Maybe it’s just because I’m a wonk, but it seems that comparing long-run growth rates in various nation sets up a slam-dunk argument for the superiority of free markets and small government.
Whether it’s North Korea vs. South Korea, Cuba vs. Chile, or Ukraine vs. Poland, nations with bigger governments and more intervention inevitably decline compared to market-oriented alternatives.
That’s very compelling evidence, in my humble opinion, but I wonder whether it’s not overly persuasive because it’s too dry and analytical.
Maybe I should focus more on the human cost of statism. And not just by sharing data about low levels of per-capita GDP. Perhaps it would help to explain what that means for the lives of ordinary people.
Venezuela certainly would be a perfect (in a bad way) example.
The Associated Press explains that big government and statism aren’t working very well, particularly for the most vulnerable members of Venezuelan society.
Tens of thousands of Venezuelans poured into neighboring Colombia to buy food and medicine on Saturday after authorities briefly opened the border that has been closed for almost a year. A similar measure last week led to dramatic scenes of the elderly and mothers storming Colombian supermarkets and highlighted how daily life has deteriorated for millions in Venezuela, where the economy has been in a freefall.
That certainly sounds grim, but that story doesn’t fully capture how bad life has become for ordinary people.
Here are some excerpts from a BBC report on the government-created misery in Venezuela.
Travelling through the country this month I saw endless queues of people trying to buy food – any food – at supermarkets and other government-run shops. I was stopped at a roadblock in the middle of the countryside by people who said they had eaten nothing but mangoes for three days. I saw the hopeless expression of a mother, who had been eating so little that she was no longer able to breastfeed her baby.
What a miserable tragedy.
The reporter shares information on his own family and other people he met.
…it was my family who really brought it home to me. My brother told me all his trousers were now too big. My father – never one to grumble – let slip that things were “really tough”. My mother, meanwhile, confessed that sometimes she only eats once a day. They all live in different parts of Venezuela, but none of them is getting enough to eat. It’s a nationwide problem. …a young mother, Liliana, …admitted to going to bed in tears on days when she had been unable to give her two children any dinner. In western Venezuela, in the oil-rich province of Zulia, I visited several small towns where people didn’t know what they would eat the following day.
What a horrifying life.
Imagine if you were a parent in Venezuela and you couldn’t find food for your children? That shouldn’t be happening in the 21st century.
Unsurprisingly, deprivation and economic chaos are now the norm.
A study by three of the country’s main universities indicates…that “extreme poverty” has jumped by 53% since 2014. …The country’s official inflation rate was 180% in December, the last time a figure was made public, but the IMF estimates it will be above 700% by the end of the year.
Considering that Venezuela is in last place for Economic Freedom of the World, none of this should be surprising.
But remember that we want to focus today on the human cost of statism, not just broad measures of economic mismanagement.
And this chart from the BBC on food riots certainly is a persuasive piece of evidence.
Here’s the part that shows the mess was created by bad government policies, with price controls being a major culprit.
…the government years ago fixed the price of many basic goods, such as flour, chicken, or bread. But Venezuelans can only buy the goods at these fixed prices once a week, depending on the final digit of the number on their national identity card. …Because there is a risk of the goods running out, people often arrive at supermarkets in the early hours of the morning, or even earlier. At 6am one morning in Caracas, I met a man who had already been in the queue for three hours. …”I’m hoping to get rice, but sometimes I’ve queued and then been unable to buy anything because the rice runs out before I get in,” he said.
In a sad example of Mitchell’s Law as the failure of one bad policy leads to the imposition of another bad policy.
President Nicolas Maduro[‘s]…latest step has been to create Local Committees of Supplies and Production, better known by the Spanish acronym, CLAP. The CLAPs essentially mean that the government will stop sending imported food to supermarkets and start handing it over to local community councils. …The ultimate aim of the CLAPs is to create self-sustaining communities, where people grow their own food. …a member of a colectivo – a group of hardcore government supporters, often armed, …agreed in the end to show me what the CLAP was aiming to achieve. I was taken to see a barren field – “which we aim to have ready for crops in eight months” – and several chili plants waiting to be planted. It was, to say the least, disheartening.
In other words, Venezuela apparently is creating a sure-to-fail mixture of autarky and collective agriculture.
Even Ayn Rand didn’t think to include something that crazy in her dystopian novel, Atlas Shrugged.
Let’s wrap up with a CNN story about a new “jobs” program from the thugs in Caracas.
