City. A.M. Editor Allister Heath has written
a
great article that highlights the awful situation in Venezuela
and its experience with socialism.
From City A.M.:
Food is running out, as are other essentials, even though the
country claims the world’s largest oil reserves. There are
shortages of toilet paper and soap, empty shelves and massive
crowds queuing for hours in front of supermarkets. Patients are
sometimes having to buy their own medicines; doctors are warning
that 95 per cent of hospitals have only five per cent of the
supplies they need. The central bank’s scarcity index has reached a
record of 28 per cent, which means that more than one in four basic
goods are out of stock at any time; and the situation has worsened
considerably since the figures were last compiled.The reason? A brain-dead rejection of basic economics, and a
hardline, anti-market approach of the worst possible kind. There
are maximum prices, other prices controls, profit controls, capital
controls, nationalisations, expropriations and every other statist,
atavistic policy you can think of. An extreme left wing government
has waged war on capitalism and won; and as ever, ordinary people
are paying the price.
Heath goes on to mention Venezuela’s very high murder rate:
Independent observers estimate that there were close to 25,000
murders in 2013, five times the amount seen in 1998, when the
current regime took over and really started to wreck the
country.
Heath points out that the U.K., which has more than twice the
population of Venezuela, recorded 532 murders in the year to June
2013.
The Venezuelan Violence Observatory estimates that Venezuela’s
murder rate was 79
per 100,000 people last year. The U.S., which is one of the
developed world’s
most homicidal nations, recorded a murder and nonnegligent
manslaughter rate of
4.8 per 100,000 people in 2012.
Heath concludes by saying that the situation in Venezuela is
just as relevant as the situation in Ukraine because economic
illiteracy is not geographically restricted:
This is a hugely important story and yet one which has been
covered insufficiently prominently in the UK, partly because we are
understandably more concerned with what is happening closer to home
in Ukraine. Yet the political blunders and the economic illiteracy
at play in Venezuela have universal applicability, and are
therefore just as relevant to us than Putin’s power grab.The lesson from all of that is clear. Socialism doesn’t work.
Price controls don’t work. Stealing people’s property doesn’t work.
Chasing away foreigners doesn’t work. Destroying the supply-side of
an economy doesn’t work. Supply, unsurprisingly, has collapsed, as
has investment, and that means fewer goods in the shops as well as
reduced incomes. Companies aren’t allowed to increase prices,
despite rampant inflation, so they are not selling at all. It is a
spectacularly horrible case of what FA Hayek called the Road to
Serfdom. The world must pay more attention to Venezuela’s
plight.
Ongoing anti-government protests began earlier this year. Today
it
was reported that a student leader was shot dead at a protest
in western Venezuela. According to journalist Rafael
Osío Cabrices, the protests have prompted the government to
respond “with massive military force, raiding offices and houses
without judicial orders, imprisoning civilians in military
compounds and applauding the killing of protesters by paramilitary
groups.”
Perhaps unsurprisingly the Venezuelan government’s behavior
didn’t stop the actor
Sean Penn from recently posing with Venezuelan President
Nicolas Maduro for a selfie.
More from Reason.com on Venezuela here.
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