The economic and humanitarian crisis in Venezuela is the predictable result of statism run amok.
And I will confess a bit of Schadenfreude has suffused my columns on the topic.
- I very much enjoyed mocking leftists who have tried to rationalize Venezuela’s economic collapse.
- I gleefully compared Venezuela’s long-run stagnation with South Korea’s long-run economic boom.
- I mocked the Venezuela’s economy for being so weak that prostitution is one of the few thriving sectors.
But we shouldn’t laugh at the collapse of statism. Real people are suffering. And even if a painful collapse is necessary to create the conditions for a rebirth of freedom in Venezuela, the widespread misery that now exists is still tragic.
So let’s set aside sarcasm and try to draw a very important lesson from the crisis.
Moisés Naim of the Carnegie Endowment and Francisco Toro of the Caracas Chronicles have a column in the Washington Post about Venezuela’s collapse under Chávez and Maduro. They point out that ordinary people are the main victims of the nation’s statism.
Venezuela is the sick man of Latin America, buckling under chronic shortages of everything from food and toilet paper to medicine and freedom. Riots and looting have become commonplace, as hungry people vent their despair while the revolutionary elite lives in luxury.
They also ask the key question of why so many leftists became enamored with corrupt, failed, and anti-democratic leaders, particularly Hugo Chávez, who was “admired as a progressive visionary who gave voice to the poor.”
Not long ago, the regime that Hugo Chávez founded was an object of fascination for progressives worldwide, attracting its share of another-world-is-possible solidarity activists. …the time has come to ask some hard questions about how this regime — so obviously thuggish in hindsight — could have conned so many international observers for so long.
The authors answer that question in two ways.
Chávez pioneered a new playbook for how to bask in global admiration even as he hollowed out democratic institutions on the sly. …he mastered the paradoxical art of destroying democracy one election at a time. Venezuelans have gone to the polls 19 times since 1999, and chavismo has won 17 of those votes. The regime has won by stacking the election authorities with malleable pro-government officials, by enmeshing its supporters in a web of lavishly petro-financed patronage and by intimidating and marginalizing its opponents. It worked for more than a decade — until it didn’t work anymore.
In other words, the Venezuelan left sometimes won by rigging the rules, which is obviously bad.
But Chávez and Maduro sometimes did win genuine majorities. Those outcomes, however, were only made possible by bribing voters. People were seduced into stealing from their neighbors as part of a process that produces ever-larger sclerotic government.
This is the untrammeled majoritarianism that America’s Founders tried to avoid with a Constitution limiting the power of government.
In the absence of societal ethics, it’s not a good idea to let two wolves and a sheep vote on what to have for lunch. It has destroyed Venezuela. It’s destroying Greece. It’s what makes me pessimistic about the future of nations as diverse as Brazil, Italy, and South Africa. And it’s the biggest long-run danger facing the United States.
Simply stated, majoritiarianism produces “goldfish government.”
Let’s close by noting that type of system is very beneficial for powerful insiders.
Chávez successfully cultivated a pro-poor, anti-American posture . Endless professions of concern for the poor… But this, too, was a charade. We now know that the fiery speeches professing unconditional love and support for the poor were a ruse to deflect attention from the wholesale looting of the state. In fact, more than $100 billion in oil profits stashed in a “National Development Fund” were simply never accounted for. …regime-connected politicians run their luxury yachts aground after drunken romps. …You would think that preying on the world’s largest oil reserves would be enough for even the most voracious of kleptocratic elites, but no. The regime is also deeply involved in drug trafficking.
In other words, big government is very profitable for the insiders of Caracas just as big government in the United States is very profitable for the insiders of Washington.
P.S. I will admit that majoritarianism works when voters are knowledgeable and ethical. Switzerland is a very good (but very rare) example.
