Summing up

"Just a reminder that as of now, Iran is still run by cruel theocrats, Venezuela is still run by far-left socialists, Russia is still run by a destructive dictatorship, and Ukraine is still run by a vibrant democracy that is is basically left alone to fight.

"Meanwhile, Donald Trump's priority is to invade Denmark and Minnesota. And to invite Putin to help run Gaza."

~ composite quote by Phillips O'Brien, Dan Smith, Clotilde I. & Alastair Twin

"Trump is nothing if not the King of Distractions."

"With his Venezuelan Victory fresh in the news again due to his new award for protecting world peace, the president also happily announced this week that he had already sold his first half-billion dollars worth of Venezuelan crude oil to an unnamed recipient. As further evidence of the transparency of the Trump regime, he also said the money from the redacted sale would all go into an offshore bank account somewhere in Qatar, as is now standard Trump Treasury protocol. ...

"Not disclosing the buyer of this US oil—now that the US [government] owns all Venezuelan oil—is also how businesses is properly done by the transparent Trump regime because they’ve realised that redacting names ahead of time will make it easier to comply with likely congressional mandates to release files about these offshore oil transactions ... Protection of the name of the buyer also helps assure that the public will never know if the oil went to one of Trump’s top billionaire campaign supporters, a guy Paul Singer, who recently bought Citgo, the American arm of Venezuela’s state-owned oil company. ...

"Singer bought Citgo for a song, paying dimes on the dollar for the Venezuelan-oil producer when US courts ordered its sale to one of Singer’s companies shortly ahead of Trump’s invasion. The court-ordered sale came because the Venezuela state-owned rig was unable to pay its bonds due to typical commie mismanagement … and possible due to Trump’s embargo on Venezuelan oil. The president keeps his reputation clear of sending billion-dollar windfall deals to his most loyal supporters by keeping their names well-redacted out of his deal disclosures.

"If the president of the United States of Armerica proved nothing else this week, it is that using American arms to change the press news cycle away from the topics you are tired of—a long-favoured ploy of many a US president—really does work well because, outside of Blondi boasting about her Republican Redactors, there was not a second left in the week for news about the Epstain Files.

"Trump is nothing if not the King of Distractions.

"It was practically a stain-free week … other than the American bloodstains inside of an SUV where a mother was shot in the head ...

"The need to battle the fires of internal insurrection by trying to turn the nation into a police state is clear proof of a peaceful president, meriting his coveted Nobel prize."

~ David Haggith from his post 'A DEEPER DIVE into the Chaos'

"Capitalism created Poland's miracle, and socialism created Venezuela's catastrophe."

"Capitalism created Poland's miracle, and socialism created Venezuela's catastrophe."

~ Young Americans for Liberty [chart from the Our World in Data website]

"The Greens' vision a pathway to Venezuela"

"LET'S STRIP AWAY THE political gloss and assess the Green Party’s 2025 budget for what it is: a document heavy on ideology, neo-Marxist buzzwords, and te reo, but dangerously light on pragmatism, economic credibility, and operational realism. ...

"Fundamentally, their budget is about lifting government revenue by taxing New Zealanders an extra $88billion over four years. They have no plan for growing the economy. ... for additional capital, the Greens have decided to simply borrow more. ...

"Included in the Greens tax grab are following revenue channels: Inheritance Tax [i.e., Death Tax]... Private Jet Tax ... 10-year Brightline test ... Labour’s removal of interest deductibility for residential property ... Companies/Corporate Tax [hike] ... Income Tax [threshold] change ... Mining Royalties [hike] ... Wealth Tax...

"It is worth remembering that the Green Party only claims these policies will generate nearly $90 billion in new revenue over four years. This is an implausibly optimistic figure. The reality is you can’t just plug in tax rates and expect static revenue. People adapt and restructure in reaction to law changes and shifting systems. Sometimes they just straight up leave. These are not 'guaranteed billions.' They are some pretty wild assumptions disguised as policy. ...

"CLAIMING TO HAVE FOUND $88 billion in additional revenue thanks to taxing the shizzzzz out of New Zealanders, the Greens have gone to town spending big. ... their budget is more manifesto than fiscal plan. At the heart of the document is the assumption that profit should be avoided and the state should act to hamper it as much as possible. Other assumptions of note relate to their allergic reaction to anything that remotely suggests that adults should be responsible for their own wellbeing. ...

"In classic modern Marxist fashion, they are determined to try things that have already failed multiple times over in other jurisdictions. ...The biggest problem with [their] extensive list of spending [outside the morality of altruism and theft, Ed.] ... is that there’s clearly a lack of capacity in our systems to deliver any of these services. ...

"It is also a strategy that assumes infinite government competence. The Greens are highly critical of our existing systems and yet they want to expand them, give them vastly more power, and put them under further pressure. ...

"'As Venezuelans have learned over the past 20 years of socialism, “free things” come at a high price'.' ...

"Most depressing of all, in my view is the way the Greens would set out to cause lifelong structural dependency on the state. Accusations of Marxism and socialism are often overblown, but in this case they are truly warranted. This plan contains no serious expectations of any personal responsibility nor any incentives to engage in commerce and grow the economy. Guaranteed incomes, regardless of effort, encourage longterm unemployment or permanent student life. There’s no point in saving, working hard, starting a business, or taking financial risks. In fact, those who do would be penalised severely by the Greens through taxation. This is a social model built not on empowerment, but entitlement. ...

"This budget is a blueprint for turning our country into the next Venezuela. It is easy to dismiss the insanity of the Greens as the fantasies of the irrelevant, but the assumption that will not get close to the levers of power is a naive one. ... unless MMP is overhauled ..."

~ Ani O'Brien from her posts 'The Greens' vision a pathway to Venezuela' and 'Greens' moral crusade masquerading as an economic plan

WATCH: Greens's co-leaderette Chloe Swarbrick attempts defending the impossible against Jack Tame's timid prodding:

"Rather than searching in Marx's texts for a condemnation in advance of the Gulag, it is a matter of asking what in those texts could have made the Gulag possible."

