Foreign Policy Politics

AOC & Bernie’s proposals are not a roadmap to Venezuelan dictatorship

This will be a short post as compared to past writings where I’ve tried to build longer arguments about more complicated topics. My argument here is much simpler: Alexandria Ocasio-Cortez (AOC) and Bernie Sander’s ‘brand’ of socialism is not the same as Nicolas Maduro or Hugo Chavez’s full-blown socialist dictatorships.

Donald Trump and the Republican Party have made it clear that they intend to make this loose connection between people like AOC and the Venezuelan dictatorships of Nicolas Maduro and Hugo Chavez. Trump is using the turmoil in Venezuela as a political messaging ploy to scare the public into thinking that the paths of universal healthcare and affordable college will lead to riots in the streets. This is an outright mischaracterization of AOC and Sanders and should be fought against vigorously, as some have already done.

It is important for people to understand the differences between the two visions of how society should be structured. By drawing a clear picture illustrating how Venezuela found itself in its current situation, it will make a clear distinction between these true socialist dictatorships and left-leaning policy proposals espoused by lawmakers like AOC.

The real reasons for Venezuela’s current downturn

For years now Venezuela has seen such a dramatic economic contraction due to a confluence of events from a drop in the price of oil, to expropriation, to net outflows of foreign direct investment. Add to these events growing authoritarian tendencies, as Chavez and Maduro exhibited, and a country’s stability can deteriorate quickly.

Oil in Venezuela

Venezuela’s economy runs on oil. Currently, oil accounts for 98% of Venezuela’s exports and 50% of its GDP. It has one of the largest oil reserves in the world with an estimated 302 billion barrels of oil. Even with a large deposit of oil, Venezuela still suffers from troubling structural woes.

Many of these woes began when Hugo Chavez rose to power in 1998. When Chavez was elected president, there was already a state-owned oil company PDVSA (Petroleum of Venezuela) which was created after Venezuelan President Carlos Andres Perez nationalized the oil industry during an oil boom in 1976. PDVSA is responsible for producing oil or having large stakes in projects initiated by any private oil company that operates in Venezuela.

Using the massive revenues from state oil exports, Chavez was able to expand social services for the poor. However, tieing these programs to oil revenues was risky. It required consistently high oil prices to fund these programs and subsidies. If the price of oil fell, these promises of helping the poor would be hollow from a lack of funding. Disregarding the risks from his actions, Chavez (as many before him) continued to tie the Venezuelan economy and his programs to oil revenues.

Expropriation

A staple of a true socialist regime is expropriation, or when the state seizes the operations and assets of private industries within the country. Venezuela, especially under Chavez, is no exception.

In 2010 alone Chavez expropriated a staggering 200 companies. Companies expropriated included everything from a local agricultural-supplies and credit firm to an American based bottle manufacturer.

The results of expropriation generally lead to sharp declines in foreign direct investment (FDI). As this chart shows, FDI in Venezuela compared to one of its neighbors Colombia has been low.

While the pros and cons of FDI and capital flows can be mixed, FDI can help local communities gain business networks and investment otherwise lacking in a state-run economy. It is clear that expropriating 200 private companies in 1 year is antithetical to promoting a humming economy.

Oil prices and production sink

Over the last few years, oil prices have plummeted worldwide. After a high of $114 a barrel in 2014, they have sunk significantly to as low as $36 a barrel. For a country like Venezuela that relied so heavily on oil to fund its social programs, this was not welcomed news. Gaping holes in the Venezuelan budget from declining oil revenues, along with other factors, have led to decreases in services, skyrocketing hyperinflation, and a contracting economy.

Chavez also contributed to a slump in oil production. In the early 2000s, he fired thousands of experienced PDVSA workers who had taken part in a strike in 2002-2003. He then replaced these workers with incompetent political appointees who gave Chavez more control of the oil producer while depriving it of the technical experience needed to keep oil production high.

Textbook moves toward dictatorship

Chavez also started Venezuela on the path to dictatorship. Along with his consistent practice of expropriation, Chavez ended term limits for the presidency, increased control over the country’s Supreme Court, and intimidated the press.

Then in 2013, Hugo Chavez died and Nicolas Maduro came to power. From there, the deterioration of democracy quickened. Maduro was repressive. He censored or imprisoned political opponents, stacked courts, and oversaw elections deemed unfair and undemocratic by international observers. The same few years oil prices dropped, giving Venezuela a shrinking economy, Maduro was initiating his road towards full-blown dictatorship. And the rest, as they say, is history.

All of this leads me to make the clear distinction I wrote this piece for: Alexandria Ocasio-Cortez, Bernie Sanders, and the left-wing of the Democratic Party are not .

AOC is not Chavez

Venezuela’s problems are not a result of anything remotely similar to policies proposed by AOC, Sanders, or quite frankly many people running in the Democratic Primary.

Venezuela didn’t spiral into dictatorship because Chavez proposed universal healthcare, affordable college, or a Green New Deal to wean off fossil fuels. It deteriorated because of excessive expropriation, its nature as a petrostate (a country with an economy predominantly focused on producing oil), creeping authoritarianism, incompetence, and a host of other factors.

I do not believe Bernie Sanders and AOC want to expropriate private industries on mass as Cesar Chavez did in Venezuela. They are not seeking to curb the press. They don’t want the government to imprison political rivals, and they don’t want to end free and fair elections. They want a more robust Federal Government for sure, but not a socialist dictatorship.

Socialism as a conservative boogeyman

Republicans are clearly drumming up the old boogeyman of socialism strictly to scare the American people into voting for them. This so-called connection between the debate over Medicare-for-all and socialist dictatorship in Venezuela is clearly disprovable, but the GOP has never been a party that cares if it’s proven wrong.

Their hypocrisy is also potent here.

They are the party that disenfranchises Democratic voters across the country. They want to fight against dictatorships while at the same time making it harder for people to vote in this country.

The GOP is also currently undergoing a project to stack the lower courts. First, they held seats open during Obama’s presidency and have been filling those seats with jurists from the ideologically driven Federalist Society like the “judges…are on a conveyor belt.” A real threat to democracy in America today is not the debate over the government’s role in the healthcare sector, but the GOP’s constant attempts to curtail democratic institutions in America.

Final Thoughts

I want to be clear that I’m not a die-heart AOC or Sanders supporter.

I think they have a great grasp on the problems facing average Americans today, much more than the GOP does. But sometimes I think they should give more attention to areas of contention surrounding their policies.

I don’t think they talk enough about the trade-offs a plan like Medicare-for-all will have. Voters have expressed in recent polling that they are wary of things like private insurance being eliminated with a Medicare-for-all plan, or wouldn’t support a plan that raised their taxes. I also don’t think Bernie Sanders does enough to distinguish himself from the very socialist dictators conservatives try to pin on him.

All that being said, AOC and Sanders are not socialists dictators. Every attempt by the GOP to group them together is dishonest and hides several actions taken by Republicans to harm democratic institutions. The current issues in Venezuela are not examples of what happens if policies proposed by the American Left are implemented. They are proposals, still being debated in the Democratic Primary, that make a case for larger government action in the face of rising inequality, expensive healthcare, and the existential threat of climate change.

Sorry. So much for a short post…

Harry
Please comment on any post if you want to have a discussion about the topic. I would love to engage in meaningful conversations with people, but will not respond to negative comments, or ones made in bad faith.

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