1. Socialism

Venezuela was already poor before they tried socialism.

In the 1950s, dictator General Jimenez administered Venezuela as an oil-rich banana republic in servitude to international capitalists. Venezuela was prosperous on paper, with the 4th-highest GDP per capita in the world, but this measure obscures the fact that “per capita” is calculated by dividing the wealth among the population. In reality, a few elites were filthy rich and most people were very poor.

A popular leftist insurgency overthrew Jimenez in 1958. With the dictator gone, Venezuela began to have semi-democratic elections (two parties colluded to share power; neither party was socialist).

During the 1973 oil embargo, the US relied more heavily on Venezuelan oil. The Venezuelan president (not a socialist) intended to nationalize oil to finance the diversification of Venezuela’s economy. So nationalization started in 1976.

But they never got around to diversifying their economy. Throughout the 1980s and 1990s, predatory foreign capitalists acted as loan sharks against Venezuela. Debt and turbulent oil prices led to rampant inflation.

For two decades, under US neoliberal guidance, the Venezuelan government tried the standard capitalist austerity measures, such as: privatization, deregulation, budget cuts, union-busting and submission to IMF coercion via more debt.

None of this improved their economy.

In fact, while education levels reached new heights in the ’80s and ’90s, employment and wages cratered. The country slid into further inequality, instability and a series of impeachment and coup attempts.

When people protested against capitalist austerity measures, the government responded with mass executions.

Working class people, unhappy with these conditions, voted for the left-wing Chavez in the 1998 election. His political program, dubbed “Chavismo,” is not really textbook socialism (because socialism is when workers own the means of production and exchange). However, Chavez tried to redistribute wealth away from international companies and towards the working class, so let’s go ahead and concede that this is sort of socialist.

In 2002, the right wing attempted a coup (with the CIA’s tacit approval or outright participation, depending on how much you believe the Bush administration’s version of the story). But the coup failed to remove Chavez from office.

When Chavez first came to power, his neoliberal opponents still controlled the state-run oil company. Concurrent with the failed coup in 2002, they cut oil production in order to de-fund Chavez’s promised social welfare programs. They hoped the ensuing economic recession would undermine working-class support for Chavez. It’s a strategy that successfully unseated leftist leaders in other Latin American countries.

But Chavez’s broad base of support kept him in power. He took control of oil production and used the oil money to increase public spending. In a reversal of neoliberal outsourcing, he turned the operation of public utilities over to the people who actually use them. Participation in worker collectives increased.

During this socialist-ish decade from 2003–2013, Venezuela made huge strides in GDP, real GDP per capita, literacy, life expectancy, nutrition and reducing poverty.

Growth (Average Annual Percent)

Source: Banco Central de Venezuela

Inflation: Pre-Chávez vs. Chávez Years

Source: Banco Central de Venezuela

Unemployment Rate: Before and After Oil Strike

Source: Banco Central de Venezuela, INEC

Poverty and Extreme Poverty Rate

Source: INEC

Gini Coefficient, 2001–2003 — Latin America

The Gini coefficient, measuring income inequality, fell from 0.5 to 0.397, the lowest Gini coefficient in the region.

Source: Economic Commission on Latin America and the Caribbean

Graduates from Higher Education

Source: Ministerio del P.P. para la Educación Universitaria

Child Malnutrition- Age 5 and Under

Source: Instituto Nacional de Nutrición

Meanwhile, in the US, during the same time period, literacy actually declined slightly:

Source: https://ourworldindata.org/literacy

US healthcare and inequality both got worse during this span, too.

So, it looks like Chavez presided over some of Venezuela’s most golden years. It’s only in the past 2 years that Venezuela collapsed into extreme poverty. What changed? Did socialism finally bite them in the ass, or were there other, more important factors? Perhaps it was due to…

2. Oil Prices / Inflation

Venezuela’s oil wealth has long been an impediment to diversification. Even before Chavez, the neoliberal government invested too heavily in further oil production at the expense of investment in other sectors: “Mini-booms in oil prices consistently reverse growth in the non-oil sector, which sees an average 3.3 percent growth in pre-boom years turn into -2.8 percent in post-boom years.”