Cartoon by Etta Hulme

"The [destructive aftermaths of the] Soviet Union, Maoist China, Kim's North Korea, Pol Pot's Cambodia, Castro's Cuba, Mugabe's Zimbabwe, Chavez and Maduro's Venezuela, and countless other deadly authoritarian regimes and revolutions— all carried out in Marx's name, and celebrated by Marxists at their inception — are casually dismissed and dissociated from Marx's theories ... They are not 'true socialism' or 'true Marxism,' we are told, and it falls to the next socialist regime to implement Marx 'the right way.'
    "A succinct and representative example of this tendency among modern intellectuals may be seen in political theorist Matthew McManus's account of Marx's reputation over time

'But of course the most substantial objection came from Karl Marx, whose epochal critique of political economy remains in some respects the climax of the modernist project...Marxism became the chief theoretical outlook for most of the major socialist movements and parties by the end of the 19th century, with many achieving important reforms. But its reputation was seriously tarnished by the totalitarian movements in the Soviet Union, China, Cambodia, and elsewhere, which appealed to Marx's legacy to advance tyranny while taking serious liberties with his thought. With the collapse of the Soviet Empire in 1989, many thought socialisms' days were numbered, though it has since enjoyed a resurgence in popularity as the inequalities and vulgarities of neoliberalism [sic] became increasingly scrutinised.'

"Note that McManus errs in assigning high status to Marx's intellectual following in the late nineteenth century, which, as we have seen, he did not possess at any point in his life or for many decades thereafter. Neither does McManus substantiate his efforts to differentiate the humanitarian abuses of Marx's twentieth century followers from Marx's own revolutionary theorising. 

    "One is reminded of the quip of French philosopher Michel Foucault, who stated in a rare moment of clarity: 'Rather than searching in [Marx's] texts for a condemnation in advance of the Gulag, it is a matter of asking what in those texts could have made the Gulag possible, what might even now continue to justify it, and what makes it intolerable truth still accepted today.' 'The Gulag question,' Foucault continued, 'must be posed not in terms of error (reduction of the problem to one of theory) but in terms of reality'."

~ Phil Magness, from recent writing

Venezuela reminds us: hard-core Marxists "are not ousted electorally nor peacefully."

 

Your regular reminder, this time from Venezuela overnight, that hard-core Marxists "are not ousted electorally nor peacefully." [Click the pics for links.]

The "anti-imperialism of idiots" + "the Americocentric delusion" = Putin?!

"The anti-anti-Putin Left are most usefully described as 'campists,' whose geopolitical philosophy is summed up by the phrase 'the enemy of my enemy is my friend.' America is the font of all evil, therefore its opponents must have something going for them.
    "The British-Syrian writer Leila Al-Shami calls this 'the anti-imperialism of idiots': 'This pro-fascist Left seems blind to any form of imperialism that is non-western in origin. It combines identity politics with egoism. Everything that happens is viewed through the prism of what it means for westerners....' Russia’s unprovoked war of imperialist aggression is as inconvenient to campists as China’s oppression of the Uyghurs. Either they must find a way to blame America after all or they must downplay the issue. Left-wing support for corrupt authoritarians such as Venezuela’s Nicolas Maduro and Nicaragua’s Daniel Ortega is disappointing enough, but sympathy with Vladimir Putin, Bashir al-Assad and Xi Jinping is symptomatic of a morally broken worldview."

~ Dorian Lynskey, from his column 'Why the Left is split over Ukraine.'  Hat tip Perry de Havilland, who observes sagely that a similar criticism also applies to certain libertarians/conservatives in the grip of the Americocentric delusion...

You can't argue against socialism's 100 percent record of failure

After more than two dozen failed attempts -- every time and everywhere it's been tried, records Kristian Niemitz in this guest post -- Socialism  has proven itself to be a disastrous economic and social philosophy, entirely unsuited to life on this earth.

Socialism is in vogue. Opinion pieces ordering us to stop obsessing over socialism’s past failures, to get excited instead about its future potential, these have almost become a genre in their own right.

Consider Bhaskhar Sunkara's recent example, penned for the New York Times, in which he claimed (as most such articles have to claim) that the next attempt to build a socialist society will be completely different:

This time, people get to vote. Well, debate and deliberate and then vote—and have faith that people can organise together to chart new destinations for humanity. Stripped down to its essence, and returned to its roots, socialism is an ideology of radical democracy. […] [I]t seeks to empower civil society to allow participation in the decisions that affect our lives.

So too Nathan Robinson, the editor of Current Affairs, who wrote in that magazine that socialism has not “failed." It has just never been done properly:

It’s incredibly easy to be both in favour of socialism and against the crimes committed by 20th-century communist regimes.
    When anyone points me to the Soviet Union or Castro’s Cuba and says “Well, there’s your socialism,” my answer […] [is] that these regimes bear absolutely no relationship to the principle for which I am fighting. […] The history of the Soviet Union doesn’t really tell us much about “communism” […]
    I can draw distinctions between the positive and negative aspects of a political programme. I like the bit about allowing workers to reap greater benefits from their labour. I don’t like the bit about putting dissidents in front of firing squads.

And Brit populist Owen Jones can declare, in print, that while Cuba’s current version of socialism is not “real” socialism at all—it could yet become "the real thing":

Socialism without democracy […] isn’t socialism. […] Socialism means socialising wealth and power. […]
    Cuba could democratise and grant political freedoms currently denied as well as defending […] the gains of the revolution. […] The only future for socialism […] is through democracy. That […] means organising a movement rooted in people’s communities and workplaces. It means arguing for a system that extends democracy to the workplace and the economy.

Simple.

And then there's self-deluded Washington Post columnist Elizabeth Bruenig who wrote an article with the self-explanatory title 'It’s Time To Give Socialism A Try':

Not to be confused for a totalitarian nostalgist, I would support a kind of socialism that would be democratic and aimed primarily at de-commodifying labour, reducing the vast inequality brought about by capitalism, and breaking capital’s stranglehold over politics and culture.

