World

Venezuela's Crisis Not Caused By Socialism

| by Mark Jones

The economic crisis currently taking place in Venezuela is undoubtedly a dire situation. The causes of the crisis, however, are decidedly less clear. It may be a while before we can say with certainty whether one thing in particular has caused it or whether it is a result of many intertwining issues. At the moment, however, we should all be able to recognize that whatever its causes may be, socialism is not to blame for Venezuela's crisis. 

The current political and economic climate in Venezuela could be described as terrible at best. According to NBC News, the country is suffering from a deep recession and hyperinflation. Prices rose by 800 percent in 2016, while the economy shrunk by 18.6 percent. Individuals within the country have faced major challenges in gaining access to necessities such as food and medicine. 

All this has occurred despite the fact that Venezuela has the world's largest oil reserves. Throughout the month of April, protesters took to the streets to demonstrate against the government but were met with harsh blowback from security forces. It is reported that at least 37 people have died. 

The protests came in light of the Venezuelan Supreme Court's decision to strip the Nation Assembly -- the opposition-held Congress -- of its power. This decision was thought to put the power of the country into the hands of President Nicolas Maduro.

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Because of these conditions, many have scrambled to name the root cause. One popular course of action has been to blame socialism for the nation's problems.

"The cause is simple. Socialism," wrote Investor's Business Daily of the situation. "End it and you will end the misery."

This assertion is blatantly incorrect. It is true that by doing things such as nationalizing the oil industry, the Venezuelan government has indeed implemented socialist policies. However, these policies are not to blame for the crisis. 

One possible explanation for Venezuela's hardships is a populist government turned authoritarian. According to The New York Times, Venezuela's former president, Hugo Chavez, was elected by popular vote with the promise to be a champion for democracy. However, actions he has taken since then has given the executive office within the country more and more power. For example, in 2004, the Venezuelan government -- under Chavez -- began blacklisting workers who were disloyal to the government. 

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According to The New York Times, cases such as this have been the root of the problems in Venezuela.

"Venezuela exhibits the worst-case outcome of populist governance," the New York Times said, "in which institutions have been so crippled that crime is rampant, corruption is nearly universal and the quality of life has collapsed."

Another possible source for Venezuela's crisis is companies' greed for profit. According to teleSur, food is often hoarded by supermarket owners and resold at higher prices to make large profits. In addition, it was found that offshore companies linked to the 2016 Panama Papers scandal were found to have been selling Venezuelan food imports to Colombian companies. These companies would then resell the products to Venezuelans. 

In the midst of this complex crisis, it is incredibly difficult to determine what exactly has caused Venezuela to fall into such a state. Undoubtedly, there is a myriad of reasons contributing to the country's hardships. However, in the midst of it all, one thing should remain abundantly clear: socialism is not to blame. 

Click here for the opposing view on this topic.

Sources: The New York Times, teleSur, NBC News, Investor's Business Daily / Photo credit: Alejandro Alarcon/Flickr

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