Venezuela is in large part the fault of socialism

Here is my Bloomberg column on that topic, excerpt:

…rates of change are important. The Venezuelan figure of about 40 percent [govt. spending/gdp] is up from about 28 percent in 2000, a very rapid increase. By boosting government spending so quickly, the Venezuelan government was sending a message that the key to future riches is courting government favor, not starting new businesses.

Or consider exports, which for most developing economies play an especially critical role. They bring in foreign exchange, provide contacts to foreign markets, and force parts of the economy to learn how to compete with the very best foreign companies. Yet over 90 percent of Venezuela’s exports are oil, and those resources are owned and  controlled by the government. For this all-important growth driver, Venezuela comes pretty close to full socialism — to its detriment.

…nationalizations under Chavez were numerous — encompassing much of the oil sector plus parts of the agriculture, transport, power, steel, telecommunications and finance industries. Even though many of those nationalizations were small in scale, the threat of further encroachments on private property rights discouraged investment and sent the wrong signal about where the nation was headed.

There is much more at the link, including a discussion of the all-important dimension of ideas.  And here is the essential Kevin Grier on Venezuela.

Comments

This was an interesting article. Not so much for the headline topic, but for the clear subtext. Tyler Cowen is worried about American socialists. He sees them on the rise, and as potentially powerful. I think that is wrong. American socialists are still peripheral and weak. They are more a symptom than a cause.

What is the cause?

I might have mentioned this before, but I think it has to be the collapse of right-wing political philosophy, and especially, morality. Things as bad as socialism start to look good because they are compared with things that are truly dystopian, like families separated without paperwork, and now thousands of children that cannot be reunited(*). Socialism starts to look like the only alternative to Trumpian cruelty. Gibberish. Fake emergencies. Law enforcement, as the real crime. And of course, conservative fealty to all that.

If you are a right-leaning thinker and you want to fix this, don't treat the symptom, treat the cause. Reinvent conservatism as a moral force we can believe in.

Otherwise you will get a hard swing in the other direction. And “socialism is terrible” won't help you there, because you don't really have a better, non-terrible, vision on offer.

ʕ •ᴥ•ʔ

* - if your mentions of Alexandria Ocasio-Cortez exceeded your mentions of lost children, you might be contributing to this problem, and building this stark contrast.

Trump admin: Reuniting migrant families may not be possible

Most of the rise of millennial socialism has to do with inequality. Both in income/wealth but also opportunity.

They want to democratize the economy because they don't know how to navigate it. There doesn't seem to be any real way to move up anymore.

Keep in mind that most who argue for AOC type policies are the educated, not the uneducated. (I think that is correct based on the data I have seen). But there is an education bubble. All these kids going to school, getting in debt, finding out their degrees are practically useless, and they don't know where to turn.

They are a "lost generation."

The rise of "millennial socialism" has everything to do with its adherents being over represented on twitter. Most millennials are not pining for a Venezuelan socialist system.

Never said "Most millennials are not pining for a Venezuelan socialist system."

But most who argue for socialism do argue for a venezuelan socialist system.

And have you even seen the data? The economist cover story this week showed some scary polling data on this very issue.

Oh, a poll you say? that changes everything.

The function of polling is to provide some sciency looking numbers that confirm your prior held beliefs, nothing more.

And who cares about those who argue for socialism if they are a tiny minority? This is fake trend spotting gone mad, AOC primaried a crusty placeholder Democrat in a safe district, thats it. This is not a revolution, this is the next made up thing to drive traffic and generate clicks.

Here is some "sciency looking numbers."

47% of Democrats view capitalism positively, down from 56% in 2016
57% of Democrats now view socialism positively, little changed from 2010
Republicans very positive about capitalism; 16% positive on socialism

source https://news.gallup.com/poll/240725/democrats-positive-socialism-capitalism.aspx

I hope you appreciate them as all i could initially find where unsciency looking numbers.

There is also some interesting stuff in here https://www.nationalreview.com/2019/02/white-progressives-polarizing-america/

I don't think we are on the verge of real socialism but things have changed quite a bit. Look at how Trump changed the republican narrative so quickly. AOC is doing the same thing.

You overestimate the centrist.

That gallup link contains this little gem "The question wording does not define "socialism" or "capitalism" but simply asks respondents whether their opinion of each is positive or negative."

Sciency looking but meaningless, exactly what im talking about.

They may not be pining for Venezuelan socialism, but the ideas of AOC's "Green Leap Forward" are very attractive from an egalitarian standpoint. These naive millenials need to become better educated on the failures of well-intentioned reformers like Mao and Chavez.

This too captures a dilemma. If you are worried about authoritarians like Mao or Chavez seizing power, you might ... I don't know ... strengthen protections in the Constitution?

Except the entire right wing in America is forced to be mum on such protections, for reasons we all know.

This is the contrast AOC plays on in the link below.

Give me a break, there was no 'socialist' Venezuela system and Chavez was no socialist. Never tried outside offering to share oil revenues. He was ex-military and was brought in to stop the famine in 1999 after years of being stripped by multi-nationals.

Cowen needs a beat down for this "post". Lying is lying. Oil prices collapsed and the global elite tightened the noose, Allende style. That is a large reason why the battle against capitalism must be international and development of socialism is tribal/regional. There is no such thing as "right wing" Nationalism. They are all globalist, tied to globalist organization meant for market totalitarianism. AOC? Give me a fucking break faggies. She ain't Socialist, period.

Your 2008 bailout proves capitalism doesn't work. The system should have died then loser. I mean, repeal it and watch the collapse. Dow 1000 baby!!!!

When you consider that the True Believers, like religious zealots everywhere, suffer the disappointment of every
"crisis of capitalism" failing to deliver the utopia that is right around the corner, perhaps you can summon some of the milk of human kindness for poor Bob and his hapless worldview here.

I'm not a socialist but I suffered the disappointment of the crisis of capitalism, as you put it, during the whole bank bailout fiasco. I'm a capitalist but what we saw was anything capitalism. Socialists have a right to be mad too for their reasons. The whole thing is disappointing to anybody with a sane, coherent worldview. Its unfortunate it ended up with Trump's election but we don't want to continue rewarding crooked insiders by voting in their failed policies so we'll continue to hold our noses at the poll.

