Americas, Venezuela, Opinion, Politics

The Problem with Democratic Socialism in Venezuela

Democratic Socialism is literally just socialism, and this particular term was not really in flux until fairly recently within the United States and some parts of Europe as well. Indeed there are social democracy movements around Europe, yet some of them fall well short of having actually anything to do with socialism. Some of them are literally like the Democratic Party in the United States; essentially a corporatist movement, slapping the ‘socialism’ label on themselves in a vain attempt to have youth appeal, in a sort of “Marx is a splendid guy but communism goes too far” way.

Look at the term that we are thinking of, or more specifically, ‘democratic socialism’. What does the f**k it actually mean? Socialism within the bounds of a democracy? Is any representative system that adopts socialism is a democratic socialist system? Sounds very family friendly, doesn’t it? Well, yes, but we need to be very careful around family-friendly terms when used in a political context…

War on Terror.
U.N ‘Peacekeepers’.
A coalition of the Willing.

Sadly, terms such as these usually mean the opposite of what they are. Think of a nation that is technically a democracy and also under a socialist system; it’s called Venezuela! Of course, Venezuelans don’t use that term, the government would much prefer to call themselves ‘Cheveztas’ or something similar along those lines.

Similarly, Bernie Sanders and people akin to him, do not want you to compare his unique, American version of socialism to the policies of Venezuela. He would rather you compare his doctrine to the first-world Scandinavian nations, rather than the failed states in the third world that adopt far-left agendas. This is what Bernie Sanders wants you to think of when he talks about Democratic Socialism; he wants you to think of Sweden. He thinks fiscally when it comes to his branch of socialism, as he does not want to scare off the centrist politicians and voters in the United States who are worried mostly about money, their job, and taxes.

Ultimately, he wants centrists to look at Sweden and take heed in their free healthcare, education and childcare policies which sound like a wonderful world doesn’t it? The problem is, it will never work in the United States, simply because it is not actually free. To carry out Sander’s vision of utopia, the tax rate would have to be amped up significantly across all brackets, and most importantly, the taxpayer would not be the one deciding what to do with that money.

Another problem with socialism we see after it enters its ‘late stage’ is exactly what we see in Venezuela. The government of this country absorbed more and more of their taxpayer’s money, gobbling up most of the people’s productivity, before planning what to do with their centrally acquired wealth. Not surprisingly, it was redistributed in the form of healthcare, whether it was free or subsidised or to a chain of government subsidised supermarkets; in other words; products that are reduced in cost, or free on the backs of the productive classes of Venezuela. Initially, things in Hugo Chavez’s Venezuela were going just fine, as they had high productivity, oil prices were historically through the roof; being their mono-cultured productive asset of their economy in the first place, thus making a killing off all of their natural petroleum.

Thus, as long as the oil sales went well in Venezuela, everything was fine and dandy in Chavez’s socialist paradise. Conversely, when a socialist nation experiences an economic downturn in the later stages of its development, it then experiences layer upon layer of bureaucracy, tax increases, and state handouts. What then happens is that country then strangulates itself?

Within the democratic system of socialism, it is not possible in many cases for the nation to actually transfer out of, or even temper, the socialism that it has gotten itself into. The lower, and many cases, the middle class have become reliant on the handouts that the government is giving out; so when it can no longer fund these things it simply goes into debt and it hyper inflates. Venezuela’s problem was not only the oil price collapse, it goes well beyond that. Not only did the price of oil collapse; they did nothing to diversify their centrally planned, rigid economy, seldom making investments into infrastructure. It appears that socialism is the main symptom Venezuela’s problems, don’t you think?

About Peter Mossack

Peter is the CEO of Kinstream Media, and he manages the editorial board and day-to-day operations as the publisher of CrowdH. He’s a tech and news junkie, and an avid social media analyst who’s always on the lookout for new stories to cover. He has been an entrepreneur for the past 20 years and he’s now dedicated to change the news, and the world!

All Articles