The policy proposals coming out of the Democratic primaries hearken back to the utopian mantra of socialism: the needs of individuals can be determined and fulfilled by society at large.
In the heart of the socialist world, life is sustained not by the paternalistic state but by pure, unfettered capitalism.
Democratic hopeful Elizabeth Warren recently argued that Americans have a “social contract” that obliges them to take a “hunk” of our hard-earned wealth and “pay forward for the next kid who comes along.”
And of course, who can forget the Democratic Socialist poster child, Bernie Sanders? Sanders went as far as to revel in Chinese breadlines that were borne of destitute poverty: "It’s funny, sometimes American journalists talk about how bad a country is because people are lining up for food. That is a good thing! In other countries, people don’t line up for food. The rich get the food and the poor starve to death.”
Much of the Democrats’ ideologies echo those of Hugo Chavez—one of the most notorious Socialists of contemporary times. Chavez’s policies created a modern nation full of “millionaires”; indeed, the Venezuelan Bolivar is so heavily inflated, the government had to hack a few zeroes off to control their “immense wealth.”
Meanwhile, Venezuelans are leaving the country in droves, armed with accounts from the supposed utopian life they are fleeing. What the rest of the world is coming to learn from these harrowing experiences of centralized, universal policies is that capitalism finds a way.
In the heart of the socialist world, life is sustained not by the paternalistic state but by pure, unfettered capitalism.
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Oil fields.[/caption]
OIL FOR SOCIALISM: THE TRUE FOUNDATIONS OF THE BOLIVARIAN REVOLUTION
Elected in 1998, Hugo Chavez implemented his grand socialist vision in 2000 through anti-poverty initiatives called the “Bolivarian Missions.” Chavez sought to provide educational services, free health clinics, and other forms of state-funded support.
Year after year, under Chavez’s socialist regime, the national reserves depleted, and Venezuelans began to starve.
What started out as small-scale endeavors quickly snowballed into dozens of unilaterally implemented government-run social programs, ranging from universal healthcare to education and culture programming. Chavez bypassed the legislature, putting in place policies that effectively established complete societal control—and he used the country’s vast natural resources to fund his scheme.
As global oil prices steadily increased during the early aughts, reaching over $30 a barrel in 2003, Venezuela, which has the largest oil reserves in the world, became one of the wealthiest nations in the world. Chavez took full advantage of this. Venezuelan’s robust oil industry, which had been nationalized in the mid-1970s, became the fuel for his “utopian dream.” In 2002, using a general strike as a justification, Chavez swiftly replaced 19,000 employees of state-owned natural gas and oil companies with new employees loyal to his regime.
Starting in 2006, under the pretense of wealth redistribution, Chavez nationalized other key industries, such as cement, communications, electricity, steel, and several sectors of food production. In other words, all of the essentials a modern society needs.
Unfortunately, with complete governmental control over society, Venezuelan imports began to decline at an annualized rate of -22% from 2012 to 2017. It wasn’t long before the stockpiles started to shrink. Year after year, under Chavez’s socialist regime, the national reserves depleted, and Venezuelans began to starve.
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Empty shelves in a Venezuelan grocery.[/caption]
THIS IS WHAT A SOCIALIST “UTOPIA” LOOKS LIKE
In 2019, with a food shortage dramatically effecting the entire country, the government is trying hard to maintain its ideological narrative, enacting campaigns to encourage local communities grow their own food. This has done little: nothing has been done to solve the issue of mass starvation.
Both the variety and quality of the food distributed continuously decrease. The milk is questionable—at the best of times.
As the Venezuelan state grew closer to its ideological comrade, China, they took a page out of the Red State’s book. In 2018, the state introduced the Fatherland ID, a new citizen card that uses QR codes to enact tighter surveillance and control over the population. Not only does it contain all personal information about the cardholder, but it is also now the system through which welfare checks and distributions are handed out.
For those who can afford to purchase goods, each citizen is assigned an ID number which determines the day of the week that they can shop for groceries. The idea is to give stores a chance to resupply, but production is so low that supplies remain scarce. Certain items are prescribed price freezes by the state, but there are tight restrictions on the quantity of food that can be accessed with your ID card, which makes flexibility impossible when a family’s need fluctuates.
