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 flows from the top, which is another way of saying limit federal government spending.
Venezuela is a case study in corruption, authoritarian dictatorship, rampant interference from outside states, and a multiple decades long brain-drain due to the aforementioned factors.
this should not be held up as ANY KIND OF EXAMPLE whatever re: the efficacy of social safety net programs. it's simply a non-sequitur. the fact that you're even attempting to link them at all speaks poorly as to your own understanding of the situation and reveals your ideological agenda.
I really don't get it. This sentiment always pops up on here when Venezuela is discussed. In the Chavez era, the ruling party pushed through rule by decree, suffered a military coup, purged the opposition, tried to set up their leader as dictator for life... and the lesson we should take away from the resulting chaos is that big spending on social programs doesn't produce long-lasting benefits?
Are you sure you don't get it? This stuff pops up because some of the community here are ideologues trying to score "points" off of this, regardless of whether or not it is appropriate of the situation being discussed. Any excuse to push for more tax cuts.
I guess I either assume they're sincere, or if not then they should at least be aware enough to realize that it's a bad argument. I realize this assumption may not be very well supported, but it can be hard to adjust.
Yes points. And perhaps there's a larger discussion about what the role of the federal government should be is now discussed in our daily lives, not just hacker news, with such topics as student aid debt forgiveness, basic income, mandatory health care, etc.
And also maybe it's an example how power can be purchased with social programs.
Also points. Gotta get those points. I hear someday I'll be able to cash them in for bad karma debt forgiveness.
valid things to discuss. while doing so you might want to start form the point of having an actually relevant example to draw from? why would you attempt to use Venezuela for that discussion? Are you honestly trying to assert that Venezuela's social safety net programs are _really_ what went wrong there?
> an example of why spending big on social programs doesn't produce long-lasting social benefits.
which is not a statement of opinion, but rather, is an unjustified assertion that conforms with your ideological agenda.
an opinion would have been something like "I prefer to vote for politicians that are fiscally conservative because I don't think the government has a good track record of implementing positive social change with spending programs"
but that's now what you said or how you said it. instead, you implied that social programs ANYWHERE AND EVERYWHERE are comparable in some meaningful way with a failed state that collapsed under the weight of corruption and authoritarian dictatorship.
And the economic policies were tremendously popular and would likely have persisted in a carefully designed democracy that did not specifically prohibit them. I don't see the authoritarian nature of the government as being a root cause. Democracy doesn't automatically make price controls (including currency controls) less disastrous.
That just seems to lend weight to the idea that there was a lot more going on and blaming it all on social programs doesn't make sense. Unless you're lumping price and currency controls into the "social programs" category?
I don't think anyone in this thread is blaming it all on social programs. Even the opening post mentioned that corruption was largely to blame.
If you want to get into discussions on socialism, one might ask the question whether nationalization of industries presents an opportunity for corruption or if socialist ideology can present a cover for kleptocracy. It looks a lot like that's what happened in Venezuela.
You're right, it's not all. Still, I don't get why it's even brought up. Seems like authoritarian government, nationalization of industries, and general screwing about with market forces would be far more important.
Or are people just equating nationalizing the oil industry and making it illegal to get money out of the country with "social programs"?
I would describe land redistribution as radical revolutionary upheaval of established order. In my view this is not worth the damage to the social fabric it causes. It's an intrinsically violent thing to do, even if no shots are fired. It can only ever occur under conditions of extreme duress. "Give us your land or we kill you". Not a good approach to positive social change.
Taxation is the more reasonable way to do this. It is also confiscatory but it does so in a way where the level of duress is much reduced, and representation, agency, and participation are possible.
I would offer a provisional definition of a social spending program as a program with humanitarian goals that is funded by taxation. Land redistribution is not taxation (just pure confiscation) and so doesn't meet my definition of social program.
Maybe you think I'm just making a semantics argument and splitting hairs but I think its a meaningful difference. Land redistribution is the classic case of "peasant uprising gone bad".
There are only roughly 28 nations on earth with a GDP per capita over $20,000 for example.
I happen to find what the six or so best managed welfare states in Europe have accomplished, to be impressive. However, for every Sweden in Europe, there are two Bulgarias. Or there's France, which has seen economic stagnation for nearly a generation. Most of the well-managed welfare states have seen zero or near-zero economic growth for nearly a decade at this point, while their debt has exploded vastly higher as they try to fake-maintain their present standard of living by stealing from the future.
