to Cuba for free Cuban healthcare?
-How many of the poor in West Berlin fled to East Berlin?
-How many of the poor in Hong Kong fled to Communist China?
-How many poor in Colombia are fleeing to Venezuela?
We can have the reasonable discussions on whether Medicaid spending should be increased, but the praise of Chavez and true socialism (which I see in a new Netflix Documentary, lots of Michael Moore stuff, Bernie Sanders rhetoric, Antifa, etc) is disconcerting to me.
This is a surprisingly persistent myth. A quick google search will show you that this is not the case.
http://www.feedingamerica.org/hunger-in-america/impact-of-hu...
Don't take this to mean I am ignorant if the poverty problem in the US, but that's a separate concern. Comparatively, the US has a reasonable safety net (sure, it could be better, but again, separate issue). Given the choice, I'd rather be economically unequal and live in poverty in the US than economically equal and living in poverty in places like Venezuela.
I think inequality is fine as long as it's not hurting the economy (which it is when the inequality is large enough) and thus making things worse for the poorest people.
Moreover, someone that possess more resources than some countries in the world has a huge power over other individuals, sometimes more than governments. I think we want to avoid that if possible. Think of the majority of the press being possessed -in France at least, I'm not sure how it is in the US- by a few individuals. Do you like the idea that everything you see on TV or read on the news is decided by a few individuals ?
So I'd say poverty is not the unique issue here. Avoiding concentration of too much wealth also avoids concentration of too much power.
That's more what you like to believe than what is out there.
Most of the "overwhelming evidence of the success of capitalism for the poor" has been the success of colonialism and imperialism (western countries fucking the planet's 2/3rds and bringing the loot in, then using it to fuel their internal growth).
Colonialism and imperialist has been a historical fact, most of the "developing" and "underdeveloped" countries today were owned by western powers up until the 50s. It would be interesting to see how those "free market" success stories would have fared without mass exploitation of external peoples.
And socialist policies (which are different to totalitarian states like USSR and co) have worked just fine in Sweden, Denmark, France, and tons of other places, including unexpected ones like Singapore (where the state owns tons of businesses, the poor get public funded houses and so on). And of course for most of its own buildup and rise, US had strong tariffs and protections for its market.
Heck, the most boost in the US (in the post WWII era) was tied to increased unionism and post-New Deal social policies -- closer to socialism to regulating everything and then gifting 1 trillion to Wall Street "too big to fail" scum.
Regardless of whether it is the case that socialist policies are responsible for this situation, it’s weird that there are a sudden upswing in the strange, almost sneering style of comment that is littering the comment area.
I almost expect a list of Wikipedia links about Zimbabwe and other countries to follow.
If governments are invested in changing opinions on other Internet forums, why not here? These comments are very low quality and seem to me to be writen to stir up political screaming matches, not actual debate.
In such a swamp, a good conversation is too much to expect. We need drier, more boring ground as a first condition.
While outside it's just a normal political current (and most of the western democracies besides the US will recognize and embrace some elements of socialism).
Indeed. Quite unfortunate for those other democracies.
I want to be ready for when that day comes.
There's this line of debate that goes "Since I cannot argue with you on merit, I will call you heartless and rude"
It's designed to shut people down without consideration for the merits of what they are saying.
It kinda works sometimes. Sure enough, there are plenty of folks who are heartless and rude on the net. But when I read comments that begin with "This whole situation is so sad, because it is 100% human caused. This is not a natural disaster! Socialism does not work and it is not moral..."
I nod my head. This doesn't mean I care less for the people involved. In fact, I care more. What a terrible thing to bring on yourselves for what appeared like a noble cause at first! And how many other South American countries have skated with this very disaster, most of the time coming out better than these folks did.
This is a horrible disaster and I wished I could do something about it.
You don't have to be a troll to point out that this has been a train wreck everybody saw coming, and the disaster continues to play out with more and more harm befalling others -- all for predictable reasons. That's not trolling. That's just where we are.