I don't wish to deny or minimize the massive suffering. Losing 10 million jobs in less than two years is a staggering thing for those 10 million people, along with anyone else unfortunate enough to be entering the job market in 2009. Nothing close in post WWII US experience. Mostly the Fed's fault.

It's just never gonna presage the long-awaited "first coming" of the utopia envisioned by the True Believers.

Me thinks Dr. Cowen’s Bloomberg status is going to invite a lot more communist twitter trash to this site in the coming years....

The only thing worse than suffering through a recession or depression in a capitalist economy is living in a non capitalist economy-there’s nothing to recess or depress from......

Lol it’s always the fault of the international financier class when one of these crap hole socialist 3rd world countries goes full dystopia. It can’t be converting so much of the economic decision making to the political sector? No it’s never that. If only the international financiers wouldn’t of meddled everything would of been ALL GOOD in Chavismo world.

'The only thing worse than suffering through a recession or depression in a capitalist economy is living in a non capitalist economy-there’s nothing to recess or depress from'

You would be surprised at the number of (older) East Germans who would disagree with you, as seen by their voting for Die Linke and/or the AfD (from the perspective of (older) East German voters, those two parties are not opposites, they pretty much represent the same thing, in the same fashion that the CDU and FDP are not seen as opposites).

As noted, Chavez nationalized (i.e. took from the previous private owners and hadthe government own and run them) many key industries, including oil. That's key to every big example of socialism I've seen.

Of course, once the government took them over, they couldn't run them and so output dropped significantly over time, in many industries like oil, virtually in half. That's also expected by the opponents of socialism, but not typically by the proponents.

As for the price of oil, it went up and dropped back down at one point, but it's still way up (3x) over when Chavez took over and the seven or eight other countries with a higher dependence on oil as a percentage of GDP at the same time didn't suffer even a recession, let alone the economic devastation of the nationalized food system being unable to provide even basic amounts of food to the population.

But hey, the government is in charge of it all on behalf of the people and no one is "profiting" on it anymore, so it must be a paradise now, right?

I be more inclined to take someone's charge seriously that they actually believed this isn't a problem with socialism if they were to go back in time when the "socialist reforms" were being proposed and made and show us where a socialist supporter somewhere back then said it wasn't really socialism.

Venezuela was a shithole well before the decline of oil prices. Bolivarianism never worked.

Remarkable! Your panties are in a bunch over a couple thousand alleged offsprings of illegal invaders. As if.

We survived eight years of Obama. Yet, I am seriously pessimistic.

What about unsustainable $22 trillion in national debt, increasing at $1 trillion a year?

What about immeasurable unfunded federal liabilities?

What about $$$ trillions in uncovered/devastating state, county, municipal government debts and pension obligations?

What about twenty-five million criminal invaders and tens of millions of lotus-eaters (legal weed and the so-called opioid epidemic) bankrupting public education, food stamps, all hospitals, housing, the welfare state?

The collapse will make dystopian fantasy "The Walking Dead" look like a Fourth of July picnic.

Finally, a reasonable, sane post that totally understands how the world works.

Cool story bro.

Anybody noticed the Trump administration's secret support for socialism?

Steve Mnuchin: We're not going back to socialism again.
Donald Trump: We're going to make America great again.

Put these two statements together. America was once socialist and was once great. To make America great again, it must be socialist again. A conspiracy hidden in plain sight!

'Tyler Cowen is worried about American socialists.'

No he isn't. But in the age of Trump, it is important for those who grew used to a steady stream of support to be able to continue to receive that support even as Trump polarizes many of those supporters in different ways.

Talking about socialism and taxing the rich and being mean to billionaires incessantly is a way to remain comfortable, while skirting the edges of what Trump is wreaking.

AOC fans are not 'educated' they are merely skooled, credentialled, and then saturated in John Oliver's BS or other 'infotainment'.

The current malaise is directly downstream of Bush's devaluation of the USD throughout the early 2000s. It's impossible to overstate the negative effects of this policy.

@ Bear ASCI art image - you underestimate TC. Remember he was New Jersey state chess champion in 1976/77, a tournament previously won by none other than the world famous Hungarian GM Pal Benko (yes, they named the Benko Gambit opening after him). TC, like a chess master he is, can spot trends well in advance of you and I. He called "Great Stagnation" (about the same time as Robert Gordon, though in the science field there were hints of this as far back as the 1990s I recall). He called "average is over". He called "complacency" . And he made fundamental advances in the art of art and the science of picking restaurants. Simply put, TC is a genius of probably the 170-180 range (I scored 120 in my last test, putting me in the top 7%; in some earlier tests I scored in the top 130+). How you doing?

When TC says something you should drop everything and listen. He is calling a socialist trend but at the same time not predicting a socialist sweep. I think this judgment is, for now, sound. Everybody else is mood affiliation.

As much as this essay and my response might strike you as unique, they are both very much "of a type" in this political moment.

Trivia: I read Tyler's essay earlier this morning and composed my response. As I finished, I saw a much more succinct version from 'herself'

https://twitter.com/AOC/status/1098227885427646464?s=19

Doesn't she consider herself a socialist?

https://www.vox.com/policy-and-politics/2018/6/27/17509604/alexandria-ocasio-cortez-democratic-socialist-of-america

Sure. The difference between her comment and mine is that I genuinely hope conservatives rise to the occasion. She just plans on reaping the rewards of their failure.

She doesn't like the idea of the right screeching about socialism. I would think socialists would embrace the accusation.

She's the new Sarah Palin. Palin was never a deep thinker either.

@annoying bear face

“Strengthen the Constitution”, you say? You mean it’s not an ossified white patriarchal construction that should rather be seen as living?

But he was very good at chess 45 years ago!! LISTEN!!!!