Oil prices dropped throughout 2016 and early 2017 because of an increase in supply:

Technological advances made it easier for the US to extract previously inaccessible fossil fuels in shale.

OPEC removed quota limits on production.

The Saudis decided to keep their production levels high to undercut investment in natural gas in the US.

Venezuela depends on oil exports. As oil prices plummeted, so did the Venezuelan economy.

But Norway also depends on oil exports, and Norway also nationalized their oil production to fund a social welfare state. Why didn’t Norway’s economy collapse in 2017?

The answer is that Norway has a more diversified economy. They are able to freely participate in global markets.

But now it’s too late for Venezuela to diversify, due to US sanctions on trade and investment. Venezuela does not even get the chance to participate fairly in the global economy. Maybe they should stop subsidizing an artificial exchange rate, which started a cycle of inflation-depreciation in 2012 (before the latest oil shock). The 2-tier exchange rate system incentivizes a black market for dollars and a drain on public food and medicine programs, which are smuggled to Colombia.

But Venezuela can’t fix their currency issues, either. Why not? It’s because of…

3. US imperialism

Venezuela holds the world’s largest oil reserves, plus lots of gold, bauxite (the main ingredient in aluminum) and coltan (used in batteries). But because Chavez and Maduro did not hand these resources to US and international corporations, Venezuela is now being bludgeoned into a shakedown.

The US has blocked Venezuela from accessing its own money or implementing currency reforms. The US intends to inflict pain on Venezuela in order to achieve regime change. US foreign policy is like the mafia. Either pay for our “protection” with access to your resources, or we will destabilize your country.

The historical US playbook in Latin America:

A country’s working class wants a bigger slice of the pie, so they freely choose to elect socialists.

Business owners, who don’t want to relinquish profits to workers, respond with violence.

The US funds, arms and directs right-wing murder squads to terrorize the working-class majority into submission to US-backed dictators.

For example, in the 1980s, the US sent about $2 million per day to the military dictatorship in El Salvador to subdue an insurgency of peasants, indigenous people and workers. The CIA advised the Salvadoran military dictatorship on intimidation tactics. Here’s what we bought with our tax dollars:

“A Catholic priest reported that a peasant woman briefly left her three small children in the care of her mother and sister. When she returned, she found that all five had been decapitated by the Salvadoran National Guard. Their bodies were sitting around a table, with their hands placed on their heads in front of them, ‘as though each body was stroking its own head.’ The hand of one, a toddler, apparently kept slipping off her small head, so it had been nailed onto it. At the center of the table was a large bowl full of blood.”

More Latin American examples, alphabetized:

President Peron tried to enact an employment contract law that would have raised wages. This angered American and Argentinian business leaders.

1976 — a right-wing coup ousted democratically-elected Peron.

US Secretary of State Kissinger made repeated visits to coordinate with the new dictatorship under General Videla.

The dictatorship “disappeared” 30,000 opponents via secret arrests and mass executions. The dictatorship used torture, rape, and child separation to terrorize people into submission. Kissinger witnessed these crimes and helped hide them from the US media.

1964 — JFK authorized CIA involvement in the violent right-wing coup against democratically-elected center-left social democrat Goulart to “prevent Brazil from becoming another Cuba.”

The coup set up a dictatorship, which eventually gave way to a neoliberal democracy that adopted “market reforms,” such as auctioning off Brazil’s resources to foreign companies. Brazil remains one of the poorest and most unequal places in Latin America.

2018 — Brazil elected Bolsonaro, an extreme right-wing fascist who said, “The error of the dictatorship was that it tortured but did not kill.” Bolsonaro wants to bulldoze the Amazon rainforest, displace the last isolated indigenous people on earth, outlaw homosexuality and kill gays, etc. Trump celebrates Bolsonaro as an ideological ally.

Allende became the first-ever Marxist elected by a democracy.

So Nixon ordered the CIA to “make the economy scream” in Chile.

