Socialism’s grim end game is ever closer to playing out in Venezuela.
The late anti-capitalist, anti-American strongman Hugo Chavez bequeathed to his hand-picked successor, President Nicolas Maduro, a legacy of nationalized industries, neglected infrastructure, corruption, overspending and heavy-handed state intervention, resulting in inflation exceeding 1,000 percent and shortages of food, medical supplies — even toilet paper. And now, CNNMoney reports, Venezuela’s central bank says Mr. Maduro’s government is down to its last $10.5 billion in foreign reserves.
It’s all happened in, and to, a nation so wealthy in natural resources — Venezuela leads the world in oil reserves — that only a governing philosophy as ruinous as Mr. Chavez’s “Bolivarian socialism” could have brought it so low. With about $7.2 billion in debt payments due this year and foreign-currency income from oil exports — which represent more than 90 percent of all Venezuelan exports — off sharply along with global petroleum prices, the specter of default looms ever larger over Caracas.
That means things are likely to get worse for suffering Venezuelans before they get better. Yet Venezuela’s bitter lesson is clear: Don’t emulate its approach.
As Forbes contributor Tim Worstall, a fellow at London’s Adam Smith Institute, puts it, “Maduro and his posse” have “just ignored everything we humans have learned about supply, demand, markets and prices.”
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Socialism’s outcome: Venezuela on default’s brink,