The French Revolution (and others) was tied to hyperinflation and a shortage of wheat. When people are hungry they get desperate. There is no reason why anyone should be hungry in Venezuela. It’s a verdant country. Yet the socialists have so mismanaged the economy that even here, in a veritable Garden of Eden, people are hungry. Even here, a country which sits on massive oil reserves nearly unrivaled in the world there is not enough energy to keep the lights on.
It takes real work to screw up an economy this bad. When a country which sits on massive energy reserves must cut the lights for 4 hours a day one knows that socialists have got to be running things. In a market economy these issues would be solved pretty quickly or more likely would not happen at all.
But hey, everyone will be equally in the dark. So that’s good.
Venezuela is seeing some challenges. But this is what happens when planners try to deny the natural tendency of prices to ebb and flow.
This is video is from last May, before the Chavistas (the socialists) were hammered in parliamentary elections, but it is so good I had to post it.
And you think shopping at Kroger on Saturday morning in tough.
This image is a bit dated. It appears to be from last year. But it still illustrates a great point. Why is anyone getting busted for smuggling milk under any circumstances?
Those damn capitalist opportunists. Those reactionary running dogs. Always seeking to undermine the revolution.
Interestingly this guy was supposedly smuggling subsidized milk OUT of Venezuela. Some seem to think that is somehow worse than smuggling it INTO Venezuela.
The point is milk is being smuggled because of stupid central planning from Venezuela’s government.
If Venezuela’s situation wasn’t so tragic, if there wasn’t so much pain for the people, we’d have to laugh. This happens every time. We’ve been chronicling the demise of socialismo and its crony nature in Caracas for a good while. Toilet paper, soap, beer (beer!) have been in short supply in Chavez’s Bolivarian revolutionary state for quite a long time now.
Socialism is inherently crony. It is a system which is highly centralized and as such encourages the consolidation and then dissemination of wealth (such as it is) and power to vested interests, sometimes quazi-private, (as is the case with Petrobras) often within the government. This is the sad legacy of modern Venezuela and Brazil. (And pretty much all socialist systems.) That these two countries are now failing so spectacularly is to be expected. This is what crony systems do.
For a while we’ve been reporting on the ebbing of the “pink tide” all across South America. A decade ago socialists took power in Brazil, Venezuela, Argentina, Ecuador, Bolivia, Uruguay, and other countries. Now that tide is rapidly going out. Across the continent the leftists are in retreat and leaving a trail of cronyism and just general corruption behind them.
On Sunday the people of Venezuela gave the parliament to the opposition. Yet another win for opponents of “Chavismo.”
It is a large serving though, so keep that in mind.
The central planners in Venezuela have really done a number on their economy. We’ve been following the meltdown there for a while. Slowly but surely the place has fallen apart. No soap. No toilet paper. No french fries. No beer.
That’s right, no beer. At least the last time we checked in the national brewery was on the edge of collapse.
Socialism is death. It is sold as life of course. It is sold as a way to get even with those nasty capitalists with their “greed driven” profit motives. A way to bring heaven to earth. Better to let the cronies in government manage things than the people in a free economy. The cronies only have your best interests in mind.
Socialists prey on the ignorant and hopeless.
“My stock portfolio has gone through the roof! Viva la revolucion!”
This always seems to happen. The socialists at the top of the socialist hierarchy end up with all the loot. Time and time and time again.
What of the proletariat? What of the people?
Invariably socialist countries are also deeply crony. From the Soviet Union, to Hitler’s Germany, to modern China, to even in the “good” socialist countries like Denmark, cronyism is a key part of the system.
Forgive me dear readers.
When socialist countries implode things start disappearing. First it’s meat, then bread, then soap, then toilet paper, and then that absolute necessity of a socialist paradise, booze. Then it’s only a matter of time before people start filling the streets and toppling statues of Lenin, or in this case Hugo Chavez.
Why? Because without alcohol socialism of the kind we see in Venezuela is simply intolerable. Ask anyone who lived in the Soviet Union.
Whether a state has a more corporatist flavor or a more “socialist” flavor (crony systems typically have both) it is the denial of prices, the denial of reality, which leads ultimately to disaster. If the pricing mechanism isn’t allowed to work distortions in the economy arise. Distortions make the system wobbly, and sooner or later the system is off the rails.
And out of toilet paper.