Socialism through Central and South America
By Dr. Henry Fischer
September 2017 – “The problem in Venezuela is not that socialism has been poorly implemented, but that socialism has been faithfully implemented,” President Trump explained during his speech before the UN General Assembly. “From the Soviet Union to Cuba to Venezuela, wherever true socialism or communism has been adopted, it has delivered anguish and devastation and failure.” The president’s diagnosis of what ails Venezuela—and other socialist experiments in the Americas—is dead-on accurate.
Venezuela is blessed with resource wealth (especially oil) and a geographic placement made for tourism. Yet Venezuela is on the “brink of total collapse,” as the president observed. The reason: socialism.
Before Hugo Chavez was elected president in 1998—it pays to recall that he attempted to seize power through a military coup in 1992—Venezuela was one of the wealthiest countries in South America. It enjoyed a relatively high per capita GDP, had a robust and booming oil industry, and a thriving tourism sector. Yet today, after 19 years of socialism under Chavez and his successor, Nicolas Maduro, Venezuela has been transformed into an economic and humanitarian disaster area.
Venezuela’s per capita GDP was $15,581 in 1977; today, it’s just $13,800. Venezuela’s unemployment rate is 17 percent, headed for 25 percent by the end of this year. Venezuela’s poverty rate stands at 82 percent. The Chavez-Maduro brand of socialism has left Venezuelans without food, milk, fuel and toilette paper. It’s so bad that Venezuelans have been forced to raise rabbits at home in order to enhance their protein supply. The public-health system has collapsed, forcing 10,000 Venezuelans into Brazil each month to seek food and medicine.
Venezuela’s inflation rate is a staggering 800 percent. The inflation rate and devastating devaluing of the bolivar (Venezuela’s currency) call to mind the economic chaos of Weimar Germany after World War I.
As economic historian John Steele Gordon details, “Since 1975, the Venezuelan economy has shrunk by 17 percent.” By way of comparison, he points out that Chile’s economy has grown by 287 percent during that same timespan. There’s no mystery as to why. Chile abandoned socialism in 1973, while Venezuela embraced it in 1998. Thus, Chile’s poverty rate has fallen from 45 percent to 14 percent. Chile’s unemployment rate is 6 percent. Chile’s inflation rate is 4 percent. Chile’s per capita GDP has increased by 130 percent.
Or compare oil-rich Venezuela and comparably-sized Taiwan, which has virtually no natural resources. Thanks to capitalism, Taiwan’s per capita GDP is 28th in the world; Venezuela’s is 115th.
Some 2.1 million tourists annually flock to neighboring Colombia, 4.5 million to the nearby Dominican Republic, 5.6 million to neighboring Brazil—but just 700,000 visit Venezuela.
Again, it’s no mystery why: Venezuela ranks dead last—113th out of 113—on a global rule-of-law survey; 126th out of 127 on the International Property Rights Index; 159th out of 159 on the Fraser Institute’s economic-freedom index. Why would anyone want to vacation in such a place?
As all authoritarian regimes do, Venezuela’s dictators have used this crisis of their own making to justify an expansion of their powers and a doubling-down on their failed socialist experiment.
After his election, Chavez moved to eliminate the Senate and extend his term in office; took control of television stations and banks and the courts; and limited the powers of the legislature. Chavez followed the Castro model and even opened Venezuela to Cuban and Russian advisers. Moscow and Caracas have entered into billion-dollar deals for military equipment. In addition, Chavez gave Iran access to the country and ended up with Islamic terrorist organizations on Margarita Island and other places in Venezuela.
When Chavez passed away in 2013, Maduro followed in his footsteps and accelerated Venezuela’s downward spiral. Maduro created and passed an illegal budget without the involvement of the National Assembly, then used the courts to dissolve the National Assembly, and finally created an unconstitutional and illegal “constituent assembly” in its place.
Inevitably, Venezuela’s turn toward strongman-socialist rule triggered a backlash. As the Los Angeles Times reports, 130 people have been killed protesting Maduro’s authoritarian government; 5,051 have been arrested by the Maduro regime.
“The socialist dictatorship of Nicolas Maduro has inflicted terrible pain and suffering on the good people of that country,” the president noted. “This corrupt regime destroyed a prosperous nation by imposing a failed ideology that has produced poverty and misery everywhere it has been tried.”
Sadly, there’s no sign that things will get better—on the political, economic or public health front—in Venezuela.
How can a system of government that has been so unsuccessful in so many places—in the Soviet Union, in Eastern Europe, in Cuba, in North Korea—continue to dupe and seduce so many people? Those who preach the tenets of these discredited ideologies only contribute to the continued suffering of the people who live under these cruel systems.
Photo: Venezuela’s President Nicolas Maduro/Photo: Prensa Presidencial