Chavez is Building 19th Century Socialism in Venezuela

President Hugo Chavez starts this third term in office today vowing to move Venezuela along the path to “a socialist republic.” He said after swearing in a new cabinet yesterday, “We are in an existential moment of Venezuelan life. We’re heading toward socialism, and nothing and no-one can prevent it.” Unfortunately for Venezuela, Mr. Chavez seems to be anticipating a very 19th century kind of socialism, in which the state misrules the nation and mismanages the economy.

He said that he wants to nationalize the electric company and the telecom industry. He also wants state control of the oil refineries in the Orinoco region, and he wants to end the independence of the central bank. Furthermore, he wants parliament to give him the authority to promulgate new laws by decree. The next step, if the customary pattern holds, is to declare himself president for life.

One can make a very persuasive case for nationalizing certain economic sectors, especially in a developing economy. Even in the market-worshiping US, road building and maintenance, air traffic control and national defense are provided by the state and not the market. Public goods should be provided by public entities. In the case of Venezuela, state-ownership of energy and telecoms may well allow faster growth of industries that rely on those two. And whenever there is a private monopoly, state control is almost inevitably better for the society.

That said, the nationalization of companies can result in corruptible private businesspeople being replaced by corruptible government bureaucrats. Precisely how this is progress one cannot determine. However, it means that the people running various economic enterprises are beholden to the president for their positions. Give the government control of the central bank, and it becomes just a matter of time before the economy is not run for the benefit of the people in whose name the nationalizations occur but rather for the benefit of the government and its apparatchiks.

Also, Mr. Chavez has narrowed the range of views he’s getting with the latest cabinet shakeup. He has new ministers of interior, justice, finance and education. The latter is his brother, and the rest are quite definitely his yes-men. Moreover, José Vicente Rangel has been replaced as vice president. Mr. Rangel has been viewed as one of the few people able to say “no” to Mr. Chavez. Couple these personnel changes with the right to rule by decree, and one can see the 21st century plan for Venezuela looks very 19th century. One man, one vote – Mr. Chavez is the man, and his vote is the only one that will count.

© Copyright 2007 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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