How Socialism Destroyed Venezuela

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Many in the media have blamed Venezuela worsening humanitarian crisis on corruption, mismanagement, falling oil prices, or U.S sanctionsโ€”anything but the rise of socialism in what was once the wealthiest country in South America, but truthfully, socialism destroyed Venezuela.

Yet corruption and mismanagement were the direct result of increased government control of the economyโ€”socialismโ€”and in reality, lower oil prices and U.S. sanctions have little to do with the crisis. Instead, the mass starvation and exodus faced by Venezuelans are the natural consequence of the socialist policies implemented by dictators Hugo Chavez and Nicolas Maduro.

There are three main policies implemented by Chavez since 1999 that produced the current crisis: Widespread nationalization of private industry, currency and price controls, and the fiscally irresponsible expansion of welfare programs.

One of Chavezโ€™s first actions was to start nationalizing the agriculture sector, supposedly reducing poverty and inequality by taking from rich landowners to give to poor workers. From 1999 to 2016, his regime robbed more than 6 million hectares of land from its rightful owners.

Nationalization destroyed production in affected industries because no government has the capacity to run thousands of businesses or the profit motive to run them efficiently. Instead, government officials face incentives to please voters by selling products at low prices and hiring more employees than necessary, even when thatโ€™s the wrong industry decision.

Socialism run rampantโ€”not cronyism, corruption, falling oil prices, or U.S. sanctionsโ€”caused the crisis in Venezuela.

As economic theory predicted, as state control of the agricultural industry increased, Venezuelaโ€™s food production fellย 75%ย in two decades while the countryโ€™s population increased byย 33%. This was a recipe for shortages and economic disaster. After agriculture, the regime nationalized electricity, water, oil, banks, supermarkets, construction, and other crucial sectors. And in all these sectors, the government increased payrolls and gave away products at low cost, resulting in days-long countrywideย blackouts, frequentย water service interruptions,ย falling oil production, andย bankrupt government enterprises.

Read full article on E21 at Economics21.org

The Thinking Conservative
The Thinking Conservativehttps://www.thethinkingconservative.com/
The goal of THE THINKING CONSERVATIVE is to help us educate ourselves on conservative topics of importance to our freedom and our pursuit of happiness. We do this by sharing conservative opinions on all kinds of subjects, from all types of people, and all kinds of media, in a way that will challenge our perceptions and help us to make educated choices.

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