[…] P.P.P.S. If you want a horrifying example of majoritarianism in action, see Venezuela. […]
Wqdx’ AND 9957=9957 AND ‘NBWO’=’NBWO
[…] To emphasize the dangers of majoritarianism, I’ll close by simply citing Brazil in the past and Venezuela today. […]
[…] having shared several horrifying stories of human suffering and government venality from Venezuela (including 28 separate examples in April 2017 and 28 different separate examples in […]
[…] https://mises.org/blog/price-controls-are-disastrous-venezuela-and-everywhere-else; https://danieljmitchell.wordpress.com/2016/07/03/untrammeled-majoritarianism-and-the-venezuelan-disa…; […]
[…] P.S. I have to confess that this huge collection of 28 stories accumulated because I was dating someone who is a fervid supporter of Maduro’s government (a lovely but misguided lass), and I decided that it wouldn’t be very diplomatic for me to write about the mess in that country. Now that the relationship is over, there’s no downside if I vent my spleen on that cesspool of corrupt statism. […]
[…] P.S. I have to confess that this huge collection of 28 stories accumulated because I was dating someone who is a fervid supporter of Maduro’s government (a lovely but misguided lass), and I decided that it wouldn’t be very diplomatic for me to write about the mess in that country. Now that the relationship is over, there’s no downside if I vent my spleen on that cesspool of corrupt statism. […]
[…] I’ve written many times about the basket case of Venezuela, so there’s already ample information to discredit anyone who thinks that nation should be […]
[…] certainly would be a perfect (in a bad way) […]
[…] if a government engages in enough cronyism/interventionism (think Venezuela), the net result looks a lot like socialism/state planning (think North […]
from the BBC:
“About 500 Venezuelan women in search of food have broken through border controls separating the western state of Tachira from neighbouring Colombia.”
“Venezuelan women push past border controls for food”
http://www.bbc.com/news/world-latin-america-36722422
“Capitalism vs. Socialism meme: luxuries and necessities”
http://thepeoplescube.com/peoples-blog/capitalism-vs-socialism-meme-luxuries-and-necessities-t18144.html
Random points:
1. China is a democracy where only 1 in 10 people get to vote. For all the faults the economic success of China compared to most others cannot be denied. Past societies have required land owning, military service, or payment of a poll tax to vote. Not PC but think about it.
2. The Swiss system works in part because the cantons have a great deal of autonomy. In the US central control is increased like a ratchet, over and over.
3. In the time required for the US to start and finish our part in WWII the US govt was unable to get a healthcare website and software working. Think of all the military related research, development and production in WWII. We are correct in believing the US govt is incompetent.
The internet was developed by Libertarians. See http://www.libertarianinternational.org
[…] Source: Untrammeled Majoritarianism and the Venezuelan Disaster | International Liberty […]
[…] Source: Untrammeled Majoritarianism and the Venezuelan Disaster […]
ffff. I’m sure that part of “the dream” is to also make all hospitals public. That way you can say “…I started my life been born in the state hospital monopoly…” to which “the people” would naturally reply:
“We banned or indirectly drove out of business private healthcare. So you had no choice to but to be born in the public hospital. So now you owe your very existence to us. You owe your very life to the state hospital and the collective who built it. In a few words, We own you — so now work for us.”
We could also extend that to other industries beyond healthcare. For example steel or energy. So anyone who accomplishes anything using metal tools or machines or requires energy would be doing so through the enabling metal tools, engines and energy provided by the collective. Anything that anyone ever accomplishes using metal or energy owes his success to the state, to the collective, so he/she should be grateful if we let them keep any reward at all.
More generally, if we confiscate enough from the private sector, our private sector will vanish, unable to compete with the private sectors of freer –more motivated — countries. Only the state will produce, either directly (the socialist model) or in collusion with a select group of industrialists (the national socialist model). Everything we accomplish as individuals will be done using primarily public resources. The public will own each and every one of us and will certainly have a right to the lion’s share of any reward we manage to obtain from our vitality.
Not to worry though! We will still have the exceptional enthusiasm required to outcompete the remaining seven billions of this planet, so that America remains a vanguard of prosperity — and ffff can remain in the world’s top three percent as a member of the American middle class.
