The Return of Chavismo
Michael C. Moynihan | January 23, 2008, 4:01pm
After a post-referendum-defeat period of calm, Hugo Chavez is back on the balcony, threatening enemies of Venezuela's Potemkin democracy. (But Mr. Moynihan, you say, Venezuela
is a democracy, Chavez is Venezuela's
elected leader, and he
graciously conceded when smacked down by voters!). AP reports that
El Jefe is threatening to nationalize counterrevolutionary farms:
President Hugo Chavez threatened on Sunday to take over farms or milk plants if owners refuse to sell their milk for domestic consumption and instead seek higher profits abroad or from cheese-makers. With the country recently facing milk shortages, Chavez said "it's treason" if farmers deny milk to Venezuelans while selling it across the border in Colombia or for gourmet cheeses. "In that case the farm must be expropriated," Chavez said, adding that the government could also take over milk plants and properties of beef producers.
Incidentally, these ungrateful farmers seek "higher profits" abroad because there are no profits to be had at home, thanks to the Bolivarian system of price controls that, despite impressive
economic growth fueled by high oil prices, has left
supermarket shelves bare. Chavez also threatened to nationalize those banks "neglecting laws requiring them to set aside nearly a third of all loans for agriculture, mortgages and small businesses at favorable rates":
President Hugo Chavez threatened on Saturday to take control of banks that fail to meet state-imposed loaning requirements designed to benefit Venezuela's farmers.
[...]
Chavez has threatened banks before. He raised the possibility last year of nationalizing commercial banks amid demands they use some of their profits to fund social programs for the poor.
He has not followed through on most of those threats, although Venezuela's central bank, which is controlled by his allies, ordered private banks in 2006 to double bank deposit reserves from 15 to 30 percent in attempt to head off inflation. The Venezuelan leader's warnings come amid fluctuating food shortages and rising inflation, which reached 22.5 percent in 2007 - the highest official rate in Latin America.
Full story.
My review of a recent Chavez biography here.
tarran | January 23, 2008, 9:28pm | #
joe said,
tarran,
"This," being the proposal to forbid the sale of milk products.
Ah, good thing I didn't waste my time on google looking up sources for you then. ;)
As to the sale of milk products, I am not sure. I've been reading the odd article in pro-free-market-economics blogs over a period of many months now. If my memory serves correctly, the Venezuelan central bank created a great deal of money, resulting in prices starting to rise. The very poor could not afford the higher priced staples (most of the new money ended up in the hands of the politically connected), and began agitating for relief. Chavez then instituted price controls on basic staples but exempted luxury goods.
From the beginning of the institution of price controls there were shortages in the price controlled stuff. Initially the shortages were the product of a few manufacturers diverting their product to the most profitable sales venues, something that the government could control through anti-hoarding or anti-speculation laws. In the meantime the government also convinced themselves that the shortages were due to the increase in demand as a result of the increased welfare payments to the poor. Essentially they claimed that the poor could afford more food and that was why the shelves were so bare.
Within months of the institution of price controls, visitors to Venezuela were commenting on the bizarre sight of supermarkets with plenty of imported cheese from France and pastries and other luxury foods, but with bare shelves where flour and milk and eggs should be.
The inflation continued, and the profit margins of the manufacturers of price controlled goods are so razor thin that they cannot sustain their businesses. Things were made worse as the government slightly expanded the lsit of items that were price-controlled.
Of course, this route of price-controls has been tried many times before. If pushed through to its economic conclusion, eventually the government starts threatening to shoot farmers for hoarding.
Sometimes the government comes to its senses, like Truman did in 1947 with price controls on meat. Sometimes it ends up with thousands being shot as happened with Stalin.
I think Chavez has convinced himself that unlike the thousand times in recorded history where these things have failed, this time he can pull it off. He also has a lot of people with guns backing him up, ones who are not well disposed towards those whom they consider hoarders and speculators. Thus, I think Chavez will try to go pretty far down the traditional route of shooting and jailing people in an attempt to evade basic praxeological laws.