Look this is pointless argument. Same way we could argue that small government, sovereign citizen, libertarian meritocracy leads to Somalia.
There is a continuum of social systems that can work, and whether it works mainly depends on confounding factors. History, culture fit, geography, neighbours. E.g. Sweden's been an empire most of its history; Bulgaria has been a colony. Check their performance in historical cohort perhaps? Sweden vs Turkey and Bulgaria vs Tajikistan?
Chavez' Venezuela system is well beyond the "habitable range" of governance. To present it as some condemnation of West European welfare states is ridiculous.
Well, how many fall in the opposite category? Isn't it pretty much a bell curve?
And their debts are so high because they had to bail out a deregulated finance sector, which caused a recession and major spike in unemployment, how is that a fault of a welfare state? You might as well argue the financial sector "stole from the future" by creating a decade long downturn. Quite the opportunity cost there.
How is this different from the US practice of issuing ever more treasury bonds to pay back the maturing treasury bonds? My point is that borrowing from the future is not limited to welfare states (unless you consider US to be a welfare state.)
Using social expenditure in % of GDP to measure its "cost-effectiveness" is problematic, as there's wide agreement social spending has a big impact on GDP. (Structure of the spending is the other big variable of course)
We pretend there are clean examples, but everything is pretty messy, and we rarely get any pure test cases for any economic philosophy.
Macro is black arts. "Avoid price controls" and "don't print boatloads of money" seem like reasonable guidelines. Beyond that, who knows? Corruption's bad but hard to stop. Moving risk around is (sometimes)* bad but hard to stop. Shrug and try not to do anything too extreme.
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?
OK then, which countries in the world are or have ever been socialist?
The point isn't that the "textbook" definition of socialism is bad. The point is that every single real world attempt at getting to socialism has been bad, so why wouldnt future attempts run into the same problems?
It's a bit of a straw man to present failed socialist-in-name-only states when critiquing socialism. If someone were to bring up the Democratic Peoples Republic of Korea as an attempt to critique democracy you'd rightly scoff.
I'll freely admit there have been numerous failed socialist states. Very few self-proclaimed socialist states have even attempted to implement socialism. Many who claimed to be socialist were destroyed by capitalist states[1]. Some attempts for free states have been crushed by other self-identified socialists[2] but it's of course impossible to know if these groups would be socialist in the long term. Socialism is inherently horizontalist, which means it doesn't fit into the model of centrally controlled countries, making it very hard to achieve for any extended period of time.
The only current socialist experiment I'm aware of is Syrian Kurdistan, Rojava, which is trying to promote a co-op based economy based, while reducing the damage private ownership can do.
Imagine you tried to have a capitalist revolution in feudal Europe. Can you imagine that would go very well? Probably not. It's easy to see why capitalism is an improvement over feudalism, but it's hard to comprehend how long it took to get there. Similarly socialism, if it is ever achieved, is probably going to fought against by the established order tooth and nail. This is certainly no excuse for the failures and crimes of vanguard communist parties[3]. All this humble fellow would ask is people take the time to educate themselves on what socialists actually want before presenting critique.
[1] This category is almost beyond enumeration, Reagan Doctrine, Guatemala, domino theory, Vietnam, etc. etc. etc.
[2] My history isn't great but I believe these count: Revolutionary Catalonia, the Black Army, Kronstadt rebellion, there are probably more, especially in relation to the Russian Civil War of 1917-1922
[3] As an aside, I don't believe vanguard parties are the way to go
"It's a bit of a straw man to present failed socialist-in-name-only states when critiquing socialism. If someone were to bring up the Democratic Peoples Republic of Korea as an attempt to critique democracy you'd rightly scoff."
It's a bit of a straw man to present failed attempts at cold fusion when critiquing cold fusion itself.
Communist revolutionaries genuinely did attempt to implement socialism. The fact that so many failed should make one question the wisdom of attempting their approach.
Perhaps the fatal flaw in socialism is only in it's revolutionary nature and a more conservative approach in it's implementation is warranted? Interesting hypothesis, but I'd like to see more data.
"Imagine you tried to have a capitalist revolution in feudal Europe. Can you imagine that would go very well? "
I dunno, I believe that's usually called the Industrial Revolution.
Your point about referencing socialist revolutionaries is indeed part of what I'm going for, and is why I'm very reluctant to align myself with vanguardists, but we're not discussing the efficacy of revolutionary socialist parties. I meant precisely what I said, if a state is socialist-in-name-only, then how can you compare it to an actual socialist economic model. If these countries we're discussing ran a system of worker ownership, that I'm simply unaware of, then I'd love to be provided with some names so I can study their history.