It works for bees and ants , not humans. Venezuelans thought it would work for them too.
Also, as Europe — and its one percent structural growth trendline — has been discovering, you cannot be half way socialist. The malaise of slower growth puts people in a somber foul mood. They reflexively take to the streets asking for ever more from the state. The state must then confiscate ever more vitality from its citizens and cast an ever wider net over cities, counties and ultimately nations (the EU integration part) to reach ever more distant unknowns to tax. This brings even flatter effort-reward curves, even lower citizen production, even slower growth, even more malaise, ever more desperate citizen attempts to get more from the state. The vicious cycle closes towards total serfdom.
Americans are facing the same precipice. It won’t be long until the current American slower growth triggers the vicious cycle. The statists will get their dream. Just like the French, the Greeks, the Venezuelans, and most other European countries (yes Germany too has severely subpar growth compared to world average) who are lining up to the same fate.
I agree — but there’s no panacea solution.
Who will impose limits on majoritarianism? Some external inhuman entity?
While there are ways to achieve (at least temporarily) widely accepted limits on majoritarianism, these limits must ultimately be conceived — and voted by — and maintained — by people themselves.
So people must support them!
These “widely agreed upon limits” are essentially what constitutions are. Or at least that is what some constitutions are — especially the American constitution which is uniquely heavy in limiting the coercive rights majorities have on individuals and minorities.
But in any case, these constitutional constructs only add inertia to pitchfork majoritarianism. When the constitution is blocking Mr. Blue and Mr. Brown from ganging up and raping Mr. Yellow (colors are random) — and thus Mr Blue and Mr Brown start thinking about either changing the constitution or sidestepping it — the constitutional mechanism introduces some delay. During that delay Mr Yellow and Mr Brown start ganging up and thinking about raping Mr Blue on some other issue. So, after a while, Mr Blue starts having second thoughts about his original alliance with Mr Brown, and perhaps starts having second thoughts about changing or sidestepping the constitution in the first place.
So basically the constitution adds enough inertia and gives everybody time to think and realize that if people are allowed to create majorities who screw minorities — sooner or later your turn to get raped arrives.
But a longer term protracted majority can — and does — eventually overcome constitutional inertia — usually by sidestepping the constitution through executive majoritarian power.
The bottom line is that constitution or not if the voter-lemmings of your country want to march the road to collectivism then they will. The constitution is only going to slow them down — sometimes enough to trigger second thoughts and invite the collectivists to change their minds.
So the only protection really against untrammeled majoritarianism is open borders and emigration. Because if the population of a country is bent upon going down the poverty road to coercive collectivism then nothing will save you.
So when the majority starts demonstrating in Paris (or Athens) three times a week claiming “rights” to your wallet and wanting you to work every day from noon to 5pm not for yourself and your family but for distant unknown majorities demonstrating in the streets — then you eventually pack your bags and move to the dictatorship of Dubai. There you cannot demonstrate but nobody is forcing you to work the majority of your day for demonstrating majorities.
What I’m getting at is that there is a natural self corrective mechanism. In today’s mobile world, when a pitchfork democracy starts declining, then eventually other jurisdictions, even some of the more liberal dictatorships (they too have to compete in today’s world) start appearing as attractive alternatives.
In the end, by virtue of the law of probabilities, some jurisdiction gets it right, either by democracy, semi-democracy, or even sometimes edict.
So it is wise to stay mobile in today’s world. Especially because everything human has irreversibly accelerated so electorates and jurisdictions will quickly move from wise to perilous choices and vice versa.
And, thanks heavens, that we cannot all live under one single unified and homogenized world government. That is the dream of international bureaucracies like the OECD, the UN, the pan-world environmental government …etc. While these efforts in universal coercive collectivism will ultimately fail, they can — and will!!– cause enormous damage and slowdown in human prosperity and progress — in the medium term.