Despite differences in style and emphasis, articles in this genre share a number of common flaws.

Flawed Arguments

The first and most obvious flaw is this: that as much as the authors insist that previous examples of socialism were not “really” socialist, none of them can tell us what exactly they would do differently. Rather than providing at least a rough outline of how “their” version of socialism would work in practice, the authors escape instead into abstraction, and talk about lofty aspirations rather than tangible institutional characteristics.

“Charting new destinations for humanity” and “democratising the economy” are nice buzzphrases, but what does this mean, in practice? How would “the people” manage “their” economy jointly?

Would we all gather in Hyde Park, and debate how many toothbrushes and how many screwdrivers we should produce?

How would we decide who gets what?

How would we decide who does what?

What if it turns out that we don’t actually agree on very much at all?

These are not some trivial technical details that we can just leave until after the revolution--as Karl Marx did. These are the most basic, fundamental questions that a proponent of any economic system has to be able to answer. Almost three decades have passed since the fall of the Berlin Wall—enough time, one should think, for “modern” socialists to come up with some ideas for a different kind of socialism. Yet here we are. After all those years, they have still not moved beyond the buzzword stage.

The second great flaw is this: that the authors do not even realise that there is nothing remotely new about these lofty aspirations to which they aspire, and the vapid buzzphrases they employ. Giving “the people” democratic control over economic life has always been the aspiration, and the promise, of socialism. It is not that this has never occurred to the people who were involved in earlier socialist projects. On the contrary: that was always the idea. There was never a time when socialists started out with the express intention of creating stratified societies led by a technocratic elite. But, inevitably, socialism always turned out that way. It was not always the intention; but that result was always baked in.

Socialists usually react with genuine irritation when a political opponent mentions an earlier, failed socialist project. They cannot see this as anything other than a straw man, as a cheap shot. As a result, they refuse to address why those attempts have turned out the way they did. According to contemporary socialists, previous socialist leaders simply did not really try, and that is all there is to know.

They are wrong.

The Austro-British economist Friedrich Hayek already showed in 1944 why socialism must always lead to an extreme concentration of power in the hands of the state, and why the idea that this concentrated power can be "democratically" controlled is an illusion. Were Hayek to come back from the dead today, he would probably struggle a bit with the iPhone, Uber and social media—but he would instantly grasp the situation in Venezuela.

Hayek's successor in this line of criticism, George Reisman, understood Venezuela's fate as early as 2007, and has explained in compelling detail why this is always and inevitably the endpoint of socialist government: why, in his words, "Marxism/socialism [is] a sociopathic philosophy conceived in gross error and ignorance, culminating in economic chaos, enslavement, terror, and mass murder."

This is the result of the third great flaw of the socialist system: that contemporary socialists completely fail to address the long-understood deficiencies of socialism in the economic sphere. Austrian economist Eugen von Böhm-Bawerk explained as long ago as 1896 that
Marx’s economics was disaster heaped upon blindness, was “contradiction … heaped upon contradiction,” and that “the great radical fault of the Marxist system at its birth; from it all the rest necessarily springs” was his blind attempt to force his economic theories to fit into the Procrustean bed of his formal “dialectic” methodology.

And Böhm-Bawerk's student Ludwig von Mises drove the final nail into socialism's economic pretensions by pointing out that that socialism could never work because (without a price system) it could never distinguish more or less valuable uses of social resources, predicting in 1920 that the system would always end in chaos -- Mises's arguments proved to be unanswerable.

Socialists ever since have talked a lot about how their own particular version of socialism would be democratic, participatory, non-authoritarian, and nice and cuddly. But they could never prove Hayek, Böhm-Bawerk, Mises et al wrong and magically make their version work. So inevitably, to make people work they were obliged inevitably to resort to threats and violence.

What starts in fantasy always ends in slavery.

Economics Matters

Many of today's socialists, just like those of the past, would prefer to be able to avoid the Gulags, the show trials and the secret police next time, the avoidance of which would obviously be an immeasurable improvement over the versions of socialism that existed in the past.

But even without those inevitabilities, socialism is still left with a dysfunctional economy, and no other way but threats to even try to make it work.

Contemporary socialists still maintain the fantasy however that a democratised version of socialism would not just be more "humane" but also economically more productive and efficient: reform the political system, and the rest will somehow follow. The key word is "somehow." Because there is no reason why it should, and nowhere it ever has done. Democracy, civil liberties, and human rights are all desirable in their own right, but they do not, in and of themselves, make countries any richer--and no strict socialist society has ever been able to enjoy these fantastic promises for very long.

A version of East Germany without the Stasi, the Berlin Wall, and the police brutality would have been a much better country than the one that actually existed. But even then: East Germany’s economic output per capita was only one third of the West German level. Democracy, on its own, would have done nothing to close that gap. (And East Germany never enjoyed that boon.)

A version of North Korea without the secret police and the labour camps would be a much better country than the one that actually exists. But even then: the North-South gap in living standards is so vast that the average South Korean is 3–8cm taller than the average North Korean, and lives more than ten years longer. (Even if they ever had it, democracy alone would not make North Koreans any taller, or likelier to reach old age.)

Ultimately, the contemporary argument for socialism boils down to: “next time will be different because we say so.”

After hundreds of millions dead in more than two dozen failed attempts, that is just not good enough.

* * * * * 

Dr. Kristian Niemietz is the British Institute for Economic Affairs's Head of Health and Welfare.

A version of this post previously appeared at FEE.

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"From what I can see, the people of Venezuela do not want to end socialism. They want to end the rule of Maduro, and get back to when socialism 'worked.' They don't understand that socialism only seems to work only as long as the seed corn lasts." Bonus #QotD

"From what I can see, the people of Venezuela do not want to end socialism. They want to end the rule of Maduro, and get back to when socialism 'worked.' They don't understand that socialism only seems to work only as long as the seed corn lasts."

