Venezuela: A Failure of Socialism?

[IMPress Polly]

I've posted this elsewhere recently, but given the many dishonest commentaries on the nature of the situation in Venezuela that we see in the corporate news media and that I've seen replicated on this message board, I thought it deserved its own thread, so I'm re-posting the material here (with some minor amendments for context):

There is no question that Hugo Chavez reformed Venezuela in many positive ways. The main way was nationalizing the country's oil sector, which was (and is) the country's principal source of income and had previously been controlled by American companies. Once the oil business was brought under national ownership, the country was able to actually benefit from the sale of its oil resources for a change, which brought in a decade of general prosperity, which Chavez's leftist government shared with the people via many new public welfare programs. This agenda, together with a number of democratic reforms (such as the introduction of community councils that brought in some participatory democracy and the official promotion of worker-owned cooperatives), made Chavez and his government very popular, as they increased democracy while yes, substantially reducing poverty.

However, the Venezuelan government had also promised to use a lot of those oil revenues to diversify their economy (e.g. by using those revenues to build up a manufacturing base, as so forth). That was a lie. In reality, they just simply reinvested those newfound resources in the extraction of more oil for sale mainly to the United States, though they did gradually shift more of their trading focus to China as well for the sake of balance. That failure to diversify their economy left them dependent on the global price of oil when the crash of 2008 hit, causing those prices to collapse. That just simply destroyed Venezuela's oil-based economy. Of course, successful American and Saudi pressure on OPEC to keep global oil prices artificially low subsequently in order precisely to wreck economies like Venezuela's into submission was also a factor.

The key thing to point out here is that there is no way to argue that the global market price of oil is the fault of a socialist program. It is likewise impossible to argue that Venezuela was ever a socialist country given that, at all times, the majority of the country's economic activity has come from the private sector. A country whose revenues depend on the sale of oil to the global marketplace by a state-run (but not worker-controlled!) oil company can, as Noam Chomsky has pointed out, best be described as state capitalist. As in the state runs the country's single most crucial economic sector, but it runs that sector on a market basis. This scheme has created a government bureaucracy corruptly profiting from it behind the scenes, especially since Chavez's passing, and that is the textbook definition of state capitalism.

A socialist economy, in contrast, is, at least for the most part, both popularly owned and controlled and revolves around production for use, not for exchange.

It's worth adding that the reason American news commentators (not only on Fox News, mind you, but also CNN and the rest) are anxious to discredit Venezuela's current regime is because their sponsors salivate over the prospect of restoring the previous system of near-total American domination of Venezuela's economy, which can only be accomplished by the re-privatization of the country's key oil sector; something they hope, and suspect, the opposition to Venezuela's current government would enact.

[Newpublius]

This epitomizes why socialists are disgusting people.

[Peter1469]

The country is sitting on the largest or one of the largest oil fields on earth.

They should be a wealthy nation. They aren't. They are collapsing.

[Chris]

Polly, seems to me your argument rests on the old canard it's not true socialism. You blame the market for oil but who's killing people in the streets?

List of people killed in marches and unrest since 1 April:
Jairo Ortiz, 19, killed on 6 April in Miranda state. According to Venezuela's Interior Ministry, Mr Ortiz was not taking part in anti-government protests when he was shot dead. A police officer has been arrested in connection with the shooting.
Daniel Queliz, 20, killed on 10 April in Valencia state. Shot in the neck during an anti-government protest.
Brayan Principal, 14, killed on 11 April in Lara state. Shot in the abdomen during anti-government protests in the city of Barquisimeto.
Miguel Ángel Colmenares, 36, killed on 12 April in Lara state. Shot 11 times, witnesses said he was targeted by "colectivos", pro-government militant grassroots groups.
Gruseny Antonio Canelón, 32, died on 13 April after being shot during a anti-government protests in Lara state.
Carlos José Moreno, 17, shot in the head on 19 April in the centre of Caracas near an opposition demonstration. Was on his way to play football, his brother said.
Paola Ramírez, 23, shot on 19 April near an anti-government demonstration in Táchira state. Witnesses said "colectivos" were to blame, while the interior minister blamed an opposition party.
Neomar San Clemente, 28, sergeant in the National Guard, officials said he was killed by a "sharpshooter" during an anti-government protest near Caracas on 19 April.
Melvin Fernando Guittian, 26, shot in the stomach as he was returning to his home amid anti-government protests on 20 April.
Almelina Carrillo, 47, died on 23 April after being hit by a bottle of frozen water during a pro-government march on 19 April in Caracas.
Jesus Sulbaran, 42, shot in the neck during protests in Merida on Monday 24 April.
Renzo Rodríguez Roda, 54, shot in the chest during demonstrations in Barinas on 24 April.
Eleven people died in the El Valle area of Caracas between Thursday 20 and Friday 21 April, many of them were electrocuted when a bakery was looted.

@ http://www.bbc.com/news/world-latin-america-39691890

[Kalkin]

Venezuela: A Failure of Socialism?

Yes.

[Peter1469]

The market tried to bring oil riches to the country. Then the country nationalized the oil companies. Rigs and other infrastructure has not be upgraded nor adequately maintained since.

Socialism can't manage complex functions I guess.

[Chris]

A country whose revenues depend on the sale of oil to the global marketplace by a state-run (but not worker-controlled!) oil company can, as Noam Chomsky has pointed out, best be described as state capitalist.

Right, socialism, which Chomsky praised, fails, so he labels it capitalism.



They failed to develop a sustainable economy. Sounding like Trump he talks about trade deficit with China. And finally, the socialists were corrupt.


Question, how does socialism develop a sustainable economy?

[Kalkin]

Question, how does socialism develop a sustainable economy?

Answer: It can't.

[Standing Wolf]

Polly, seems to me your argument rests on the old canard it's not true socialism. You blame the market for oil but who's killing people in the streets?

Chris, all sorts of governments in the world today, and throughout history, have killed people in the streets. The repressive nature of a regime, the mistakes of its leaders and the crimes that they commit against their people, are not determined by economics.

[IMPress Polly]

I don't think I've made any attempt to romanticize Venezuela's current regime, people. What I have presented is called a nuanced view. My critics, by contrast, seem to have very little to say on this subject, perhaps reflecting their small amount of knowledge thereof.

Peter wrote:
The market tried to bring oil riches to the country. Then the country nationalized the oil companies. Rigs and other infrastructure has not be upgraded nor adequately maintained since.

Socialism can't manage complex functions I guess.

That is a completely ridiculous view. All you have to do is compare Venezuela's position on the Human Development Index now and then to see that the average Venezuelan is, even now, far better off overall than before the nationalization of the country's oil sector in 1999.

It's just as silly and baseless to claim that the condition of the country's oil rigs, rather than the drop in global oil prices in the last decade, is responsible for the country's current economic condition.