Monday, January 21, 2008

Chavez continues the madness

What does a socialist do when he is concerned about poor people not being able to afford food, well he makes it illegal to sell food at the market price so they can afford it. It is a childlike response "price too high, make it low or else". Don't laugh too hard, Rob Muldoon wasn't much different for a few years. Venezuelan President Hugo Chavez, the latest pinup boy of the "New Left", and mate of London Mayor Ken Livingstone did just that. What was the reaction? Well Venezuelan farmers weren't too impressed by having their livelihoods cut, so they started exporting their produce to neighbouring countries to get the prevailing market prices for what they grow. Venezuela is a net food importer as well, but then few want to sell to a country unwilling to pay market prices.
So shortages have appeared, you know like bread queues in the former Soviet Union - shortages are the stock in trade of socialism, because incentives to produce are completely schewed by central planning and prices not being an equilibrium between demand and supply.
So what is Hugo Chavez's response? According to the BBC, he has called for the nationalisation of farms that export their produce. He is willing to "call in the army" to do this. By saying this, he effectively is nationalising the farms, and the next thing you can be sure of is that the farmers will cut back spending on their farms. A low price means reduced production.
Shortages will simply grow. He also threatens to nationalise banks that don't give low interest loans to farmers. Again though, this is something else he has meddled in. With inflation reportedly at 22.5%, interest rates are capped at 15% - so banks can only loan money at a loss. So maybe there will be loans available on paper, but in reality none will exist.
Sadly for the Venezuelan people what we have now is a textbook example for all students of socialism at work. Pay close attention kids, watch what happens next and ask yourself how a country that is rich in oil, at a time of high oil prices, has shortages of basic commodities, and why it is led by a man whose response to those who don't do what they like is to steal their property.
It goes a little something like this:
- I want to make poor people wealthy;
- I take money off of wealthier people, take a little for me and give the rest to the poor;
- They stop making money or working so hard, and complain;
- I take over the rich people's media so their complaints don't demoralise the poor;
- I get less produced by the wealthy, threaten them more;
- There are shortages;
- I blame the wealthy people and take more off of them;
- They try to leave or stop producing altogether;
- I stop them leaving, blame them for economic sabotage;
- Shortages get worse, starvation occurs, unrest develops;
- I use the nationalised media to calm people's fears and point out that poverty is being eradicated, everyone has jobs, and to show the hell that is life in the USA for the poor;
- I blame the USA, IMF, World Bank and international banking for impoverishing my poor hard working people;
- Further economic collapse.
Zimbabwe is at the final stages of this... and you hear John Minto say what about Venezuela?
Maybe you might ask about those who are supporters of it? Like those who may promote this film, former Jim Anderton ally Matt Robson being one of them. What do they say to Venezuelans facing food shortages? Will they be prepared to admit their own economic illiteracy has been tested once again, and give up cheerleading bullies who keep wanting to repeat the failed experiment of socialism?
Look at the list of failure:
- Mongolia
- Yugoslavia
- Albania
- Czechoslovakia
- Hungary
- Poland
- Romania
- Bulgaria
- east Germany
- China (pre 1978 - can hardly be seen as socialism now)
- Cambodia (Democratic Kampuchea)
- Laos
- North Korea
- Cuba
- Zimbabwe
- Angola
- Benin
- Congo (B)
- Mozambique
- Somalia
- Yemen
- Ethiopia
- Tanzania
- Afghanistan
- Myanmar
or hasn't enough blood been spilled yet?


Crampton said...

Sounds like Hayek 1944 is being used as instruction manual, save that we start with the Demagogue rather than transitioning to the Demagogue.

bubbsie said...


First time Ive logged in to your blog. You are bloody good, put in the hard work to get your point across. Why so few comments? You deserve a wider audience.

Are you linked into the " main" kiwi blogs, dont mean that in a negative way, just I think more people should be able to hear what you have to say.. Cheers

libertyscott said...

bubbsie thank for your comment. I am linked into quite a few, to be honest I had a slow year last year for personal reasons, and have linked to others rarely (which is what is needed to get linked back). I have had high readership plenty of times, but to sustain it I have to keep busy on this - which is one goal for this year :)

On average I get around 100 a day at the moment, but have done better.

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