Chavez expresses the desired freedom of going. Cowan harkens to the Credo Ave Maria -- "I saw him as if the sun"; war is love...."who were free by now." In privatization, "speaking and acting were one." Of course, they are not. Ask any "go-between," ask yourself if JG is a question mark, ask if spirit of country is the same spirit of the earth. I shall speak about and say only no herb or spell that can force "peace as rest." Chavez will let "fate take us wherever it pleases," and for those who cannot listen, Cerberus will roam free.

He wasn't wrong about ZMP people; he just understated the case. NMP (negative marginal product) people are all over the place. I seem to meet three a day. Cashiers who can't make change; a car rental agent who couldn't answer the simplest question about a rental car, and whose only visible emotion was hostility; a waiter who left on break in the middle of a meal and didn't come back. Sabotaging your employer is capital destruction and it is hard to imagine a positive equilibrium wage rate for such a person, who is said to make up 20% of the workforce.

Agreed. Remember that the first socialist country—the USSR—became socialist because in 1917, the liberals foolishly allied with right-wing nationalists and militarists in wanting to continue World War I, causing the vast majority of Russians to turn to far-left parties like the Bolsheviks (whose slogan mentioned peace first and economic issues second).

The lesson for liberals is that they must be willing to abandon their natural meekness and firmly resist aggressive right-wing policies, or they will lose support to left-wing parties that are.

Kerensky would have been wise to get out of WW I, but it is simply false to claim that "the vast majority of Russians" supported parties "like the Bolsheviks." In the one Duma election held after the Bolsheviks siezed power, the Socialist Revolutionaries (SRs), a much more moderate party baed on appealing to the peasantry won big over the Bolsheviks. This led to Lenin simply putting the election aside and simply seizing full power with no shred of parliamentary or multi-party democracy.

Zaua, it was closer to a coup de Etat than anything resembling a popular movement. It is estimated that there were fewer than a thousand hardcore Bolsheviks. Millions just outside of the larger 2-3 cities had to be informed about their new masters. And they were quickly informed, good and hard.

"In czarist Russia, the mentality Tom Wolfe was to dub “radical chic” gripped educated society. The privileged cheered on those who would destroy them."

Liberal professionals and industrialists did more than applaud: They offered their apartments for concealing weapons and contributed substantial sums of money. Lenin supposedly said “when we are ready to hang the capitalists, they will sell us the rope,” but he might better have said “buy us the rope.” Liberals proudly defended terrorists in court, in the press, and in the Duma. Paul Miliukov, the leader of the liberal Constitutional Democratic (Kadet) party, affirmed that “all means are legitimate . . . and all means should be tried.” The Kadets rejected the government offer of amnesty for political prisoners unless it included terrorists, who would, they well knew, promptly resume killing government officials. “Condemn terror?” exclaimed Kadet leader Ivan Petrunkevich. “Never! That would mean moral ruin for the party!”

- https://www.weeklystandard.com/gary-saul-morson/the-history-of-russian-terrorism-dagger-and-swagger

Late 19th century Russia was not a place where the right wing allied with the privileged classes, but a place where anarchists and socialists were romanticized, supported, sympathized with and eventually even acquitted by bien-pensant opinion.

Eventually, at the end of the Long 19th Century, they got what that eventually, inevitably leads to.

"Things as bad as socialism start to look good because they are compared with things that are truly dystopian, like families separated without paperwork, and now thousands of children that cannot be reunited(*)"

So the first sign of an Obama program that wasn't socialist? Is his legacy redeemable?

As a supposed Obama program, shouldn't you be fighting strongly against it?

I don't think the word "Supposed" means what you think it means.

msgkings, It's complicated. A court ruling started it all, and then the issues with adults latching onto kids to appear as a family make it worse.

My point is that partisans, like you are at times, blame Trump for Obama policies, like this and the no fly from a few Muslim countries. If it's ok for Obama to do X and not Trump, then you are a partisan.

And if it's ok for Trump to do X and not Obama, then you are the opposite partisan. TMC, don't be stupid. You are obviously a virulent partisan.

Now, I don't think we can say that the children separated at the border from their parents seeking asylum was also an Obama era policy. Trump changed how asylum claims are adjudicated and the kid separation is the result.

If I'm wrong I'm sure you can provide a link or two, showing all those kids Obama separated from their parents and was never able to reunite.

Where have you seen me claim it's ok for Trump to do X and not Obama?

I wasn't crazy about Obama's policies, but he left a legacy of talking reasonably, using good English, and sounding like he is not insane.

+1

The left almost always sound like they're insane....

True, but it's what you do that counts. Do you want your doctor to be competent or have a good bedside manner? I prefer both, but lately we got Trump, with a bad bedside manner, and Obama who was incompetent. Having to give up one of these, I'll forgo the bedside manner.

SJW "socialist" politics have been around for years. Didn't appear with Trump. Being weak on borders having consequences won't make them go away.

Of course socialism has been around, not just for years but for centuries. The key question is has it been growing in popularity in recent years. I think the answer is clearly yes, and then the more interesting and difficult question is why has it been growing.

And what to do about it, which will depend on your ideology but is a question that both the Democratic and Republican parties have to answer. Easier on the whole for the Republicans, the answer is resist (except for the Wall and the infrastructure that Trump said he was going to build).

You are an absurd narcissist. Just because you are obsessed with the latest made up controversy does not mean that everyone else is.

I also believe that "tens of millions of rapists and drug dealers streaming across an open border" is made up.

"The true hallmark of the proletarian is neither poverty nor humble birth, but a consciousness--and the resentment this consciousness inspires--of being disinherited from his ancestral place in society and being unwanted in a community which is his rightful home; and this subjective protalitarianism is not incompatible with the possession of material assets." -Arnold Toynbee

I find his abstraction more profound than your "socialism is caused by what upsets me in the news" version. And more useful.

You are saying that the metastasization of socialism is due to the "collapse of right-wing political philosophy"?

Presumably because that is the bedrock upon which all philosophies rest. If only there were another way. We can only hope the right-wing philosophers get back to work so society can progress.

It's just more of his incessant kvetching about Trump, dressed up in pseudo-intellectual pish posh.

Back to using the bear avatar, nice.

Of course Bernie Sanders won 43% of the Dem primary vote, so your hypothesis is that Trump was elected president, got into a time machine, went back to ..2014 ??

