The Truth About Socialism: The Venezuelan Disaster

by Dr. John A. Sparks

The Truth About Socialism: The Venezuelan Disaster
The Truth About Socialism: The Venezuelan Disaster
The Center For Vision & Values
The Center For Vision & Values

Grove City, PA -(AmmoLand.com)- Many Millennials are finding socialism attractive—at least as presented by Bernie Sanders. This is perplexing because there is ample and dramatic evidence of how a full-fledged socialist state fails its own citizens so miserably.

Witness Venezuela. Fifteen years under socialist Hugo Chavez followed by three years under his socialist successor, Nicolas Maduro, have left the economy in shambles and the living standards of Venezuelans falling to a level that can only be described as intolerable. Why and how does this happen in Venezuela or in any other country that embraces the false, deceitful, utopian promises of socialist politicians?

The policies that socialist leaders invariably embrace turn their socialist dreams into nightmares. Fundamentally, socialist regimes seek to destroy markets and market prices, the fundamental institutions of an exchange economy. Socialist ideologues maintain that the prices of goods are arbitrarily fixed by business exploiters at artificially high levels. Therefore, they can and should be controlled by law.

Chavez’s Venezuela is a classic case. Price controls, that is, the government setting the price of certain goods below what would be a normal market price, first began with “essentials” like sugar, cooking oil, coffee, beans and powdered milk, with some of these being controlled since 2003. In November 2011, Chavez announced that he was about to establish additional price controls on some 15,000 goods. From the start, the promise of the Venezuelan socialist was to make the price-controlled goods more “affordable” for their citizens. However, the result is just the opposite. Shortages became the norm. Production declined. Today, the hapless “masses” which socialism was supposed to help are facing what the Venezuelan government euphemistically calls a “nutritional emergency.” Why?

During the decades of continuing price controls, the profits of farmers and other processors were eliminated through the artificially low state-mandated prices. What happened to the coffee-roasting companies beginning in 2006 is a typical scenario. First, some coffee producers simply held supplies off of the market in hopes the government would agree to price increases that covered their costs. The government countered with military force, authorizing the National Guard to “find every last kilogram of coffee” being “hoarded.” By 2009 the Venezuelan government seized control of two of the largest coffee-processing plants, claiming that the private companies were engaged in hoarding and smuggling coffee and therefore being disloyal to the state. Shortly thereafter, Chavez nationalized the two largest coffee enterprises. However, the government running the plants produced no benefits for the consumers. Today, market analyst Luis Vicente Leon sums it up this way. “They [the government] expropriates the sugar companies, and you cannot find sugar … They expropriate the coffee companies … and you cannot find coffee. They expropriate Owen-Illinois, and we cannot find packages.”

The second response of suppliers to price controls was to produce the controlled products but smuggle them out of Venezuela to neighboring countries like Colombia where they could receive what Venezuela regards as illegally high “black market” prices. So much of this was occurring that by 2015 the Venezuelan government under Nicholas Maduro “expanded an anti-smuggling offensive along the Venezuelan frontier with Colombia.” He closed border crossings and deported Colombians who were apparently engaged in smuggling contraband goods.

While producers are victimized and harassed, what about Venezuelan consumers?  Venezuelan shoppers face shortage after shortage. They line up in Caracas in the wee hours of the morning, standing in a line in front of the state-run grocery stores hoping that they will get something (almost anything) before the meager supply runs out. The government now requires registration with identity cards and fingerprinting in order to shop, all this to prevent “hoarding.” The Economist reports that national guardsmen, fully armed, recently stopped a pregnant woman from shopping because it is not her designated day under the strict rationing rules. In the same article, The Economist says that the empty shelves in Venezuela are eerily reminiscent of the same empty shelves in Robert Mugabe’s claimed socialist paradise, Zimbabwe. Precisely so. Economic laws know no borders. They are not respecters of the empty claims of socialist politicians.

At the very beginning of the increase of price regulation in 2011, Karlin Granadillo, head of the Venezuelan price control agency, proudly proclaimed: “The law of supply and demand is a lie.” Events have confirmed the utter foolishness of such a socialist edict.

Dr. John A. Sparks
Dr. John A. Sparks

Would that Venezuela had a leader who would courageously exclaim to the current President: “Abolish these controls Mr. Maduro! Repeal them for the sake of your fellow citizens!”

