Venezuela's Misery Due To Socialist Principles, Not Oil Prices

Authored by Virginia Fidler via GoldTelegraph.com,

Socialist countries are quite adept at providing excuses for their inevitable failure.

As socialist Venezuela hits bottom, the latest culprit is oil. Let’s blame failing oil prices for all the misery. But once prosperous Venezuela has one of the world’s most abundant oil reserves. Ninety-five percent of Venezuela’s income is from oil sales.The country should be swimming in riches. Instead, its people are starving, scavenging desperately for food. The government has helpfully suggested that eating beloved pets might help the hunger problem.

Venezuela is in crisis. Many news sites point at falling oil prices as the reason. But oil prices have been rising since the fourth quarter of 2017, and Venezuela’s economy has only gotten worse. These higher prices should be a boom for Venezuela by creating greater revenues. Instead, its oil industry is in shambles and decline.

Thanks to Venezuela’s mismanagement of its major industries, massive debts and defaults on payments are at an all-time high. Halliburton has written off its $312 million investment in Venezuela, as have other companies. With inflation an annual inflation rate of 16,428%, and its oil output declining by 12 percent in just two months, Venezuela is plummeting into an unprecedented disaster of its own making.

Falling oil prices are not the cause of Venezuela’s misery. It’s socialism. It’s the system whereby government owns the means of production. Historically, governments do a horrible job managing businesses. The Venezuelan government isn’t managing its industries on any level. It’s slowly destroying them. President Maduro has been unable to keep the oil industry running. There are no new investors because the government will confiscate any further exploration.

For any economy to thrive, production must meet consumer demand. The available goods must be affordable to potential buyers. Venezuelans need approximately $150 per month to purchase a dozen of eggs.The averagemonthly income is $2.20, with a tiny stipend of government welfare. Citizens cannot afford to buy what is needed to live comfortably and healthy. That’s socialism. No centrally-run government has ever been able to create and produce efficiently.

Many of Venezuela’s shortages have been created by price controls – another popular socialist tactic. When the government determines prices instead of market forces, prices become artificially low. This creates a greater demand for the product than the seller can deliver at any kind of a profit. The seller is losing money with each sale. The results are the empty Venezuelan supermarket shelves.

In the 1970s, the U.S. instituted price controls on gasoline. The result forced motorists to wait in long lines for hours to get whatever gasoline was available. Buyers at the end of the line frequently found that the gas was sold out once they reached the front of the line. Gas stations set limits on the amount of gasoline that could be purchased, forcing consumers to stand in line more frequently.

When the government controls what is being produced and how much, an invariable hierarchy develops, as it has in Venezuela. While the average Venezuelan citizen goes hungry, government employees eat just fine. Not to mention the military and the police. President Maduro needs to keep these factions happy to ensure their support. So, they get the major share of available goods while the remaining population goes without. This sham is possible only when the government controls the means of production and distribution of goods. It would be impossible in a free society.

In addition to shortages and hiking up prices beyond the means of the average Venezuelan, the country is experiencing extraordinary levels of hyperinflation. The cause of hyperinflation is always the uncontrolled, rapid printing of fiat currency. Venezuela’s annual inflation rate is 16,428%. According to Steve Hanke, a senior fellow at the Cato Institute, Venezuela’s inflation is exceeding 200 percent every month. It recalls the hyperinflation of post-WWI Germany when money was burned as heating material due to its low value. It was this hyperinflation that led to the election of one of the world’s darkest dictators – Hitler.

In Venezuela, President Maduro is showing similar despotic tendencies. He is allowing a large part of the population to starve to maintain his socialist principles. Starvation and misery have become government policies. There is no other explanation. The situation can only worsen. As people die from hunger, the labor force is reduced, thus reducing the number of available goods, even more, creating even greater catastrophic shortages.

All oil-producing nations have experienced falling oil prices. Only Venezuela is at the brink of an abyss from which it may never recover. Venezuela is sinking in a quagmire of socialist principles. Inefficiency, corruption, price controls, and out-of-control hyperinflation have created economic madness. Does President Maduro care? It’s hard to say. But he and his military minions are not starving, and they have guns. The population is bound to notice sooner or later. What happens when socialism encounters the forces of reality?

The world is watching this grim development, which undoubtedly will not have a happy ending.

Tags

Comments

Bring the Gold Pearson365 Thu, 05/17/2018 - 19:59 Permalink

Bingo. I'm pretty sure that another VERY significant cause of suffering in Venezuela is US interference, scheming banks like Goldman Sachs, sanctions, attempted coups and various intelligence activities by the CIA et al.

