Confused Cato¶
By coincidence I was recalling this Cato-hosted essay by Peter Thiel, in which he states: “I no longer believe that freedom and democracy are compatible.” It isn’t a message the Cato Institute is able to digest.
Consider this article by Juan Carlos Hidalgo (from the Cato Institute’s Center for Global Liberty and Prosperity). Headlined ‘How socialism has destroyed Venezuela’ it tracks the descent of what “was once South America’s richest country” into a hellish, crime-wracked, economic ruin. Socialist insanity is, of course, the immediate cause. How, though, did socialism become Venezuelan public policy? This is a question Hidalgo seems unable to imagine, let alone answer.
The account, as far as it goes, is unexceptionable:
Driving the unrest is a large segment of the population that is fed up with the country’s rapidly deteriorating economy. Despite receiving over $1 trillion in oil revenues since 1999, the government has run out of cash and now relies heavily on printing money to finance itself. The result is the highest inflation rate in the world: officially 56 per cent last year, although according to calculations by Steve Hanke of Johns Hopkins University, the implied annual inflation rate is actually 330 per cent.
The government reacted to skyrocketing inflation by following the typical socialist script: it imposed draconian price controls and has been raiding businesses it accuses of hoarding. As a result, there are widespread shortages of food and medicines, and people have to endure hour-long lines in supermarkets. The scarcity index produced by Venezuela’s central bank reached 28 per cent in January, meaning that one out of four basic products is out of stock at any given time. Somehow, toilet paper is now more valuable than paper money.
The productive sector has been decimated after hundreds of nationalisations and expropriations. Oil now accounts for 96 per cent of export earnings, up from 80 per cent a decade ago. Moreover, due to gross mismanagement at PDVSA, the state oil monopoly, production has dropped by 28 per cent since 2000, the only major energy producer in the world to experience a decline in the last quarter of a century.
The economic hardship faced by Venezuelans is compounded by a horrific rise in crime. The country is now one of the most dangerous places in the world, with almost 25,000 homicides in 2013 – a murder rate of 79 killings per 100,000 inhabitants. One of the reasons the protests are growing, despite the government’s brutal repression, is that the country is quickly becoming unlivable and many Venezuelans think that they have nothing to lose.
We get it (really); socialism is the path to chaotic ruin. And the path to socialism? Here Hidalgo switches without the slightest hint of reflective awareness from perceptive acuity to self-subverting cognitive confusion:
For many years [Venezuela] was also a remarkable democracy in a region where most nations were ruled by military dictatorships. Today, socialism has turned Venezuela into an authoritarian basket case that thousands try to escape every year. With millions of Venezuelans no longer willing to put up with deteriorating living conditions, and a government willing to take whatever means necessary to hold on to power, it looks like the worst is yet to come.
So over the course of “many years” democratic Venezuela transformed into a socialist catastrophe. Are the Cato story tellers going to suggest a narrative for this, or are they going to let us do it for them?
ADDED: Maduro’s war on “fascism” driven by invincible idealism: “We will guarantee everyone has a plasma television.”
ADDED: From the Left: “What has emerged in Venezuela is a new bureaucratic class who are themselves the speculators and owners of this new and failing economy.” (Weird the way that always happens.)