In a vaguely-worded decree, Venezuelan officials indicated that public and private sector employees could be forced to work in the country’s fields for at least 60-day periods, which may be extended “if circumstances merit.” …President Nicolas Maduro is using his executive powers to declare a state of economic emergency. …According to the decree from July 22, workers would still be paid their normal salary by the government and they can’t be fired from their actual job. …Venezuela…is grappling with the lack of basic food items like milk, eggs and bread. People wait hours in lines outsides supermarkets to buy groceries and often only see empty shelves. …Venezuela is the world’s worst economy, according to the IMF. It’s expected to shrink 10% this year and inflation is projected to rise over 700%. Beyond food shortages, hospitals are low on supplies, causing many patients to go untreated and some to die.
Wow, I’m not even sure where to start. The fact that people are dying because of horribly sub-standard care? The fact that the government is engaging in a form of quasi-slavery by forcing people to work on farms? Or the fact that bad government policy is the reason for the disaster?
As I contemplated these questions, it got me thinking about the varying degrees of statism and the harmful impact on ordinary people.
So, with apologies to fans of Dante’s Inferno, I put together the Five Circles of Statist Hell. The first layer is relatively benign, featuring nations such as France that sap an economy’s vitality with lots of feel-good programs. Then you get countries that belong in the second layer, which is characterized by economies that are actually declining rather than merely stagnating.
And the next layer is where Venezuela is today, with systemic misery and poverty. In other words, the nations in this layer already have declined and have lots of suffering.
But it’s always possible to decline even further. If Venezuela doesn’t reverse some of the awful policies that are causing chaos today, it’s just a matter of time before the country joins North Korea is a state of pervasive deprivation and even starvation.
And the only thing worse than that is the final layer of statist hell, which features countries that actually butcher their own citizens.
By the way, let’s not forget the “useful idiots” who have justified and/or praised Venezuela’s brutal government. I’ve previously cited the misguided words of Joseph Stiglitz.
Well, Joe Kennedy also deserves our scorn and disdain. The former politician actually mourned the death of the evil slug who is most responsible for the mess in Venezuela.
Former congressman Joe Kennedy (D-Mass.) is mourning the death of Venezuelan President Hugo Chavez today, praising Chavez as someone who made a difference for poor people. …Kennedy also said that “some of the wealthiest people on our planet have more money than they can ever reasonably expect to spend.” Kennedy joins Rep. Jose Serrano (D-N.Y.) among the few American politicians to praise Chavez after his death Tuesday.
How disgusting and unseemly. Makes the Che sycophants seems like moral giants.
[…] been just as badas Trump)? Or was it back in 2018 when I expressed hope that Venezuela’s socialist government might be on the verge of […]
[…] wrong since Biden has been just as bad as Trump)? Or was it back in 2018 when I expressed hope that Venezuela’s socialist government might be on the verge of […]
[…] other words, Norway is the opposite of Venezuela. It hasn’t squandered its oil wealth on bigger […]
[…] None of this is a surprise. Venezuela is a basket case. […]
[…] with the country now in a death spiral, you would think it’s a perfect time for further commentary. I sometimes wonder, though, what […]
[…] Haiti is in last place, below even Venezuela. […]
[…] Haiti is in last place, below even Venezuela. […]
[…] Haiti is in last place, below even Venezuela. […]
[…] wrote last year that Venezuela was entering the “fourth circle of statist hell.” […]
[…] a una mejor política en Zimbabue (sería difícil moverse en la dirección incorrecta, aunque Venezuela es la prueba de que es posible un mayor […]
[…] lead to better policy in Zimbabwe (it would be difficult to move in the wrong direction, though Venezuela is evidence that further deterioration is […]
[…] years ago, I concocted a visual showing the “Five Circles of Statist Hell” and speculated that Venezuela was getting close to the fourth level. Though I still […]
[…] may lead to better policy in Zimbabwe (it would be difficult to move in the wrong direction, though Venezuela is evidence that further deterioration is […]
[…] Utterly depressing. A very bad situation keeps getting worse. […]
[…] Utterly depressing. A very bad situation keeps getting worse. […]
[…] of Venezuela – Given the disastrous deterioration of the Venezuelan economy, it’s difficult to envision how the Maduro dictatorship can survive […]
[…] Combined with growing political oppression, the country may zip through the fourth circle of statist hell and soon find itself in the fifth and final […]
[…] have easy access to your nest egg (whether it’s a lot or a little) if you lived in Russia? Or Venezuela? Or China? Or […]
[…] I remarked last year that Venezuela was entering the fourth circle of statist hell. Why don’t we stipulate that the country in now fully and (un)comfortably ensconced in that grim position. Who knows, maybe it can join North Korea in the fifth circle if Maduro clings to power a few more years. […]
