Friday, May 20, 2016

The Social Disease

“Thanks Hugo Chavez for showing that the poor matter and wealth can be shared. He made massive contributions to Venezuela & a very wide world.”
—Future leader of the UK’s Labour Party Jeremy Corbin, tweeting his eulogy for the recently deceased Venezuelan president in 2013

“If we were to have two parties in Cuba, Fidel would head one and I the other.”
—Raúl Castro, joking with American officials in April, as quoted by The Economist
It is hard to miss the irony. At the moment when socialism is attracting a whole new generation of willing adherents in the United States and western Europe, that very same economic system is melting down in a devastating way in Venezuela.

The IMF recently reported that Venezuela’s inflation rate, the highest in the world, was headed toward 720 percent. Shop shelves are empty, with shortages in everything, including electricity. Crime, already high, has skyrocketed. The country’s currency, the Bolivar, is so worthless that even armed robbers refuse to take it. They break into houses looking for dollars and other foreign currency. With President Nicolás Maduro stonewalling every way he can the huge majority of opposition representatives elected to the National Assembly in December, it is hard to see how a military coup is avoided. Not that a coup would solve much, since the military was thoroughly staffed with loyalists by Maduro’s predecessor, Hugo Chávez. A replacement president could hardly be less competent than Maduro, but the fact is his cluelessness only hastened what was inevitable anyway.

One of the excuses regularly trotted out for economic failures in the developing world is that the global system is inherently unfair. Certain countries were lucky enough to be sitting on valuable natural resources and others were not, thereby explaining the wealth gaps between countries. But Venezuela is sitting on top of huge oil reserves. The Chávez and Maduro governments rode high on their revenues but obviously did not make the best us of them. The recent drop in oil prices was all it took to send the whole country into a tailspin. Other excuses we can expect to hear for Venezuela’s demise is sabotage by the United States and other crimes of imperialism dating all the way back to the Spanish conquistadors.

We may also hear that what was being implemented in Venezuela was not true socialism. That is always the problem with testing economic theories with real world examples. Human societies are never going to practice pure forms of economic systems. The most hard-core socialist country will always have elements of capitalism, and the most free-market liberal economy will have elements of socialism. All you can do is look at specific economic policies in specific countries and judge how well they worked.

Meanwhile in Brazil, former Marxist guerrilla (and successor to the Workers’ Party’s Luiz Inácio Lula da Silva) Dilma Rousseff was suspended from her presidential duties last week, pending an impeachment. Corruption is so prevalent in Brazil, you might well ask, what does one have to do there to actually get impeached for corruption? The answer is to be presiding over a disaster of an economy. Apparently, President Rousseff was cooking the books to hide how much money from the state oil company has gone astray. That’s the problem when the government is so involved in the economy. When large sums of money are passed around, there is always the temptation to pocket some of it or to pay someone off. When corruption happens in the private sector, there is at least some hope that the government will keep people honest. When it is the government itself moving the large sums around, there is virtually no hope.

What about Cuba, the one full-blown surviving Communist country in the Americas? Does its recent rapprochement with the U.S. represent a victory for the island nation or a capitulation? For nearly six decades Cubans have been frozen in a time warp that many left-leaning North Americans find quaint and even admirable but which has not tempted any that I know of to actually emigrate there. The U.S. embargo has always been blamed for the island’s lack of economic progress—even after it had long become ineffective. President Obama was not the first U.S. leader to make back-channel overtures to the Castro brothers about ending an estrangement that had gone on way too long. He was merely the first to agree to the Castros’ demands, i.e. lifting its designation as a supporter of terrorism (specifically, Colombia’s FARC and the North Korea regime) and releasing Cuban prisoners in the U.S. (Many of the dissidents released in Cuba in exchange have since be re-arrested.) I guess Fidel and Raúl just had to live long enough until there was a U.S. president young enough to have grown up with a Che Guevara poster on his wall.

Will the expected influx of western companies and tourists eventually bring Cuba into the modern economic world? Probably not as long as the Castro brothers are alive. But after that, who knows? Assuming those two don’t outlive us all.

Personally, I am more interested in seeing what happens as these young enthusiastic supporters of Bernie Sanders and Jeremy Corbin mature and become more prevalent in U.S and British politics. Maybe Fidel and Raúl will decide to retire in Florida.

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