Friday, January 12, 2007

Catallarchy Roundup II - Chavez and the End of History

Alright - now the serious.

Hugo Chavez is set to become the de facto dictator of Venezuela. He was reelected in a landslide and is using his mandate to completely transform the country into - wait for it - yet another Socialist hellhole. I mean, you'd think - you'd really think - the world had had enough of this crap. Which is why I am convinced that there is a Socialist gene of some kind. There's a lot more evidence for this than the gay gene, I'd say. After all, there are more Socialists than gays, and Socialists manage to oppress themselves even when they're in the majority.

Catalarchy has an entry on this that I completely agree with. The basic idea is that this is a chance to shut up the annoying whiners who complain that Socialism has never had a fair chance. In particular, those who think that if only it is blessed with Holy Democracy will it work.

The case they generally bring up is Allende and Pinochet in Chile. If only, if only Allende had been allowed to finish his term, they cry, then the world would have seen just what Democratic Socialism could achieve.

Anyone with half a brain knows this is hogwash. Allende was busy running Chile into the ground when they deposed him. That, in fact, is why they deposed him. The idea that the US did this all by itself is complete bunk. There is, to date, no convincing evidence that the US was involved in the coup (though it was definitely involved in trying to sabotage Allende before the coup - especially just before and just after his election). But even if it had been, it's difficult to see how the US alone would have tipped the balance in favor of the plotters. Allende, after all, was getting aid from both Cuba and the Soviet Union. At best, US intervention should have simply evened the scales a bit. And this is, after all, the same US that didn't have the will to win in Vietnam. How it is that boots on the ground in Vietnam failed while bank payments here and there (which is all US aid would have amounted to in Chile) were able to work their magic is quite beyond me. But then, these are people who believe in Socialism - that most tried and tested of economic theories that has yet to produce a single success story - so I guess we can only expect so much from the logic department.

Anyway - Catalarchy is right that this is a second chance for Socialism. No one is going to interfere this time (assuming they even did last time), and Venezuela has more wealth (since it's oil wealth instead of copper wealth, as it was in Chile in the 70s) to spread around. Further, Chavez, unlike Allende (who only won 34% of the popular vote), has a real mandate at 63%. And Chavez has also promised to put a lot of his reforms to popular referrenda, something Allende never did. I believe he will follow through on this promise - partly because he knows he enjoys support right now and will win, and partly because I think Chavez, like Allende but more so, is sincere in his populism. Maybe he would find ways to talk around it if he didn't have public support, I don't know. But the truth on the ground right now is that he applied for this job and got it fairly, and there weren't many illusions about what he was going to do. True, he's going a bit further than his election promises already, but he's told nothing like the outright lies that Allende told going into election. At least in Chavez' case his ties with Cuba were known before the vote (he's been bankrolling that country for several yreas now and getting some of Cuba's surplus of stellar doctors in return). Allende sprung the Soviet Union on everyone by stealth; Chileans probably wouldn't have voted for him if they'd known (though they should have guessed).

So this trial run for Democratic Socialism in a somewhat developed country is even more promising for true believers than the one in Chile. If their system really works, and the excuses they've given for its stunning failures in the past are all genuine, then now is their chance to prove it.

Here are my predictions:

  • First year goes well - Venezuela is a commodity economy (oil), which means that it's hard to ruin it outright. The same went for Chile in 1970. If history is any guide, Chavez will get a good economic showing in his first year. The reason for this is that the money is "already there." Which is to say, the US produces most of the wealth that Venezuelans live on. They trade their oil to us in return for things they need to enjoy their lives. So Chavez can redistribute this happily for a honeymoon period. The immediate effects of redistributive policies in such economies are generally favorable - because it stimulates demand. You simply increase the number of people with cash in their pockets to spend, which means more goods change hands, etc. Since lots of these people are currently starving, Chavez will get a nice bonus of pictures to broadcast on television of grateful people whose lives he's significantly helped. The overall point is that the money that gets printed in commodity economies is actual real money - at least at first - so you can pull these stunts without triggering hyperinflation, as in the Soviet Union and other miserable socialist economic basketcases. The money they print represents real oil (nationalized), which is traded for real goods, so it's all aboveboard. For awhile.

  • Oppression starts soon - While the economy is doing well (better, probably, than last year), Chavez will consolidate his power. You'll start seeing an exact repeat of Chile, where gangs of ruffians start sprouting up to beat up political opponents. Just like Allende, Chavez will deny any personal connection to this, but neither will he condemn them, nor will he make a real effort to stop them. The military will be sincerely beefed up, as will the police (and the police may well be absorbed into the military). Lots of resolutions designed to increase central authority will be passed. Probably these will include things like price controls, compulory military service may be expanded, etc. I fully expect that constitutional amendment to go forward - the one that lets him run for president forever.

