The Failure of Socialism in Venezuela, Part I

March 12, 2023 by Dan Mitchell @ International Liberty

Socialism is an immoral system that has a horrible track record of misery and failure.

One of the most tragic examples is Venezuela.

It used to be the richest nation in Latin America. But per-capita GDP has collapsed according to IMF data.

As you can see from the chart, there were a couple of decent periods, peaking in 2008 and again about five years later.

But those were driven by world oil prices. The overall trend during the Chavez-Maduro years has been negative.

Socialism has been such a disaster that the country is now largely incapable of benefiting when oil prices rise.

By the way, if you somehow think IMF data is suspect, you can also look at the UN’s Human Development Index. Over the past couple of decades, only Syria, Libya, and Yemen performed worse than Venezuela.

In his column for the Miami Herald, Andres Oppenheimer documents Venezuela’s descent into misery.

As Venezuelan dictator Nicolás Maduro celebrates his 10th year in office this week, a reality check shows that his presidency has been much more disastrous than people think. Maduro…has performed an economic miracle in reverse: He has turned what used to be one of Latin America’s richest countries into the poorest one, alongside Haiti. …Venezuela’s gross domestic product has plummeted from $350 billion in 2013 to $60 billion today… Venezuela’s poverty rate has soared from 40% of the population in 2013 to 94% today… Venezuela’s annual inflation rate has risen to nearly 350% this year from 56% in 2013… More than 7.2 million Venezuelans have fled the country during the past decade, according to United Nations estimates. That’s the biggest mass exodus in Latin America’s history.

That’s a depressing indictment.

But there’s more bad news to share. Here are some excerpts from an article by Dominic Wightman for the U.K.-based Critic.

Caracas has grown into one such city from hell. …there’s all-round cynicism, the pongs of death and dank deprivation ubiquitous. …The capital city is flatlining, the flatline only spiked by oases of ill-gotten gains underwritten by Russian gangsters, by wannabe Cuban puppet masters and the Chavistas themselves, whose grip on Venezuela has been transitorily perpetuated by narcodollars… No politics class or textbook can prepare a man for fifteen years viewing first-hand this latest chapter in the failure of socialist doctrine. The descent to hell in Venezuela has been swift and gruesome. …Too often in the West we have discussed Socialism as if it were a cheese on a cheeseboard, some kind of edible mushroom from which we might find nourishment, even as a side dish in a broader menu of political possibilities. The truth is that Socialism is poison, whichever way it is prepared or digested. It is appropriate — no, it is vital — to be so black and white about it.

Wightman’s analysis is particularly persuasive since he is married to a Venezuelan woman and has personally witnessed the nation’s decline over many years.

P.S. I’m still flabbergasted that the New York Times published a lengthy article on Venezuela’s economic misery and somehow never mentioned socialism.

P.P.S. Here’s my description of what it’s like to encounter victims of Venezuelan socialism.