Of course, to be fair, I am no expert on Venezuela. I merely read the occasional article in the Economist and blogs like Distributed Republic, Cafe Hayek, Mises Institute, Reason and of course by my fellow contributors on The Liberty Papers. I would thus take my story with a grain of salt; I am no authority and could be grossly misinformed.
tarran | January 23, 2008, 11:48pm | #
I think Mr Nice Guy is a big Ursula K LeGuin fan. ;)
Let me ask you something I'm always curious about with propertarians, who is worse, Chavez's Venezula or something like United Arab Emirates. The UAE seems to have a thriving business environment, but has no real democracy at all, government censorship of nearly all publications, television, etc., few civil liberties, etc. But I don't see MM decrying the UAE or like states that restrict social liberties but foster some form of "economic development" that meets the propertarians tests...And that makes me suspect.
Interesting question. I don't know much about the UAE and am too busy to research it, so I am just going to talk out of my ass. I am also going to keep this brief since I have to get up early tomorrow to set up the lab for an 0800 AM class.
Additionally, I can't speak for any more than a vanishingly small minority on this site, since I think there are only 5 - 6 regulars who are anarchists like myself. Your mileage may vary.
With that out of the way, from the short description you have given, the UAE
would be preferable to Venezuela. However, that does not mean I would like living in the UAE.
There are several reasons for this:
The UAE is, if I remember correctly, a federation of 5 or 6 emirates. Thus, there is no absolute ruler, rather the heads of the ruling families have to work together and arrive at consensus. It has probably the best mercantile legal system in the world; a free market arbitration system that functions in a manner similar to what Rothbard theorized about.
The emirates engage in tax competition which means that they are rationally self interested in keeping the areas they control very attractive to residents. This results in continual improvement of the social climate. For the most part they respect property rights, you may not legally engage in homosexual activity, for example, but they are not likely to go into your house and try to arrest you for it.
With that being said, the fact that they don't respect the property rights of people who own television stations, webservers and communications equipment is a problem. It's the second biggest problem, from my perspective.
The biggest problem with te UAE is that they still have sharia there, and if you get snared into the criminal justice system, you will probably be unjustly treated. I can't remember the details, but I seem to recall there was some scandal recently about the mistreatment of a male French tourist, whom I think was raped and then prosecuted for engaging in homosexual activity.
This is, of course, unacceptable to me. The reason why I don't fret about the UAE (aside from the fact I have no interest in ever visiting it again having seen it enough times in the Navy) is that they seem to be evolving in the right direction. Several of the emirs have acknowledged that the criminal code is ghastly and they seem to be trying to figure out how to reform it.
Contrast this with Venezuela which is headed down the opposite direction with decreasing freedom in all respects. I should point out that socialist movements tend to have pretty rigid social restrictions against what they perceive as immoral or frivolous activities. In Cuba, for example, during the first decades of Castro's rule, being caught listening to rock and roll music or engaging in homosexual activity could get you imprisoned or shot. Since Chavez seems to be going through the checklist of how to run an overbearing socialist state, I am sure he will get around to attacking people who are "weakening the moral fibre of the country" through "subversive bourgois activity" or somesuch.
But, yes, in a sense you are right. I think all human rights are based on property rights. Your right to life comes from the ownership of your body. Your right to freedom of conscience comes from the ownership of your brain. Freedom of the press is comes from ownership of a printing press and being free to do whatever with it that you wish, etc.
I should point out that a lot of people have only a vague emotional idea of what it means to own something. If you think about what ownership means, it really is the moral right to control something. It's not merely control. Otherwise the thief who grabs a woman's purse and runs off with it would be said to own the purse because he has established control. The thief may control the purse after he seizes it, but most people would argue that the woman retains her ownership of it.
If you apply take this principle to its logical extreme (what you refer to as propertarianism), then you get all the "social freedoms". If you own your body, you can put whatever you want into it, heroin, trans-fats, tobacco smoke, another man's penis, live eels. It's all cool.
