A graph of the Devil Excrement at work in Venezuela

July 12, 2011

There is an interview with Economist Asdrubal Baptista in last week’s El Nacional that had the following graph:

taken from apparently a book by him. I find this plot fascinating. It shows Venezuela’s per capita GDP since 1830 in constant Bolivars, that is adjusted for inflation. What is remarkable is how little GDP per capita has increased since essentially the 50’s. Since Venezuela went from producing zero oil in 1914 to producing half a million barrels of oil in 1950, the rise until 1950 can easily be understood. The rest, as they say, is pure Devils Excrement, production went up to one million barrels a day by 1960, without GDP per capita increasing significantly. Then, as seen below, the price of oil began to rise in 1969 (see chart below), production more than tripled and GDP per capita barely moved up. You can see how the peaks and valleys in price are clearly reflected in the GDP plot, but it never got above the level set in the 70’s, despite the fact that the price zoomed up.

The oil was never sowed.


33 Responses to “A graph of the Devil Excrement at work in Venezuela”

  1. Susan Says:

    When GDP includes government spending, (according to Wikipedia ) it is a false data indicator. The US,, among other countries, spends more on war than other programs. And war is expensive. This does not include Homeland Insecurity forces or the subversive ops that are carried out worldwide. Perhaps we should deduct government spending from the formula to get a better measure of a citizen’s GDP !! S.

  2. m_astera Says:

    Speaking of sowing the oil: I had an interesting conversation yesterday with friend who works in Venezuelan agriculture. My friend used to do a lot of business with small farms in the Andes but told me that so many small farms had been expropriated lately that, combined with the rains, agriculture was at a standstill there. Seems there’s a group with the power to expropriate any farm they like, and once expropriated the farms are idle and abandoned. There was some talk about F. Engels being the ideological source behind this group pushing expropriations of small farms, because of Engels’ rants about what poor caretakers of Nature private enterprise was. I remarked that Engels’ family fortune came from textile mills, probably the biggest polluters in England in the 1800s, so he should know.

    The talk went on to the various factions affecting agriculture in Venezuela right now, and I was told that they strongest faction is the military. The military has a vested interest in importing chemical fertilizers and pesticides because they control the ports and all of the transportation routes. Same with food, machinery, clothing; any sort of importation and distribution, the military gets a cut all down the line, over and over. They have less opportunity for graft when things are produced within Venezuela, and no real opportunity when food and goods are produced and consumed locally. There are other, smaller factions pushing for organic agriculture, sustainability, etc but they don’t have the power that the military does, obviously. My friend also told me that to go from city x to city y he had to go through thirty military roadblocks and pay a bribe at each one. If the bribe was not paid, they would find something wrong with his paperwork and confiscate his goods. Apparently this is the case with all commercial transport.

    I can’t vouch for the truth of this, just passing along what I was told, but my friend would have no reason to make it up.

  3. carne tremula Says:

    A little OT:

    wanna have some fun :

    Read the following Wikipedia Articles:


    Their main source is Weisbrot et. al.

  4. moctavio Says:

    I tried that, but could not get a good table of production since 1950, have the prices.

  5. An Interested Observer Says:

    I’d like to see that first graph juxtaposed not against the second graph you show here, but rather against the value in the second chart times oil production. That is, GDP/capita vs oil revenue. I’ll bet those track pretty well for a while, but get turned upside-down gradually, and especially in the last 10 years.

    Be sure to use official oil production figures. 😀

  6. Kepler Says:

    I will check it out.
    I wonder how they could get such specific information from the XIX century, Venezuela is not precisely a model for record keeping. Even if the evolution at that time cannot be clearly seen due to the scale, I am surprise there is no particular dent for the period of the Federal War, where over 1/8 of Venezuela’s population died in 5 years.
    One thing i found curious: Humboldt was comparing the Valles de Aragua with some regiones along the Rhine or the Netherlands – year 1800. I don’t think he would say the same thing now.

  7. moctavio Says:

    I think you can do it with this software, you can choose lots of different data sets.

  8. Kepler Says:

    Thanks, Miguel. The second graphic is particularly brilliant.
    Still, I wonder how an old graphic looks where one can see population growth for those countries AND next to it GDP per capita. Perhaps I will just create it with the World Bank data.

  9. loroferoz Says:

    “The oil was never sowed”

    Except possibly in the period from 1954 to 1974 approximately. Note the steady growth, even as oil (and gasoline) were actually cheap for the developed world.