          ~ Keith Weiner, on Twitter

[edited for clarity]

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Quote of the Day: A reminder about socialism

“Socialism has been tried on every continent of the globe. In the light of its results, it is time to question the motives of socialism’s advocates... The alleged goals of socialism were: the abolition of poverty, the achievement of general prosperity, progress, peace and human brotherhood...  Instead of prosperity, socialism has brought economic paralysis and/or collapse to every country that tried it. The degree of socialisation has been the degree of disaster.”~ Ayn Rand, from her article ‘The Monument Builders'

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Quote of the Day: On socialism's latest inevitable disaster

"When the Berlin Wall fell it was obvious to everyone with eyes to see and a brain to think with that socialism had been tried, and it had failed spectacularly. No one alive at the time could fail to get the lesson: Socialism Sucks.

"But it seems lessons that big have to be relearned every generation: the tragedy of Venezuela should be this generation’s object lesson that Socialism Sucks.
"Socialism [has now come] to Venezuela ... This issue of The Free Radical sends out A Challenge to Young Socialists to watch, and to learn – and to reject this ideological harbinger of misery."
~ PC in the introduction to the Free Radical magazine's Venezuela edition, 2007

It’s Christmas in Venezuela

 

Its socialist rulers having taken the means of production into the toilet, and with its currency now worth less than the toilet paper you won’t find there, Venezuela’s socialist apparatchiks have now done a reverse Scrooge – confiscating toys from toy makers so they can be seen to be Santa.  But quite apart from the moral outrage of blatant theft, Dan Mitchell points out in this guest post that the practical problem with raiding toy makers to redistribute toys is that next year, there won't be any toy makers to raid.
This is what socialism looks like, children …

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Socialist Venezuela Raids Santa's Workshop

Earlier this year, I borrowed from Dante’s Inferno and created the Five Circles of Statist Hell. At the time, I suggested that Venezuela was on the cusp of moving from the third circle (“widespread poverty and economic misery”) to the fourth circle (“systematic and grinding poverty and deprivation”).

Since we now know that children in the country are suffering from hunger and malnutrition, I think we can safely confirm that Venezuela has made that crossing, joining the dystopian hell of North Korea (though you can make a good argument that the savage regime based in Pyongyang actually belongs in the fifth circle).

And just in case you need another piece of evidence about Venezuela, consider these excerpts from a surreal BBC report.

Venezuelan authorities have arrested two toy company executives and seized almost four million toys, which they say they will distribute to the poor. Officials accused the company of hoarding toys and hiking prices in the run-up to Christmas. Last week, the government issued an order to retailers to reduce prices on a range of goods by 30%. …Our children are sacred, we will not let them rob you of Christmas,” it said in a tweet, along with photos and video of thousands of boxes of toys. …The agency also posted photos of the two executives being marched from the premises by a squad of heavily armed soldiers.

Here’s some additional background on the economic situation in the country.

This is not the first time Venezuela has ordered price cuts on retailers, or mobilised armed units to enforce it. In late 2013, the country introduced laws allowing the government to fix prices and dictate profit margins. …The same measures have been used to fix the prices of basic products such as flour, meat and bread – but supply is limited in a country where many people go hungry.

Before continuing, I can’t help commenting that BBC journalists apparently can’t put 2 and 2 together. The reason supply is limited and people are suffering is because of the price controls and intervention.

Sigh.

Anyhow, here are some final passages from the article.

The Venezuelan government is becoming increasingly unpopular as the country’s economic crisis grows. …The International Monetary Fund estimates that inflation – the rate at which prices go up – will hit 2,000% next year.

Yup, Venezuela is a regular Shangri La. No wonder Bernie Sanders is so infatuated with the place.

But let’s focus today on the Venezuelan government’s attempt to play Santa Claus by seizing toys and selling them at below-market rates.

I don’t know if this move will be politically popular since that depends on whether ordinary people have some degree of economic sophistication.

But we can say with great confidence that it represents terrible economic policy. That’s because, as Thomas Sowell has wisely noted, it’s very difficult for a government to steal wealth more than one time.

The victims (both the ones who already have been looted and the ones who might be targeted in the future) quickly learn that it’s not a smart idea to accumulate assets that can be stolen by the state.

In effect, the productive people of the country learn to behave like the Little Red Hen.

In the short run, though, the Venezuelan government gets to play Santa Claus. At least for 2016.

But it won’t have that option in 2017. And because the nation’s kleptocratic government is running out of victims, it’s just a matter of time before the system collapses, at which point the government either gives up power or launches a brutal crackdown.

Hopefully the former.

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Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.
This post previously appeared at his blog International Liberty, and at FEE.

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#VenezuelaWatch | You will not see this on the 6pm news

 

For anyone watching the contemporary experiment in socialism that is Venezeula –  a conclusive almost scientific experiment that every young person sympathetic to the system should observe: as starvation became a real thing this week in what was once one of the wealthiest countries in South America, the Venezuelan regime opened its border with Colombia to allow desperate people the opportunity to purchase food and other supplies on the Colombian side of the border.

Get that: To get food and supplies, Venezuelans had to queue up to cross over to neighbouring Colombia – not because Venezuelans have experienced a natural disaster, but because they voted themselves into the political disaster that is socialism. And, see, it is easy to buy food and provisions in Colombia, because they didn’t.

While store shelves sit empty in Venezuela, they teem with food and provisions just next door. The footage below shows the difference between socialism and the free market for any with eyes to see it – and there is no need to speak Spanish to understand the tragedy that is taking place in that country.

The Venezuelan regime opened up the bridge for only a few days: https://www.youtube.com/watch?v=bQ-Y05rOLcw

 

Venezuelans streamed toward the border, pleading for liberty and food:

 

The desperation can be seen in this video: a Venezuelan man crying, kissing and hugging a Colombian soldier. “This government oppresses us a lot…There is no food in Venezuela. God bless you, you are very kind” he cries.

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How to create starvation in 2016

 

 

How to Create Starvation in 2016
Guest post by Jeffrey Tucker

One of the great achievements of the human mind is having produced a solution to the single greatest challenge of life on earth: getting enough to eat. Shelter and clothing are no brainers by comparison. You find a cave, you snag a pelt, and you are good to go.

