Friday, October 18, 2013

Economic War. If you want to believe…

If you want to believe in the theory that Venezuela is not suffering the consequences of mismanagement, but instead is the victim of a Grand Conspiracy in the form of an “economic war, here is a more articulate presentation than one made by most government official quoted in this blog.

Arturo Rosales wrote for Axis of Logic the piece “The War on the Venezuelan Economy (includes photographic evidence).”
My favorite paragraph of the article is the usual enumeration of all that has gone wrong in Venezuela during the last year presented, in itself and in a circular logic, as evidence of sabotage by the opposition (Rosales adds several more accusations than those usually made by Venezuelan officials, such as “circulation of illegal drugs” and “denial of agriculture”):

There was the speculation by the stock exchange houses in Caracas, resulting in capital flight; the corrupting of the private bank officials resulting in the theft of millions of depositors' funds; infiltration of government bureaucracies by the fifth column to render services ineffective; the circulation of illegal drugs into Venezuelan youth, particularly in locales of the Chavista electorate; Colombian paramilitary groups crossing the border illegally to spawn violence and in some cases, executing labor leaders; the organizing and funding of the opposition by the US State Department for elections and violent street actions; the August 2012 attack on Venezuela's biggest oil refinery at Amuay; the sabotage of the national electrical system causing blackouts throughout the country; the opposition's denial of agriculture on vast stretches of their privately-held fertile lands; artificially-produced inflation by means of the parallel dollar market and attacks on the production and distribution of food and household items with their control of food processing and distribution and their hoarding and dumping of massive quantities of food to create shortages in the market. Of course each of these attacks against the revolution have been made-to-order for consumption by the US/European capitalist media to convince the public that the Venezuelan government is failing and more broadly that "socialism doesn't work."

As with the claims made by the Venezuelan government, no real evidence for any of this is provided. The article does make emphasis on the “sabotage of food processing and distribution” by the opposition, and evidence for this is promised. Basically, Rosales argues, hoarding and smuggling are to blame shortages. But he also twists the currency exchange problem in a curious way:

Since last November, the opposition has stepped up two main fronts: manipulating the parallel dollar-bolivar exchange rate market causing the devaluation of the local currency, the bolivar and the hoarding and price speculation on basic food products typical of the average Venezuelan family’s diet. Regarding the foods kept off the market, it's worth mentioning that most of it is under price controls which offers lower profits to the opposition food industries.

A truly all powerful opposition is capable of manipulating the parallel exchange rate at will, and can also coordinate hoarding, smuggling and “price speculation”.

“Photographic evidence” of the hoarding of food products follows. This includes pictures of Táchira state governor Vielma Mora conducting a raid on a warehouse in the frontier city of San Cristobal, where 400 tons in diverse products were seized. Presumably the products ready to be smuggled into Colombia.

Note however that most economist do not deny the fact that there is hoarding, smuggling, and panic buying on Venezuela. The difference is who gets the blame. Some believe that they are the consequence of economic policies by the government. Rosales on the contrary seems to believe that the government is doing the right thing, but that persons are somehow failing to live up to the high moral standards of socialism and therefore engaging in sabotage. Subsidizing food prices, for example, does not necessarily produce smuggling of those products, you need evil conspirators to actually hoard and take those products out of the country to sell them at better prices, ostensibly to get rich, but really with the ultimate aim of destabilizing Venezuela’s economy. 

Socialism does work; it’s just that the people living in it don't want to behave properly. Perhaps, as Maduro seems to suggests, as the “new man” delays his appearance, what is needed is a stronger, more authoritarian form of socialism… have you hear this before?  

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