Venezuela

The real cost of socialism: Venezuela suffers under severe shortages of flour, butter, milk and diapers

Thursday, April 03, 2014 by: J. D. Heyes
Tags: socialism, Venezuela, product shortages

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(NaturalNews) Rising unrest and turmoil in Venezuela are side effects of the ugly, predictable face of socialism, as evidenced by the underreported realities of life in a country besieged by a bankrupt political ideology.

It wasn't always this way in the South American nation.

At the turn of the 20th century, Venezuela was one of the poorest economies in Latin America. But by 1970, the country transformed itself into the richest nation in the region, whose economy was larger than some other nations including Greece, Israel and Spain.

But between 1978 and 2001, several economic factors led to a sharp reversal of the country's gross domestic product; non-oil GDP fell by nearly 19 percent, and oil GDP (Venezuela is one of the world's top oil producers) by more than 65 percent (reflecting the reality of the global oil market at the time).

Enter centrally planned, government-controlled economic model here

Around that time, voters elected Hugo Chavez, a committed revolutionary in the prototypical socialist mold who, over the next 14 years before his death last year, did manage to improve a number of economic conditions and factors for his people, but at an atrocious cost to the overall economy, which transformed from a quasi-free-market model to one essentially controlled by the government. And that says nothing of his authoritarianism.

If it weren't for the sonic boom in the global oil markets, Chavez's "reforms" would have doomed the economy outright, say experts and analysts who have done an economic post-mortem on his tenure.

"It looks to me as if Chavez's government made substantial improvements in things like primary school completion, progression to secondary education, and so forth. (The World Bank's statistics on Venezuela are surprisingly patchy, so this limits the number of variables I could look at). Poverty rates have fallen. This is all genuinely good news that happened on his watch," writes Megan McArdle for The Daily Beast.

"But in the course of these achievements, he severely compromised the engine of Venezuela's future prosperity: its oil fields. And over the long run, the poor cannot thrive if the economy is failing," she notes.

In fact, according to data, Venezuela's single most important generator of GDP -- oil exports -- have fallen in recent years, and that is due in large part to Chavez's revolutionary/socialist nationalization of the industry. Government-run businesses tend to be far less efficient than if they were run by private companies with investors and profit motives.

So in the end, perhaps the poor aren't doing as well as they should be -- or could be -- as evidenced in a report by National Public Radio, which notes that even basic supplies and consumer goods are in short supply because of the nationalization of so much Venezuelan industry:

Alvaro Villarueda starts his morning the same way every day -- putting in a call to his friend who has a friend who works at a Caracas, Venezuela, supermarket.

Today, he's looking for sugar, and he's asking his friend if he knows if any shipments have arrived. As he talks on the phone, his wife Lisbeth Nello, is in the kitchen.

There are 10 mouths to feed every day in this family -- five of them children. The two youngest are still in diapers.


Barter system has sprung up, out of necessity

"The things that are the scarcest are actually what we need the most," Nello says. "Flour, cooking oil, butter, milk, diapers. I spent last week hunting for diapers everywhere. The situation is really tough for basic goods."

The growing scarcities have spawned widespread and growing protests which are being led mostly by students. But as usual, the government's propagandized (and wholly controlled) media is blaming the shortages on "unscrupulous businessmen" who are "hoarding" consumer goods -- rather than blaming the shortages on the government's socialist policies.

"Those in the opposition blame a system that imposes price controls, the lack of money to buy imports and problems in the supply chain after the expropriation of farms and factories by the socialist government," NPR reports.

As a way to avoid hours-long lines at supermarkets -- and that's only if and when the stores have staples -- a barter system has sprung up (as they so often do in such economies).

"We are always helping each other," says Nello. "We are sending messages to other members of the family when we find out something is in the market."

Sources:

http://www.npr.org

http://www.theguardian.com

http://www.thedailybeast.com

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