“Concentrated power is not rendered harmless by the good intentions of those who create it.”

Nobel Laureate Vernon Smith: Markets Could Restore Prosperity to Venezuela Almost Immediately

Venezuela must restore freedom by reversing its socialist policies

by Barry Brownstein

Would you use a doctor or dentist who didn’t believe in germ theory and used the same instruments all day without sterilizing them? What would you say if, when their patients developed infections, the doctor or dentist insisted he meant well and argued that capitalism, not germs, causes infections?

Allowing such a practitioner to keep their license would be madness. Yet we elect and support politicians who believe something other than socialism causes the ongoing humanitarian crisis in Venezuela.

Starvation Is Standard Under Socialism

In his Wall Street Journal report, "Venezuela is Starving," Juan Forero reports on the worsening tragedy:

Jean Pierre Planchart, a year old, has the drawn face of an old man and a cry that is little more than a whimper. His ribs show through his skin. He weighs just 11 pounds.

His mother, Maria Planchart, tried to feed him what she could find combing through the trash—scraps of chicken or potato. She finally took him to a hospital in Caracas, where she prays a rice-milk concoction keeps her son alive.

“I watched him sleep and sleep, getting weaker, all the time losing weight,” said Ms. Planchart, 34 years old. “I never thought I’d see Venezuela like this.”

Venezuela “was once Latin America’s richest, producing food for export. Venezuela now can’t grow enough to feed its own people in an economy hobbled by the nationalization of private farms, and price and currency controls.”

In 2010, many in Venezuela were already going hungry while 120,000 tons of rotting food sat at the government-run port of Puerto Cabello. That was an ominous warning of what was to come. Western supporters of Chavez apparently took no notice or didn’t care. Thor Halvorssen, president of the Human Rights Foundation, noticed and wrote, “it is no surprise then that Venezuela’s agricultural policy is modeled on that of another country with chronic food shortages — communist Cuba.”

Vernon L. Smith is a Nobel laureate in economics. Recently, he made these informal observations on Facebook about Forero’s report:

The government of Venezuela in the name of the people and for the benefit of the people seized the big bad profit-grabbing oil companies, thinking that anyone off the street could manage a business. They started redistributing wealth to poor, made electricity free, were praised by some (well at least one) American Nobel economists for reducing inequality.

This small incredibly oil rich country cannot now feed itself. Markets, whose prices coordinate and incentivize the creation of wealth cannot function. Farmers cannot buy seed or fertilizer, food imports have declined 70% and people cannot find enough food in the garbage cans. The invisible-to-the-eye workings of the complex economy of plenty—which of course cannot assure that all will be productive enough to share in its plenty—has utterly collapsed.

Smith continues with these haunting words: “REVERSE all those policies, and its effects would be immediately reversed and plenty restored easily as quickly as it disappeared.” Let Smith’s words sink in—the human suffering would almost immediately end as soon as freedom is restored to Venezuela.  

The Delusion of Central Planning

Given that the Venezuelan tragedy is manmade, it is hard to fathom why politicians such as Jeremy Corbyn (who could be the next prime minister of the UK) and Bernie Sanders, who provided succor to the Hugo Chavez regime, are not laughed out of politics. Corbyn has also supported Chavez’s successor, Nicolás Maduro. Maduro supported Sanders in 2016, calling him a “revolutionary friend.”

In 2011, ignoring food shortages, Bernie Sanders said: "These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela, and Argentina..."

In 2013, Jeremy Corbyn said: "We salute Chavez and the people of Venezuela for turning the clock of history full circle... I look forward to the development of Venezuela, the efficiency of Venezuela, in providing good services and decency for all the people of that country." 

When Hugo Chavez, the father of Venezuela’s nightmare, passed in 2013, President Carter praised Chavez’s good intentions, saying, "Although we have not agreed with all of the methods followed by his government, we have never doubted Hugo Chavez's commitment to improving the lives of millions of his fellow countrymen.”

Hitler, Mao, Stalin, Pol Pot, and every other despotic mass murderer also claimed they had good intentions. What are good intentions worth? Milton Friedman famously wrote, “Concentrated power is not rendered harmless by the good intentions of those who create it.”

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