That Venezuela has not been well run in economic terms in recent years is well known. Even the progressives and idiots, but I repeat myself, who were praising the policies even a just a couple of years back understand that now. It's only the diehard Trotskyists who think that the problem was not enough interference in markets rather than too much. And we all knew that the country was having food shortages, that there were large queues for people trying to buy even the basics of life, hours long queues for toilet paper, cooking oil, rice, chicken, corn flour. But you're really got to get things really bad indeed before you're going to get the civilised people of a middle income nation actually rioting over the lack of food. Storming food trucks, ripping the iron bars off stores, that sort of thing.
But the economic management of that Bolivarian revolution has indeed been so bad that that is what is happening in Venezuela now:
Venezuelans are starving, and they are tired of waiting in line.
In a revolt against president Nicolás Maduro’s flailing government, they are increasingly turning to rioting and looting to feed themselves. In the city of Cumaná they raided more than 100 supermarkets and other food stores last week. Hundreds were arrested; one died.
To those versed in basic economics there is no surprise at this end game. The economic policies were only going to end in one manner, this one:
Although home to the world's largest oil reserves, Venezuela seems to be running out of almost everything these days: food, medicine, electricity, even beer.
Economic conditions have become so bad that Venezuelans are ransacking grocery stores — even though many are largely empty. A Venezuelan monitoring group, Observatory for Violence, says there are about 10 lootings per day around the country, with food riots sometimes turning deadly.
This is the inevitable effect of truly idiotic, grossly stupid, economic policies:
While Maduro has blamed the downturn on an "economic war" he claims is being waged against his government by the political opposition, the private sector and Washington, his critics have slammed the president for sticking to Chavez's socialist blueprint instead of embracing free-market reforms.
"Within 2½ years, Maduro has taken an unsustainable [economic] model and just ridden it right off a cliff," David Smilde, a senior fellow and Venezuela expert with the Washington Office on Latin America, previously told CBC News.
It really isn't the oil price, it's not economic war on the socialist government, it's idiocy, pure and simple.
There's nothing wrong with the idea that perhaps the poor should have a fairer shake of the stick. Nothing at all wrong with putting some policies into place that ensure that either. But what does matter is which policies. A bit of tax and redistribution might slow the overall growth rate fractionally but so what? Entirely feasible that that's what the people want so why not? The Nordics do this social democracy and they're fine places to live - the tax rates are eyewatering but that seems to be what the Vikings want and that's what they get, good and hard.
There's not really anything wrong with socialism either. There's plenty of examples of communal ownership of productive resources in our own economies and those farmer co ops, credit unions and the like get along just fine. The thing we must have though are functioning markets and prices. Prices being the most important - they are not just random numbers we assign to this for grins and giggles. They are instead vital information about who wants what and who is prepared to produce what. The market clearing price being the one at which enough people can be prodded into producing for the people who want to consume. Have any other price than that market clearing price and you'll have either gluts or shortages.
What Chavez did, and Maduro has continued to do, is treat prices as just random numbers to be assigned to things. Thus the gross shortages of everything. Thus the queues and now thus the food riots. The lesson for us is that if we wish to make the poor better off then tax and redistribute is the only method that works. Market abolition doesn't.
Another way to put this is that we've got a spectrum of possibly useful economic models. That spectrum running the entire gamut from something like full on free market low tax and low benefit capitalism to full on free market high tax and high benefit capitalism. From, approximately, the economic model of Hong Kong through the Anglo Saxon variety of the UK and US to the social democracy of the Nordics. And that's it really, nothing else works. We can redistribute the results of the economy a little bit if that's what we want to do but going and messing with markets will, and I repeat will, produce disaster.