But finding food to eat is a daily issue for human beings, never finally solved. You need more than a stock of food; you need a system that produces a continual flow.

In 2016, we finally have such a system in place, one capable of supporting 7.4 billion people. It’s so robust at this point that the developed world has the opposite problem of obesity -- which, in the course of social evolution, is a nice problem to have.

The creation of this system – which you can see on display at any grocery store in your own neighborhood – defied the expectations of legions of doubters in the 19th century. Population then was booming beyond belief. How would they be fed? Most intellectuals couldn’t imagine how it could happen.

And yet it did. So complex, well developed, and productive is the global market for food that it turns out to be extremely hard to break the system. To create starvation in 2016 requires extraordinary effort. It requires a comprehensive system of coercion that attacks all the institutions that make abundance possible: ownership, international trade, an adaptive price system, the right of commercial innovation.

Socialism Strikes Again

Such a system does exist, however. It goes by the name “socialism.” It is being tried today in a country that was once wealthy, comfortable, and civilized: a country with the largest oil reserves in the world.

Yes, it seems like fiction. It’s not. In one country in particular, over the course of 16 years of unrelenting destruction of property rights and human rights, step by gruesome step, socialism has resulted in unthinkable scenes of human suffering.

That country is Venezuela. It began under the rule of Hugo Chavez and now continues under the rule of his successor Nicolás Maduro. As bad, grafting, and despotic as their intentions, it is not likely the case that they intended to create starvation. Rather, they sought to bring about all the promises of socialism: fairness, equality, an end to exploitation, justice, and so on. But you look around and what you see instead is the end of everything we call civilization.

I can do no better than to quote at length from the New York Times report from yesterday:

CUMANÁ, Venezuela — With delivery trucks under constant attack, the nation’s food is now transported under armed guard. Soldiers stand watch over bakeries. The police fire rubber bullets at desperate mobs storming grocery stores, pharmacies and butcher shops. A 4-year-old girl was shot to death as street gangs fought over food.

Venezuela is convulsing from hunger.

Hundreds of people here in the city of Cumaná, home to one of the region’s independence heroes, marched on a supermarket in recent days, screaming for food. They forced open a large metal gate and poured inside. They snatched water, flour, cornmeal, salt, sugar, potatoes, anything they could find, leaving behind only broken freezers and overturned shelves.

And they showed that even in a country with the largest oil reserves in the world, it is possible for people to riot because there is not enough food.

In the last two weeks alone, more than 50 food riots, protests and mass looting have erupted around the country. Scores of businesses have been stripped bare or destroyed. At least five people have been killed….

The economic collapse of recent years has left it unable to produce enough food on its own or import what it needs from abroad. Cities have been militarised under an emergency decree from President Nicolás Maduro, the man Mr. Chávez picked to carry on with his revolution before he died three years ago.

“If there is no food, there will be more riots,” said Raibelis Henriquez, 19, who waited all day for bread in Cumaná, where at least 22 businesses were attacked in a single day last week.

But while the riots and clashes punctuate the country with alarm, it is the hunger that remains the constant source of unease.

A staggering 87 percent of Venezuelans say they do not have money to buy enough food, the most recent assessment of living standards by Simón Bolívar University found.

About 72 percent of monthly wages are being spent just to buy food, according to the Center for Documentation and Social Analysis, a research group associated with the Venezuelan Teachers Federation.

In April, it found that a family would need the equivalent of 16 minimum-wage salaries to properly feed itself.

Ask people in this city when they last ate a meal, and many will respond that it was not today.

Among them are Leidy Cordova, 37, and her five children — Abran, Deliannys, Eliannys, Milianny and Javier Luis — ages 1 to 11. On Thursday evening, the entire family had not eaten since lunchtime the day before, when Ms. Cordova made a soup by boiling chicken skin and fat that she had found for a cheap price at the butcher.

“My kids tell me they’re hungry,” Ms. Cordova said as her family looked on. “And all I can say to them is to grin and bear it.”

Other families have to choose who eats. Lucila Fonseca, 69, has lymphatic cancer, and her 45-year-old daughter, Vanessa Furtado, has a brain tumor. Despite also being ill, Ms. Furtado gives up the little food she has on many days so her mother does not skip meals.

“I used to be very fat, but no longer,” the daughter said. “We are dying as we live.”

Her mother added, “We are now living on Maduro’s diet: no food, no nothing.”...

Sugar fields in the country’s agricultural center lie fallow for lack of fertilisers. Unused machinery rots in shuttered state-owned factories. Staples like corn and rice, once exported, now must be imported and arrive in amounts that do not meet the need.

In response, Mr. Maduro has tightened his grip over the food supply. Using emergency decrees he signed this year, the president put most food distribution in the hands of a group of citizen brigades loyal to leftists, a measure critics say is reminiscent of food rationing in Cuba.

“They’re saying, in other words, you get food if you’re my friend, if you’re my sympathiser,” said Roberto Briceño-León, the director of the Venezuelan Violence Observatory, a human rights group.

It was all a new reality for Gabriel Márquez, 24, who grew up in the boom years when Venezuela was rich and empty shelves were unimaginable. He stood in front of the destroyed supermarket where the mob had arrived at Cumaná, an endless expanse of smashed bottles, boxes and scattered shelves. A few people, including a policeman, were searching the wreckage for leftovers to take.

“During Carnival, we used to throw eggs at each other just to have some fun,” he said. “Now an egg is like gold.”...

At the same time, the government also blames an “economic war” for the shortages. It accuses wealthy business owners of hoarding food and charging exorbitant prices, creating artificial shortages to profit from the country’s misery.

It has left shop owners feeling under siege, particularly those who do not have Spanish names.

“Look how we are working today,” said Maria Basmagi, whose family immigrated from Syria a generation ago, pointing to the metal grate pulled over the window of her shoe store.

Her shop was on the commercial boulevard in Barcelona, another coastal town wracked by unrest last week. At 11 a.m. the day before, someone screamed that there was an attack on a government-run kitchen nearby. Every shop on Ms. Basmagi’s street closed down in fear.

