This article was published by The McAlvany Intelligence Advisor on Monday, June 26, 2017:
Thanks to Americans for Prosperity (AFP), the lessons being taught by the on-going destruction of Venezuela have been codified. It’s called “10 Biggest Lies of Socialism” and seven of them apply directly to the once-prosperous oil-rich South American country. First the lie is stated and then the reality:
- Under socialism there will be income equality, as everyone will contribute what they can and receive what they need. But, says AFP, the system instead guarantees that everyone (except the elites in charge) will be equally poor.
- Under socialism private companies will be forced by the government to charge what it determines to be “reasonable” prices through price fixing. Rationing follows when goods previously available disappear from the market. All that these mandates do, says AFP, is guarantee bread lines and shortages as producers cannot produce under such strictures without going bankrupt.
- Under socialism, the economy, having eliminated the overhead cost of “profits” needed under a free market capitalist system, is touted as being able to make the economy grow. In Venezuela, however, the oil-rich nation is unable to feed itself, thanks to bureaucratic miscues and massive corruption among government officials doing the rationing of goods and services.
- Socialism is sold as guaranteeing a class-free society that turns out, according to AFP, to be a society where “everyone is equal in their misery.”
- Socialism guarantees free college educations and free healthcare for everyone but without asking, and answering, the key question: at whose expense? The myth that everyone can live at the expense of everyone else has been exposed in Venezuela.
- Socialism claims that everyone is entitled to material goods (see 5 above) but fails as instead it favors those at the top at the expense of everyone else, leaving the population destitute.
- Socialism promises that workers will be “liberated” from their capitalist slave masters, but discover that they are now slaves of the state, subject to the orders of the state and having their earnings taken from them and distributed to the state for distribution to others.
The sad forced transition of Venezuela into a backward, third-world country whose starving citizens are forced to barter has been tracked extensively. Starting in April, angry civilians took to the streets to protest the increasingly totalitarian regime that has in turn ramped up its oppression, which, as of this writing, has resulted in the death of more than 70 protestors, the injuries of hundreds more, and the arrests of still hundreds more. Those jailed are living in conditions that are too horrifying to recount here. Political rights have all but disappeared, and oil production has dropped precipitously while drug trafficking (involving close relatives of president Maduro) has skyrocketed.
There are two lessons being taught in Venezuela that aren’t mentioned by AFP. The first is the lengths to which starving citizens are forced to go to feed themselves. Mariana Revilla, a medical doctor reduced to making midnight excursions over 60 miles of open ocean to feed her family, was making her fifth trip to Trinidad when her boat capsized, costing her her life and the lives of two others assisting her.
Her boat contained seven tons of flour, sugar, and cooking oil that she had obtained through barter at one of the west coast towns of Trinidad, exchanging them for the tons of fresh shrimp she had brought with her. Others making the midnight trips would take with them anything of value to exchange for food and basic necessities, making the boats look like a floating garage sale: plastic chairs, house doors, ceramic cooking pots, and even exotic animals like iguanas and macaws to trade for food.
The second lesson is that socialist states operate like locusts. Once socialism has absorbed all the wealth of the land, it dies unless it is propped up by outside states. One of those outside “states” in this case happens to be Goldman Sachs. Goldman Sachs is coming under fire for buying $2.8 billion worth of bonds for pennies on the dollar. Now nicknamed “hunger bonds,” Goldman was reviled by Rolling Stones’ Matt Taibbi back in 2010 as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” In Venezuela, Goldman Sachs smells opportunity, hoping either to offload those bonds to unsuspecting investors unfamiliar with the risks of default, or holding them in the hopes that somehow, some way, the country will be bailed out and the bonds paid off at something much closer to face value. With the substantial influence Goldman has inside the Trump administration, it’s more than likely that there will be a bailout of some kind in Venezuela’s future. Buying those bonds at 31 cents on the dollar would give the vampire squid a “double” if its bonds were redeemed at par.
Other states supporting the failing Marxist regime queered the sanctions that the Organization of American States (OAS) tried to apply last week. At its meeting in Cancun, Mexico last Wednesday the OAS’ motion to sanction Maduro failed by three votes: those from Bolivia (run by socialist Evo Morales), from Nicaragua (run by Marxist Sandinista Daniel Ortega) and from the Dominican Republic, which continues to prop up Maduro with annual payments of $1.5 billion (and products such as black beans) to pay for its oil purchases.
Ironically, the island country of Trinidad and Tobago is also supporting Maduro, just inking an agreement in May to engage in collaborative gas exploration and expanded trade agreements.
Socialists in America, in Washington, and on campus really ought to visit Caracas and the towns of Irapa and Guiria on the northeastern peninsula of Venezuela. They need to see with their own eyes the reality of socialism that is costing the country’s citizens their lives in their efforts just to obtain enough food to eat. But perhaps, as Scripture says, they would not believe with their own eyes even if they did: Mathew 13:13 (“Therefore I speak to them in parables: because they seeing, see not…”) and Jeremiah 5:21 (“Hear now this, O foolish people, and without understanding; which have eyes, and see not…”).
The Wall Street Journal: Venezuela’s Shortages Spur Perilous Sea Journeys
Rolling Stone: Matt Taibbi’s The Great American Bubble Machine