February 07, 2003
From the desk of Jane Galt:We like to talk about politicians rewarding their cronies, but in America, really what happens is fairly small potatoes. It's appalling, of course, but it's minor; most of what politicians do is to reward voting blocks like steelworkers or teachers, not their friends.
No, if you want to see how crony capitalism really works, better go see what the socialists are doing:
[T]he president is indeed pursuing a revolution; he has been doing so since well before 1992, when as an army officer he led an attempted coup against a democratic government. But Mr Chávez has not yet “decided to bring down the guillotine” on democracy, says Mr Garrido.What would Venezuela look like if and when he does? Neither socialist nor communist. Unlike Mr Castro, Hugo Chávez does not propose to abolish private property. But the private sector he has in mind would consist of enclaves of foreign investment, plus small firms dependent on the state. Neither would threaten his grip on power.
Many larger Venezuelan companies, most of which back the opposition, will struggle to survive. On top of the economic effects of the strike, they now face exchange controls, announced last month as oil exports dried up. The controls will enable the government to starve businesses of imports. They will be administered by a former army captain who took part in Mr Chávez's 1992 coup against a democratic government. The bolívar has been fixed 17% higher than its last trading rate, making corruption and a black market likely.
The outlook for the economy is bleak. Oil output is unlikely to return to its previous levels quickly, if at all (see article). The government says GDP will contract by not more than 5% this year; Venezuelan analysts at LatinSource, a New York-based consultancy, put this figure at 17-20%. But Mr Chávez will attempt to shield his own supporters. He is likely to divert scarce foreign currency and cheap credits to loyal small businesses or co-operatives; he also has plans to distribute urban plots and rural smallholdings to the poor.
The “revolutionary offensive” has other targets. The government has filed complaints against the main private television stations, which could lead to their being fined or temporarily closed. It has also sent a bill to the National Assembly that would allow the infrastructure minister to revoke the channels' licences. The government is also seeking to wrest control of police forces run by opposition mayors; it has already partly disarmed the Caracas police. And there is another bill in the assembly, this one to add ten judges to the supreme court (which has recently shown some signs of independence).
For all the ranting on both sides of the political spectrum, our politicians have never tried this kind of meddling in the economy, impoverishing the nation in order to punish people they don't like and create opportunities for rewarding supporters. (If you think that the [insert the political party you don't like] does pretty much the same thing, I don't want to hear about it. Go try living in a Third World country as a peasant, not a tourist, and we'll talk.)
This is extremely saddening. Chavez's trouble started over Venezuela's economic woes. Now he seems hell bent on making them worse.
What a tragedy. It just makes you want to scream.
Where is this piece from?
Posted by: Kevin Drum on February 7, 2003 12:08 PMThe Supreme Court thing does sound familiar, though. But I agree, we get small potatoes corruption and manipulation. It just looks so much bigger because it is so much closer, and the journalists beat it to death in an attempt to further their career.
Posted by: Joe on February 7, 2003 03:37 PMKevin,
Right click on the link and then click Properties. You'll see that it's from economist.com, i.e. the Economist (of London) magazine.
Posted by: Roger Sweeny on February 7, 2003 03:49 PMThat's my bad, not Kevin's -- I left out the link, and then fixed it when he pointed it out. Then, in an atrocious display of bad manners, forgot to thank him. Thank you, Kevin.
Posted by: Jane Galt on February 7, 2003 05:39 PMAnd I thought you were just being evasively effete... ;->
Posted by: Tom Roberts on February 8, 2003 09:08 AMOn a serious note, I am still trying to figure out what US policy is on Venezuela. One thing is for sure, it ain't "all about oil". But what it is about I couldn't say, and what it has to do with Colombia and the rest of the region is even more obscure.
Posted by: Tom Roberts on February 8, 2003 10:43 AMFrom you -- "see what the socialists are doing."
From the source you cite -- "Neither socialist nor communist."
From Ronald Reagan -- "There you go again.."
Chavez is not a socialist, even if it would be convenient if he were. He has played the populist image as well as he can, but has failed to pry enough out of the "oligarchs" (his word) to offset for the "people" a roughly 8% Q3-over-Q3 decline in output. Neither the rhetoric nor the failure make him a socialist. He is an opportunist who will make use of whatever rhetoric and whatever means he can to stay in power.
Posted by: K Harris on February 10, 2003 12:49 PMUmmm. . . okay. The revolution he's running may bot be socialist, but he pretty much is, and his policies are the next best thing to.