European feudalism was over by about ~1500, the Industrial Revolution started in about ~1750, but it certainly makes for a cute soundbite. People on the left often cite the enclosures[1] in England as the beginnings of capitalism. Laws such as vagrancy[2] laws were in place to force people to work, land which was previously agreed to be communal was taken into private hands. If you consider this to be a 'capitalist revolution' then it could easily be argued
[1] This has a lot to do with the lefts definition of capitalism, which I recognise is not universal so enclosures being the origin of capitalism isn't an argument which is likely to be fruitful, especially on HN.
> The point is that every single real world attempt at getting to socialism has been bad, so why wouldnt future attempts run into the same problems?
The problem is that "every single real world attempt at getting to socialism" has been inspired by the same ( bad ) implementors, using the same ( bad ) mechanisms, without anyone trying to implement socialism from scratch by going back to the source of the ideology as opposed to looking at other dictators who used the premise of socialism to get into power without actually caring about socialism itself.
Venezuela is a corrupt place with socialism being implemented as a means to launder money as opposed to implement social safety programs, it's the same as the "Democratic" Republic of Korea or Congo.
Capitalism wouldn't really help a corrupt country like Venezuela, but Socialism was making some good progress in another Latin American country... Nicaragua, weren't it for the Contras.
The rest is history.
I would call Norway socialist. Not because the government owns everything, but because society distributes a large fraction of all earnings. Note, defacto tax rates are what's important. Greece may have a high nominal tax rate, but nobody actually pays it. The US has a 15% tax rate on capital gains irregardless of what the nominal top tax rate is. Further, the US pretends Social Security is not an income tax.
By comparison the USSR, China, and North Korea all pay / paid some lip service to communism, but if you look at the people at the top it was not even close to communism.
PS: The real world is complicated. If you promote revolution you generally don't get whatever the revolutions talking points where.
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.
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.
Wait, what? There are numerous countries with the resource curse; the typical result is, "wow, they're not growing as fast as they could"; it's not "so devastated that people have to hunt for rats in the street".
Even Saudi Arabia -- which does redistribute oil wealth like Venezuela and is far from the enlightened Norweigian policy -- is smart enough not to draw down the seed corn.
And are you seriously claiming the only thing stopping West Virginia from this kind of downward spiral, is free highways from Uncle Sam?
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?
Germany wasn't being propped up by a single resource that was seized by the state. They are far more reliant on a capitalist system than Venezuela ever was during Chavez' reign. The comparison is absolutely silly.
The Large Banks are a failed system, evidenced by when they failed and were bailed out and the illegal practices of HSBC, Wells Fargo, Deutsche Bank, JPMC, Goldman etc
I suspect anyone from the Netherlands or Norway/Iceland might disagree with you there. The issue with Venezuela is almost certainly not socialism, but chronyism and good ol' fashioned corruption.
Chavez's "Bolivar Revolution" was a farce to get rid of his opponents and seize power as a strongman. In that, he succeeded. When the price of oil was high, it worked. Now, well... His legacy is a once great nation left in ruin, and many desperate people. It is sad stuff.
It's really hard for me to imagine an austerity program making life better for Venezuelans.
There's also plenty of history of corrupt right-wing governments with market economies in South American that were just as miserable, so I'm hesitant to say social programs did this. There are plenty of social democratic governments around the world that aren't corrupt failed states.
> 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.
Different markets have different needs. I disagree with socialism for all things. There are some things, where i think it's the best system we have. Air quality is a good example. Everybody needs air and it's hard to separate mine from yours. So, collective ownership with collective decisions about how much pollution is to be allowed makes sense to me.
Remember when the far left held Hugo Chavez up as the paragon of modern socialism? People pleasing in a petro-state is easy when oil is $150+ a barrel.
That's a good point. It's easy to bring a lot of good to a lot of people when there's a lot of money to be made from a lot of natural resources.
It's also easy to let "just a little" corruption ride along as a political price for getting things done.
Problem is, "just a little" corruption always becomes "a bit more" corruption and then "way too much" corruption. And while the good and the corrupt engage in battle royale for limited resources, the poor and hungry are soon forgotten.
Plenty of nations with high federal government spending do fine, plenty of nations with low federal spending do badly. On the whole, high spending is correlated to better outcomes.
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 flows from the top, which is another way of saying limit federal government spending.