And that enforcing the law regarding illegal crossing in 2018 made white college kids in 2015 self identify as socialists and vote for Bernie.

Cool theory...of course it doesn’t match up with the real timeline at all.

Better theory might be that millions of young liberals projected fantasies and delusions onto Barack Obama, who was constrained by both his moderate cabinet officials, his desire to appear centrist, and even his own misgivings about the far left. They became disappointed and disillusioned with the Democrat Party and went full Occupy Wall Street in 2011. Which ....you know..actually lines up with reality.

Trump is not the origin of the decline of conservative philosophy, he is the endpoint.

At least, one hopes.

So what was the trigger in 2011 then??

Bush’s billions of dollars in AIDs treatment in Africa?

Bush’s Medicare Part D expansion of billions to help the elderly?

Obama’s 2011 surge in Afghanistan?

Get real.

Your timeline is off. As usual, being against some enemy (bush) acts as a unifying force. It wasn’t the Bush administration policy whose main attribute was Wilsonian foreign policy advocated by both parties.

The left split in 2011, during the Obama administration. 3 years were Enough to split the far left and the left leaning.

Was Obama ever called, say, "a socialist?"

Was he ever called that with respect to fairly mainstream ideas, like universal healthcare?

Yes, and that moment more than any other laid the foundation for Sanders and AOC.

"Socialist" was pushed too far as an epithet, and so it became a badge.

^^^THIS EXACTLY

When every good idea gets branded "socialist", you teach people that socialism is a "good idea". I'm not a socialist, and I think the result of all this could be very, very bad. But in a way, conservatives deserve it.

In fact Obama was repeatedly and regularly called "socialist," especially by the Tea Party types who were disrupting townhall meeting shrieking about how very non-socialist Obamacare was "socialist!" Did you just arrive from another planet?

Wasn't that his point? I agree- socialist, racist. There's a problem when you call anything you don't like a bogeyman. Suddenly the bogeyman seems a lot less scary.

Once again anonymous avoids addressing a flaw in his theory of the hour and moves the goal posts around. He's incapable of conducting a rational discussion.

All I see is nibbling around the edges of the argument, and certainly not what I asked for, a positive and defensible moral conservatism.

You can't defend Trumpism on those terms, as a positive moral force, so you do this thing that helps the socialists. You attack everyone else.

It's what Tyler is doing too, in a somewhat more sophisticated way.

Credit where it's due, it's not only the crappiness of the Reps that has fired up the millenial socialists but that's probably a big part of it. So you have a good point there. The poster above who talked about the despair of the indebted millenials with useless degrees and a stagnant economic system to deal with, that's a big part of it too and not really the fault of either party alone.

"You can't defend Trumpism on those terms, as a positive moral force, so you do this thing that helps the socialists. You attack everyone else."

No polar bear. You're trying to do it again. The post was about the crash of Venezuelan socialism. You can't defend that, so you try to make the post about Trump.

And then without the slightest bit of awareness of the inherent irony, you make the claim that everyone else is trying to change the subject.

Whataboutism. The funny thing is his lack of self-awareness in doing it. It's a trainwreck, but you can't look away.

That's funny. "Whataboutism" that returns attention to the central focus and performance of government.

As opposed to going the other way, from the performance of government to "those kids on Twitter."

Lulz. Right on cue. Well done.

"Of course Bernie Sanders won 43% of the Dem primary vote, so your hypothesis is that Trump was elected president, got into a time machine, went back to ..2014 ??"

I think polar bear should have gone with the mulpian tactic of blaming everything on Reagan. It's got the advantage of actually being logically possible.

'No one in this country should be denied medical care for lack of funds,' said the Gipper.

Yes Ronald Reagan supported the idea that Emergency Rooms should have to accept people that had an emergency medical condition , regardless of their ability to pay.

Reagan was to some extent a populist. He advocated tariffs on foreign cars, increasing domestic manufacturing, stronger border security, penalties for hiring illegal aliens, etc.

Donald Trumps presidency has little policy. The idea that a wall and being cruel to immigrant families is an excuse for socialism-widespread nationalization of the economy or tax levels so high that everything may as well be government owned-is without merit.

Like all things Donald Trump, the branding is lowder and nastier than the actual milquetoaste product. People that find Donald Trump to be an authoritarian right winger have truly never suffered under an authoritarian right wing government.

A loud-short sighted-prickish business man republican in the White House isn’t the same thing as Hitler, Mussolini, Pinochet, hell its not even as authoritarian as Churchill....

*ILLEGAL* Immigrant families

Us legal immigrants are doing just fine, thanks.

Oh, but this is not REAL socialism ....

The opposite of socialism isn't capitalism. The opposite of socialism is math.

"The problem with socialism is that you eventually run out of other people's money." - Margaret Thatcher

You don't need socialism to run out of money. Just put a Republican in the White House. Bush, Trump, Reagan all do a good job of pushing record debt without fail. What do we get for all those trillions? Wars, bailouts, giveaways to cronies, and a lot of debt.

Yes, lol, by letting people keep their money we run out of money. [/sarcasm]

It's mental paradigms like this that I'd wish economists addressed more often.

Venezuelana will always be Venezuelans.

Funny, that's not what the headline says over at Bloomberg.

And get this:

>the evidence shows that, for some parts of the ideological left, the cause for embarrassment is very real indeed.

Got that? This guy can't even assign blame to the left -- he has to hedge it down to SOME parts of the IDEOLOGICAL left.

And he's not even assigning blame -- just EMBARRASSMENT. Millions starving or driven out or dead, a rich and fertile country in ruins... boy, SOME of you ought to be EMBARRASSED! For real, indeed!

I really love how the Stormfront has to blame all the Left for Venezuela. Yeah, if Americans had the same rights European workers have, it would the horror, the Gulag or worse.

Congrats on finally realizing that Venezuela is something that requires blame, and not "embarrassment."

Baby steps, little man, baby steps!

Europe’s workers are poorer than America’s workers. Unless you are talking about Luxembourg or Switzerland, I’d
Much prefer to be middle, lower or upper class in America. Honestly if I got to be myself, I’d rather be terribly poor in America as well.