The CIA-backed coup against Allende set up a military dictatorship under Pinochet.

The dictatorship, intending to silence dissent through fear, murdered thousands of people. They raped and tortured opponents in coordination with the CIA. The campaign included a “caravan of death,” in which death squads traveled the country by helicopter to perform brutal public executions by dismemberment.

Leftist activists tried to unionize.

Business interests hired paramilitary forces to murder unionizers.

The US joined in funding and training right-wing death squads.

Leftist leader and presidential candidate Gaitán was assassinated. CIA involvement is plausible but unproven.

The ensuing civil war pit right-wing capitalists against peasant farmer communists and moderate liberals.

Colombia is now our henchman against Venezuela. Colombian forces, under US direction, feint attacks at the border to try to goad the Venezuelans into violence, which the US could use as a pretense for an invasion.

1948 — the CIA backed a right-wing coup against the democratically-elected Christian Socialist president. This began a bloody civil war.

1970s/early ’80s — Costa Rica’s left-leaning president refused to help the US-backed fight against leftists in Nicaragua. He also tried to renegotiate Costa Rica’s debts with the predatory IMF. For this, Costa Rica was punished with economic warfare from the US in the form of sanctions.

When Costa Rica and Mexico tried to sign a peace treaty in the 1980s, Ronald Reagan tried to sabotage it, because he wanted to use the conflict to weaken leftists in Central America.

Cuba

Batista’s regime was great for the rich white people and awful for the poor multiracial working class.

Communist revolutionaries kicked some ass.

The US comically tried and failed to assassinate Castro for decades. They knew he liked to SCUBA dive, so they even hid a bomb in a brightly-colored seashell.

George W. Bush intensified the cruelty of the Cuban embargo, which punished international businesses for trading with Cuba. If an international shipping vessel docked in Cuba, it was prohibited from docking in the US. Thus, the US forced international corporations to choose between us and Cuba up until the present day. So we are responsible when Cubans don’t have access to basic goods.

American-owned companies like United Fruit ran El Salvador as a prototypical banana republic.

1932 — brutal inequality lead to the formation of a socialist party. So El Salvador’s oligarchy sanctioned a peasant massacre. After the massacre, the military stayed in power.

1970s — election fraud and worsening inequality galvanized a coalition of left-wing insurgent groups. The US funneled millions of dollars a day to the military dictatorship to suppress left-wing insurgents.

Again, American companies like United Fruit enslaved and massacred indigenous groups. Worker revolts rocked the country until the election of a left-leaning president in the 1950, who was, of course, overthrown by a US-backed coup in 1954. The ensuing dictatorship waged a 40-year brutally repressive civil war against the working-class majority.

Throughout the 20th century, US fruit companies imposed slave wages on Honduran workers, who repeatedly unionized and were crushed by violence.

The US repeatedly backed right-wing military juntas against majority-supported workers’ rights movements.

The US used Honduras as a base of operations in its war against the Sandinista government in Nicaragua.

2009 — Another right-wing coup against a center-left leader. Notable because it happened recently, in 2009, under Obama and Secretary of State Clinton. It’s unclear whether they actually opposed the coup or merely pretended to oppose it. Republicans in Congress supported the coup. Once the dust settled, US leaders formed a bipartisan consensus to view the coup leader as Honduras’ legitimate president.

1960s-1980s — A brutally repressive US-backed dictatorship fended off left-wing insurgents (Sandinistas).

1979 — The Sandinistas, who had much more support among the majority, finally overthrew the dictatorship. The expropriated privately-held land and businesses and transferred them to worker control.

In the Iran-Contra affair, the Reagan administration illegally circumvented Congress to sell weapons to Iran in order to raise money for right-wing Contras in Nicaragua.

1981 — Panama’s dictator Torrijos (admittedly, he was a leftist) considered expanding access to the Panama canal without allowing a disproportionate benefit to US businesses. In retaliation, the CIA worked with Manuel Noriega to kill Torrijos in a plane crash.

Noriega became the new dictator. As a US puppet, he helped combat leftists in Nicaragua and El Salvador.