About the Author:

Dr. John A. Sparks is the retired Dean of Arts & Letters of Grove City College where he taught U.S. Constitutional History for 38 years. He is a graduate of the University of Michigan Law School and a Fellow of The Center for Vision & Values, Grove City College, Grove City, PA. He is a frequent contributor on U.S. Supreme Court developments.

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    RattlerjakeoldshooterAmmolandSantiagoMike Murray Recent comment authors
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    oldshooter
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    oldshooter

    No one, including Bernie Sanders, is ever willing to discuss the failing/failed socialist states all around the world. It is interesting that Bernie talks about (as do my liberal friends in my local coffee house), how socialism is working just fine in Scandinavia. Should you encounter this argument from others, I hope you will point out to them that no Scandinavian country actually engages in economic socialism. They ALL have free market economies, which is why they are doing OK, despite their very high tax rates, often 50 percent or higher. They have socialist-like social policies such as a form… Read more »

    Santiago
    Guest
    Santiago

    It is “Colombia”, not “Columbia”.

    Ammoland
    Admin

    Santiago, Good catch thanks for having our backs.

    Mike Murray
    Guest
    Mike Murray

    Hoping for any politician to come to the rescue is a fools errand. The incumbents keep getting re-elected 95% of the time and the bureaucracy remains in place forever. The true “meme” isn’t D versus R, Black versus White, or Rich versus Poor, they are all distractions. It’s really the State versus the rest of us, no matter who is in charge.

    jim
    Guest
    jim

    Wage slave, here. No difference, except we’re slightly better fed.

    USPatriotOne
    Guest
    USPatriotOne

    CommieCore is the reason behind all those under the age of 30 agree with the Commie/NWO/DemoRat Communist Plan! People need to stop playing nice, it’s Communism plain ans simple! The Commie/DemoRats have been in control of our Public Schools (complete control) starting with old Billy Bob Clinton (the Rap*st) in 1993 and have been feeding our Children the Communist Manifesto “K” through “12”, and when they get to a Public College these Commie/Liberal Professors teach nothing but the Communist Manifesto! I reviewed my nephews history book (5th Grade) a few years back, and this book made our founding Fathers look… Read more »

    Nate
    Guest
    Nate

    Eric is absolutely correct.
    My home is paid for, I have no debt. But when I retire in 2 years, the property tax will force me to move to who knows where. The major portion of the tax bill is going to fund Taj Mahal like Middle and High School campuses with multi million dollar football arenas. We need a nation wide Tax Payers Bill Of Rights that forces all tax bills to be directly voted on by the people.

    DaProf
    Guest
    DaProf

    Let’s remember that in 2008, Obama and Chavez were best buds. And yet, Obama refuses to recognize, given his narcissistic hubris as a Liberal, that socialism does not work. Obama continues forward with Alinsky and Cloward-Piven. Because, you know, “smarter than anyone else on the planet” and perhaps a death wish for America for some fraudulent reasons that were ingrained in his brain when he was younger. He never seems to have gotten a “Reality Check” and has instead been coddled like the snowflakes of today. It is a sad that the MSM never bothered to investigate Obama and instead… Read more »

    Eric
    Guest
    Eric

    Your property tax increases 11% a year , in 30 years you have no JOB , Not enough income to live on SS benefit m, since your employers no longer give retirement plans. You spent your 401k on food to live , now the local government is auctioning your house for $9k for unpaid property tax .
    Now your broke busted and disgusted all because NO ONE will reire WORK Until you DIE . SHARECROPPER .
    Freedom died when property tax and income became the norm. I blame my grandparents and parents for allowing this to happen, you should too.

    Edward Medeiros
    Guest
    Edward Medeiros

    Agree 100% people need to get involved in politics more than on sports and on liveral media that is brain washing us to conplaisance.

    Rattlerjake
    Guest
    Rattlerjake

    No only is it our parent’s and grandparent’s fault, but our fault for allowing it to continue. Why have we sat back and allowed an illegal to sit in the White House? Why are we allowing the government, right now, to assault our rights? Knowing that the Federal Reserve and Income tax is illegal and unconstitutional, why do we insist on allowing it to continue? Why do we sit back while the government ignores the illegal invasion and ast the same time imports more by the tens of thousands? WE ARE OUR OWN WORST ENEMY! Something could have been done… Read more »