Posted by: Jane Galt on February 10, 2003 03:30 PMYou would think that rather than Iraq, the leftists looking for a Bush-Oil-Military trifecta would be loudly protesting current US inaction on Venezuela -- we get a lot of oil from there, and now this nuthatch is wrecking the place with barely a notice from the US. Payeth we no attention so long as the oil flows?
Or is there some obscure, long-term plan to start pulling all of our oil needs from the Saudis and a re-constituted Iraq, thus cutting off the national income Chavez is pillaging?
Posted by: anony-mouse on February 10, 2003 11:14 PMI have to say that this is about the worst piece the Economist has ever printed in attempting to blame it all on Chavez and make the whole thing look like crony capitalism. The "cronies" involved are the oligarchs, a bunch who are every bit as bad as their Russian counterparts, and Chavez is desperately trying to prise some bits of the economy out of their control before they can do the same job that the Russians did. An 8.5% fall in GDP is small beer compared to what rapacious private ownership inflicted on Moscow.
It is also not quite cricket to describe what has happened in Venezuela as a "strike". It was instigated by capital-owners, not workers, and looked much more like a "lock-out" to many people on the ground.
Posted by: dsquared on February 11, 2003 03:42 AMSo Chavez is wrecking his economy for the people? Come on, D^2, I don't believe that you believe that. He's trying to cut off the oxygen to the political opposition, and he doesn't care who else he hurts along the way. Those oligarchs have had control of the Venezuelan economy for many years, and while I don't think that's a good thing, I think Chavez's cure is worse than the disease. Remember, it may be a lockout, but all they're trying to do is force a vote -- if he's so gosh-darned popular, how come he can't stand for election? The big, gad oligarchs going to do him in there too?
Since elected, Chavez has changed the constitution to try to keep himself in power longer, behavior that's hardly heartening from a chap who previously tried to stage a coup. Now he's instituting the kind of growth-killing, special-interest favoring "reforms" that take decades to undo and are currently strangling most of the third world basket cases on the World Bank's roster. All so he won't have to face early elections. I had sympathy for him before -- it's not healthy for a democracy to try to recall the president every time it hits a bump. But after this move, I think he should stand and face the people.
Posted by: Jane Galt on February 11, 2003 08:13 AMThe WSJ today had an article today noting that the brunt of the strike is being carried on by the employees of the state owned oil company. The rest of the "oligarchs" or neither here nor there lately and are following the residual strikers at the oil company. None of which squares with dsquare's dialectical post.
Posted by: Tom Roberts on February 11, 2003 11:19 PM>>He's trying to cut off the oxygen to the political opposition, and he doesn't care who else he hurts along the way.
Give over. Chavez didn't launch a coup against himself, and he didn't instigate the oil strike. He's trying to defend his government against people trying to bring it down.
>> Those oligarchs have had control of the Venezuelan economy for many years, and while I don't think that's a good thing, I think Chavez's cure is worse than the disease.
A majority of Venezuelan peasants disagreed in the recent elections, and to put it bluntly, they get a vote and you don't.
>> Remember, it may be a lockout, but all they're trying to do is force a vote -- if he's so gosh-darned popular, how come he can't stand for election?
Same reason George Bush, Tony Blair and everyone else don't submit themselves to mid-term plebiscites every time their poll ratings drop -- it's a completely ludicrous way to run an electoral democracy. A more pertinent question would be that, given that the Venezuelan constitution still allows them to demand a midterm election just by collecting signatures if they waited until August, why so keen to demand one now?
>> The big, gad oligarchs going to do him in there too?
As I say, who's afraid of who here? If the opposition wanted an election, then one might think that collecting signatures and waiting six months would be a more civilised way to have gone about getting one than trying to destroy the economy.
>>Since elected, Chavez has changed the constitution to try to keep himself in power longer, behavior that's hardly heartening from a chap who previously tried to stage a coup.
Hmmm, I seem to remember another coup attempt in Venezuela, slightly more recently than 1992 ...
Yes, and I wasn't in favor of it. Only ideologues support violence done to democracy just because it's their economic/social plan that will get enacted atop the carcass of liberty. So what? Is he justified in making himself dictator for life because his opponents tried to gaslight him? I was sympathetic to Chavez until this latest round of shenanigans.
Posted by: Jane Galt on February 12, 2003 07:09 PM>>Is he justified in making himself dictator for life
This ought to be in the conditional tense. Chavez has never done anything of the sort and is currently negotiating with his opponents (with the good offices of Jimmy Carter and the OAS) in much better faith than they have ever shown him.
Posted by: dsquared on February 13, 2003 06:50 PMComments are Closed.