The AOC left trying to seduce voters into thinking that what goes on in Spain, Italy, France, Or UK is laudable or applicable to the US is such freaking sham.

We’re wealthier because people like to invest here and we have most of the mega corporations.

All of those unionized, heavily regulated economies with nationalized health care, free this and that have a lower standard of living than the US as a function of MEDIAN INCOME DATA.

Want to know what is worse? The US population is 325 million and growing....

The dat. France for example has the same productivity per hour as the US but it's per capita income is 75% because their super high taxes and regulations depress labor supply so that people there cannot fully enjoy the potential fruits of their labor.

Congrats Ty - you are the first Hillary voter to have your article linked on Drudge Report!

I guess that even daring to mention The Left and Venezuela in the same sentence is considered to be groundbreaking these days...

HAHA: " Nicolas Maduro, who has also failed to use his post to educate Venezuelans about the benefits of capitalism and globalization ,,,"

Ya think?

How timid this guy is.

Writers and columnists rarely have any role in writing the headlines in newspapers and magazines.

One would have assumed this was basic knowledge, particularly in such a sophisticated comment section, but it is true that a lot of loyal readers seem to have no idea how the entire game here works.

Does NIMBYism and complacency possibly lead to socialism as well? Let's hope not...

Nope. What was the problem in 1989 or 1997. I remember the shortages and "people" fleeing Venezuela then as well(that dude on NCIS, I met that guy in customs, yes sir, I did). Socialism? Where, were was it, where was it ever?

That country is being gutted by the global elite and anti-globalist forces should join the fight against the elite. That is why destroying capitalism in the US, destroys in globally. They got nothing. No WTO,World Bank,IMF, Foreign of Council Relations.............Itd dead. It died in 1929 and when the corpse tried to be buried in 2008, they wouldn't let it.

You seem rather delusional so this may not be the reality tonic I want it to be, but even the Guardian (UK) recently had an article about the Maduro socialists rape and pillage of what was left of Venezuela.

You leftists are incorrigible. Google: Panama Papers ‘tightened the noose’ on offshore assets of Maduro’s inner circle (Guardian)

From 2007 to 2009, spending as a percent of gdp rose from 35 to 41% in Japan. From 1998 to 2005, it rose from 36 to 41% in the UK. From 1988 to 2003 it rose from 19 to 33% in South Korea. Did this also signify that the key to future riches was in courting government favor and not starting businesses? Or is that just unsubstantiated drivel...

Examples respectively: A - Great Recession. B - Under New Labour? Yes ("the key to future riches was in courting government favor and not starting businesses"). C- Massive economic growth tends to make people feel a bit more comfortable about a relatively larger state.

Argument is Venezuela expands public sector too fast relative to increase in GDP per cap and diversity of economic mix (volatile, based on a single commodity). Further public sector expansion is from nationalisations, not expansion of public services (you can bet its not in SK or even the UK). This is socialist ideology at play. (Of course socialism is also at play in the brutality and the authoritarianism). The critique is valid.

The problem with Venezuela is that Venezuela has oil, but it doesn't want to let Americans control it.

Contemporary history shows that to this attitude leads to shortened life spans and political "instability".

Ordinarily, we would just bomb them and be done with it. But since it is in our hemisphere, we have to do it the hard way.

Iran has been an enemy of the US for much longer, and it also has oil. It's doing much better than Venezuela.

Hey, don't forget all that Russian oil we "control," too!

McMike is an idiot - let him run with it.

Nonsense. Russia has the ability to fight back. yet we are in constant "cold" armed and covert tension with Russia. Only idiots pretend oil/gas is not a major aspect of that tension.

Perhaps you have missed the news lately, but our relationship with Russia is a hot topic.

Norway and Canada both have huge oil reserves, but oddly neither of them is politically unstable. Badly governed countries (Russia, Saudi Arabia, Iran) are awful places to live, and badly governed socialist countries (Venezuela, Cuba, the old USSR) are worse. The US doesn't need to interfere to make those countries miserable, and in the case of Venezuela, it's hard to imagine how they would go about making it worse.

"Doing better than". odd standard for rebuttal.

Are you also proposing that we have not significantly meddled in their politics and made war with them via proxy? Or did you sleep through that class too.

Google is your friend. Look up “Panama Papers ‘tightened the noose’ on offshore assets of Maduro’s inner circle” (Guardian UK). No outside gringo pressure coerced the Maduro socialists into moving their stolen assets abroad.

Look. I understand that many of the minds here can only handle first-order consequences.

Sorry I brought it up

https://www.reddit.com/r/iamverysmart/ awaits you...

Of course that’s absurd and hilarious. But that’s not best part. We refine their oil. They send it to us.

I agree with you, however, that it’s time we stop interfering in oil rich countries such as Japan, South Korea, Australia, Taiwan, Germany, Poland, Lithuania, Ukraine, Kosovo, Estonia, Italy, Columbia, and Somalia.

Joking aside, disband the entire military and reduce taxes accordingly. I’d rather spend my money as I see fit than send it to the Redneck Violent Racists’ Jobs Program. It’s welfare for the literal worst of society. Next up, TANF, SNAP, and border patrol.

Germany? Are you for real. Their reserves are less than 1/10 of 1% of venezuala.

Look, you and your pals can pretend that US doesn't interfere with other nations when they have oil or something else we want. It's your privilege to be willfully ignorant.

"It's your privilege to be willfully ignorant."

There's nothing as willfully ignorant as blaming Venezuela's collapse on the US instead of the far more obvious fact that they destroyed their own economy.

Yeah, the US is not why Venezuela is so fucked up right now.

I'm liking this new down-vote-me honey pot pattern that TC is using. This is some good popcorn.

Yes, it is quite entertaining - and a great way to not talk about Prof. Cowen's previous concerns about a vindictive president threatening retribution and talking about treason (with the amazing irony of the fact that following the 25th Amendment cannot be treason, the only crime actually defined in the Constitution - 'Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort.' Section 3, Article Three).