Other shops stay open, like the bakery in Cumaná where a line of 100 people snaked around a corner. Each person was allowed to buy about a pound of bread.

Robert Astudillo, a 23-year-old father of two, was not sure there would be any left once his turn came. He said he still had corn flour to make arepas, a Venezuelan staple, for his children. They had not eaten meat in months.

“We make the arepas small,” he said.

In the refrigerator of Araselis Rodriguez and Nestor Daniel Reina, the parents of four small children, there was not even corn flour — just a few limes and some bottles of water.

The family had eaten bread for breakfast and soup for lunch made from fish that Mr. Reina had managed to catch. The family had nothing for dinner.

It has not always been clear what provokes the riots. Is it hunger alone? Or is it some larger anger that has built up in a country that has crumbled?

Inés Rodríguez was not sure. She remembered calling out to the crowd of people who had come to sack her restaurant on Tuesday night, offering them all the chicken and rice the restaurant had if they would only leave the furniture and cash register behind. They balked at the offer and simply pushed her aside, Ms. Rodríguez said.

“It is the meeting of hunger and crime now,” she said.

As she spoke, three trucks with armed patrols drove by, each emblazoned with photos of Mr. Chávez and Mr. Maduro.

The trucks were carrying food.

“Finally they come here,” Ms. Rodríguez said. “And look what it took to get them. It took this riot to get us something to eat.”

Sometimes people wonder why people like me are so passionate about free markets and all that they imply. In the end, it is about the quality of life on earth. Will we thrive or will we starve? This is what economics is about. And it is not an abstract problem.

Any country on earth is capable of creating starvation. You only need to follow the path of Venezuela. Attack property rights and trade, pillage the rich, abolish the price system, jail dissenters, crush the opposition, dismantle the system of natural liberty that has fed the world.

This is socialism. It is the path to Hell on earth.

---

 

Jeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events.

His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook.

This post first appeared at the Foundation for Economic Education website.

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• #FeelTheBern | Venezuela edition

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What Would Ludwig von Mises Do in Venezuela?

 

Guest post by Tho Bishop

The crisis in Venezuela is the most modern illustration of the horrific consequences of socialism and the devastating reality of hyperinflation. What makes this disaster all the more infuriating is that it could have been avoided with a basic understanding of history. We’ve seen the disaster of socialism and interventionism in various forms play out across the world time and time again with similar results, and yet new generations of central planners — backed by ideologically-aligned intellectuals — are consistently able to fool people into believing that “this time will be different.”

Ludwig von Mises himself lived through one of these historical episodes.

Following defeat in World War I, the Austro-Hungarian Empire was in a state of crisis. The Habsburg monarchy ended in 1918 and with it came the dissolution of the Empire. The German-speaking population formed what we now know as Austria, and the nation soon faced a severe economic crisis. The government, led by a coalition of Social Democrats, Christian Socialists, and a Nationalist Party, implemented an ambitious economic program of price controls, food subsidies, nationalisation of industries, protectionism, and welfare — all funded with the printing press.

The result, as Mises predicted, was catastrophe.

Faced with this unbearable reality, Mises used his position as chief economist of the Austrian Chamber of Commerce to push for a series of economic reforms. Given some similarities between today’s situation in Venezuela and the crisis that struck Austria, looking at Mises’s prescription from the past can illustrate a path to prosperity for Venezuela’s future.

1. Abandon and Condemn Socialism

This one is obvious, but it’s a vital first step. Venezuela is a nation of abundant resources, including the world’s largest oil reserve and awe-inspiring tropical beauty. There is no hope for the country until that is understood that the crisis that Venezuela finds itself in is purely one of ideology. This was the same problem Mises faced in Austria. Writing in 1923, Mises lamented that:

Austria is suffering from a fundamental problem: the dominance of socialist ideas in the country....The Social Democrats rule because they have armed forces behind them, and because at every moment they can impose their will upon the populace by shutting down the transport facilities and the power stations. As long as their unbroken dominance continues, every attempt to put the country back on its feet must fail.

Until the power of Nicolás Maduro’s United Socialist Party of Venezuela is broken, Venezuela has no hope.

2. It Must Abandon the Bolivar

While the official numbers have Venezuela’s annual inflation rate at over 180%, there are many who say the real inflation number is still higher. Whatever the “real” rate is, we’ve seen the Bolivar literally reduced to toilet paper as its value has evaporated to the point that thieves won’t even bother stealing it.

Faced with a similar climate, Mises prioritised monetary reform as the first step in reversing Austria’s situation. As he wrote in 1922:

The continued depreciation of the Austrian crown destroys all prospects for reestablishing the state budget until a new bank of issue has been founded. It is not an improbable assumption that the state will be compelled to suspend all payments once it has become impossible to increase the circulation of banknotes—a possibility that entails almost unthinkable social consequences.

Mises’s ideal solution was for Austria to adapt the gold standard, with the chief reason being that it was a “stable medium of exchange that is independent of the crown.” While I favour any country returning to the gold standard, it is worth noting that there are other currencies that could be used in a Venezuelan reform package.

Daniel Fernández Méndez has written about the possibility of Venezuela adopting the US dollar, as Zimbabwe did following its bout with hyperinflation in 2008–2009, and there is certainly a great deal of logic in this approach. While there are many reasons to have doubt in the long-term stability of the Federal Reserve note, it remains the world reserve currency and would represent a major source of stability after the Bolivar.

While adopting the dollar makes sense on paper, it’s fair to question whether such a move would be accepted by a Venezuelan populace who have been warned for years of the dangerous reach of American imperialism. The necessary economic reforms will be painful enough, adding the adoption of the dollar could be too much for Venezuelan people to accept.

An alternative option could be adopting the Chinese yuan. China already has a lot invested in Venezuela, with Chinese banks having pumped billions into the country even while oil prices were plummeting. China has made the stability of the yuan a key part of the Communist Party line, succeeded in having it included last year in the IMF’s basket of currencies.

