Iraqi threats over the deployment of additional Turkish forces in Northern Iraq not only add another layer of complexity to the war against the Islamic State, they are reminiscent of the struggles the US faced in its efforts to provide for Iraqi security and work with Iraq’s highly dysfunctional leadership. With this and contradictory accusations over airstrikes against the forces of the Assad regime threatening to broaden the conflict, it is difficult to pivot away from the Syrian Civil War. The decisive victory of Venezuela’s Democratic Unity coalition, however, represents an opportunity for constructive engagement in South America that cannot be ignored.
The Obama Administration has been willing to ignore long-standing grievances against the governments of Myanmar, Cuba, and Iran to mend fences and try to jumpstart progress in these nations. Where a lack of “regime change” has sparked backlash in President Obama’s previous efforts, the shift away from the so-called Chavismo movement and its socialist policies create a clear-cut opportunity for the US to explore renewed relations with the South American oil producer.
More importantly, the potential opening of the Venezuelan economy makes it far more attractive for the United States to pivot back to its own hemisphere and reengage a continent full of neglected issues. That said, change will take time in Venezuela. Venezuela’s new political leaders and their foreign suitors must, therefore, tread softly as they seek a capitalist revival in this long-time socialist country where capitalism has been used to justify great wrongs by the wealthy.
Since the death of the often-confrontational socialist President Hugo Chavez in early 2013, there has not been a beloved figurehead capable of pacifying the growing unrest rooted in the unfulfilled promises and failing policies of the Chavismo socialist revolution. Where the high-valued oil reserves of the South American country offered Chavez an easy and plentiful source of revenue that could be used to fuel massive socialist programs, yet insufficient to meet all the interests of the Venezuelan People, Venezuela suffers from the shortcomings of an idealized socialist economy.
The structural problems of the Venezuelan economy have, of course, only become more apparent with the collapse of oil prices.
Through various conversations with South Americans, this writer has discovered the capitalist versus socialist struggle is still very much alive in South America. Faithful socialists and communists believe the rich are nothing more than thieves and should be killed for their crimes against humanity. The purist capitalists of this Cold War-era world, however, still insist the impoverished should willingly accept their lot in life. They even proclaim the lives of common people would be far worse without the self-serving capitalist policies they have pushed.
What both radical perspectives have failed to do is recognize that capitalist policies can be designed to either enrich or impoverish the many. They have also failed to understand the intellectual distinction between capitalism and socialism is useful, yet the real world depends on public policies that share capitalist and socialist traits. Frankly, capitalism and socialism are nothing more than economic philosophies that determine how a nation governs its economy. Capitalism and socialism can both be used to justify enriching the few and impoverishing the many.
The fault of any socialist economy is that the political class is empowered to manually distribute wealth to the population. Because politicians are pressured to appease the whims of their constituents in order to stay in power, among other issues, it is far harder to distribute wealth, e.g. financial capital and other resources, to areas of the economy that will increase productivity while developing new sources of capital for the economy. In other words, socialist countries focus more on consumption and far less on production. This fault, of course, also exists in capitalist economies when the wealthy elite engineer the economy to cater solely to their own interests at the expense of all others.
Although an easy cure for poverty can be an alluring possibility, socialist governments discourage productivity and create stagnation, even as unaccountable, corrupt government officials enjoy the privileges of wealth. In theory, a democracy with a pure socialist economic system would further empower the people; however, government inefficiencies, stagnation, and corrupt elements of government result in the very opposite. A pure socialist state should force out some of the best qualities of humanity, but the practice of pure socialism leads to corruption, the disenfranchisement of the People, and a loss of freedom.
On the other hand, a pure capitalist system can easily create a narrow concentration of wealth that restricts the flow of money and leads to the inevitable collapse of an economy. “Free market” proponents like Ayn Rand failed to recognize that capitalism must serve the interests of the People in order for it to be useful and acceptable to any given society, because they were so focused on combating the harm socialist policies can do.
In other words, the downside to socialism is that it gives the government too much economic power; whereas, the downside to capitalism is that it can give the wealthy too much economic power. Because the economy affects every aspect of a person’s life, the consolidation of economic power is the consolidation of power over the People. As the distribution of wealth narrows, i.e. income inequality grows, the more disempowered the majority of People become. Due to the nature of money, a lack of distribution translates into a lack of circulation of wealth and resources, i.e. the collapse of a formal economy.
As exemplified by the 2008-2009 global recession, the shortcomings of capitalism can quickly lead to a push for far-reaching socialist reforms and can turn a society away from the benefits of capitalism. Capitalism cannot survive when it leads a population to financial ruin or disenfranchises an entire People. This is a lesson that the newly elected leaders of Venezuela would be wise to learn, especially since their economic woes will take years to fix. In fact, Venezuela’s economic woes will probably last longer than the patience of the Venezuelan People.
A lack of jobs, a skyrocketing cost of living, and a failure of government responsiveness created the political outrage that swept Venezuela’s new generation of political leaders into power, yet democracy will not immediately solve Venezuela’s problems, which rich capitalist countries also face. Like the US, Venezuela’s economic problems can only be solved with solid people-centered economic policies that strengthen the Venezuelan economy through years of strong, broad base growth. Too much impatience on behalf of the Venezuelan People and a lack of faith building in capitalist policies by political leaders will only perpetuate the failures of the Venezuelan economy.
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