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The first week of
March witnessed the death of President
Chavez of Venezuela and Western ideas,
not all of them “bad”, swirled about
this controversial figure in the Globe
and Mail. My starting
information about Venezuela was patchy.
In the early 1990s I spent 2 days of
meetings in a hotel on the edge of Caracas,
a
modern city in the mountains. It had a
subway rapid transit system. I remember
dire warnings about the risk of violent
robbery in the streets. My later reading (see
oil references earlier in these
articles) told of the economic folly of
making a scare resource available at low
cost to nationals. Chavez apparently did
this - using oil revenues to finance
handouts to the poor and to make sweet
deals among those deemed friendly
nations. Few would dispute the value of
developing a health care system, but
using resource revenues in this way can
harm the economy by undermining domestic
production in agriculture and
manufacturing. The Chavez approach was
the antithesis of the Norwegian tactic
of putting oil revenues into a savings
fund to protect the rest of the domestic
economy and to have something for the
long term. The Chavez approach was
described as a problem for Saudi Arabia.
Alberta has oil and has a fund, but a
fund far too small to stabilize the rest
of
Alberta’s economy. I also read
somewhere about rampant inflation (20%)
in Venezuela to add to a stressed
domestic economy. So I didn’t have a
sense of a great economic Chavez legacy.
But there was intent to help the poor
and this is laudable in today’s world. Somewhere, I picked
up that Chavez was a doctrinaire
socialist. Economist Joseph Stiglitz
(see his book considered earlier in
these articles) found from his World
Bank days that there were good and bad
socialist economies as well as good and
bad free economies. My own concern is
that almost anything done with
doctrinaire blinkers cannot take into
account particular circumstances and so
can seldom turn out well for ordinary
citizens. In the West, we heard
sound bites about Chavez’s anti-US
rhetoric from time to time. However,
hearing George W Bush speak about Iraq
brought a welling up of anti-US
sentiments in many of us. Meanwhile,
Chavez had the good sense to keep
selling oil to his best customer – the
US. On March 8th the
Globe’s Mark MacKinnon accused Chavez of
being a master of “managed democracy”
like Putin in Russia – controlling
media, judges and non-governmental
groups. Yet at the same time, as
MacKinnon witnesses, Chavez did remain
democratic and he did face some
set-backs as a consequence. He left
behind a democracy. There
are few countries where democracy
doesn’t include making partisan
appointments, managing NGOs and managing
the media – Harper’s Canada? The Globe’s Doug
Saunders had a thoughtful perspective in
a March 9th article. He noted
that Latin America had socialist
countries, but they were not all
identical. Socialist Brazil and Chile
allowed open trade and market economies,
taxed and used the tax revenues to build
social programs and redistribute income.
Socialist Argentina and Venezuela
imposed national control of key
industries, “blocked” trade and foreign
investment, controlled prices and gave
resource income directly to the poor.
All these countries showed reduced
poverty and income disparity. But Brazil
and Chile reduced them dramatically,
developing a solid domestic economy
supporting an enlarged middle class.
Saunders’ article seems to be written to
re-enforce the current conventional
wisdom. So I’ll repeat my thought. A
doctrinaire approach – even Saunders’
implicit conventional wisdom – cannot
take into account the particular nuances
of a situation and so can seldom be
ideal. Moreover, the key feature here is
that all these countries aimed to reduce
income disparity and aimed to reduce
poverty. Some, if not all, aimed to
develop their domestic economy and its
employment. It is the aim of doing these
things which is praiseworthy. Not
considering alternatives, possibly as a
result of doctrinaire stances, may have
hurt Venezuela. Also, Chavez should have
been more alert to the problems of
having oil. On March 11th
the Globe came out with its solution
under the title The
next Venezuelan government should move
the country to the centre. Of
the two contenders to follow Chavez,
Maduro – Chavez’ chosen successor, and
Capriles – now the opposition leader,
the Globe favours Capriles. Capriles is
chosen because he favours what the Globe
describes as “the Brazilian left leaning
reform.” (I note that the Globe now
considers the approach of Socialist
Brazil in its thinking about “the
centre.”) The
Globe notes that both Maduro and
Capriles are pragmatic. This is a
welcome sign for someone like me who is
concerned with avoiding doctrinaire
approaches. On the other hand, today’s
leaders need to understand the dangers
in today’s world. I think of the pools
of angry under-employed young men which
Judt describes arising at the end of the
20th century in towns in
Europe as a result of open trade. And
the Globe needs to be reminded that
Venezuela is not Brazil. Venezuela has
oil. I
hope that whoever leads Venezuela will
consider carefully what Canada is
afraid to fully address – the problems
of having oil for an economy. So far
there is a Norwegian solution. Perhaps
Venezuela will find another way to
show us?  |