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June 13, 2011

Venezuela 2011

Ilya asked:
If one goes by what's written about Venezuela in the press these days, it doesn't seem like a very happy place to be right now. High inflation, rampant crime, dysfunctional economy, political repression, etc. Is that an accurate view of everyday life there or is the reality of it different from how it's portrayed?
Capitalism and FreedomTo start answering your question I will quote Milton Friedman from the preface to the 2002 edition of Capitalism and Freedom:
A final personal note: it is a rare privilege for an author to be able to evaluate his own work forty years after it first appeared. I appreciate very much having the chance to do so. I am enormously gratified by how well the book has withstood time and how pertinent it remains to today's problems. If there is one major change I would make, it would be to replace the dichotomy of economic freedom and political freedom with the trichotomy of economic freedom, civil freedom and political freedom. After I finished the book, Hong Kong, before it was returned to China, persuaded me that while economic freedom is a necessary condition for civil and political freedom, political freedom, desirable though it may be, is not a necessary condition for economic and civil freedom. Along these lines, the one major defect in the book seems to me an inadequate treatment of the role of political freedom, which under some circumstances promotes economic and civil freedom, and under others, inhibits economic and civil freedom. [emphasis added]
I applied this thinking to Venezuela in my essay Three Freedoms: Civil, Economic, and Political. I urge you to read it before continuing to read this reply:
Is that an accurate view of everyday life there or is the reality of it different from how it's portrayed?
Yes, things are bad. Worse than at any time in the past 60 plus years. But my adeco and copeyano socialist friends get mad at me when I point out that there is not that much difference, at least in the economic, from their own governments. For example, the rate of inflation, or the rate of devaluation of our currency vis a vis the US dollar has remained pretty much constant since 1984: 27 years, 15 adeco/copeyano years and 12 Chavez years.

Latin America is socialist and populist at heart with very few capitalist exceptions. But mostly it is a democratic socialism in the Europen mold and as long as you have your civil liberties and a certain measure of prosperity it is quite bearable leaving plenty opportunities for enterprising people. Besides, I love Venezuela and her people. Venezuela has been very good to us.

Chavismo is neither revolution, socialism nor communism. Chavismo is charismatic fascism. Chavez is a typical South American caudillo (Fuehrer in German, Duce in Italian and Caudillo in Spanish). Francisco Franco liked to be called: "Caudillo de EspaŅa por la Gracia de Dios." This was a regression to the divine right of kings (por la Gracia de Dios, by the Grace of God). The aim of Chavismo is to perpetuate Chavez in power until he dies. Any and all means are valid. Any impediment must be swept aside ruthlessly.

Some people have questioned my comparison of Chavez to Hitler and Franco who were known anti-communists. Caudillos are not so much idealists, even if they portray themselves as such, but opportunists. One reader commented that Hitler cannot be on the right since he was the leader of the German National Socialist Workers Party. Had this reader read Hitler's "Mein Kampf" he would realize that workers were to be used as disposable pawns during the rise to power. Recall how the SA Brown Shirts were discarded when they were no longer useful.

No one can rise to power without a power base. Chavez needed one in addition to the military. What was available to him in 1998 was the extreme left that had never gotten more than 15% of the popular vote. Chavez's charisma, the general discontent with the previous adeco and copeyano governments and the backing by the extreme political left got Chavez elected in 1998 -- by a landslide, I might add. Many of my middle class friends voted for Chavez, much to their ultimate regret. Over the next few years Chavez transformed Venezuela into a personal fiefdom starting by rewriting the constitution, getting re-elect by fraud, overt and covert, bringing in Cuban militias and advisors, Circulos Bolivarianos -- the equivalent of Hitler's Brown Shirts -- and many more illegal or quasi legal maneuvers.

Yet despite all this you can do worse in North Korea, Cuba, many African states, and in many Islamic theocracies. Hungary, during communism, was more repressive than Venezuela is today. It's all a question of degrees. And if you are a Chavez crony you do very well, like the "apparatchiks" in the former Soviet Union.

Denny Schlesinger

Capitalism and Freedom: Fortieth Anniversary Edition by Milton Friedman

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