Socialism is for sure a huge factor, but let's not discount the evil of what is being done to Venezuela to punish them for getting out of US dominance under Chavez.

In reply to by Pearson365

beemasters Bring the Gold Thu, 05/17/2018 - 20:22 Permalink

It's no longer Capitalism when the gubbermint is controlled and "gives away" money to preferred groups and special entities - ie. Israel gets $38 billions, Trump spending $700 billions on military that invades other nations while enriching banks and MIC in the process. How about building/repairing infrastructures (education of the young being one of them)?

In reply to by Bring the Gold

bshirley1968 beemasters Thu, 05/17/2018 - 22:53 Permalink

Right. It's a little hypocritical talking about socialism being the ruin of Venezuela.

I keep asking for someone to tell me what developed country today isn't socialist.

It works "fine" until the NY banksters decide to destroy your currency on the world markets......I mean you do realize that is what we do to those who disagree with us?

In reply to by beemasters

css1971 bshirley1968 Fri, 05/18/2018 - 04:37 Permalink

Almost no countries are socialist today. Socialism definitively socialises the means of production.

Venezuela is trying real hard to become socialist though.

 

No. Almost all countries today are fascist, not socialist. The key difference of fascism, is assets remain in private hands, are not nationalised. Instead the state heavily regulates them.

Sounds familiar?

In reply to by bshirley1968

nmewn Bring the Gold Thu, 05/17/2018 - 20:37 Permalink

"Socialism is for sure a huge factor, but let's not discount the evil of what is being done to Venezuela to punish them for getting out of US dominance under Chavez."

Simon Bolivar is rolling over in his grave for what Hugo did.

He financially raped his own people. It is very fortunate for Hugo that Simon is in a higher place and can't get his hands around his neck ;-)

In reply to by Bring the Gold

stacking12321 RopeADope Thu, 05/17/2018 - 20:42 Permalink

you're too dumb to understand what the difference is between capitalism and crime, apparently.

shooting someone and taking their stuff, is not employing capital for productive means. therefore, someone doing that, could not be called a capitalist.

learn the basics of what things mean before you speak and make yourself sound like an idiot.

 

In reply to by RopeADope

Quantify ???ö? Fri, 05/18/2018 - 18:48 Permalink

Per the link I provided, how many countries with an average IQ under 89 build boats? Or should I say export seagoing commercial tankers. Or Aircraft? Or automobiles? Or have ever been a world leader in economics or maintained a democratic government that others wish to emulate. Or have masses of people wishing to immigrate to it? Certainly one must accept the facts that those countries have issues due to the abilities of the indigenous population.

In reply to by ???ö?

css1971 PrometeyBezkrilov Fri, 05/18/2018 - 06:16 Permalink

100 isnt high. It's right in the middle.

For any average score half the population are above, and half are below.

100 is just enough to function at a low level in western society. 85 is considered at the borderline of requiring care. The US army for example won't take people below 85 because they can't be trained to function safely.

Most criminals come from the low end of the spectrum because they cant function well. Average criminal IQ in the west is about 90.

So where you have a population where a majority can only reason about as well as a child, and give them a vote, then it should be no surprise when you get childish outcomes.

In reply to by PrometeyBezkrilov

MozartIII Thu, 05/17/2018 - 19:28 Permalink

Why is the death of socialism always so long and drawn out. More pain for everyone?

Europe will go through the same shit, as will others. Very sad!

MozartIII Quantify Thu, 05/17/2018 - 20:23 Permalink

"higher IQ populations are decreasing daily" the government schools work is almost done. Almost everyone is stupid as shit!

 

Home school your kids! They won't get shot by a maroon and there are so many specialist home school moms that will help you if you are deficient in area's. Then there are groups that will do the same. Do not give your children to the system of degradation and decay!

In reply to by Quantify

dchang0 New_Meat Thu, 05/17/2018 - 19:51 Permalink

Socialism won't die because there are always a certain group of people who believe that they will be able to rule at the top of their socialist paradise, an elite class above the proletariat.

They know full well the socialist promise of a workers' paradise is a lie, and they tell it deliberately to fool the jealous and stupid proletariat into supporting their ascent to tyrannical power.

 

In other words, they do not care that socialism doesn't work because socialism isn't their aim: it is totalitarianism they're really after.

In reply to by New_Meat