Once in while I read an article that I like a lot because it is clear and to the point and says a lot of what I am thinking of have thought, but synthesizes things in a very nice way. Such is the case of the following article by Raul Gonzalez Fabre published in SIC magazine (A Jesuit publication) recently, entitled “Venezuelan Style Socialism: Five little problems”. It is long, so that I will translate it in the same five parts or “problems” that the article focuses on: 1) Living off the income Socialism, 2) Nationalizing with a dysfunctional state, 3) Businesses without Businessmen, Markets without merchants, 4) The phantom of the New Man and 5) Government by witticism.
Lately, I have not been writing much for two reasons, I have had a terrible cold for over ten days that has taken a lot of energy out of me, but additionally, things like more mismanagement of the economy or the unity party only having one party seem to be almost irrelevant in the scheme of things. So, while I get my energy back, enjoy this lucid article:
Venezuelan Style Socialism: Five little problems by Raul Gonzalez Fabre
Hugo Chavez was reelected in December 2006 with more than 60% of the votes. During his campaign and afterwards, he assured us that voting for him was backing an XXIst. Century Socialism of unknown boundaries. At the same time, the nucleus of his campaign consisted in an expansion of public spending which gave way to a phenomenal populist piñata, with money and imports running with an abundance that made us remember the first period of his archrival Carlos Andres Perez.
First problem: Living off the income Socialism
There is however a problem: not even Commander Chavez can deceive himself with respect to the fact that receiving income form the state in exchange for votes, on the one hand and producing at the maximum of your own capacity without the spirit of profit for the benefit of the collective, on the other, are opposing movements of the human soul. If you recruit supporters and voters via the first procedure, it is going to be truly difficult to make them function under the second directive.
In fact, Adam Smith already noted the attitude of the indepently wealthy class, accustomed to receive without work or care, is contrary both to the entrepreneurial initiative based on your own interest of the capitalist class, as well as to the effort to survive and social ascent of salaried workers. Nobody will get involved with the complications and risks of investments, or in the sweat associated with productive employment, if you can solve your economic problem with income from the land, the State or whatever.
That is why Asdrubal Baptista (a local economist) has insisted that in the great economic project of the Venezuelan XXth. Century, consisting in using oil income to realize the first accumulation of a modern capitalist system was internally contradictory. He was absolutely right. Businessmen under the regime of oil income (protection, contracts, incentives, overpricing, preferential dollars, loans without return…) already have a profit made for them: They don’t need nor wish to leave to compete in uncertain markets with Colombians with knives between their teeth, or Chinese that work sixteen-hour days. The income that was going to feed our endogenous capitalism also froze it after the initial push. When the hour of truth came and income was seriously diminished, there was no competitive private sector, capable of going to open markets without the aid of the State in order to leverage their development.
Living off the income paralyzed capitalism, with which it shared the search for its own interest as the fundamental motivation. Now Venezuelan style socialism pretends to convert the beneficiary of the income that he cultivates with gifts, campaigns and missions, into a socialist capable not only of efficiently producing but do it following the interests of the community at least as much as his own interest. Where living off the income capitalism was impossible because it was internally contradictory, living off the income socialism will fail for even more reasons. There can no be socialism in Venezuela but another gargantuan distribution of wealth through a scheme that is even less productive and capable of creating economic modernity than that of living off the income capitalism.
The Devil's Excrement 
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