  • Economy tanks by year three - We have to put up with annoying socialist professors saying "I told you so" for about 3 more years. The economy will start to go bad in a year and a half to two years. Partly this will be because Chavez is shipping a lot of surplus wealth to Cuba (which he will then scale down), but more than that it's because price controls simply don't work, and neither does giving people cash for free. By the middle of the second year, real cracks will be showing. The country will have spread itself thin, and the social situation will be deteriorating. Public opinion will begin to turn, which will only inspire more crackdowns. By year three, the place will be a shambles - just as Chile was.

In short, the experiment will fail - again, just as it always has in the past. Socialism doesn't work because it can't.

Will this end the debate? Absolutely not. The unfortunate recipients of the socialist gene will just find some other excuse for why it didn't work with Chavez (almost certainly it will be mostly the US' fault), and so the cycle will spin again. Paul Krugman will keep his job at the Times. However - I do believe that history slowly approaches a better state. Venezuela's inevitable failure won't end the debate, but it will weaken the Socialist case that much more. We'll have to go through this several more times, but eventually the world will learn.

It reminds me of what Paul Graham says about programming languages:

It seems to me that there have been two really clean, consistent models of programming so far: the C model and the Lisp model. These two seem points of high ground, with swampy lowlands between them. As computers have grown more powerful, the new languages being developed have been moving steadily toward the Lisp model. A popular recipe for new programming languages in the past 20 years has been to take the C model of computing and add to it, piecemeal, parts taken from the Lisp model, like runtime typing and garbage collection.

Something similar is happening with Socialism and Capitalism. They were invented at roughly the same time - Capitalism a little ahead of Socialism. Capitalism got its trial run first, and everyone beheld it and saw that it was good. But it just wasn't the way that people were used to thinking about things. And so they continued trying to make the other model work. And this process goes through several iterations - Socialism is tried, and it fails for one reason or another, and so people try it again. But here's the catch: each time they try it, it's a little bit "less Socialist" than it was before and a bit "more Capitalist."

There aren't any more dyed-in-the-wool Socialists. That breed was laid to rest by Margaret Thatcher in 1979. It's interesting that a lot of the agitators she faced down in the 70s and 80s were more Socialist by that point than the Soviets (who were already talking quietly about reform) and the Chinese (who were already talking openly about reform). Eastern Europe was just about ready to gear up for another push at the envelope. So yes, even though the UK wasn't nearly as Socialist in implementation as, say the DDR or USSR, when I think of who faced honestly Socialist opponents, the real vanguard of the revolution, I think of Thatcher vs. the Trade Unions.

In any case, radical Socialism went with the Cold War. And it was largely gone before the Cold War's end anyway. The Soviet Union was not nearly so radical in 1991 as it had been in 1981, and less so in 1981 than in 1971. Lenin's picture was everywhere, but his revolutionary zeal was not. And that's because his policies simply didn't hold up on the ground.

At each iteration, Socialism becomes more like Capitalism. If you meet someone who calls himself a Socialist today, he's as likely as not to tell you that competiton is important, or that the free market brings benefits, sure, it just has to be tweaked here and there for "humanitarian" reasons. You rarely find people today who think that factories should be directly controlled by workers, or that there should be no differences in wages for different jobs, or that the government should put everyone on a rationing system. These ideas are still out there, but they hardly form the backbone of "Socialist" thought as they once did. Now, "Socialists" recognize the need for hybrid systems. And when these systems fail to outperform freer systems, they'll recognize even more of a need.

And we'll go on repeating this process until the world gets it right. Just languages based on C get gradually more like Lisp with each generation, Socialism gets gradually more like Capitalism with each generation.

We had it right in the early 20th century. The world had an ideal economic system staring it in the face. But then we mucked it up. And now we'll just keep mucking, I guess, until we realize that.

Well, Chavez is the next class volunteer to demonstrate for us why central planning is moronic, and why, in fact, people really are individuals, and not "citizens" or "comrades" or whatever else. We'll watch this drama play out, and it will suck for the people who have to live through it.

But I take some small comfort in knowing that this one will suck a bit less than last time, and so on and so on to the End of History.


At 2:56 PM, Blogger Noah Motion said...

With regard to step one, I read somewhere that Venezuelan oil-cash is mostly being spent on consumer goods rather than investment, so, even without the march toward socialism, the wealth there is unlikely to last.

With the socialism, of course, it will fall apart even faster.

At 5:26 PM, Blogger Joshua said...

Consumer goods build a capital base for those selling them, though. This is why commodity economies can get away with the appearance of success with Socialism at first - as Chile did during the first year of Allende's presidency. Since the money represents real stuff (i.e. oil - or, more pertinently, the imported goods from abroad they buy with their oil money), they can use it to stimulate demand (i.e. entice people to buy consumer goods), which is generally good for the economy. Of course, none of this means a damn if the stimulated economy is being systematically mismanaged, as is about to happen with Venezuela to great pain.


Post a Comment

<< Home