It is worth noting that Zimbabwe’s financial minister floated the suggestion that Zimbabwe could adopt the yuan in exchange for billions of dollars in debt relief. While that suggestion was eventually shot down by The Reserve Bank of Zimbabwe, it’s a concept that could work in Venezuela.

3. Mass Privatisation of the Venezuelan Economy

In 1921, Mises wrote a memo titled An Economic Policy Program for Austria. After stressing the importance of monetary reform, Mises turned his attention to government deficits, writing:

The federal, provincial, and municipal budget deficits principally all spring from the same two sources: the inefficient management of public enterprises and of the food subsidy scheme. The goal should be to transfer the public enterprises into the hands of private businessmen and to dismantle the food subsidies.

Mises spent most of his career writing about the inefficiencies of government bureaucrats trying to replicate the vital societal function of true entrepreneurs. There is perhaps no better example of this than Venezuela today, who — in spite of sitting on more oil than Saudi Arabia – is having to ration power and import oil.  By selling off Venezuela’s publicly owned oil companies — and returning formerly private oil rigs that were seized by the Venezuelan government — Venezuela will see oil production rise and a key industry restored.  

Similarly, privatising Venezuela telecommunications would solve the problems that currently face that industry. International telecom companies in business with publicly-owned Venezuela companies have begun suspending service as they have no ability to pay bills. One of the biggest drains for these Venezuelan companies is that price controls have prevented the company from raising rates to meet inflation, forcing providers to take major losses over time.

Other Recommendations from Mises

Of course, the necessary reforms that must take place within Venezuela do not end with these three broad actions. In fact, a number of the bullet points in Mises’s Economic Policy Program would also apply here. Substituting Venezuela wherever Mises wrote Austria, these include:

• Currency trading is to be decontrolled. (Ending its current system of bizarre exchange rates.)
• All import prohibitions are to be lifted.
• All impediments to exportation and transit are to be removed.
• Venezuela can cover its need for raw materials and foodstuffs only by importing them. In order to pay for imports it must export finished products, on the basis of which businesses may earn profits. Venezuela needs free trade.
• Government oversight of industrial production of manufactured goods and the use of raw materials is to be ended.
• The government management of food supplies is to be abolished.

Embracing these solutions, combined with a legal system dedicated to the protection of property rights, would empower Venezuela into a leading economic power in the world. With the establishment of Mises Institute Venezuela, and the presence of Austrian scholars within the country, there is hope that the works of Ludwig von Mises can obtain the same following they have obtained in Brazil.

Menos Marx, Mas Mises.

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Tho Bishop directs the Mises Institute's social media marketing (e.g., twitter, facebook, instagram), and can assist with questions from the press.

His post first appeared at the Mises Daily.

 

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#FeelTheBern | Venezuela edition [updated]

 

I hope youthful advocates of socialism have been watching the acopalypse in slow motion that is being inflicted upon Venezuelans by their experiment with socialism. It’s working out exactly as badly for them as anyone could have predicted.

The country’s oil riches – ”more proven oil reserves than any country in the world” – have not saved them from what has been inexorable in every worker’s paradise yet devised.

First, with price signals and profits banned, there are serious shortages: food, medicine, toilet paper, electricity. Indeed, their richness in oil reserves hasn’t even made oil immune to the inevitable: unable to get it out of the ground in sufficient quantity, Venezuela is now importing oil. And with shortages of food, “Hungry Venezuelans Hunt Dogs, Cats, Pigeons as Food Runs Out: Economic Crisis and Food Shortages Lead to Looting and Hunting Stray Animals.”

And with that, inevitably: inflation. Desperate to “fix” things, or at least to appear to, printing money has delivered only an abundance of printed paper bills, and an inflation rate of around 720%. (And paradoxically, Venezuela doesn’t even have enough money now to pay for the paper to print more money to keep up with its hyperinflation.)

And with threats not working, the next thing is outright thuggery (the only thing of which the socialist state is never short: President Maduro is now preparing to seize factories and jail their owners.

And: crime. With the police otherwise occupied, Venezuela now enjoys the highest crime rate in the world – one Venezuelan murdered every 28 minutes.

Forget the stories of socialised medicine too: the economic emergency has become “a public health emergency, claiming the lives of untold numbers of Venezuelans” as doctors and staff flee and -- without medicine, electricity or even gloves or soap – hospitals collapse into something last seen in Dante’s hell.

This has all happened in just under a decade. That’s how rapidly collapse can happen.

What happens next?

What have rulers of every socialist paradise done every time to take their subjects’ mind of disaster?

Yes, you guessed it. From today’s news headlines:

• LA TIMES: Unrest continues to grip Venezuela as president threatens to make opposition-controlled legislature 'disappear'
• BLOOMBERG: Venezuela Prepares for Biggest Military Exercise in History

The Lesson? That full-blown socialism delivers neither peace nor prosperity – just penury and perdure.

Make sure that everyone you know under forty is watching the present disaster play out.

Watching and, hopefully, learning.

[Hat tip Foundation for Economic Education, thoughtcrime, HedgedIn ]

UPDATE:

• “About the same time I was listening to [John Lennon] sing “Imagine,” this item came across my news feed:
        “’By morning, three newborns were already dead. The day had begun with the usual hazards: chronic
        shortages of antibiotics, intravenous solutions, even food. Then a blackout swept over the city, shutting
        down the respirators in the maternity ward. Doctors kept ailing infants alive by pumping air into their
        ungs by hand for hours. By nightfall, four more newborns had died. “The death of a baby is our daily bread,”
        said Dr. Osleidy Camejo, a surgeon in the nation’s capital, Caracas, referring to the toll from Venezuela’s
        collapsing hospitals.’
  “Venezuela has some of the world’s largest supplies of oil, with more proven oil reserves than Saudi Arabia. But about 15 years ago, the late president Hugo Chavez set out to impose a socialist revolution, making a particular point about his great munificence in providing free health care for everyone. In pursuit of this revolution, Chavez crushed every industry outside the oil sector and brought the state-owned oil company under his control. The result has been a long spiral into poverty and oppression. Now we can see the results: socialism literally kills babies.
      “It began by imagining no possessions…”
  Imagine No Possessions, Imagine Venezuela – Robert Tracinski, TRACINSKI LETTER

.