[…] other words, Norway is the opposite of Venezuela. It hasn’t squandered its oil wealth on bigger […]
[…] as the country has shifted from cronyism and vote buying to explicit socialism (otherwise known as entering the fourth circle of statist […]
[…] wrote last year that Venezuela was entering the “fourth circle of statist […]
[…] wrote last year that Venezuela was entering the “fourth circle of statist […]
[…] wrote last year that Venezuela was entering the “fourth circle of statist […]
[…] I disagree with some of Mallaby’s analysis, but enjoyed his depiction of Mélenchon, who bizarrely thinks Venezuela is a role model. […]
[…] It appears that Venezuela is on the brink of collapse as it enters the fourth circle of statist hell. […]
[…] Venezuela is a particularly poignant example. Once the richest nation in Latin America, it now is an economic laggard and also is a cesspool of oppression. […]
[…] It appears that Venezuela is on the brink of collapse as it enters the fourth circle of statist hell. […]
“Ami Horowitz: Democrats Love Socialism
So let’s see how much they like it in Venezuela…”
http://www.truthrevolt.org/commentary/ami-horowitz-democrats-love-socialism
[…] the entire world. The worst nations are in red, with North Korea at the very bottom, followed by Venezuela and […]
[…] And the results in these real-world experiments are similar to what happens in the book. Except the book actually has a happy ending, whereas there’s little reason to be optimistic for a rebirth of freedom in places such as Greece and Venezuela. […]
[…] Comédie) de Dante Alighieri, j’imaginais les cinq cercles de l’enfer étatiste. Je considérais alors que le Venezuela était sur le point de passer du troisième cercle (« pauvreté […]
I live in italy and I can say we are approching the time for rebellion against a state voracious for our money but non existant when you need its help…above all Italy is literally infested by bureocrats and othe “law givers” who regularly take the “obedience” to insane, bureocratic legislation as a religious mission and will attack anyone who dissents….I hope Trump will help in getting rid of the whole lot !
[…] I borrowed from Dante’s Inferno and created the Five Circles of Statist Hell. At the time, I suggested that Venezuela was on the cusp of moving from the third circle (“widespread poverty and […]
[…] I borrowed from Dante’s Inferno and created the Five Circles of Statist Hell. At the time, I suggested that Venezuela was on the cusp of moving from the third circle (“widespread poverty and […]
[…] Obama intervention has not produced good results. Meanwhile, I’m guessing that the thugs in Caracas (154 out of 159) are happy that Venezuela isn’t in last […]
“Venezuela’s currency now worth so little shopkeepers weigh vast piles of notes instead of counting them”
BY Charlotte England
“Scenes on the streets of Caracas said to be reminiscent of the past century’s most chaotic cases of hyperinflation”
http://www.independent.co.uk/news/world/americas/venezuelas-currency-hyper-inflation-oil-crisis-devalued-shop-keepers-weigh-notes-a7443596.html
[…] of either to produce. And the greater the level of plunder, as we see from extreme examples such as Venezuela and North Korea, the greater the […]
[…] as the profoundly stupid “Happy Planet Index” that puts despotic hellholes such as Cuba and Venezuela above the United […]
[…] profoundly stupid “Happy Planet Index” that puts despotic hellholes such as Cuba and Venezuela above the United […]
[…] 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 […]
“Venezuelan children fainting in school because they are hungry”
By María Emilia Jorge
http://latino.foxnews.com/latino/news/2016/09/26/venezuelan-children-fainting-in-school-because-are-hungry/
[…] don’t show the nations in the bottom half of the rankings, but I assume nobody will be surprised to learn that Venezuela is in last place (though, to be fair, the communist hellholes of North Korea and […]
[…] Borders also are good, Andy explains, because they create natural experiments that allow us the compare the success of market-oriented jurisdictions with the failure of statist jurisdictions. […]
[…] But that improvement still leaves Cuba with a lot of room for improvement. It may not be at the level of North Korea, but it’s worse than Venezuela, and that’s saying something. […]
[…] Borders also are good, Andy explains, because they create natural experiments that allow us the compare the success of market-oriented jurisdictions with the failure of statist jurisdictions. […]
[…] Borders also are good, Andy explains, because they create natural experiments that allow us the compare the success of market-oriented jurisdictions with the failure of statist jurisdictions. […]
[…] companies “pay to go” is an unseemly sentiment. Sort of what you might expect from a place like Venezuela where politicians treat private firms as a source of loot for their […]
[…] endorsed Hillary Clinton”? What’s next, a pro-Hillary campaign commercial featuring Nicolas Maduro? A direct mail piece from the ghost of Che […]
[…] I closed the interview by pointing out that it makes no sense to make America more like Greece or Venezuela. […]
[…] Venezuela’s economic collapse evidence that larger governments boost […]
My only add would be for you to put the five levels of statist hell in a toilet bowl.