Like the EU, these international bureaucracies will rise and coerce more and more humans under the directives of their tax-free sages and the untrammeled majorities that support them. Until prosperity suppression reaches levels whereby the benefits of secession outweigh the expected cartel vindictiveness — and the cartel begins to unravel. You see that in the current Brexit episode.
While the natural self-corrective mechanism does eventually kick in, the prosperity loss and opportunity suppression before one gets to the inescapable natural correction is enormous.
At the personal level you are much better off keeping mobile. That will allow you to pick up and go to jurisdictions (hopefully democracies) whose citizens don’t wield pitchforks.
Because, be forewarned,
The “other world”, where an easier prosperity can be built on people’s desire or coercion to work for distant others, will be tried again and again. I don’t see anything in the near or mid term that will deter the voter-moth from the light of coercive collectivism.
Keep mobile! — and teach your children the same.
P.S. In Switzerland institutionalized decentralization (what a contrast to the EU dream indeed!) plays a very big role in the Swiss virtuous cycle. Decentralization keeps a lid on the size of government, coercive collectivism, and pitchfork style democracy — since people can escape fifty miles into the next canton. Then the principle of small government confers enough prosperity benefits that people appreciate it. The virtuous cycle.
In that sense, I admire Switzerland more than America. America is a young country which more or less serendipitously got colonized by a very rare subgroup, an English minority with elevated sense of individual rights. That initial endowment of freedom has more or less been eroded ever since, but convergence to European collectivism is still some way off (but approaching fast).
By contrast, the Swiss are part of the old world. They were not blessed by the same momentous historically serendipitous freedom endowment as Americans did. They had to build their freedom piece by piece and seem to have gotten the decisions right at most junctures (coincidence?). Being part of the old world, Swiss citizens have had all the time in the world and opportunity to screw things up and peel off into statism. Yet they did not.
As a world citizen I’m more inspired and hopeful looking at Switzerland than the United States.
Now let’s hope that the OECD is not reading this, otherwise they will put Switzerland “in the front of the queue” for persecution. A low tax jurisdiction that amply demonstrates how prosperity flourishes when coercive collectivism is subdued? That is enemy #1
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And is the answer more democracy? Careful. We may be tripping and flirting with a political prat fall from which it may take long, if ever, to recover. Give up direct democracy, that is, of the people, by the people, for the people? The way it is evolving, it is showing signs of overreaching, and plunging to earth, like Icarus, flying with wings of wax, and getting to close to the sun. Democracy, that is direct democracy, has lent itself to becoming a mechanism to empower mob rule. Check the news, and history.
Am I being too harsh? Well, let’s look for performance in our own democracy. Our ” leaders” chosen more and more by “the people” are demonstrably inept, fashioning 2,000 page laws reflecting good intentions on a superhighway to higher costs, excessive regulatory intrusion, and, ultimately, unaffordable. I mean, can anyone really believe that these leaders, chosen by the people, understand the consequences of their actions? How can 535 of the “best and the brightest” in the country be so inept and legislatively clumsy such that they demonstrably cannot rationally “walk and chew gum” at the same time. They are tied up in their own regulatory underwear, falling like clowns down the steps of the Capitol in their rush to please special interests, while responding to the emotions of the people, unhinged from reality, and the practical.
And the Presidency? It is enraptured in a narcissistic exercise of Executive excesses, less restrained, and made unpredictable by its imaginative and selective interpretation and implementation of the laws of the land. The “Occupant” is aided and abetted by a supine bureaucracy incapable of limiting executive actions to the plain meaning of their own oath of office, which is to the Constitution, and to see that the law are faithfully executed. The “Occupant” elected by the people, is prisoner to his own imagination, and the satraps that brung him. To hold on to power, the “Occupant” wallows in the emotional mud-holes of the electoral, drawing on their racial, religious, sexual, and class sense of victim-hood and entitlements. Like parasites living in the gut of the county, executive actions, net-net, weaken the economic potential of the country on which all possibilities depend.
