Young Voices Advocate, Katarina Hall, joins Liz Wheeler on The Tipping Point to share the latest in news out of Venezuela. She calls in from Guatemala to break down the faux election, arrests of opposition leaders and the descent into socialist dictatorship
Once the richest country in Latin America, Venezuela is suffering its worst ever economic crisis. Inflation is sky high, products of necessity like food aren’t available, and there are shortages of most medicines and medical supplies. Poverty is crushing large parts of the population, there is high malnutrition, and infant mortality is rising at dangerous rates. Given these conditions, it is not a surprise that Venezuela has become a common feature in international news.
Venezuela presence in the media started after the massive protests in different cities around the country that began in March of this year, since the Supreme Court of Venezuela released a decree to take the functions of the National Assembly of opposition majority which was considered a coup d’etat by the opposition.
Read more in Counter Punch
Venezuela is literally starving. The New York Times reports that food in Venezuela is being transported by armed guards. Soldiers watch over bakeries and shoot rubber bullets at mobs desperate for food. Common explanations for Venezuela’s economic failure focus on falling oil prices. But even if oil prices were high, Venezuela’s profits would only serve to mask the economic problems that plague the country. The root of Venezuela’s economic ills is its lack of economic logic in its policies.
Venezuela’s problems stem from its economics: currency and price controls, subsidies, minimum wage, and currency manipulation among a host of other policies. For a long time, Venezuelan politicians didn’t believe economic principles applied to them. Venezuelan politicians convinced themselves that they didn’t have use for economics so long as the oil money kept flowing.
From a finance minister who didn’t believed in inflation, to President Nicolas Maduro increasing the minimum wage by 30 percent in the face of Venezuela’s most severe economic depression, the government has been out of touch. During the reign of Hugo Chavez, oil prices were high and times were good. But once the oil money stopped flowing in, the failure of the Venezuelan economy was laid bare. And what was once seeing as a thriving socialist utopia was stripped to its bones: a hell on earth—just with less food.
How is it that a country with the richest oil reserves in the world has a starving population? Economist Thomas Sowell in his book Basic Economics wrote, “Principles of economics apply around the world and have applied over thousands of years of recorded history. They apply in many very different kinds of economies— capitalist, socialist, feudal, or whatever— and among a wide variety of peoples, cultures, and governments.” Simply put: economics matters.
Just because a country has a lot of resources does not mean that it can turn those resources into goods or services for consumption. The higher amount of goods produced, the higher the standard of living for a country’s citizens. Thus, how a country decides to allocate it resources has a dramatic effect on whether a population lives comfortably or without food. Bolivarian socialism has failed, not because of falling oil prices, but because of its economics.