Venezuela: History Tends To Repeat Itself, Or I Hate To Say It, But I told You So

When Hugo Chavez first came into power I remember hearing a joke. The joke is not particularly funny, but it says a lot about what most people, mostly Cuban Americans, thought at the time. The joke goes like this: Two Venezuelan businessmen are discussing Chavez's rise to power. They are discussing the future of their respective businesses and one says to another "I am considering moving all my operations to Cuba." "Cuba!?! Why in the world would you do that?" says the second. "Because Communism is ending there, but it is just beginning here."

It has been quite sometime since I first heard that joke. Communism is still going strong in Cuba, Raul taking the helm notwithstanding. However, the sharp turn left (south?) for Venezuela continues. Isben Martinez writes the following in the Library if Economics and Liberty:

I live in a Latin American neo-populist petrocracy.

For the last decade, my government's economic officials have pledged themselves to the "comprehensive, humanist, endogenous and socialist development of the nation", whatever that means.

Perhaps that gobbledygook just means that in Venezuela it is much easier to fetch a bottle of premium Scotch whisky at any low-income neighborhood's supermarket than a bottle of milk, a pound of sugar or a dozen of eggs. Paradoxically, the local branch of Audi set an all-time Latin American sales record during 2007 by catching a 22% share of the region's luxury cars market.

He goes on to say:

Consider breakfast. My breakfast, to be exact. It's been months since I have had an oatmeal breakfast or a nice cup of espresso with a drop of milk because coffee and milk has literally vanished from supermarkets' shelves since last November. And that includes "Mercal", the government's supermarket network where the poor are supposed to buy food at subsidized low prices

The reason? Stiff price controls, of course, and fixed currency rates that have been going on for 5 years, too.

Be sure to read the full article.