“Shopping for groceries becomes an increasingly dangerous activity.”

Young folk who’ve never seen socialism up close, and Martyn Bradbury, should be keeping their eyes on Venezuela – the world’s fifth-largest oil producer, a once-prosperous country that has and is being turned to ruin by socialism.

Latest news from the hell-hole: “shopping for groceries becomes an increasingly dangerous activity.”

It’s the law of the jungle in Venezuela, as shopping for groceries becomes an increasingly dangerous activity. As the shortage crisis worsens, more and more angry mobs are raiding the nation’s supermarkets, looting whatever basic goods they can find…
    High inflation and the drastic decline in the value of the bolívar on the black market has hit wages hard. Venezuelans currently earn the lowest incomes on the continent, with a minimum wage of US$10.87 per month, based on the unofficial exchange rate.
    Marco Antonio Ponce, general coordinator for the OVCS, tells the PanAm Post that the rise in protests and vandalism stems from a widespread dissatisfaction with the government among the public. “Desperation is increasing, since people can’t purchase food, medicine, or personal-hygiene products,” he says…
    The number of total protests, however, has dropped compared to the same period last year, when 6,369 anti-government rallies took place, leaving 43 dead, hundreds wounded, and dozens of political prisoners detained.

Both tyranny and poverty are endemic to the socialist commonwealth – poverty, because socialism fails to produce; tyranny, because the poverty must be equalised by force.

Read more: Looting Sweeps Venezuela as Hunger Takes Over.

The consequences of socialism … [updated]

“The Sex Pistols, we never really thought of ourselves as some dead serious load of old nonsense, it
was always more to do with humanity and humour. There was no vicious undertone in us, no nasty
edge. And certainly none of the deadpan, dreary political opinions like The Clash wallowed in. We lived in
the real I world. We actually did come from council flats. We knew the consequences of socialism.”
- John Lydon, Uncut Magazine

“Without calculation, economic activity is impossible. Since under Socialism economic
calculation is impossible, under Socialism there can be no economic activity in our
sense of the word … Socialism is the renunciation of rational economy.”
- Ludwig Von Mises, from “Why Socialism Must Always Fail”

“The problem with socialism is that you eventually run out of other people's money.”
- Margaret Thatcher

The consequences of socialism have been evident everywhere they’ve been tried. Anyone over forty has seen them all before. Anyone over forty who has seen them all before and still denies them is lying to you.

The consequences, ultimately, if not stopped in time, are tyranny and starvation.

Venezuela did not stop in time.

This video below is in Spanish - but the pictures give you the idea (and here is a translation of the video description): Spanish journalists in Venezuela “to uncover the ‘secret’ that the president, Nicolas Maduro, and his government try to keep hidden from the world” – here, videoing a nationalised, government-owned supermarket.

The videoing has to be done secretly as men with guns forbid it. They forbid it, because there is very little in the supermarket to buy.

The first image is a parking garage. There are no cars (there is very little fuel in one of the world’s largest oil producers). Where there should be cars, instead there are seats for people to use when waiting to enter the supermarket. You must wait to enter the supermarket because as empty as the shelves are inside they are not as empty as people’s stomachs.

So they queue just for the chance to buy very little.

The consequences of socialism are evident everywhere they’ve been tried.

[Hat tip Julian D.]

UPDATE: “It's been said, "If you tried socialism in the Sahara, you'd get a shortage of sand. The "New Socialism" looks and feels just like the old kind.”
Read: Venezuela Runs Out of Toilet Paper, Achieves True Socialism – F.E.E.

Socialism working its magic again...

Have you been keeping up with the ongoing socialist experiment on human beings in Venezuela?  Like all such experiments, it has headed down all the old familiar tracks, arriving now at a sever shortage of staple foods and medicines and an increasing aggressiveness to control it.

Latest news:

• Over the last year there have been long queues at supermarkets because of widespread shortages of basic goods.
• Last month the owners of several chains of supermarkets and drugstores were arrested for allegedly artificially creating long queues by not opening enough tills.
• The lack of staple foods and medicines has contributed to discontent and to frequent large, often violent anti-government demonstrations.

Today, the government announced its latest measures to repair the disaster.

Will they be releasing the price controls on basic goods that has been causing their shortages? Of course not. Will they be freeing up producers of basic goods so they can supply them without fear of their businesses and supply chains being destroyed by government action? Will they hell.

No, Venezuelan president Nicolas Maduro has announced instead is they will “begin installing about 20,000 fingerprint scanners at supermarkets across the country.”

This, he says, will stop what he claims is the primary cause of shortages: Colombian food smugglers.

It would be funny if it weren’t so tragic. And so goddamned predictable.

Cartoon by Cox and Forkum. Cover image from ‘Free Radical’ magazine.

Venezuela proves Hayek right again

Writing in the Road to Serfdom, Hayek pointed out that socialism inevitably ends up in tyranny. In his book, Government Against the Economy, George Reisman outlined the process in detail.

Socialist controls creates higher costs and partial  shortages, which inspire partial price controls and/or rationing, which creates more shortages and more controls, which creates even greater chaos in the production and distribution of goods, which leads to more shortages and universal controls, which leads to the seizure of production and distribution and even greater shortages and more and more controls – an inevitable and unsustainable process leading inexorably to bankruptcy, to starvation and to the tyranny and terror necessary to maintain the now-utterly corrupt system against those forced within it.

The process lasts either as long as a country has something to loot – or until its citizens wake up.

Venezuela continues to perform today’s demonstration of this tragic process.

Not only has Venezuela imposed price controls, it now seeks to “cure” shortages by cracking down on shoppers. “Venezuela’s food shortage is so bad the country is mandating that people scan their fingerprints at grocery stores in order to keep people from buying too much of a single item,” Fox News reports.