Wednesday, March 28, 2007

Another Experiment in Socialism Gone Awry

It is truly amazing how the socialists in the world fail to get the message that it doesn’t work. Our Universities and the Educational community in general continue to be filled with these people who feel capitalism is evil and that socialism is the only “fair” way to run a government. Of course it goes unsaid that they should be the ones to run the government because the rest of us are too stupid to make the right decisions. Even in those European countries where socialism is entrenched the best they have been able to achieve is a level of mediocrity, where no one is terribly rich, no one terribly poor, and many who simply give up and live parasitic lives without working. If it wasn’t for the leadership of the United States most of Europe would simply collapse. But that really isn’t the issue. The issue today is Venezuela, a once prosperous country rich in oil revenues but suffering from the usual Latin America malaise of few members in the middle class, too many ignorant and uneducated peasants, and too little reinvestment in the country.

What we find today in Venezuela is Hugo Chavez doing what dictators and communists have done forever and that is promise something for nothing to the masses and then find a scapegoat to blame for the failures that inevitably follow from socialist policies. Since Chavez gained power the economy of Venezuela has slipped into decline and is growing worse day by day. At first glance this deterioration may not be obvious because the streets are filled with vendors hawking their wares and shouting out prices. These vendors are selling virtually everything and from the sheer number it would appear that the economy is in good shape and that the people are prosperous and doing well. But this appearance is deceiving because the supermarkets where one would ordinarily buy vegetables and other staples are virtually bare. But why is this happening when the whole objective of socialism / communism is to share the riches with everyone. The objective is to take from those that have and give to those who have not so why are goods becoming scarce?

Obviously the answer to this question is complicated but it starts with some of the fundamentals of socialism / communism. In capitalism the objective of any enterprise is profit and if the profits are not forthcoming the business goes out of business. In socialism and in Venezuela the Chavez form of Socialism is more nearly akin to communism the objective is employment and any profits from the enterprise are taken by the state and redistributed into other endeavors that are not making a profit. The inevitable result of this policy is that eventually there are no profits being generated by any enterprise. But the more direct impact of government control of the economy is the policy of price control. This failed in ancient Rome and it has failed in every instance where it has been tried and it is failing in Venezuela. As soon as the government fixes the price at which a product can be sold it immediately drives that product out of the marketplace because the product can be sold at a higher price on the black market. Punishment of black marketeers increases the scarcity and drives the prices even higher. In Venezuela the government allows these individual entrepreneurs to exist, which is why the street vendors are selling vegetables on the street but the shelves in the markets are bare.

Regimes like Chavez’s drive away business from outsiders and cause investors internally to flee the country taking their wealth with them. This has historically been the problem in Latin America as one dictator after another seizes power the wealthy move their wealth to other countries and the new regime falters and fails to be replaced by other and the pattern repeats itself. Dictatorships are inherently unstable and eventually fail. Communist states follow the same pattern for much the same reason – any prudent person will not stand by and allow the fruits of his labor to be seized by the government and redistributed to the unproductive.

There is a lesson here for America’s leftists and the extreme positions held by many in the Democratic Party. Raising taxes is simply a legal way of taking the profits from the productive and giving them to the unproductive. This is what Chavez is doing in Venezuela and his strength comes from the unemployed, the disenfranchised, and the poor. The power base of Pelosi and the extreme left increasingly rests on the illegal immigrants, the poor, and the unproductive.

But the real warning is that Hugo Chavez is a “democratically elected” leader who seems to have convinced the American left that he is not only a popularly elected leader but that he represents the future of Latin America. Of course this was the position these same leftists took with Fidel Castro and we see how well that worked but the situation in Venezuela may actually be worse because Chavez like dictators before him is using the US as a scapegoat to distract the people from the evident failures of his regime. This is the same technique being used by Kim Jong Il in North Korea, the Mullahs in Iran, the Islamofascists all over the world, and the list goes on and on. However, unlike the others Chavez appears to be trying to provoke the US into some sort of retaliation or military intervention. The recent capture of the British Soldiers is an example of this attempt to provoke an attack by the Iranians. Chavez needs something similar to consolidate his grip on the country because his seizure of private property and obvious drift toward a fascist communist state is rapidly eroding his power.

The leftists in this country and worldwide continue to view the US as the oppressor of the weak, especially Cuba and other communist countries like North Korea. Chavez is relying on this attitude and the fact that the US is distracted by the Islamofascists, which gives him the opportunity to establish himself as the first Communist in South America. He doesn’t represent a significant problem yet but he is not someone to be ignored for long.

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