'..A rising tide of government interventions in the marketplace during the 1960s and 1970s would soon lead to a host of new problems for Venezuela.''The brunt of the blame for Venezuela’s current economic catastrophe should fall on Hugo Chávez and his successor Nicolás Maduro. However, this does not mean that all was well in Venezuela before Chávez arrived on the scene. The ideological and institutional seeds of the current crises were sown decades earlier. A rising tide of government interventions in the marketplace during the 1960s and 1970s would soon lead to a host of new problems for Venezuela.
..
While Chávez may have been correct in pointing out the corruption of the old Punto Fijo order, he would ironically continue many of its failed policies throughout his regime, amplifying their disastrous effects and implementing them in a tyrannical fashion.
Currency controls, expropriations, price controls, and the use of the state-owned oil company, PDVSA, to finance lavish social spending programs were fixtures of Hugo Chávez’s socialist economic policy.
In addition, Venezuelan political institutions were completely eviscerated, media outlets were suppressed, and political activists were subject to numerous human rights violations under Chávez’s heavy-handed rule.
Chávez had the luxury of high oil prices from 2003 to 2010 to finance his socialist schemes and channel the petroleum rents to consolidate political support in the short term. But once oil prices plummeted, the laws of economics reared their ugly head and the system began to unravel in no time.
Even with Chávez’s death in 2013, his brand of tyrannical socialism has continued unabated under the rule of his successor, Nicolás Maduro.
The Venezuela that stands before us is a failed state. In an atavistic sense, Venezuela has returned to its 19th century state as an increasingly fragmented, political backwater.
Time will tell if the Venezuelan nation will continue to exist as a cohesive whole, or if certain sectors of Venezuelan society decide to blaze their own trail and start to break up the country.
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The Venezuelan case serves as a strong warning to many a European country with crumbling welfare states and growing social discontent. Sooner or later, unsustainable transfer systems are bound to collapse and social disorder ensues.
Left unchecked, socialism only creates a vicious cycle of interventionism that leads to more chaos and misery. To reach the light at the end of the tunnel, Venezuela must completely abandon socialism and embrace the capitalist path to prosperity.'
- José Niño,
Venezuela: Forty Years of Economic Decline, May 18, 2017
ContextVenezuela Before Chavez: A Prelude to Socialist Failure, May 4, 2017
'..Venezuela’s problems have everything to do with perverse government policy..'