Too much socialism?
Venezuela is in deep trouble. But in some ways it's West Virginia on Socialist Steroids, which is not the same thing as the 'scientific' socialism Frederick Engels wrote of. The similarity is the condition of being cursed by natural resource wealth and a history of exploitation by external, and global, oil and coal interests. In Venezuela, the government of Hugo Chavez famously took control of the oil resources and applied historic taxes on the foreign oil interests that owned the shipping and refining and extraction capital associated with the oil. For such impudence Chavez enemies organized assassination attempts in which US government assets were implicated. Things got worse from there. It turned out fighting poverty and underdevelopment in the rest of the country could not be accomplished with cash alone. The same is true of West Virginia Senator Robert Byrd's legacy of the Federal Subsidies and a coal Severance Tax -- they did not fix WV poverty. Without being long winded, taking a world tour, "socialism" largely financed by the 'curse' did not fare will in Libya, or Nigeria, or Russia, for that matter. There are some successes -- Finland. Maybe the lesson is: if you have to partly or fully socialize natural resources to reverse suffering -- you need 1) science to guide you toward diversification, and 2) partners to help finance your less catastrophic economic development. Since there is no "great leap" from scarcity to abundance, there is no "great leap" through capitalism.
Venezuela Braces for the Devaluation Storm
-- via my feedly newsfeed