With the death of Hugo Chavez socialism in South America and indeed the whole world has lost its greatest contemporary leading light. A man lauded by many for his revolutionary efforts in addressing the plight of Venezuela’s poor as well as his courageous opposition to the United States and it hegemony over South America, successfully weathering a CIA coup attempt in 2002. Chavez’s distinctive manner of popular democratic socialism, which allowed him to win no less than four elections, gaining 60% of the popular vote in 2006, was much aided by his bumbling yet charismatic persona which put him in stiff competition with Slavoj Zizek to be the left’s response to Boris Johnson. So amongst all of this euphoria and deep respect which has greeted the passing away of the far left’s new pin up boy how could anyone possibly criticise the rule and legacy of this all round great guy and man of the people. Indeed the question that surely must be in every readers mind, is whether it’s possible that this author can once again disagree with Sean Penn on a second issue after questioning his pronouncements on the spectre of British imperialism in the South Atlantic, how can he possibly have it within him to further question the judgement of Mr Penn by daring to criticise his best friend the Colonel. It might be risky but I’ll give it my best shot.
However before beginning to do so it should be noted and freely admitted that there is a lot of unwarranted criticism of Chavez circulated by the empirical news outlets such as Fox News which can and should be dismissed without the danger of making oneself an honorary Chavista. Hugo Chavez has been democratically elected in free elections despite accusations of foul play and even though he has ramped up total military expenditure well beyond Venezuela’s strategic needs Chavez at no point during his rule posed any credible threat to the USA. As compared to his friends in Iran, North Korea and Libya and Havana, the latter for whom he picked up many bills that needed paying, Chavez never operated a police state or an accompanying set of concentration camps. And unlike Fidel Castro, Chavez’s regime has never been hell bent on persecuting his country’s homosexuals or other minorities.
However these important admissions aside, the fatal conceits of socialism, though concealed behind impressive statistics of poverty reduction are still a prevalent legacy that Chavez has left Venezuela. Chavez has through sweeping policies of nationalisation and public spending binges made the Venezuelan economy even more dependent on oil revenues, produced rampant inflation and has destroyed the private sector and the economic standing of the country’s middle class. Doubling the country’s money supply within the last 5 years the consequent inflation and devaluations of the Bolivar have caused the prices of everyday essentials to sky rocket. The price controls that have been put in place to solve this problem, supposedly caused by evil speculators and ‘price gougers’, have unsurprisingly caused shortages and the destruction of economic sectors such as agriculture, as well as a new lease of life for the black market. It is not surprising that the seizure of the assets of private farmers and entrepreneurs has reduced the amount of private investment and hence the productivity growth of the country and with paper backed government spending Venezuela is now a country in which buying a used car is more expensive than purchasing a new one. Venezuela is learning the lesson and reality of Say’s law, it does not matter how much you spend and consume you shall not increase your economic standing unless you save and invest in the productive capacity of your economy which might well mean you have to reduce your welfare bills which although clearly very popular amongst Venezuela’s poorest will guarantee nothing but economic stagnation in the long term. Chavez and his party have succeeded in redistributing the wealth of the country and everyone’s share of the pie but have failed to make sure that the pie will grow in anything resembling a sustainable manner.
Chavez’s followers need desperately to take advantage of the passing of the their great leader to switch their country’s economic course to one based on the unequal sharing of wealth and away from their current one which shall only ensure the equal sharing of misery. This is an opportunity for Venezuelans to switch their copies of Das Capital for Latin American economist Hernando De Soto’s The Mystery of Capital, his important work on the significance of property rights and capital accumulation in wealth creation which has led to the economic success of neighbouring Chile. Equally Friedrich Hayek’s The Road to Serfdom would be another useful addition to the reading list of Chavez’s successors as even though Venezuela is not at the moment an authoritarian state the increased government control of the means of production, the sight of soldiers policing markets to maintain price controls and the all too predictable rise of government corruption and wasteful spending are ominous indications of what could soon be in store. As Hayek forewarned in his great work increased government control over economic activities, which in their infinite complexity cannot be successfully administered by any system other than a free market, will either force that government to admit defeat and relinquish their control of production or they will have to acquire more and more power to try and mitigate the mess they are creating. An indication as to which of these two options is currently being taken can be found in aftermath of the loss of the Caracas mayoral elections of 2009 by Chavez’s party to the country’s opposition coalition. Instead of a peaceful and successful hand over of power the new mayor Antonio Ledezma was refused entry to City Hall by armed occupiers who had also trashed the building making it unusable for any subsequent occupants.
Add to this concerns over the ability of the opponents of Chavez’s party to exercise their freedom of speech and the popular electoral support that Chavez’s party wields, the political infighting that might well ensue over his mantle makes it easy to conceive how Venezuela could end up heading further down the road to serfdom. This although boring to some is Chavez’s true legacy which urgently needs to be contended with.