Noriega angered the US by also selling information and favors to other governments and drug cartels. So, the US invaded Panama in 1989, ostensibly to avenge the death of a US marine (though the invasion was planned months prior).

Right-wing US-backed dictatorships ruled Paraguay for most of the 20th century.

In 2008, a moderately left-wing candidate (Lugo) won the presidential election. Lugo promised to invest in public housing, which angered real estate interests. He also promised to create public hospitals, which angered private healthcare providers.

The US Agency for International Development funded an opposition campaign that successfully impeached Lugo, even though human rights groups and both right- and left-wing foreign governments condemned the impeachment process as unconstitutional and unfair.

The CIA facilitated corruption and illegal arms sales in Peru as recently as the 1990s.

For 150 years, right-wing dictatorships ruled Uruguay.

1973 — unions organized a general strike for better conditions. To combat the strike, the right-wing president, with the support of a military junta, closed parliament, suspended the constitution, outlawed unions, expelled some activists and murdered others.

Which brings us back to:

When Venezuelans elected Chavez in 1998, 2000, 2006 and 2012, it was because they did not want to meet the same fate as their Latin American neighbors. If Venezuela abandons socialism and joins its neighbors in the global economy, life would improve… for the rich. For the poor, they’d just get poorer. The socialist majority in Venezuela knows that US influence brings debt, poverty, violence, environmental degradation, and brutal labor abuse.

The US wants Venezuela to install a pro-capitalist government that will allow US business interests to extract wealth from Venezuela. That’s why they pretend Guaidó is the legitimate president. Guaidó was chosen by 1 of the 5 branches of Venezuela’s government according to an opportunistic, unprecedented, deceitful interpretation of Article 233 of the Constitution of Venezuela, which says: “When the president-elect is absolutely absent before taking office, a new election shall take place […] and until the president is elected and takes office, the interim president shall be the president of the National Assembly.” But was Maduro “absolutely absent?” No, he was elected by the same assembly in the wake of Chavez’s death, but Maduro’s election was upheld by the other branches of Venezuela’s government.

So the US engages in propaganda, both within the US and in Latin America, to paint Chavez and Maduro as “would-be dictators.” When right-wing coups attempt to unseat socialist leaders, if the socialist leaders retaliate or jail the coup plotters, the US media calls it “repression” and uses it as a pretense to levy sanctions.

The Obama administration levied sanctions against Venezuela in 2014, and Trump intensified sanctions in the summer of 2017. The sanctions hit poor people hardest via starvation and medicine shortages. In the words of a UN report on sanctions against Venezuela:

“Modern-day economic sanctions and blockades are comparable with medieval sieges of towns. Twenty-first century sanctions attempt to bring not just a town, but sovereign countries to their knees.”

How do the sanctions work?

CIGNA, a Venezuelan-owned oil company that operates in the US, is not allowed to send money back to Venezuela. Meanwhile, Trump’s Yosemite Sam war hawk, John Bolton, is trying to replace CIGNA’s corporate leaders in Texas to create a shadow cabinet.

Financial institutions are not allowed to make loans to Venezuela or allow Venezuelans access to their own money in US-based accounts. They starve Venezuela of capital. Without the ability to spend on investments, it’s almost impossible for Venezuela to tread water — they can’t even rely on their own oil production if they don’t have the money to invest in continued production.

Again, Venezuela might stop the inflation-devaluation cycle by floating its currency, but that would require foreign debt restructuring first, which the sanctions prohibit.

If Venezuela defaults on loans, they’ll likely lose foreign assets to seizure. If they permanently lose those assets, such as oil subsidiary CIGNA, they really have no hope of recovery.

What are the effects of sanctions?

It’s useful to compare Colombia and Venezuela, because they both rely on oil exports, but Colombia is squarely US-allied. Both countries suffered from a global drop in oil prices in January 2016, but only Venezuela suffered production shortfalls in August 2017, which was right after the US intensified sanctions.

From August 2017 to about August 2018, the sanctions cost the Venezuelan government about $6 billion.

