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The Cure for Venezuela’s Woes


I’ve got an idea that will cure the severe economic crisis in Venezuela. All that Venezuelan officials need to do is to raise the minimum wage to $15 an hour and also give everyone a monthly welfare check of $5,000.

After all, isn’t that what American statists say is the solution to poverty in the United States? Well, if it works for the United States, why wouldn’t it work for Venezuela?

In fact, here’s an even better idea: Let’s do what Bernie Sanders, new Democrat congressional nominee Alexandria Ocasio-Cortez, and a growing number of progressives are advocating for the United States. Why not have Venezuela adopt a full-fledged socialist economic system, one that includes a $15 per hour minimum wage, a guaranteed monthly welfare check of $5,000, free food, free housing, free healthcare, free clothing, and a free education?

Setting aside my sarcasm, there is a simple answer to those questions: Venezuela already has a full-fledged socialist economic system that includes a minimum wage and a welfare state.

In fact, that’s precisely why Venezuelans are now on the verge of starvation.

That’s what Venezuela’s socialist dictator Nicolas Maduro, along with Sanders, Ocasio-Cortez, and their growing army of American socialists, cannot bring themselves to see. It is the socialist philosophy to which they are devoted that has inflicted horrendous economic suffering on the Venezuelan people, to the point that many are now fleeing the country to avoid starvation.

It’s also no coincidence that Venezuelan socialism has been accompanied by political tyranny. The last thing the socialists want is for Venezuelans to be talking about the failures of socialism and blaming Maduro and his socialist cronies for the crisis and the chaos. Better to simply jail or kill dissidents and critics.

That’s not to suggest, of course, that Venezuela had a genuine libertarian free-market economic system before Maduro and his predecessor Hugo Chavez came into power. Like with the United States and Latin American countries, Venezuela had a welfare-state, managed-economy way of life before Chavez and Maduro.

But welfare, taxation, and governmental interference with economic activity vary in nature and scope. Some governments tax and regulate less, while others tax and regulate more. The countries where the government taxes and regulates less are going to be more prosperous than those where the government taxes and regulates more.

Prior to the socialist regimes of Chavez and Maduro, the Venezuelan government taxed and regulated less, certainly compared to the Chavez-Maduro regimes. The result was that there was a significant amount of wealth in the country in the hands of the rich and the middle class. The country was still poor by American standards but much better off compared to the Chavez-Maduro standard.

In the early days of any socialist regime, the rulers have a field day. That’s because there is lots of wealth to confiscate. They grab everything they can from the rich and the middle class and distribute it to the poor. They are hailed as heroes and saviors. The poor love them because they are giving them free healthcare, free food, free education, and other freebies. Three cheers for socialism!

But the socialist party doesn’t last forever. Over time, businesses are put out of business. People start getting squeezed economically. Millionaires become middle-class. The middle class becomes poor. The poor verge on starvation.

Socialism makes the pie smaller and smaller, with everyone fighting over the rapidly diminishing pie. Finally, the pie dwindles to nothing, with everyone now desperately poor. Everyone is wiped out. That’s why raising the minimum wage and handing out welfare checks won’t do any good. There are no more businesses to pay a minimum wage and there are no more government tax revenues to fund welfare checks.

You would think that this would make socialists sad. On the contrary, they love it because as far as they are concerned, everyone is now equal. No more disparities of wealth, which socialists hate. No more millionaires and multimillionaires. Everyone is now in the same boat. Everyone is now struggling to survive. Equality!

That’s when socialists look for scapegoats. Foreign sanctions and embargoes. Illegal immigrants. Rapacious businessmen. Corruption. The chaos and the crises are everyone else’s fault, not the fault of socialism or socialists.

Even though socialists will never admit it, what drives them are the big sins of envy and covetousness. They cannot stand the thought that someone has more than they do. It’s just not fair. Even if they get none of the loot that the government confiscates from others, what satisfies the socialist is that the rich and the  middle class have been brought down to his level. Such “equality” makes socialists happy.

The socialist experiment in Venezuela provides Americans with a choice:

If you want a society in which America will be plunged into economic chaos, crisis, and even starvation, along with political tyranny, join Sanders and his socialist acolytes.

If you want a society that moves toward socialism more slowly through the welfare-warfare state way of life, join conservatives or progressives.

If you want a society based on the principles of economic liberty, prosperity, and harmony, along with the protection of political liberty, join up with us libertarians.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.