Please, tell me more about how this should really have been about Trump and how this essay represents Cowen carrying water for Trump. Mmmm.

Socialism is a dead end, but we don't need to add to any excuse for people to consider, or worse yet, implement it. The response to the 2008 Crisis didn't take this nightmare seriously enough.

"SUNDAY, JANUARY 18, 2009"The worst riots since the fall of Communism have swept the Baltics and the south Balkans." Ambrose Evans-Pritchard on the Telegraph:
I don't know if he correct. What interests me is the social disruption and dislocation being seen in the wake of this Calling Run ( Debt-Deflation Spiral, Deleveraging ). This is the main reason it is silly to allow the run to go on until it stops of its own will. By that time, the least of our problems will be economic. People who see free market ideology as the ideology that will be chosen at the end of this run are sadly mistaken. It is much more likely to be deemed the cause.
POSTED BY DONALD PRETARI AT 7:53 PM

I'm not convinced that Venezuelan rhetoric, rather than policy, was that important. Trump's rhetoric seems very different from Obama's, but current outcomes don't seem that different. China and Vietnam are officially communist, but that doesn't prevent capitalist enterprises from functioning.

Clearly the takeaway is: Socialism: bad. Communism: good.

No. I think there’s a lot packed into the word “officially” in that sentence. As in: they are really neither socialist nor communist but crony capitalist states than offer enough relative autonomy to 1) small businesses that don’t scare their Politburos or 2) large businesses they control.

TLDR:
- Government spending as a percentage of GDP rose from 28% in 2000 to 40% (in 2018?); currently 37% in USA (in 2018?)
- That change was quick and Venezuela is a developing economy so that is more significant than the comparison makes it look, and likely suppresses private investment. (?)
- 90% of exports are oil, which is state-owned and operated.
- Venezuela's oil is not as well-managed as Chile's state-owned copper. (?)
- The new wealth of Chavez's family implies embezzlement. (?)
- There were other smaller nationalizations that discouraged private growth. (?)
- Chavez said a lot of anti-private enterprise things similar to non-Venezuelan socialists.
- Socialist ideas reduce growth. (?)

As much as I'm biased to eat up the headline, there's not a lot of beef there. The evidence presented does not provide much support for the assertion that Venezuela's troubles are largely due to socialism.

+1. The military backed kleptocracy aspect of Venezuela is more relevant than almost anything else. The wrong guy is in charge and very difficult to replace. That's 95% of the problem.

It's like the idiots who say that trickle down economics doesn't work. When clearly it's just never been implemented correctly. {sarcasm}

Yeah, but they always had kleptocracy, but they still had toilet paper -- until recently. Venezuela has always been troubled, but the mass starvation and exodus is recent -- and primarily the result of socialism.

Yes, every study I've seen on the subject says that the effects of corruption are overrated in the impoverishment of a country.

As much I am inclined to point the finger of blame at socialism, I'd have expected TC to have made a remotely compelling argument. His inability to do so has caused me to question my bias in that direction.

You missed where the government of Venezuela nationalized huge swaths of the economy. This was done at different times (so oil well before steel, for example), but in each case the result was the same post-nationalization, massively lower output, down to half of what it was pre-nationalization, or in the case of steel, down to one-third..

The number of private businesses dropped from 14K in 1998 to 9K in 2011 (and likely lower now). As the government took over running more and more of the economy "in the name of the people", they economy did worse and worse. They ruined thousands of companies. Temporarily higher oil prices masked some of that in the beginning, but even with currently 3x higher oil prices than when Chavez started it all, the government isn't capable of running the industry well enough to continue to finance their business mistakes.

It turns out those private owners and managers actually do something useful when motivated by profit and taking the socialist route of nationalizing industries leads to corruption and losses as things are decided by political considerations rather than market forces.

Cowen didn't argue "huge swaths", he argued "nationalizations under Chavez were numerous...many of those nationalizations were small in scale". He then proceeded to argue that the threat of further nationalization was the primary inhibitor, but he doesn't support that argument with any data or anecdotes.

You make a better argument than he did, by citing effects of nationalization on output and on the number of businesses.

Again, I'd have thought this was an easy argument to make with ample data to support it. It is a bit shocking to see TC do such a wanting job of it.

There's no doubt that the far left was often big fans of Chavez, especially those that he actually funded: Spain's Podemos has plenty of economic ties with Venezuela, and would have had trouble getting a voice without him.

That said, the problem of Venezuela has more to do with the extent at which they decided to intervene in the economy than intervention itself. It's not hard to argue that pretty much every government action is ultimately messing with someone's property in one form or another, and that governments that do nothing are not a great way to go in practice: It's just a matter of predictability, and putting national good first. For instance, any improvement in US healthcare will involve disruption of company's property and rights: Even a right wing approach, Singapore style, would still make a few companies richer and others far poorer, but nobody is arguing that the Singaporean Healthcare system is old school socialism.

Nationalization of companies is something that might be necessary some of the time, but it's a scary thing to do in excess, and in ways that signal that it will continue to happen with no warning. Similar situations also happen, however, when you go through rounds of privatization instead, and said privatization is done by handing the resources to your friends and family, Russian style. In a smaller scale, we've seen plenty of that in Southern Europe's beach towns, where mayors that have friends in real estate do all kinds of interesting things to hand money to people they like.

I think that's really the problem in Venezuela: Not necessarily that many things where nationalized, but the how, they why, and how it was clear that, instead of doing the best for the country's social or economic growth, actions were motivated by what is good for top leaders and their friends. It just happens to be far easier to be very corrupt when one has a lot of power, like in a socialist country with very weak democratic norms.

Tyler that's a good post. I do think your language was too passive.

Possible omitted variable bias: very weak rule of law.

Now do Denmark.

Denmark is WAY less socialist than Chavism, and it shows.

All these Hispanic Southern Hemisphere countries are all the same. A few lite skinned elites in segregated lives try to keep order and middle income status.

The darker skins occasionally get rallied around the idea that the light skins stole the money from them. That was Chavez’s pitch.

While whatever natural resource drives the economy is high they can spend and go into debt, but the second commodity prices go down it crashes.