I do think, however, that the dichotomy between "social freedoms" and "economic freedoms" is a false one. To me freedom is being permitted to do what you want with your property, so long as you are not infringing on the freedom of other people to use their property. When one person is prevented from enjoying the use of their property, but is rather compelled to turn it over to some other man, for example like a fairness law that would require the New York Times to balance Krugman's essays with ones from Don Boudreaux of CafeHayek, I don't see that as making people more free, but rather making people less free. After all, would you describe a society where the rule is might makes right as being a free one? It's the societies where a poor person does not have to fear that his hovel will be bulldozed by some wealthy guy waving a government notice condemning the hovel which are freer. It's the societies where a middle class person can open a shop and not fear that his store will be looted by the poor or stolen by the rich that are freer. In other words, it is the societies where the entire population very rigidly respects property rights that are the most free and pleasant to live in. It's no accident that the size of the middle class seems to correlate with how much property rights are respected... if you ignore Scandanavia... ;)
Mr. Nice Guy | January 24, 2008, 12:35am | #
"Are you seriously proposing that if, at any time in the distant past, someone in a government used coercion in the transfer, the deed should be abrogated for all future owners and the land stolen, using coercion, by the current government?"
prolfeed-so if my great-grandfather used his government ties to coerce and sh*t on your great-grandfather, and because of that I owned the land you were born on and made you work cleaning out my latrines for a living, you would say "holy sh*t, my boss has a moral propery right over me, I better scoop that sh*t faster and better to impress him!"
"Oh, and the farmers and their descendants and subsequent owners took raw land and, by dint of hard work, turned it into productive assets, which are now reverting to raw land again under Mugabe's reign of theft."
You are right, especially in the past, those who had the resources to get the government, under the auspices of colonial practices, to force one's ancestors a prefereable property arrangment, would ALSO probably have the resources and education to make the land more productive! Hell, that validates it, huh?
"Was this a teachable moment, or are you going to continue advocating for socialist redistribution no matter how badly it turns out whenever it is tried?"
Was this a teachable moment for you, are you going to continue to advocate for socialist redistribution (you know, when a tax-payer funded army like the Brits comes in and uses their coercive power to give the land some people lived on to other people, then enforces disrciminatory laws at gun-point for a while)? You socialist you! Lenin would be proud!
robc | January 24, 2008, 9:29am | #
DavidS,
Looked up the Freedom House scores for the 4 countries. The two categories are Political Rights and Civil Liberties, 1 is best, 7 is worst:
In 1989, Venezuela was a 1,2. In 1999, still a 2,3. In 2007, a 4,4. That is an amazing dropoff for a country that was almost hanging with western democracies in the late 80s.
By comparison, same 3 years (they were picked based on turning pts in Venezuela 89 and 99 were local maxima in freedom):
Pakistan 3,3 to 4,5 to 6,5. Same amount of dropoff, but basically moving from kinda unfree to mostly unfree.
UAE 5,5 to 6,5, to 6,5.
Nigeria 5,5 to 6,4 to 4,4. Nigeria bounces all over the place. They have been up and down. There have been better and worse numbers in that time frame. The 2007 number measures 2006, so a lot may have changed.
Venezuela has moved from freedom to crap. The others were always crap.
My uncurved view is 1,1 is good. 1,2 or 2,1 is moderately acceptable, anything else is a hellhole. Yes that means I just put India and Mexico (both 2,3) in the same hellhole category with Cuba (7,7).
joe | January 24, 2008, 10:36am | #
R C Dean,
This is true in every government. Hell, in every organization. Means nothing.
In this case, the competing power center is indepenent of the alleged "maximum leader," and powerful enough to check him. Excuse me, but that does mean something, something rather significant, and relevant to the thesis that Venezuela is a dictatorship.
Arguing that the army is the most powerful institution in a given country does not exactly advance the thesis that said country is democratic in a meaningful way. So, basically, you are conceding the pont that the independent-from-Chavez military, a powerful insitution in the country, is unwilling to allow their commander-in-chief to commit electoral fraud. Thank you.