60% of Venezuelans depend on government assistance for food & basic goods. With access to money constricted, the government cannot afford to subsidize or distribute goods anymore. Therefore, the effect of the sanctions is not to merely chastise Venezuela’s leaders; the point is to starve ordinary citizens.

If the US truly cared about ending the misery in Venezuela, they could do it immediately by ending the sanctions.

The Trump administration hopes that, if they inflict enough pain on Venezuela, people will stop supporting Chavez-style leftists and submit to neoliberalism. This has not happened as quickly as Trump and his thugs hoped.

So the US is now trying to foment civil war under the guise of delivering humanitarian aid.

US sanctions cost Venezuela an estimated $30 million per day. The rejected aid convoy amounted to a one-time $20 million gift.

Why did Maduro reject the aid?

In past conflicts, the US has used humanitarian aid to smuggle weapons and cash to right-wing militias.

This trick was a frequent favorite of Elliot Abrams, who is now Trump’s special envoy to Venezuela.

After Trump denied humanitarian aid to Puerto Rico, an American territory, and jailed migrant children in disease-ridden concentration camps, it’s fair for Venezuela to be suspicious about his intentions.

CNN claimed that Maduro burned trucks full of humanitarian aid. The story spread quickly, but it was soon debunked by video evidence. The entire humanitarian aid envoy was a stunt; the bridge they used has been closed for construction for years. The US knew it was a pointless delivery. The Red Cross and other humanitarian organizations pleaded with the US to not send aid convoys because it makes it more difficult to get aid past hostile, suspicious governments in the rest of the world.

After the rejection of the aid convoys, US interlopers changed tactics. In February 2019, an American plane was caught in an attempt to smuggle weapons and military radios to anti-Maduro forces.

Conclusion

I’m not denying that things are bad in Venezuela right now. I’m not denying that Chavez and Maduro mismanaged the economy. But I don’t think socialism or bureaucratic mismanagement were the deciding factors in Venezuela’s economic collapse. It was a murder, not a suicide.

The US has been waging economic warfare in Latin America for longer than any of us have been alive. If you parrot anti-socialist propaganda, you’re participating in a bloody American tradition.

Corporate media’s purpose is to keep our imperialist exploitation going. I’m not just talking about Fox; The NY Times and WaPo and WSJ all supported “regime change” in Iraq as vociferously as they’re now supporting it in Venezuela. And it’s still just about getting control over oil.

Time and CNBC reported that Venezuelan stores ran out of basic goods like Tylenol as far back as 2016. But an American reporter in Caracas debunked this; serious medicine shortages did not start until after US sanctions intensified. It’s routine for US media outlets to exaggerate Venezuelan problems as pro-”intervention” propaganda. In Haiti, people are starving to death right now. Haiti’s US-allied capitalist government has imploded. Why is this not in the news every day? Maybe it’s because Haiti doesn’t have oil.

There’s so much dishonesty about Venezuela because the truth is uncomfortable. Most of us in America would like the believe our own hype. We want to believe our wealth comes from having the best constitution, the hardest workers, the bravest leaders, etc. But the hard truth is that America’s wealth comes from armed robbery. We stole land from Native Americans. We stole laborers from Africa. Our cheap food depends on an undocumented underclass that’s paid less than minimum wage. The goods we buy are manufactured under slavish conditions — not only in other countries, but also in prisons here in the US and offshore for major brand-name retailers. Banking and real estate depend on unfair tax advantages that shift money from working-class people to oligarchs who hide their money in tax havens. America is an empire. I don’t think ceding power to China would make the world any better, but these are not our only options. I think the whole global capitalist system is unjust and dangerous — and beatable.

People are eating out of dumpsters in Venezuela for the same reason people are eating out of the dumpsters in Venice, CA: capitalism.

Capitalism inevitably leads to the concentration of power. It is incompatible with democracy. Capitalism requires returns on investment, meaning economic growth, meaning it inevitably extracts until there’s nothing left. It is incompatible with the sustainability of our ecosystem. I care about nature and people, so I’m a socialist.