Venezuela

[KUSA]

Anyone considered cheap oil as one of the major reasons? I mean that's the only real asset the country has.

They have other assets.

[Cato]

Anyone considered cheap oil as one of the major reasons? I mean that's the only real asset the country has.

This is almost a two decade old problem and has almost nothing to do with the fluctuation of oil prices during that time. The only problem associated with oil prices was Venezuela not saving for a rainy day when prices were high.

Venezuela's biggest problem was that Hugo was one of those that gained power through populism promising unearned riches and entitlement. He was also one of those that thought Soviet style communism was a viable economic model, but that previous failed attempts measured in deprivation, starvation and death were simply the result of poor execution. Venezuela's economy has tanked primarily through it's practice of setting prices below the cost of production. This is why the shelves are bare and there's no work. 

Despite the current situation in Venezuela, PDVSA still finds tens of millions of dollars a year to sponsor a Formula 1 racing team. I have to ask, why does the one state owned oil company need to advertise?

[GUBU]

Anyone considered cheap oil as one of the major reasons? I mean that's the only real asset the country has.

Of course. The real question is why were they reduced to being a mono-resource economy?

Because they are a mono resource country. Its not like rich Venezuelans had spent the last fifty years (before Chavez) using their gains from oil money to build up Venezuelan industry. Oh, and if you think the economy is bad because of the current system, think what would've happened if the Venezuelan right had been able ot continue fixing the elections, the US would've tried to use them to break OPEC, like in the 70's and they'd have been in the shitter much quicker and far deeper.

Oh and before anybody goes on I'm no great fan of Chavez, initially I was willing to give him the benefit of the doubt (and he did win elections fairly) but it quickly became clear that he was just another tin pot using socialist rhetoric to bolster his own position.

[Cato]

Venezuela has a centrally planned socialist economy and has failed miserably as predicted. It wasn't just rhetoric bolstering a position. He did what he said he would do and the results are disastrous. Socialist economic policies do not work, period.

Now, consider the difference between Venezuela and China. The difference is that China has established a capitalist economy, with oversight of course, but the difference is drastic. You can endear yourself to socialist political goals all day long, but as soon as someone goes all in with a socialist economy the result is a cubic shitload of poor people.

[GUBU]

Venezuela has a centrally planned socialist economy and has failed miserably as predicted. It wasn't just rhetoric bolstering a position. He did what he said he would do and the results are disastrous. Socialist economic policies do not work, period.

Now, consider the difference between Venezuela and China. The difference is that China has established a capitalist economy, with oversight of course, but the difference is drastic. You can endear yourself to socialist political goals all day long, but as soon as someone goes all in with a socialist economy the result is a cubic shitload of poor people.

First of all, the crony oligarchy set up by Chavez was socialist in name only. Like with the USSR power and wealth was concentrated into a small oligarchy with lip service only being paid to the ideals of equality and communal ownership.

Secondly, I've not yet seen an economic system in the real world which hasn't failed at some point. In fact, I would say that most private wealth systems of economics (such as capitalism) are actually designed to fail on a periodic basis. It is an easy way to ensure that those at the top remain at the top, and in a lot of cases increase the gap between themselves and the rest (like what happened after both 1929 and 2008).

So when you go off on an ideological rant about the evils of socialism, first of all point to an actual socialist system (to be honest the closest we'll get for a long time is a European style mixed economy, humanity currently doesn't have the mentality to sustain a socialist economy) and second of all check your prejudices to see if your favoured way of doing things is not as crippled as what you believe you are arguing against.

[The Grand Nudger]

China's economy is a blend, state capitalism.  That said, it may not be working any better...as it empowers the limited class of capitalists who are -allowed- to participate....disenfranchising the rest.  Even within this tiny quasi-capitalist bubble (go take a look at the things the state -hasn't- handed over to their test tube capitalists) the state still exerts complete control through the financial sector.

[CapnAwesome]

Of course. The real question is why were they reduced to being a mono-resource economy?

Because they are a mono resource country. Its not like rich Venezuelans had spent the last fifty years (before Chavez) using their gains from oil money to build up Venezuelan industry. Oh, and if you think the economy is bad because of the current system, think what would've happened if the Venezuelan right had been able ot continue fixing the elections, the US would've tried to use them to break OPEC, like in the 70's and they'd have been in the shitter much quicker and far deeper.

Oh and before anybody goes on I'm no great fan of Chavez, initially I was willing to give him the benefit of the doubt (and he did win elections fairly) but it quickly became clear that he was just another tin pot using socialist rhetoric to bolster his own position.

It's easy to say 'oh well it's not the fault of failed socialism, it's because they are dependent on oil.' Except that part of the reason they are wholly dependent on oil is the failure of Chavez/Soviet style socialism. All of Chavez's scheme's failed to diversify the economy, the same way they failed throughout the 20th century for numerous countries. So they had to fall back on resource exploitation, which is all that was left.

[abaris]

Well, the correct answer would be, it's a mix of many contributing factors. Nothing's ever as simple as nailing it to one ground zero. Chavez not playing ball and therefore not being in the West's good graces played a part too. Also that there was a reason for the people to elect Chavez in the first place. A populist is usually elected because the people feel disenfranchised by the powers that be.

[Cato]

So when you go off on an ideological rant about the evils of socialism, first of all point to an actual socialist system (to be honest the closest we'll get for a long time is a European style mixed economy, humanity currently doesn't have the mentality to sustain a socialist economy) and second of all check your prejudices to see if your favoured way of doing things is not as crippled as what you believe you are arguing against.

This is where your argument is flawed. You are essentially saying that socialism is a grand idea, but simply not enacted appropriately, a la Stalin, Castro, Chavez, et al. You point to Europe, but the economy is NOT socialist. It is capitalist. If you're confused, answer this question...who owns the means of production? Varying degrees of regulation and taxation resulting in differing redistribution of wealth does not make an economy socialist. Who owns the means of production?

Arguing that capitalism is not perfect is hardly a justification for championing a system with a 100% failure rate. Nobody has argued that capitalism doesn't have its faults. The fact that you demand perfection from capitalism as justification for socialist economic policy is ideology writ large.

Let's do this. You choose the criteria by which we can measure a poor person. I maintain that as a percentage of the population there will be more poor people, by your measurement, in a socialist economy than there is in a capitalist economy. Seriously, you define the standard.

I love socialist propaganda. Leaders proclaim that their shelves are empty because of the capitalist devil, while ignoring the fact that shelves are not empty in capitalist based economies. You ask me to check my prejudices, I ask you to acknowledge who's shelves are empty and who has to stand in line for toilet paper. Simple math, you simply cannot set prices lower than the cost of production and expect continued production. Subsidies won't last forever because subsidies are a transfer of wealth that requires taxation which is only possible if there is revenue above the cost of production 'somewhere' in the economy. It's that fucking simple. Anyone that thinks otherwise is a moronic monetary alchemist.

[scoobysnack]

It's interesting how the media at least in the US is just barely covering this collapse. Right now they are distracting everyone with trannys and cross dressers wanting to use the bathroom.

Venezuala is an example of where socialism ends up. Also strange is that they are cutting off the power yet are an oil rich nation. You would think they would use the oil they have to give the power to the people. Problem is they racked up so much debt they have to sell the reserves of gold and oil and eventually land to make the payments with interest.

http://www.cnbc.com/2016/02/29/venezuela...ments.html

It's a sign of what is headed to Europe, and then the US. Europe will go first since that's the plan of the global order. This summer will be a time to watch Europe.