As for your point, the military is the most powerful institution in Turkey, far more powerful, in fact, and Turkey is a functioning democracy.
That's quite a leap, since it was supposedly the army, not the government, that stopped the fraud. The army is not part of the government? Excuse me, but I'm pretty sure it is.
Don't forget, this is a one-party government.
I suppose you could call it that, but only if you define "one-party government" in a way that would define the United States as a one-party government from 2003-2007. It is not a "one-party state" in the recognizable sense of that term, as opposition parties are allowed, hold a considerable number of seats in parliament, are competitive in presidential elections, exert enough power to cause the referendum to fail, and just might win the next election or one shortly after that.
Lets also not forget that a judge who was critical of Chavez was just gunned down in the street after being denounced by Chavez. Yet another assassination of a dissident. It's a shame that political violance is endemic in Venezuela, but that is hardly uniqe to Chavez.
rana | January 24, 2008, 10:37am | #
"Let's not forget that after Chavez made the plebiscite on the proposed constitutional amendments a referendum on his rule, he lost. I don't think those poor, benighted souls are as clueless as the anti-democrats suppose."
You are right about this Joe. The thing is, Chavez lost DESPITE having control of almost every governmental entity, NOT because Venezuela is a functioning democracy (there have been plenty of examples of rampant corruption and electoral fraud, but you dismiss it as oppossition propaganda).
The credit lies with the grass-roots student movement, brough to life, oddly enough, by Chavez himself when he shutdown RCTV.
And I think that is what had bothered me about your posts last year regarding Chavez. You seemed to paint him as a misguided or misunderstood politician who worked within the rules of democracy- and if he didnt "democracy" would bring him down. When the truth is that brave, fedup, citizens took it upon themselves to march, provide information, and stay at the voting centers all day and night to make sure Chavez couldnt follow through with fraud.
In a democracy you would trust that your vote would count. That has not been the case here.
Do you see the difference?
Now, slowly the truth about Chavez is coming to light, and the oppossiton does not seem like the oligarchs they were portayed to be.
Chavez has been an astute politician. He has used "democratic" means to gain undemocratic power.
joe | January 24, 2008, 10:49am | #
rana,
The thing is, Chavez lost DESPITE having control of almost every governmental entity, NOT because Venezuela is a functioning democracy Really? Not having control of the military is a pretty good sign that there are serious limits to his control. As is having to submit his desired power grabs for popular approvel As is, you know, LOSING. We've seen dictators who have total control of the government, and those things don't happen.
there have been plenty of examples of rampant corruption and electoral fraud, but you dismiss it as oppossition propaganda I DO? Where, pray tell? Got a link? Do you mean, I don't parrot every single argument I read on the internet that supports your political party? Guilty. You got me.
The credit lies with the grass-roots student movement A grassroots student movement that can deal electoral defeats to the president? Once again, we've seen what dictatorships look like.
You seemed to paint him as a misguided or misunderstood politician Lots of my posts "seem like" things that they actually aren't. I've made my feelings about Chavez perfectly clear - at least clear to anyone who isn't actively trying to read things into them out of a "with us or with the terrorists" view of the world.
I've called Chavez a hamfisted goon on these threads. Sorry if I don't follow that up by unciritcally accepting every political argument made by the people who would like to take his place.
In a democracy you would trust that your vote would count. Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!!!!!! OMG, have you ever read anything about Florida 2000, or Diebold? Rana, have you ever heard "eternal vigilance is the price of liberty?" I've got news for you: you have to keep your eye on the bastards in a democracy, too.
Now, slowly the truth about Chavez is coming to light, and the oppossiton does not seem like the oligarchs they were portayed to be. I would say that the change is not primarily in their public image, but is actually substantive. In 1999 and 2002, the opposition WEREoligarchs. Since then, Chavez's hamfisted foolishnes has led to the defection of some of his supporters to the opposition, and galvanized some apolitical people as well, to the point that the once-immensely-popular Chavez lost the last election. That's democracy for you. Happened in the USA under Bush, too.
