Lessons from Abroad #1: Venezuela

Venezuela

By Spencer Helsel

FORWARD BY THE AUTHOR: As an American living abroad, you get a perspective on other countries you normally don’t. Living within their borders, around their people, among their culture, you see differences that may go unnoticed. So, to see how other countries compare to the libertarian mind-set―or what, if anything, we could take from them or avoid―I’ll be exploring them in this series “Lessons from Abroad.” This will be the only article with a forward. All articles will follow the same format:

  1. a short blip of the event or idea
  2. what lessons we can learn
  3. and last thoughts towards the end

Of course, as with anything I write, critique and discussion are perfectly fine. I am only one part on the spectrum of liberty-minded individuals and sometimes my views are different than that of my colleagues. The best part of Libertarianism: the exchange of ideas. Live free, guys and gals!

Venezuela

Unless you are from Venezuela or have stock in the oil industry, you probably don’t know much about this country. But right now, this once oil-rich nation is burning. It’s burning because its people  have almost no money, live in third-world conditions, and hate their government. And they have hated their government for more than two decades.

Venezuela recently suffered economic disaster because of the lower price of oil around the globe. Since oil prices are determined by an international coalition, which involves private businesses and governments, the country can’t determine its prices. But since the socialist government there decided to link its economy with this one source of money, when oil prices dropped, their economy tanked.

But, as many articles have pointed out, the government is to blame for this, since other nations dependent on the oil industry thrive. The government is mired in corruption and nepotism, a by-product of governments having WAY too much power over its citizens. Nearly $300 million has been embezzled by officials in the past decade and President Nicolás Maduro’s nephews have been recently arrested/convicted of conspiring to ship 800 kilos of cocaine to the U.S. (using public funds, by the way).

To put all of this in perspective, on the corruption-scale compared to other countries, Venezuela ranks ninth after places like North Korea, Sudan, Libya and Iraq.

Further adding to problems, just this past week, President Maduro has stated he will raise the minimum wage in the country. As of this posting, this is the twelfth time he has done this, with little or no effect.

What We Can Learn

Libertarians are famous for opposing socialism in all forms, and they warn people against governmental involvement with its citizenry. Venezuela is a libertarian-lesson in crystallized form. Since the times of Hugo Chavez, the ousted former-president, the government hasn’t functioned. He put cronyism and nepotism into practice in the government and gave positions of power to those loyal to him; not to those who could do the job. He did this BECAUSE of its socialist aspects, not in spite of it. And since then, no one knows what they’re doing down there. Governments can become breeding grounds for this type of behavior.

Things like raising the minimum wage, the government determining gas and oil prices, and stipends to businesses to make them thrive, have all failed in Venezuela. The government tries to fix the problems, only to make them worse. Sound familiar? The U.S. is on track through the last few administrations to do the same. Anyone want to guess what might happen if we keep this up?

The biggest lesson to take away from this isn’t the danger of socialism. Hell, all you need to do is open up a history book for that—or look at places like Cuba or North Korea (yes, it is a communist/socialist state in everything but name). No, socialism isn’t some devil or boogeyman in the closet. What it is, in reality, is a failed system incapable of addressing issues of poverty and economic collapse because all it leads to is massive debt, corruption and nepotism. Dabbling in it can have dire consequences. This is a message we should spread and use Venezuela as an example.

And libertarians don’t have to go far to point out how stuff that is happening in Venezuela is mirrored in the U.S. Our president (whom I refer to as Burnt Citrus) has appointed family and inept individuals to positions of power the same way Hugo Chavez and Maduro has, which could lead to economic downfall.

Follow Up

Basically, if we want to avoid the issues of Venezuela, let’s not do what they’re doing. It’s time to detach government from business, including oil. If an oil company fails, then let them fail. Allow markets to do what they are doing and keep your government out of it.

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