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Venezuelan Hunger, Free Radios and TVs Purchased on Credit

Venezuelan Hunger, Free Radios and TVs Purchased on Credit (publish as video after February 3rd)

Another state embraces Socialism and as a result, the citizens go hungry. 

When the Bolshevik revolution ended in October 1917, within 3 years of the the world learned that Socialists economies and collective farms were hopelessly inefficient – 5 million Russians died in 1921 and 1922. As Communism and Socialism spread around the world, famine and starvation were not far behind as the Ukraine, China, Cambodia, Poland, Romania and North Korea all became victims of systems that just did not work.

Just 10 years ago Socialism and collective farming were fully implemented in Venezuela, and it seems that the wheels have fallen off already. The entire country is off balance and leaders are not in control of the streets while the Maduro government points its fingers at the US, claiming the country is under attack. China and Russia are supporting Maduro but in exchange for oil – future oil revenues. 

Government corruption, social unrest, and a global commodity collapse are hurting Venezuela. Now the US is tightening the screws on a country that has generated crime and violence rates even higher than its neighbor, Colombia over the past decades, while Colombia was fighting a cocaine-fueled civil war. 

Right now, the entire country of Venezuela is in panic, as a coup is taking place and the legacy of its social experiment means that the population of a socialist country is hungry yet again. Imagine people protesting corruption in their government and they have not eaten breakfast and lunch – it is a scary thought. The economic policies of the now-deceased Hugo Chavez, for the most part, destroyed what was the breadbasket of northern Latin America. Venezuela historically, was a net exporter of grain and finished food products but state expropriation of private assets, theft, corruption and supply chain breakdown have damaged a system that now relies on imports for over 60 percent of food consumption. The once state-of-the art energy sector is now in shambles as well as theft and mismanagement have destroyed most of the assets in the sector.

This wealthy and well-managed country collapsed after the entire middle class, the engineers and mangers of these businesses were marginalized and eventually were forced to leave this oil rich state. But note that the Venezuelan economy shrank 16.6 percent in 2017, compared to 2016, the sharpest contraction on record. And note that the oil sector shrank 11.2 percent in that same period.

President Chavez gained popularity in the 1990s and was elected in 1998. He declared that he was leading a socialist revolution and would allow the indigenous people to rewrite the constitution and took control of the parliament, and used bribes to get the support of the  military and general population. Corruption and mismanagement took hold off all industries, and everything went south. 

And the problems only increase as, not understanding the basics of economics and finance, Chavez and his successor Venezuelan President Nicolas Maduro set the economy on a path of collapse by not investing in infrastructure and new equipment. Despite having massive oil reserves, drilling equipment, pipelines and transportation systems are all in disrepair, as there has not been much capital investment in these systems for two decades. One geopolitical scientist, Peter Zeihan stated that this could be the first country in history that completely destroys its oil industry. According to OPEC, Venezuela has oil reserves that total 302.81 billion barrels.

But when we study history, we see that the Soviets, the North Koreans and other totalitarian states were able to control the narrative even when their populations were starving.

In the Soviet Union, the government decided prices for thousands of consumer products, but the only one that could be bought on credit or with a loan, was the TV that was placed in the living room. Even the poorest Soviet citizen was able to watch TV each day – hours of government TV. Currently the radio is free in North Korea, and it is installed in the kitchens of every home – note the volume can be turned down but not complete off. This ensures that everyone hears the accepted narrative approved by Kim Jong-un.

The current government of Venezuela lost control of the economy several years ago, now they have lost control of the media and the accepted narrative that the Socialist System really works. The entire country is falling into a black hole and when the dust settles, we will see another Socialist State that was, in the end, not able to feed its people. 

 

 

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