[…] Venezuela Is Heading for the Fourth Circle of Statist Hell […]
“More Than 50 Animals Starve to Death in Venezuela’s Zoos as the Nation Endures Devastating Food Shortages”
By Paula Bolyard
https://pjmedia.com/lifestyle/2016/07/31/more-than-50-animals-starve-to-death-in-venezuelas-zoos-as-the-nation-endures-devastating-food-shortages/
[…] in fact, his daughter is now the richest woman in Venezuela, worth some $4.2 billion. Meanwhile, the country is literally starving, the military has been put in charge of the food supply and forced…. It is the inevitable end game whenever the socialism advanced by Naomi Klein and friends is […]
buckwheaton,
Socialism and its parent, progressivism, are not based on lies. At least not initially.
The “The death spiral of liberal/progressive/socialist begins” when…
…people who bicker about girlfriends and boyfriends, about how many likes she got vs how many I got on social media and why his pectorals are more buffed than mine and my shoes are prettier than hers…etc
…believe that they can turn into altruists who will work from 8am to 12pm for themselves and their families and then from 12pm to 5pm for the “community” of distant unknowns. Day in day out for the rest of their lives — And that they can somehow either convince or coerce the the rest of their countrymen and women to do the same…. Most importantly, with enough enthusiasm for the country to retain enough motivation and outcompete the rest of the world,….,so that the American middle class can remain in the world’s top three percent!
That is the dream of progressive delusion.
Worst of all perhaps, is the fact that once you start down your road into statist hell full of hope, the march becomes irreversible. You become doomed to descend into the ever lower rungs of your dream turned nightmare.
Initially the slide is modest, ill effects are explained away by faulty narratives — not people’s inherent reluctance to becoming socialist bees. But as the decline progresses, the slope also steepens and descent from one ring of hell to the other becomes even faster.
The biggest American delusion is :”The progressive road to socialism is reversible. If it does not work out we can always return to cowboy capitalism” — that, is the biggest delusion. It’s irreversible folks! Look around you.
Well, “ridiculously short” it wasn’t. Maybe just “crude, and focused on the simplest part”.
Thanks Dan, glad to see you’re still fighting the good fight. It was actually some of your writing in the Red and Black back in the late 70s that led me to re-examine my (center-left at the time) views of the world carefully: “conventional wisdom” that I’d absorbed growing up, from teachers, popular culture, etc., and just took for granted. Were these ideas based on anything more solid than a “foundation of repetition”? Often not, but that wasn’t obvious to me at the time.
Getting through to young folks today is a similar problem, though probably harder due to an entire generation of teachers who were themselves indoctrinated, and selected for their conformance.
Your idea of using person-by-person anecdotes is a good one to start with. First-hand accounts of parents who are pained that they can’t feed their children really get the reader’s attention.
The problem is what comes next. There’s a natural reaction to want to do something right now, which is pretty much always “send them some (government) aid”. If we instead take that opportunity to get into the graphs comparing countries’ per-capita GDP growth with the extent of government intervention — they’re gone. It’s sad, but they just won’t stay with you. It might take something ridiculously short, like
1. In the year you were born, Venezuela was the first or second most prosperous country in South America. Really.
2. In Venezuela today, the shelves are empty. People wait in line for hours to buy food, only to find that it’s run out again. Parents are ashamed that they can’t feed their children. Mothers can’t produce milk for their babies, because they themselves can’t find enough to eat. There are shortages of just about every desirable product in Venezuela — even toilet paper.
3. What happened?
4. The government decided that it should set the prices of many goods and services, particularly food. They set those prices so low that the people who are in position to produce them don’t bother to anymore. They need to feed their families too, so they looked for other work that still paid them for their time.