    That was the period in which immigrants/refugees from Europe and Latin America came to Venezuela, for very real reasons. Those were years of stability and sustained growth. Those were the years alluded to when everybody commented on the great promise Venezuela showed.

    Something was done right in that period.

    Note the wild “landscape” in the period from 1976 and up to the present. Where every valley and peak can be related to a bust and boom in the price of oil. There, yes, little wealth seems to haven been created that was not directly related to oil.

    Oil might have provided the political stability (think of Gomez’s regular army) and resources for infrastructure, even a sort of Keynesian impulse to stimulate the economy.

  10. framethedebate Says:

    OT- Watch news on Washigton Mutual (bankruptcy) tomorrow. Perhaps the tides are shifting in the U.S.

  11. Elsalario Says:

    Investment in tripling homicides? quintupling corruption? standard of living has barely budged so what the h… are you talking about?

  12. OlgaK Says:

    PSF’s are great, they don’t understand the country, they don’t read or understand what you write and then they go and post a comment to show their ignorance not only about the post, but about what they are saying.

  13. moctavio Says:

    Judi: You did not even underrstand the question, it has nothing to do with your idol.

  14. moctavio Says:

    Here you have it, it is log scale, watch the movie from 1960 to 1980


    To buy stuff, give it away, import, capital flight, corruption. Not investment

    • Judi Lynn Says:

      it has gone to investment, investment in the people of venezuela and long term social justice and equality… something an apologist for global banksters and american corprofascist oligarchy wouldnt count as investment but an investment none the less.

      • Roy Says:

        You’re an idiot. Whether of drooling sort, or the willful sort, I don’t know, but an idiot nonetheless.

      • Roberto N Says:

        corprofacist? Man, a right wing zombie! Yikes! Run!!!!

      • Gustavo Says:

        Let me see..53 violent deaths during the weekend, so the money is not invested in people security and safe being. I know, I know…Infrastructure, its there … but wait we are now having electricity and water rationing, so not there either !!! Homes….. sorry only 200.000 builded in 12 years, less than president Caldera 30 years ago in a 5 year term.

        But we do have many Russian tanks, helicopters, machine guns for when we are invaded so, there you have it! We are in the war prevention business. That is really going to help our GDP growth and it is investing in people protection.

      • NicaCat56 Says:

        Judi Lynn, put your money where your mouth is. SHOW us where the investments are. NOW. Of course, since you’re an apologist for so-called “socialist” governments, it might take you awhile (or, even, forever) to prove it; we certainly won’t be holding our breath. Oh, and you also take the prize for using ridiculous terminology: “banksters” and “corprofascist”? They take the cake – um, except that YOU take the cake. Well, no, …you want to take the cake and eat it, too, right?

  15. A. Barreda Says:

    so… where did all that money go? is there a way to figure that out?

  16. Kepler Says:

    You mean South Korea, don’t you?
    Venezuela had a particularly dramatic population increase in the last 4 decades. It would be interesting to plot all that plus the same for other American countries.

  17. megaescualidus Says:

    Certainly it is not being sowed today, and hasn’t been sowed since 1999 (ever since HC took power). What I’m sure about is that it has inflated more than a few bank accounts of those within the Chavista government.

  18. moctavio Says:

    But it does say little wealth other than oil has been created in the last 51 years. You could at least say in the “horrible Cuarta” that new infrastructure was created, but not in the last twelve years.

    What does the equivalent graph look for Brazil, North Korea and Singapore?

  19. Alexander Says:

    The distribution (curve) of per capita income could distort the economic reality, which has to be partitioned into several periods, because a very long period in economics is plenty of structural breaks, even if you statistically correct for it, you will be biased by “statistics regularities” which might differ from the economics.
    For instance in that very long period you can discriminate in the XIX century not less than three periods, each one different from the other one, but with a stagnating population all over that century, the per capita distribution in the plot could miss the economic fundamentals of a country living in a very politically unstable century. Venezuela was the poorest country in Latin-American during the whole XIX century. There were not less than six revolutions and the Guerra Federal, including the big debt crises towards the end of the century.
    In the XX century, you will have to account for about six different periods, with different characteristics, and important issues, for example, the oil GDP respect to overall GDP keep falling along the last 30 years. The plot could hurry you to give different causalities.
    However, I will not dismiss the big Asdrubal’s effort to depict the economy over more than 175 years, and to show the big impact of oil in the economic history.

  20. moctavio Says:

    I actually meant 1914 when oil was first discovered in Venezuela.


  21. Roberto N Says:

    I do believe you mean 1814. We’re still 3 years away from 2014, MO

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