The Venezuela regime has intentionally crushed even the middle and working classes.

What Makes Venezuela Different

by Ryan McMaken


Unlike other leftist South American regimes, the Venezuela regime has intentionally crushed even the middle and working classes.

The economic disaster in Venezuela has prompted many to take a look at the country and attempt to understand what it is that has made things so bad in Venezuela.

It's not enough to say "socialism." After all, the political leadership in Ecuador and Bolivia right now are avowedly socialist, at least in rhetoric. Argentina has long been socialist in practice, but not even Argentina's repeated defaults and other messes brought the country anything like what is going on in Venezuela. Leftist Brazil remains something of an open question at this point.

So what is it about Venezuela that has led the country to the brink of starvation while Bolivia remains relatively stable and without famine? After all, the Bolivian president, Evo Morales, a self-described disciple of Marx, gave Pope Francis a crucifix shaped like a hammer and sickle during a recent visit by the pontiff.

The answer lies in the sheer volume of socialism practiced in Venezuela versus its South American neighbors. 

True Believers vs. Pragmatists

Ever since Lenin, political leaders have known that "pure" socialism leads to starvation very quickly. Lenin had attempted to implement total control of the economy by the Soviet state when he came to power. However, after quickly realizing that this would destroy the economy, Lenin backed off and implemented the "New Economic Plan" which allowed for limited market activity, especially in food production.

Every regime that attempts socialism quickly runs up against the calculation problem inherent in socialism. Without markets, how can we know what to produce, or for whom to produce it? What should goods and services cost? Without at least partial freedom for market prices to function, economies grind to a halt very quickly.

Wisely (and fortunately for ordinary people), Lenin allowed his pragmatism as a politician to eclipse his devotion to Marxism. Similarly, after the mass starvation and social upheaval caused by Mao's hard-core Marxism in China, Deng Xiaoping turned to the pragmatism of "socialism with Chinese characteristics." It was, in other words, socialism-lite.

As always occurs when socialism recedes, wealth increases. In the case of the Soviet Union, Lenin's limited markets never progressed beyond a very limited realm — thanks to Stalin's reassertion of centrally-planned economies. In post-Mao China, where markets were allowed to become widespread (although always heavily regulated) the Chinese economy flourished (relatively speaking) as farmers, merchants, and countless other small and medium-sized enterprises were allowed to function with relative freedom.

In Venezuela under Hugo Chávez, and today under Nicolás Maduro, things have been moving in the opposite direction.

Perhaps more than any other Latin American strongman in recent memory, Chávez was a "true believer" when it came to socialism, and he showed his ideological devotion with his war, not just on multinational corporations and other powerful corporate interests, but on everyone he considered to be "bourgeois."

Antagonizing foreign corporations has long been politically popular in South America and has been a centerpiece of the administrations of Rafael Correa in Ecuador and Evo Morales in Bolivia. But both Correa and Morales tempered their political meddling in this respect with limited laissez-faire for domestic businesses.

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