5. Can’t the government just raise the prices to the right level now, and solve this?
6. Perhaps. We should ask, though, why the government got the prices wrong the first time, and why they stuck with those for years despite the signs of econoomic decline. (Venezuela didn’t start running out of food just yesterday.) Is there really any reason that we should expect a well-dressed office worker, sitting in an air-conditioned building in Caracas, to know more about the production of rice or beans than a farmer who actually grows them? Or to know more about the value of those things than a mother who wants to feed her children? Aren’t the people who actually want to produce or buy those things the real experts on cost and value? Why not leave this critical work to the real experts?
7. “Effective tomorrow, all laws and regulations setting a specific price for goods and services exchanged between private individuals and companies are null and void.” That would be a good start.
Of course, freeing up prices to do their jobs is just Stage 1. There’s plenty more, like rolling back counterproductive regulations, demobilizing armies of bureaucrats to find productive work in the real economy, and so on. But we can pack only so much into Stage 1.
We’ve seen this scores or hundreds of times, but young folks haven’t.
And pray tell which circle we are now in.
Reblogged this on The Arts Mechanical and commented:
There’s always a lower circle of statist hell, always.
[…] Dan Mitchell: […]
This is the progressive paradise that the Democrats in this country are working hard to bring here.
Upon first hearing about the new slave labor plan in Venezuela, I wondered if the ‘Killing Fields’ could be far behind.
Kennedy also said that “some of the wealthiest people on our planet have more money than they can ever reasonably expect to spend.”
Citizen Joe, in his capacity as CEO of Citizens’s Energy, which had gotten cheapo heating oil from Venezuela, gets a salary of 560.2 thousand a year . Citizen Joe is talking about himself.
Venezuela is facing a human tragedy… that’s the sad part… socialism has robbed the country of prosperity… medical care… toilet paper… food… and now the socialists are enslaving their people… forcing them to work in the fields… this pattern has been repeated time after time… in country after country… when the food runs out… the fascists force the population into the fields… Castro… Stalin… Mao… the Khmer Rouge… all sent urban populations to do field work when the government proved unable to feed it’s people… the Khmer Rouge killed a million of their citizens in the process…
and now the BernBros… and their allies are determined to spread that same sick ideology here… under the guise of social justice… people should note that as soon as the Bern signed his book deal… he lovingly endorsed granny Clinton… re-affirmed his “independent” status… and headed off to start work on his book…
of course it was all done in the name of the revolution…….. and not the book advance….
The death spiral of liberal/progressive/socialist begins when a person decides that they love lies better than they love truth. They all start by telling themselves lies. They find common cause in lies they all prefer. When the lies become official policy, massive tyranny follows like night follows day.
“The permanent lie becomes the only safe form of existence, in the same way as betrayal. Every wag of the tongue can be overheard by someone, every facial expression observed by someone. Therefore every word, if it does not have to be a direct lie, is nonetheless obliged not to contradict the general, common lie. There exists a collection of ready-made phrases, of labels, a selection of ready-made lies.”
– Alexander Solzhenitsyn on the pervasiveness of lies in the socialist society
Don’t forget that the late Hugo Chavez’s daughter is one of the richest people in the world. Bernie Bro’s everywhere should issue an apology to Venezuelin’s for supporting this.
…and then their dream came true and the people finally took collective control of the economy. Yes, they could! Now the economy works for them, instead of profit.
And how’s that working out?
Reblogged this on Freedom Is Just Another Word….
Thanks for this blog post regarding Venezuela (I wrote a post about it just now!); I really enjoyed it and am definitely recommending this blog to my friends and family. I’m a 16 year old with a blog on finance and economics at shreysfinanceblog.com, and would really appreciate it if you could read and comment on some of my articles, and perhaps follow, reblog and share some of my posts on social media. Thanks again for this fantastic post.
Reblogged this on jamesbbkk.
It would be helpful if the Venezuelan reporter would ask the people he is reporting about whether they voted for Chavez or Maduro ever and tell us, so that we have a better gauge on where our sympathies should lie. Like the undeserving and deserving poor, there are undeserving and deserving people who find themselves under the boot of the social welfare state in its death throes. And it’s always the rulebook of Diocletian refined by those French mass killers in the late 1800s they follow, isn’t it? Never, “Sorry, we screwed this up because our ideas are rubbish, and we’re leaving.”