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How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

nytimes.com

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Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#41

Post by legulere »

matt_wulfeck wrote: post #26

Venezuela is a failed state at this point. I'm more than happy to personally take them as an example of why spending big on social programs doesn't produce long-lasting social benefits. I understand many people will find a point of disagreement here. This is especially true when corruption is rife. In countries with high corruption, it seems the very best thing to do is to limit as much as possible how much money flo…

In Germany the publicly owned savings banks (Sparkasse) and credit unions (Volks-, Raffeisen- and Spardabanks) weren't affected by the financial crisis, only the large private banks were. Does that mean we should declare private banks as a failed system?

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#42

Post by currysoup_t »

drzaiusapelord wrote: post #36
joshred wrote: post #34

Earlier quoted context omitted.

Yeah, but what about the other states that spend on social programs and ended up successful? This is like throwing out a carton of eggs because one of them broke.

Having social programs and being a Socialist government are two very different things. We can have Social Security here in the States and not be Socialist. Nordic "socialism" is just taxing the rich to give to the poor. What Venezuela did was textbook Socialism which, like Communism, is a path to economic, social, and political failure as well as massive human rights violations.

I think you'll find textbook socialism are very different to what you think socialism and communism are. Do the workers in Venezuela own the means of production?

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#43

Post by bpodgursky »

binarray2000 wrote: post #29

Why can't they just ask other more friendly countries (Russia, Norway, maybe China) for the expertise in exchange for oil? Should be an easy solution, or am I missing something in my oversimplification? (And, please, don't blame it on communism/socialism; people have interests and I believe so do people in Venezuela - including those working in the government.)

> please, don't blame it on communism/socialism; people have interests and I believe so do people in Venezuela (sic)

This statement shows that you fundamentally don't understand the problems a socialist (or communist) economy runs into. People obviously have interests and incentives; people in Venezuela are people, just like people in the US.

But you can have an economic structure which helps align those incentives with productive work -- in a market economy, those running the oil industry are heavily incentivized to actually _produce oil_ and get paid for it.

When you have price controls and rampant shortages because of them, you can make far more money using your federal money to buy supplies and sell them on the black market, instead of fixing your oil rigs (because (1) you don't own the output and (2) the gas you sell is price controlled to ridiculously low levels).

If you have a government which turns a blind eye to rampant theft and cronyism, you're not even taking risks by doing the above -- it's practically condoned.

Russia, China, and Norway know that the government of Venezuela is just as likely to turn their kleptocratic ways on them, as soon as the going gets even tighter. The "state" oil industries in those countries are actually semi-private, and have actual financial incentives to not get screwed over.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#44

Post by rayiner »

matt_wulfeck wrote: post #26

Venezuela is a failed state at this point. I'm more than happy to personally take them as an example of why spending big on social programs doesn't produce long-lasting social benefits. I understand many people will find a point of disagreement here. This is especially true when corruption is rife. In countries with high corruption, it seems the very best thing to do is to limit as much as possible how much money flo…

That's probably reading too much into it. The #1 problem is the resource curse, which happens also in capitalist economies that are singularly dependent on resource extraction. Imagine West Virginia without federal subsidy amounting to 25% of its GSP. The second problem is nationalizing companies. The government sucks at operations--that's been proven time and time again.

But Venezuela's example really tells us nothing about market-oriented welfare states, like the US and much of the EU.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#45

Post by drzaiusapelord »

currysoup_t wrote: post #42
drzaiusapelord wrote: post #36

Earlier quoted context omitted.

Having social programs and being a Socialist government are two very different things. We can have Social Security here in the States and not be Socialist. Nordic "socialism" is just taxing the rich to give to the poor. What Venezuela did was textbook Socialism which, like Communism, is a path to economic, social, and political failure as well as massive human rights violations.

I think you'll find textbook socialism are very different to what you think socialism and communism are. Do the workers in Venezuela own the means of production?

I think you'll find it easy to play up No True Scotsman to help with your cognitive dissonance here. The reality is that every practical implementation of socialism uses the government as a proxy of ownership of the means of production. Venezuela is Socialist. Socialists need to own up to it. No more No True Scotsman guys, we've been playing this game since the rise of Communism. Its time to admit that certain economic systems just don't work. How much more historical proof and human suffering can you possibly need? You sound like those people who deny the moon landing. There will never be enough proof for you it seems.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#46

Post by jdminhbg »

danharaj wrote: post #31
wildmusings wrote: post #11

The wonders of socialism.

When people use Venezuela to criticize socialism, they always compare it to the most powerful, developed capitalist countries of the world. Look how poor and dysfunctional the failed state of Venezuela is compared to a capitalist country like the United States! When you compare Venezuela to those of its neighbors who are completely submitted to international capital and empire, capitalism doesn't seem so glamorous ei…

Its neighbors seem pretty glamorous to Venezuelans, who pour by the tens of thousands into Colombia to buy basic groceries when the border is opened.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#47

Post by tim333 »

nnq wrote: post #38
wildmusings wrote: post #11

The wonders of socialism.

Sincere question: HOW? I mean, even if we assume a socialist economy is terribly inefficient, like operating at 50% of the efficiency a capitalist one, it still should be enough for sustaining a resource-rich country. WTF they are doing so wrong?! Are they under intense internal or external sabotage? Corruption is so bad? I mean, this is not some mid-African country with >50% of the population illiterate, bunch of ho…

The main thing is they don't believe in market prices at the moment. For example the official USD Bolivar rate is 10:1, the market rate is 1010:1. So you need some mining equipment imported? Either spend ages on sweet talking / bribing officials to get $ at the official rate or break the law. Result: oil production screwed.

See also official food prices below production costs, empty stores and hunger.

As an aside here's an article on how things have gone in Venez vs Chile since 1975. http://humanprogress.org/blog/5-ways-capitalist-chile-is-muc...

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#48

Post by cseelus »

joshred wrote: post #34
matt_wulfeck wrote: post #26

Venezuela is a failed state at this point. I'm more than happy to personally take them as an example of why spending big on social programs doesn't produce long-lasting social benefits. I understand many people will find a point of disagreement here. This is especially true when corruption is rife. In countries with high corruption, it seems the very best thing to do is to limit as much as possible how much money flo…

Yeah, but what about the other states that spend on social programs and ended up successful? This is like throwing out a carton of eggs because one of them broke.

Sweden, Norway and to some degree Germany could be mentioned as successful examples.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#49

Post by usefulcat »

binarray2000 wrote: post #29

Why can't they just ask other more friendly countries (Russia, Norway, maybe China) for the expertise in exchange for oil? Should be an easy solution, or am I missing something in my oversimplification? (And, please, don't blame it on communism/socialism; people have interests and I believe so do people in Venezuela - including those working in the government.)

Pure speculation: the nation's infrastructure and institutions (think electricity, water, police) are now so broken that the investment that would be required is large enough and risky enough that the risk-reward ratio doesn't make sense even if the oil itself is free or nearly so. Doesn't seem too improbable given the current low market price of oil and the disastrous conditions in Venezuela.

Re: How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

#50

Post by ufo »

nnq wrote: post #38
wildmusings wrote: post #11

The wonders of socialism.

Sincere question: HOW? I mean, even if we assume a socialist economy is terribly inefficient, like operating at 50% of the efficiency a capitalist one, it still should be enough for sustaining a resource-rich country. WTF they are doing so wrong?! Are they under intense internal or external sabotage? Corruption is so bad? I mean, this is not some mid-African country with >50% of the population illiterate, bunch of ho…

A big factor is that oil prices tanked in 2014.
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