Thursday, August 3, 2017

Michael Roberts — The tragedy of Venezuela

What went wrong with the laudable aims of Chavismo? Could this tragedy been avoided? Well, yes, if the Chavista revolution had not stopped at less than halfway, leaving the economy still predominantly in the control of capital. Instead, the Chavista and Maduro governments relied on high oil prices and huge oil reserves to reduce poverty, while failing to transform the economy through productive investment, state ownership and planning. Between 1999 and 2012 the state had an income of $383bn from oil, due not only to the improvement in prices, but also to the increase in the royalties paid by the transnationals. 
However, this income was not used transform the productive sectors of the economy. Yes, some was used to improve the living standards of the most impoverished masses. But there was no plan for investment and growth. Venezuelan capital was allowed to get on with it – or not as the case may be. Indeed, the share of industry in GDP fell from 18% of GDP in 1998 to 14% in 2012.
Now the right-wing ‘free marketeers’ tell us that this shows ‘socialism’ does not work and there is no escape from the rigors of the market. But the history of the last ten years is not the failure of ‘socialism’ or planning, it is the failure to end the control of capital in a weak (an increasingly isolated) capitalist country with apparently only one asset, oil. There was no investment in the people, their skills, no development of new industries and the raising of technology – that was left to the capitalist sector. Contrast that with ‘socialism with Chinese characteristics’, albeit in the largest country and now economy in the world.
While the situation in Venezuela  is more complicated than the scope of this post can address, Marxian economist Michael Roberts hits the high points from the perspective of someone favorable to Bolivarian revolution, Chavismo and socialism.

Michael Roberts Blog
The tragedy of Venezuela
Michael Roberts

7 comments:

Matt Franko said...

" while failing to transform the economy through productive investment, state ownership and planning."

Ummm...... the people that know how to do that are called capitalists....

Tom Hickey said...

Ummm...... the people that know how to do that are called capitalists....

Faulty logic. Capitalists are owners of property. Confusion arises about this since owners of property may also perform (productive) work as managers. Management has no intrinsic relationship with owing capital.

Six said...

Venezuela and its problems began long before Chavis and Madura. Indeed, they may well be more symptoms than disease.

Tom Hickey said...

Venezuela and its problems began long before Chavis and Madura. Indeed, they may well be more symptoms than disease.

This goes for much of Latin America. It goes back to colonialism, and the elites that remained in control after the colonial period. They still managed the countries like colonies. When populist governments have come to power, they were either overthrown or proved ineffective economically.

Matt Franko said...

Poor education down there....

Tom Hickey said...

Education is largely a matter of what the elite choose to provide on the assumption that their taxes are paying of it. As a result, they have the incentive to provide only enough education for the work force they want and to staff a military.

Kaivey said...

Yes, more socialism would have worked. Except Washington behind the scenes would have done everything to destroy it. Socialism doesn't end capitalism, it allows the free market while owning natural monopolies like the rail and energy supply industries and health care. The best of both worlds.