What Danny Glover and I have in common

In a kind of a weird back-door way, I also support Hugo Chavez. Or put another way, and going a little Hegelian, as Tyler likes to say, I think Chavez is an historical necessity, and a richly deserved one at that.

Venezuela has relatively high levels of income inequality (a gini coefficient in 2000 of around .44 compared to .36 for the US according to the UN) from a relatively low base and was run by a corrupt elite class who swallowed up oil wealth while the economic standing of the country plummeted. In 1957, Venezuela’s GDP per capita was 51% of the US, in 2003 it stood at 18.5% of the US.  Existing institutions had no credibility with a very large
portion of the population and simply could not continue to exist as they had.

Don’t get me wrong here, I’m NOT endorsing Hugo. Do I think that Chavez and his policies are going to serve the long term economic interests of Venezuela? NO. Do I think Chavez is a charming guy? NO. Would I be sad if Chavez lost power? NO. If George Bush and Chavez were in a burning building and I could only save one would it be Chavez? NO.

I am just saying that Venezuela was run into the ground by its ruling class and Chavez is the (I hope only temporary) result of their short sighted, poor governance.

A similar analysis applies to Evo Morales. Bolivia has even higher income inequality (year 2000 gini of .60) from an even lower base, and has fallen even more precipitously in economic standing relative to the US, From 25% of US per-capita GDP in 1951 to 8.7% in 2003. That is just a disaster. The ruling elite of Bolivia had Evo Morales coming and I hope he gives it to them but good.

I am not sure whether this type of path is inevitable in Latin America. Lula was a populist firebrand but has governed quite moderately.  Brazil though, did not suffer nearly the same fall in its relative living standards. Their peak of per-capita income relative to the US occurred in 1980 at 31% and it "only" declined to 21% by 2003. Income inequality though is very high (2003 gini of .58).  Will Brazil avoid a Chavez, or is that yet to come for them?

Note that the GDP figures used here are from the Penn World Tables 6.2 and are adusted for deviations from purchasing power parity (the variable I use is "CGDP relative to the United States" and it is available from 1950 – 2003).

Comments

What if you had a choice between saving Chavez and saving BOTH Bush and Cheney?

This is an interesting political application of the annealing concept that the complexity folks talk about. A system caught in a sub-optimal equilibrium can be temporarily made worse and due to being freed from the old steady state can now achieve a better outcome.

This seems to be a property of many systems from metallurgy to political economy.

If George Bush and Chavez were in a burning building and I could only save one would it be Chavez?

Hugo Chavez, by his buffoonery, is pushing someone else's country into decline. George Bush, by his buffoonery, is pushing my own nation into decline. This is a no-brainer.

GoodnessOfFit: it's great to hear someone considering ideas from complexity to be relevant to social systems.

Grier: My sentiments exactly! Chavez is necessary to break the stranglehold of the elite. This sort of turmoil is always necessary in any society that was characterized in the past by large inequality with an elite class, quite simply to change the beliefs of people to those that support a different state of society.

Unfortunately, everything is pointing to Chavez being a dictator for life and not just redistributing the income like you mentioned but running his country into the ground. He's giving himself more and more power and has seized control of the industries that will guarantee he can retain that power.

Tsunami,
There are a handful of researchers out there applying complexity to social systems. If you are interested in more about the application of complexity science to social systems see "Complex Adaptive Systems" by Miller and Page (both are affiliated with The Santa Fe Institute).

Tsunami: "Chavez is necessary to break the stranglehold of the elite."

And replace it with a chokehold from a different elite.

Meet the new boss. Same as the old boss.

Even better, it'll all be America's fault.

And just wait until he lets the Iranians base missiles there.

Thanks, the GDP comparison statistics are very helpful to me in understanding the situation.

In other words, it definitely is too Hegalian to claim that Chavez is an "historical necessity" if you're going to ignore that similar kinds have arisen in the past. He may easily not be part of progress at all, but merely part of a sadly recurring cycle.

John Thacker is correct that Chavezes are nothing new. Generally speaking, what happens is that ambitious young dark men marry fair women of the upper classes, and their successful sons repeat the process until the dark upstarts' descendents are almost indistinguishable from the rest of the white ruling class. That's how white people have stayed on top for 500 years in Latin America.

Historically, Latin America has not benefited from the brilliance of Western culture to the extent that North America did. We are seeing the consequences of that now (as well as evidence of the superiority of Western civilization).

Lacking the Western European cultural background, much of Latin America has been impoverished and uneducated. When someone finally comes around who promises the people the moon, the populace lacks the education to understand exactly what will happen; they only know who makes the nicer-sounding promises. So that's the guy they get behind.

Without the education to see past the promises of the Chavezes and the Allendes and understand what will really happen, the people of Latin America are forced to learn the hard way. But hopefully, after a generation or so the lesson will stick.

Heaven help Guatemala then (gini coeff = 0.56). They have a Nobel Prize winner waiting to take over the country.

Unfortunately the prize was not for economics.

Oh, My God!! Tanks to Him you guys are't formulating the external politics of USA!!
It's funny to see how you can be so uninformed about Latin America and think that you can discovery the cause to its subdevelopment just by looking at GNP data!!
You should to study about something before to emit opinions... PLEASE!!

Sorry, my mistake! But when I read that Chavez is an historical necessity it gave me chills! Of course declining incomes have to do with this sort of politician, very common in these lands. I think education is a more problematic point in Latin America, when we talk about populism, since populist politicians aren’t exclusivity of these days. But what you guys don’t see is the massive left propaganda that there are here. I’m not a conservative, but this kind of stuff is growing bigger and is spreading an anti capitalism thinking that only harms the people. We already now the story and where it will go. This week Chavez closed the only national TV station. We are watching the rise of a new Cuba, and Fidel wasn’t an historical necessity for his country.
LA ruling classes (specially its intellectuals) aren’t against Chaves, Morales, Lula. This IS the problem! They just want their pieces of the cake.
And I expect to not have been rude.

You should write a paper.

"Populist ideas as a precondition for long term growth without inequality"

Yes, I'm being ironic.

"(...) Do I think that Chavez and his policies are going to serve the long term economic interests of Venezuela?"

...So what is the final purpose of your idea?

"I suspect all of Latin America, with the possible exception of Mexico will travel down the path of populist dictator-for-life governments in the next 50 years, even Chile."

If I were a gambling man (and I am!), I would bet against it for Chile.

I'll bet you $1 each year for the next 50 years-or until one of us dies-that Chile will not be a populist dictator-for-life government in that year.

I'll give you 5-to-1 odds each year for the next 10 years, 3-to-1 odds each year for the following ten years, and 2-to-1 odds each year for the 30 years after that.

Offer is good until August 1, 2007.

:-)

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