"It's epic mismanagement."
Award-winning news correspondent John Stossel recently reported that Venezuela is a disaster. He had this to say and we can learn from it:
Twenty years ago, it was the wealthiest country in Latin America. It still has the world’s biggest oil reserves. It should be a happy and prosperous nation.
But then Venezuela went socialist. Democratic socialist to be exact. They voted for it. Hugo Chavez promised the poor “social and economic reforms.” The majority of voters believed him.
So did many leftists.
Model Naomi Campbell traveled to Venezuela to give Chavez a hug. She called him “a rebel angel.”
Film maker Michael Moore said that Chavez used oil money to “eliminate 75 percent of extreme poverty.”
But now that the socialists created much more extreme poverty, you would think that leftists and progressives would realize that democratic socialism is not the route to paradise.
But no, nothing convinces a dedicated socialist—or much of the mainstream Western media.
A popular Vox video titled “The collapse of Venezuela, explained” never once mentions socialism. Instead, it says Venezuela collapsed because “oil prices plummeted in 2014 and Maduro failed to adjust.”
“Blaming socialism for Venezuela’s riches to rags story is grossly misleading,” said Al Jazeera anchor Ryan Kohls.
Venezuela didn’t collapse because of socialism, added comedian John Oliver. “It’s a story about epic mismanagement.”
But mismanagement is what happens under socialist governments. It always happens.
That’s because no group of central planners is wise enough to manage an entire economy. Even if they have good intentions, socialists eventually run out of other people’s money.
In Venezuela, the solution was to print more money. That caused massive inflation.
When businesses raised prices to try to keep up with inflation, Hugo Chavez and Nicolas Maduro called that “profiteering” and punished many by confiscating their businesses.
The socialists claimed they would run those businesses better than greedy capitalists could because they weren’t obsessed with profits. Without the “excess” profits, prices would be lower and more money would go to the poor.
But pursuit of profit is what makes an economy work! You’d think the collapse of nations such as Venezuela, China, Russia, Korea, Vietnam, Cambodia, and Cuba would have taught the socialists that. But no.
Leftists and progressives claim that socialism is succeeding in much of Europe. John Oliver claims, “There are plenty of socialist countries that look nothing like Venezuela.”
US presidential candidate Bernie Sanders agrees, saying: “When I talk about democratic socialism, I am not looking at Venezuela. I’m not looking at Cuba. I’m looking at countries like Denmark, like Sweden.”
But those countries are not socialist!
Yes, they have big welfare programs, but their economies are more capitalist than America’s and ours.
They set no national minimum wage. They impose fewer regulations on businesses. Their leaders even go out of their way to point out that they are not socialist. Denmark’s prime minister went on TV to respond to Sanders’ comments by saying: “Denmark is far from a socialist planned economy. Denmark is a market economy.”
Not only are Scandinavian countries not socialist, lately they’ve reduced government control of their economies. Denmark privatized the national phone system and the railroads—and sold the Copenhagen airport to a private company. We should do the same with our railroads and NAIA.
Swedish economic historian Johan Norberg points out: “We did have a period in the 1970s and 1980s when we had something that resembled socialism, big government that taxed and spent heavily. [But] that’s the period in Swedish history when our economy was going south.”
So Sweden reduced government’s role, too. They privatized businesses and even instituted school choice.
The leftists and progressives are just wrong. Scandinavian countries that they call “socialist successes” are not socialist, and they’re moving toward more capitalism. It’s astounding that the progressives keep winning votes peddling economic nonsense.
At least Venezuelans who escaped their country’s socialism understand now that socialism creates poverty.
Recent Venezuelan immigrants to the US were interviewed about socialism. Most gave answers like “I wouldn’t recommend it to anyone” and “It’s never gonna work!”
It never will. Never.
As libertarian economist Ludwig von Mises wrote: “The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement… They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office, every man but one a subordinate clerk.”
Until leftists and progressives learn that, tragedies like Venezuela will happen again and again.