For the destitute, food distributions come in the form of ‘CLAP’ boxes, crates of food that are passed out in an attempt to satisfy local supply and demand. Both the variety and quality of the food distributed continuously decrease. The milk is questionable—at the best of times.
The breadlines are also very real. From toilet paper to food, acquiring any basic necessity requires waiting in line for hours, just for a single item. And when you finally get to the front of that line, there is no guarantee that what you lined up for will be there waiting for you.
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Creative use of the worthless Venezuelan Bolivar.[/caption]
BLACK MARKET CAPITALISM
‘Black markets’ carry a negative connotation due to their association with illegal goods. But, by definition, every transaction which is not documented and processed by the socialist government is illegal. The bolivar Venezuela had a 1,698,488% inflation rate in 2018, which led to farmers bypassing the government and going to the cities to sell or barter directly with consumers. To bypass governmental choke-hold on economic transactions, black markets have become a daily part of Venezuelans’ lives.
“With a malfunctioning public system that’s broken and corrupt to its core … people have come up with unique and elaborate ways to establish a parallel black market of its own.”
I spoke with Kaleb Caruso, a Venezuelan dissident, about the black market economy. Caruso said that “with a malfunctioning public system that’s broken and corrupt to its core … people have come up with unique and elaborate ways to establish a parallel black market of its own.”
Venezuela’s black market has two primary sources of goods: theft and exchange through unsanctioned markets.
Even as foreign imports continue to shrink, the costly private courier services that bring in life-saving medication and highly desired goods are subject to frequent pillaging. What is lost in transit is often thought of as ‘a service fee.’
Communities have organized distribution systems that bypass the state to receive supplies. These logistics networks often feature foreigners residing in Venezuela. Although the transactions are not sanctioned by their home states, foreign embassies and consulates play a considerable role in helping keep the influx of foreign imports alive.
Consumers and black market proprietors connect through social media. Using services like Facebook, a direct message to the right person can give you access to hard-to-find goods.
Because it is not subject to state scrutiny, prices are unregulated. This isn’t to say that products come cheap; there is a price to pay for subverting the ultra-authoritarian state. But what it does mean is that almost anything can be found that can’t be obtained through state-sanctioned means.
In other words, the only thing keeping Venezuela going is pure capitalism.
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Venezuelan protests in 2017.[/caption]
HUMANITARIAN CRISIS IN SOCIALIST UTOPIAS
“The government has had a love-hate relationship with the black market. It has cracked down hard at times, but at the same time, it’s left alone because it helps alleviate the state’s own deficiencies and mishandling of the economy, the latter being a normal part of their relationship nowadays,” says Caruso.
Democratic hopefuls want to design their policies around Socialism—but pay little mind to the human suffering these policies can and have enacted worldwide.
Caruso has been documenting the value of the Bolivar and reporting on currency fluctuations from inside Venezuela. In 2017, he was featured in Fortune Magazine, where he broke the story on World of Warcraft in-game currency being worth more than the Bolivar, and Venezuelan efforts to earn a livable wage playing video games. Caruso frequently condemns the war of attrition the state is waging against its citizens. People are dying from the food and medicine shortages induced by poor central planning.
“A former colleague of my mother had to steal human serum albumin from a cold storage, concealing it in her purse and hoping that the National Guard soldiers wouldn’t ask questions.” Kaleb recalls, as his mother, who was one of Venezuela’s experts on pain and palliative care, suffered a long and grueling battle with cancer and passed away in 2018.
“Yes, it was a felony … but when your loved ones are suffering and you feel powerless to act, when you turn on the television and see the Socialist regime insist that everything is a lie and that there is no health crisis in spite of what you’ve seen and gone through over the years, that’s when you suspend your moral beliefs, your social inhibitions, and you become empowered by despair to do anything and everything so that maybe, the person you admire and love the most gets to smile once more.”
Democratic hopefuls want to design their policies around Socialism—but pay little mind to the human suffering these policies can and have enacted worldwide. And if the example of Venezuela shows us anything, it’s that capitalism, no matter the extent to which it is suffocated by central planning, finds a way.
