“Lessons From History” #8: Venezuela
THE SHORT VERSION: Venezuela sat on the largest proven oil reserves on earth and was once among the richest countries in Latin America. Then it chose socialism — and in one generation, an oil-rich nation ended up with empty shelves, worthless money, and millions of its people fleeing on foot.
NOW THE FULL STORY:
In 1998, Hugo Chávez was elected president promising to fix inequality and spread the oil wealth. At first, high oil prices paid for generous social programs, and poverty fell. But the system underneath was being rebuilt: the state took majority control of the oil industry, nationalized steel, cement, telecom, and farms, and imposed price controls and currency controls.
The results followed the same pattern as every other installment in this series. State-run companies were put in loyal hands, not expert ones, and oil production — the country’s lifeblood — began to fall. Price controls meant shops could not sell goods for what they cost to make, so shelves emptied. To pay the bills, the government printed money.
Chávez died in 2013, and Nicolás Maduro tightened the same policies. By 2018 the International Monetary Fund projected inflation of 1,000,000 percent for the year — money losing its value so fast that a month’s wages could barely buy a meal. Food and medicine ran short, hospitals struggled, and power and water faltered. The United Nations counted 3 million Venezuelans fled by late 2018, most to Colombia and Peru; millions more have left since.
THE LESSON: Venezuela did not fail for lack of resources. It had more oil than Saudi Arabia. It failed because the state took over the economy that produced the wealth, spent it, and then printed money when the wealth ran out. No country is too rich to ruin — it only takes a system that punishes production and rewards loyalty.
Tomorrow: the Berlin Wall — the wall built to keep people in, and the night it came down.
#LessonsFromHistory #CarolinaAfterDeadline
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