Chávez was an innovator in how he spent money, but he did little to improve how Venezuela actually makes money. He paid no attention to diversifying the economy or investing in domestic production outside of the oil sector. The country relies on imports for many of its most basic goods and services, include food and medicine.
You could probably put the greatest economic minds in the world in charge of a big country like Venezuela and they would still fail to diversify the economy.
Markets are necessary for successful diversification - avoiding shortages and economic collapses when key industries suffer downturns.
I'd say social democracies in Europe have shown pretty conclusively that the way to fund broad social programs to help the poor and middle class is via taxation of market economies. Let a healthy private sector self-organize the production of the economy, and let taxes pay for social programs.
Income inequality is always parroted as the measurement for a healthy economy, but as my previous point suggests it’s not the end be all.
The problem occurs when the private sector is so overwhelmed by greed (always) that decides to make social programs part of their market, as can be seen in real time as they try to privatize NHS in the UK.
But those problems are small compared to widespread food, medicine and energy shortages.
I'm not entirely sure what you're saying.
If you're saying that no pro-capitalist government could have diversified Venezuela's economy, then I completely agree with you.
If you're saying that nurturing a market economy in Venezuela would have failed to diversify it's economy, then I have to disagree.
Markets tend to diversify on their own as entrepreneurs recognize new demand and respond to meet it. Because of the limitless variables that drive how this happens in different regions and industries in any given country, government administrators are not well suited to recognize and respond to such needs at a national level.
Government should instead cultivate market economies that produce economic surplus, and then tax some percentage of that surplus to provide the social programs their citizens request.
Another way to express this which lacks the apparent contradiction is: their socialist policies inhibited the natural tendency of the economy to reshape itself.
However the real problem in Venezuela was not "socialism" per se nor a lack of diversification -- in fact several countries, particularly Brazil and Argentina, experienced problems when they tried to forcibly diversify their economies (Peronism/import substitution), whereas Chile went all in on copper, and while they've suffered downturns, their long-run growth has more than made up for it, making them today the richest country in Latin America. And precisely this pattern (comparative advantage) is how capitalism usually succeeds, and Chile today is diversifying at a natural/gradual pace. But in Venezuela the biggest problem was that Chavez appointed his friends to run the oil companies, and refused to cooperate with the previous administration and employees of the oil companies, which resulted in a lot of skilled people in Venezuela's oil industry taking their ball and going home. In other words, the problem was not that Chavez was a socialist but that he was a strongman who had no respect for democracy, the rule of law, or the desires of anyone but himself, which was also reflected in his later attempts to silence his critics in the media and to sabotage the Venezuelan Constitution and its legislature. I think this is why we've seen post-Chavez socialists like Mujica and Moreno taking a more measured approach to economic reforms and working with, rather than against, preexisting institutions.
The argument for capitalism is that _no single entity can do this_ planning. It's not as if capitalist economies have a 'capitalist planner' who's better at planning that the socialist planner. Capitalist economies don't have one person - or agency - in charge of planning or shaping the economy. Bottom up, not top down.
Out of interest, why do you think this is true?
(Edit: Why does this comment have a score of -2? What can I do to improve the quality or relevance of my comments? Will the downvoters explain, please?)
Historically I think it's true because broad central planning has generally led to unstable economies.
I think the Nordic states best figured out how to provide widespread social programs funded by taxation of market economies - with national programs working alongside of self-organizing markets instead of trying to organize production directly.
This happened before in Venezuela in the 80s/90s and eventually led to Chavéz getting into power.
I don't want to appear pro-Chavez, many of his actions were despicable. But understand that "free-market" in their case means an economy controlled by USA. Chavez came into power precisely because the free-market economy before him failed to raise wages even as the GDP increased. It also failed to diversify.
Economically, Venezuela has two problems: over-reliance on oil and corruption. In 2017, we can consider it proven that neither central planning, nor free-market have succeeded alone in solving these problems. They are mostly orthogonal to the organization of the economy.
Politically, it has one problem: they don't like USA. Look at Saudi Arabia. They are centrally planned and they are extremely dependent on oil. But things go well economically. You just have to let US companies install themselves there and don't call yourself a socialist.
Why can't a free market diversify Venezuela's economy? Well when you have the world's biggest proven oil reserves (yes, more than Saudi Arabia since a few years) and an underdeveloped oil sector, where do you expect investments to flow?
You can redirect some of these investment by giving the government an amount of control over what the oil industry does, by putting quotas in place, this kind of things. But then, you are opposed by "the free world".
Venezuela is a shitshow, to put it bluntly. But the shallow analyses which focus purely on ideology instead of the physical reality on the ground is asinine, bordering on propaganda (Vox tends to swing randomly between center-left progressivism and center-right neoliberalism). Is the government of Venezuela incompetent? Probably as incompetent as most. Are they dealing with an unprecedented economic collapse caused by structural factors? Yes. On the other hand, most people don't actually know how the Venezuelan economy is structured. They just know "socialism bad" and "capitalism good". It's tiresome because the same structural deficiencies at play in their economy today was there decades ago, when they weren't "socialist".
It should be noted what happens to countries whose economies collapse because their place in the world economy no longer exists and then seek to renormalize via the accepted capitalist channels (like the IMF and the like). The entire country gets sold off to foreign interests and they spend the rest of their decades financing a debt they can never pay off.
As for the repressiveness of the Venezuelan state, it's not surprising. The violence of a state is directly proportional to how threatened it feels. When a state is failing, it is going to be violent. Cf. Spain and Catalonia at the moment.
That said, Venezuela is far from a centrally planned economy.
IOW, in case it's not clear, Venezuela failed because of socialism. It's hilarious to see all these long winded explanations that refuse to name the well known philosophy that has repeatedly led countries to the same place. There is no analysis needed. It has been analysed a hundred times already in history.
Suppose I fell off from a hundred story building and died. Now imagine newspaper articles going into gravitational theory and saying that the cause of death was a high speed impact with the ground, which was worsened because it was concrete. That would be stupid. The well known fact is that I died because I fell from a high place. You don't need an analysis for that. It's obvious. Once a phenomenon has been explained and analysed well enough, it can just be named and you need not go into a lot of details and develop your own theory. You can just reuse the name and everybody understands.
https://venezuelanalysis.com/analysis/10112
ps. Here is decent doc by John Pilger synopsising the US's history of interventionism. (Starts at about 38 mins, before that is some stuff from Venezeula from 2007)