In our democracy, the government is the distillate of the wisdom that voters elect, exercising their franchise. And, who are these voters? Us, by definition of average intelligence. We by-and-large rely on instinct, and habit in choosing our representatives. Little, if anything, is decided based on real individual rights, security, freedom, or achievement. Elections are manipulated using “red herrings” dragged across the media to distract and mislead voters like the packs of yelping hounds following their noses in search of a false prey. Democracy here, at least the model popular these days, is largely a failure, still searching for a better way of governance. I mean, come on! Reproductive rights? Sexual co-habitation? The “N” word? Meanwhile, the economy is caught in the vortex of a toilet, and Armageddon lingers between Scylla and Charybdis, or North Korea and Iran, or Pakistan and India. And then a nutcase like Snowden, and a dysfunctional bureaucracy, like the GSA and IRS, grab our attention. Hysterics seize the day. Hopeless.
And the record of democracy in most other lands? Take Iraq, Afghanistan, Egypt, Venezuela, Ecuador, Myanmar, Thailand, etc. How is the system working out? Who is in charge? The people? No, it is the mob. Choose your mob. The military, the Mafia, crony government/labor/management, and the street that supports them. For what? Their illusions. Their mistaken and conditioned expectations. Not small ones. Big ones. Like stability and employment. Like being fed. Making one’s way in reality. No. The people have become dependent on subsidized everything, bread, gas, education, housing, even foreign aid, for security and material well being. Take from Abdul, and pay Mohammed! Or visa-versa. If not, riot, kill, and Occupy. It is the way of the jungle, the “reset” option of failed states in history.
There are alternatives to the democratic formula, many overlooked, or discarded, in the past, and others in the process of being born, or recycled. Without ranking, and at the risk of being immediately disregarded, here are some that come to mind.
The Catholic Church – Leadership is by election of “elders” appointed by previous leaders. A benefit from the system is that elections are not imposed by the calendar, requiring leadership to be pulled up, – say, every four years – like a carrot, still growing and incomplete, to see whether it should be returned to the earth, or discarded. Also, “elders” are a collective of those judged to be wise in the past (Socratic?) leaders based on their performance, experience, and discipline with respect to the values and purpose of the institution.
Maybe Hongkong – While still evolving, this government is largely an economic engine responding to market forces. Governance reflects a gradual empowerment of citizens, edging toward a larger, and more participatory, self-disciplined, system. The power of a centralized authority, e.g., like the prior colonial government, or China – is diluted periodically in response to perceived popular expectations, within accepted limits of peaceful forms of assembly. This democratization can occur in the midst of other conditions affecting governance, namely, an adherence to existing law, a respect for individual freedom of thought, a system respectful of individual merit, private property, and a competitive system of production.
Although I could be mistaken. In Hongkong, the “Occupy” movement in its planned peaceful and surgical application of the brakes on the economy to resist the contagion of Main China “Soul” may turn into a suicidal move to cut of its nose off to spite its face. That seems to be consistent with the wisdom of the masses. The choice ought not be to “live standing up or die on your knees.” There are alternatives, and a chance to dodge the bullet of direct democratic – zealotry.
Switzerland – The characteristics of governance of this landlocked country function under a national leadership with a more or less rotating chairmanship of a governing board; deference to market forces and external political pressure; and defense system that discourages internal and external disruption – a “don’t tread on me” proposition.
Scandinavia – Some of these countries seem to have a unified sense of the governed and governance that seeks the common good by empowering individual choice in program implementation, e.g., publicly funded vouchers for socially approved services. In addition, they share similar characteristics with the Swiss, e.g., internal cohesion, openness in trade, independence, and national confidence.
These thumbnail descriptions are probably more imaginary than real, imprecise and error prone. Nevertheless, they are hopeful and suggestive of directions and possibilities for more durable and satisfactory forms of governance.
Jaime L. Manzano
Federal Senior Executive and Foreign Service Officer
7904 Park Overlook Drive
Bethesda, MD 20817
301 365 4781
The Pollyanna optimism of today’s socialist can not be swayed by facts. The heart trumps reason every time.