Don't get too comfy, that'll be the US in 30 years, too.

So how do the Socialist Nordic countries fit in this characterization that are generally well off on most quality of life metrics? Isn't China socialist? What about countries that have universal healthcare? What about countries with massive defense expenditure ecosystem?

Oh yeah, they aren't run by dictator and many aren't 'resource cursed'.

Is this mood affiliation? Is this token Centrist neocon support? Is this a some passive aggressive attack on Bernard and AOC? We will never know, so straussian.

Scandinavian countries aren't socialist - as the Danish PM said in a speech at Harvard in 2015, as a response to comments from Sanders ( https://www.thelocal.dk/20151101/danish-pm-in-us-denmark-is-not-socialist ) They are all market economies with relatively large welfare states.

As for just how market-oriented their economies are, I'll cite the Heritage Foundation's Index of Economic Freedom. In its 2019 rankings, the U.S. is at 76.8 (on a 100 point scale), which is 12th in the world. Denmark, Sweden, and Norway have scores of 76.7, 75.2, and 73.0, respectively. Some other European countries are in the same range as Scandinavia, but Denmark, Sweden, and Norway rank as much closer to the U.S. than they do to France, Italy, and Spain (which are all between 62 and 66 points).

Other organizations produce similar rankings. Look at those if you prefer, and you'll find directionally similar answers: the Scandinavian countries have market economies characterized by respect for property rights, the rule of law, and a regulatory burden that is similar to the U.S.

Second, while they do have higher government spending and taxation than the U.S., it's worth considering their tax structures. Here's a detailed comparison to the U.S. from 2015 - https://taxfoundation.org/how-scandinavian-countries-pay-their-government-spending/ . U.S. income tax rates and corporate rates have changed since then due to the 2017 Tax Act, but here are some summary comparisons:

- The highest marginal tax rates (income plus payroll taxes) vary from 39% (Norway) to 60% (Denmark) in those countries. The U.S. is now at about 40% federal (37% income + 2.9% Medicare), and combining that with the highest state marginal income tax rate in high-tax areas (e.g., New York or California) puts the current U.S. blended federal and state total a bit over 50%. The top marginal rates in those three Scandinavian countries also start *much* closer to average incomes than in the U.S. - between 1.2 and 1.6 times average income in those countries, versus at 8.5 times average income in the U.S.

- They raise a *lot* more money from VAT - i.e., consumption taxes paid by everyone - than the U.S. raises from sales tax. They all have 25% VAT rates and have VAT receipts between 8% and 10% of GDP. U.S. state and local sales tax rates average about 7% and receipts total about 2% of GDP.

- They all have preferential tax rates on capital income. Their highest marginal rates on dividend and capital gains income range between 27% (Sweden) and 42% (Denmark). The highest U.S marginal tax rate on capital gains and dividends shown by the Tax Foundation is 28.6%. I can get to 23.8% federal (including the 2.8% Medicare tax), and I assume that the rest is a blended state average. In California the highest marginal tax rate on that income is about 37% because California's highest ordinary marginal income tax rate (13.3%) applies to investment income also.

- They also all have corporate income tax rates similar to the U.S. Their rates vary between 22% (Sweden) and 27% (Norway). The U.S. federal corporate income tax rate is now 21% (reduced from 35% in the 2017 Tax Act), and most states tack on another few points. (Forty-four states levy a corporate income tax. Rates range from 3 percent in North Carolina to 12 percent in Iowa. https://taxfoundation.org/state-corporate-income-tax-rates-brackets-2018/ )

- Out of those three countries, only Denmark has an inheritance tax, and the rate is 15%. Denmark used to have a wealth tax and got rid of it in 1995. Sweden used to have a wealth tax and got rid of it in 2007.

So let's summarize, quoting from the Tax Foundation report that I linked above:

"A lot of the spending-side programs in Scandinavian countries cost a lot. Taxes would definitely need to be increased in the United States if it were to adopt them. If the U.S. were to raise taxes in a way that mirrors Scandinavian countries, taxes—especially on the middle-class—would increase through a new VAT and high payroll and income taxes. Business and capital taxes wouldn’t necessarily increase."

Some other points about Scandinavian social welfare states, and how applicable they are (or aren't) to the U.S.:

- These are all really small countries compared to the U.S. with populations between ~5 million (Norway) and ~10 million (Sweden).

- They also have very high levels of social cohesion and are (or at least historically have been) very ethnically homogeneous. The latter point seems to be changing to some degree - though certainly not to resembling anything like the ethnic and racial diversity in the U.S. - and there are plenty of people who would say that process isn't going particularly well (at least in Sweden and Denmark)

- Norway is in any ways a well-run, democratic petro-state. That is of course a rarity, and I'd argue that it makes Norway a particularly poor comparison to the U.S. About 50% of its exports are accounted for by oil and natural gas ( https://www.norskpetroleum.no/en/production-and-exports/exports-of-oil-and-gas/ ).

The Scandinavian countries are like US states without blacks and Latinos. Remove blacks and Latinos from the statistics in a state like Pennsylvania and you get Sweden, but with a slightly higher per capita income.

You think we don't have universal coverage in the USA? Just because they outsourced the taxing to third parties in the guise of higher premiums doesn't mean it functions differently. We just hid the true costs in the USA. We have where people cannot be denied. Those working under 4x poverty rate get subsidies (make it so they aren't the ones being taxed). The poorest get medicaid and funded through traditional taxes. Those over 4x poverty get huge premiums to cover the rest. The USA does have universal coverage now through a very progressive taxing system.

What's a bummer is those Nordic countries didn't really have better metrics. Once one controls for things like obesity, vehicular deaths, premature births and/or low birth weights, and so on, USA did better. USA lifestyles are awful (in terms of longevity as I think their might be half-captured correlated benefits). USA health providers have always been and continue to be awesome.

