“Socialists frequently tell us that in their ideal system, private property of the common man is to be respected; only major industries are to be seized…Well, that is exactly what socialism did in Venezuela, and it has not been pretty.”
Last week, Venezuela’s electric system collapsed for almost an entire week. This is ironic in the extreme, given that Venezuela has the largest oil reserves in the world. How can a country blessed with a huge wealth of natural resources fail in producing energy for its own people?
Actually, most countries rich in natural resources tend to do worse. This has been extensively documented by Michael L. Ross in The Oil Curse: the moment oil is found in a given country, there is a tendency for that country to become less democratic, less economically stable, and ultimately, more likely to suffer from civil wars.
Yet, they are not all the same. Norway is not likely to experience food shortages anytime soon. Saudi Arabia, Qatar, or the United Arab Emirates are not great champions of human rights, but at least, you won’t be left in the dark if you visit any of those countries. The case of Venezuela is different. Not only are there frequent electric blackouts, but, even worse, there is an alarming pattern of food shortages. Venezuelans have lost an average of 24 pounds. And second only to Syria, Venezuela presents the most urgent refugee crisis in the world.
This has been typical in many socialist experiences; the new socialist state rides on capitalism’s shoulders. And when private companies are seized, operations keep going smoothly, on the basis of what capitalism built. But that cannot last for long.
What, then, has Venezuela done wrong that other oil-producing countries have not? Socialism seems to have something to do with it. In 1998, a charismatic former lieutenant colonel-turned politician by the name of Hugo Chávez reached power. The major industries (including the oil and electric power industries) were already nationalized, but Chávez, under the tutelage of Cuba’s Fidel Castro, went even further by nationalizing mid-size companies in various sectors (mostly food production and distribution).
For a while, everything seemed to be going well, and Chávez was immensely popular. This has been typical in many socialist experiences; the new socialist state rides on capitalism’s shoulders. And when private companies are seized, operations keep going smoothly, on the basis of what capitalism built. But that cannot last for long. Once in control of those industries, Chávez began to replace competent managers and workers with his own cronies. Chávez was a particularly paranoid politician, and he did not trust those who did not explicitly praise him.
Eventually, the effects of cronyism kicked in. Most especially in the state’s electric company, incompetent managers had no clue about how to keep the industry going. By 2010, the electric system began to fail, with rationing periods of up to 8 hours daily. Being afraid that Caracas’ barrios would revolt, Chávez spared Venezuela’s capital of electric shortages, but the rest of the country was constantly deprived of electricity. Venezuelans in the interior of the country felt marginalized, and secessionist feelings grew in some regions, especially in the Zulia State in Western Venezuela.
In 2013, Chávez died of cancer. That same year, oil prices collapsed, and an even more incompetent socialist politician, Nicolás Maduro, succeeded him. Predictably, electric shortages became even worse; this time, even Caracas suffered the consequences. Last week’s electric collapse was in a league of its own; although Venezuelans had been suffering shortages for years, they had not experienced a blackout of this magnitude.
Instead, Maduro prefers to go along with the paranoia of Chávez, his mentor; he now claims that the blackout last week was orchestrated by the Americans as a form of “electric warfare” via cyberterrorism.
But these Venezuelan leaders decided against taking responsibility; instead they indulged in conspiracy theories to explain their country’s tribulations. When Richard Hofstadter wrote “The Paranoid Style in American Politics” in 1964, he had right-wing politicians in mind. His descriptions were for the most part accurate. But it would be extremely naïve to think that the Left does not have its own brand of a paranoid style. Chávez was in fact a master of this art. He believed that his cancer was given to him by the CIA. He claimed that Simón Bolívar (Venezuela’s national hero) was murdered by conspirators (in fact, he died of tuberculosis). He believed 9/11 was possibly an inside job. He doubted the Apollo missions ever reached the moon. And so on.
When it comes to the collapse of Venezuela’s electric system, Maduro predictably refuses to acknowledge incompetence; although strangely, he has requested his cabinet to resign, while never admitting that the collapse was due to his failed economic policies. Instead, Maduro prefers to go along with the paranoia of Chávez, his mentor; he now claims that the blackout last week was orchestrated by the Americans as a form of “electric warfare” via cyberterrorism. Needless to say, these claims are ridiculous in the extreme. Venezuela’s electric facilities are mostly analog, so there is no plausible way that a cyber attack can shut down energy production in a developing nation where digitalization is very limited.
This should be a cautionary tale for America. One may concede that Bernie Sanders and Nicolás Maduro are very different characters, that the United States has stronger institutions than Latin America, that Americans love freedom more than their neighbors to the South, and so on. But Venezuela is still a shining example of the initial enthusiasm that talk of socialism and nationalizing industries may bring. But ultimately, it all collapses. Socialists frequently tell us that in their ideal system, private property of the common man is to be respected; only major industries are to be seized, to assure lower prices for consumers and higher wages for workers in those industries. Well, that is exactly what socialism did in Venezuela, and it has not been pretty.
Dr. Gabriel Andrade teaches ethics and behavioral science at St. Matthew’s University School of Medicine. He has previously contributed to Areo Magazine and DePauw University’s The Prindle Post.