And as Venezuela moved away from markets North Korea started allowing them and it may have been their savior

https://www.nytimes.com/2019/02/14/magazine/north-korea-black-market-economy.html

My more extended comments on all this are on Econospeak at econospeak.bogspot.com/2019/02/who-is-really-socialist.html . I think Tyler is mostly right but has missed a few important points. One is that Morales in Bolivia has been roughly as socialist as Chavez and Maduro but has been muchmore competent about it, with growth remaining positive and inflation remaining under control. Chavist policy has been market by massive corruption (Tyler noted that with Chavez's daughter getting so rich) and also especially damaging and poorly thought out policies. So one that Tyler and nobody else mentioned here that is arguably socialist and also incredibly stupid is putting in place arbitrary price controls. This has become especially disastrous with hyperinflation in the case of agriculture, with the upshot an unsurprising collapse of food production. About 20% of farmland was nationalized, but most of it has simply ended up uncultivated.

Oil was already state-owned largely prior to Chavez. He replaced the competent technocratic managers with corrupt cronies. That led to the decline in oil production, an especially damaging outcome.

With regard to ideology, one can argue about whether or not Chavez and Maduro are "socialist" or not. Chavez did not use the term that much, preferring his own neologism of "Bolivarianismo." But Maduro has adopted the "socialist" label wholeheartedly, which does put people in the US calling themselves that into a potentially difficult spot.

Regarding the various figures like Stiglitz who said good things about Chavez and his policy in 2007, it must be kept in mind that it is easy now to mock them. But at that time Venezuela's economic performance looked very good, with a much higher growth rate than most neighbors (partly fueled by high oil prices) and with inflation still largely under control, although creeping upward, and with much redistribution of income to the poor, which provided the base of Chavez's support among the poor. Now they no longer support the regime, although reportedly many blame Maduro personally while still suporting "socialism."

Try just econospeak.blogspot.com/2019/02/who-isreally-socialist.html .

Try just econospeak.blogspot.com/2019/02/who-is-really-socialist.html .

Well, that was interesting - you call social democracy 'socialism' at the start, and then later point out, in detail, that social democracy is not socialism by any meaningful measure at all.

Does he mention that both Chavez and Morales actually represent a group of people previously not represented in power? Because ignoring that fact would be quite typical of how such discussions remove the sorts of elements that actually matter. It isn't just the 'poor' that supported Morales or Chavez, it was people who say Chavez and Morales having the same background.

Not all racism is American style black and white.

What about the banks?

I think proper response on Bolivia is that it is still a horribly poor country. Maybe Morales socialism wasn’t as stupid and certainly hasn’t caused anywhere near the torment and depravity that Chavismo and Maduroism has, but it’s still in the bottom rung of Latin American countries.

Let’s not delude ourselves into thinking that Bolivia is some socialist growth miracle. It’s not.

Ask yourself what would happen in the United States if 97% of all its exports went directly to the central government so as to be shared out by redistribution profiteers.

Below a tweet:
The crisis in Venezuela is conjunctural because there are murderous bandits in power.
Venezuela's problem is structural since the centralization of oil revenues both attracts bandits and helps keep them in power.

https://theoilcurse.blogspot.com/2008/09/my-minimum-minimorum-on-exiting-iraq.html

I come not to defend wither Chavez or socialism.

But Venezuela exports have long suffered from the "Dutch disease". When oil prices soar the currency appreciates in value and exporters are not competitive. By the time the price of oil declines and the currency is more competitive the exporters are out of business. This has been a problem in Venezuela and other petro-states.

Cowen needs a beat down for this post

I did not know that was an option.

Terrible things are happening in Venezuela for sure.

Is it the fault of socialism?

I can't answer that question because I do not know what socialism is. Is socialism the same as one man rule? Is socialism the same as corrupt government? What exactly is socialism and where do you draw the line with capitalism? Aren't community police departments, community schools, national defense, national highway systems socialistic?

So please explain this to me.

On another note here are two articles that point to United States interference in Venezuelan affairs:

https://www.truthdig.com/articles/everyone-has-fallen-for-the-lies-about-venezuela/

https://www.mintpressnews.com/the-truth-about-us-sanctions-on-venezuela-and-whys-the-media-gets-it-wrong/254625/

The basic argument of these two articles is that the United States has an interest in destroying the government of Venezuela and that its sanctions which started in 2017 are working toward that end.

I think we should invade!

When you take over existing, functioning industries, and leave them in the hands of political cronies that can't run them, and then you lose most of your domestic production capability -- that's socialism.

The US sanctions didn't do that. The millions of people started starving and leaving long before. Don't you have access to any articles that are willing to tell the truth?

I feel like this article fails because it doesn't actually give readers a good way to tease apart the elements of lousy governance, petrostate / resource "curse" failures, and socialism. I'm not saying that, for example, massive enrichment of Chavez's daughter couldn't happen in a socialist country. But it could also definitely happen in a corrupt petrostate. And that holds for pretty much every example Tyler cited: they all fall squarely into what you would expect from a badly managed, super-corrupt petrostate. I could be convinced that Venezuela is a uniquely "socialist" failure, but this argument ain't it, and I'm not sure you can get there without first burning up a lot of words on explaining what exactly "socialism" means in this context. As a historian, I can't help but recall that the Union of Soviet Socialist Republics was actually "communist," and the current "communists" of China are actually state-managed capitalists, or something, and that's why this whole line of discussion gets really dumb and really angels-dancing-on-the-head-of-a-pin almost as soon as you engage it.

I was living in Venezuela when Chavez was elected. I would not have supported. But my maid liked him. The government reduced mass transit fares and that helped her out economically. Tyler advises that things like this increased governent expenditures as a percentage of GNP and were bad things.

"According to the Kevin Grier abstract: We compare outcomes under Chavez's leadership and polices against a counterfactual of “business as usual” in similar countries. We find that, relative to our control, per capita income fell dramatically. While poverty, health, and inequality outcomes all improved during the Chavez administration, these outcomes also improved in each of the corresponding control cases and thus we cannot attribute the improvements to Chavismo." Does Grier answer why had they already not happened?

So, while not being a socialist, I suggest market based models often ask people living in shacks to defer the immediate gratification of better health care, etc, while offering immediate rewards to the most affluent. The people in the shacks are skeptical that promises will not be fulfilled.f the

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