This is a joint post between yours truly and Daniel Duqenal because we think that this interview of Moises Naim in El Nacional is an excellent vision of what has happened and is happening in Venezuela. Nothing really that Daniel or myself have not written in one way or another, but Mr. Naim says it as clear as it is possible. You can read the Spanish Original here (by subscription) or here.
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The current situation in Venezuela is as complex as the words of Moisés Naím are clear and strong . His unmistakable style has always been lucid during his long career in international political economy. Today, he talks about the consequences of the policies implemented in the country, rather than recommendations for their solution because he is convinced that the President will maintain his devastating policies. “Chavez will not hear anything different from what he believes, even though reality sends him strong signals that he is wrong.”
– What is the economic diagnosis of the country? –
The same as that of all Venezuelans. What more needs to be said of a country that has simultaneously extraordinary oil revenues and the highest inflation in the world? Not even African countries without governments and devastated by war have higher inflation than Venezuela. What can we say about the management of a country that has the largest energy resources in the hemisphere but that forces its people to live in a constant nightmare of blackouts and electricity rationing? A country whose policies have the effect of driving massive amounts of capital overseas and the its best trained people, and whose government gives to other countries and without anyone’s’ permission the nation’s wealth while the vast majority live in misery? The cruelest irony of all this is that the President who claims to be the best at understanding the situation and the suffering of the poor is the one that has imposed the most devastating policies for those same poor. There is no “mision“, grants, gifts, subsidies or other handouts that he can give to poor Venezuelans, that can offset the impact of the combination of inflation, unemployment and murders in which he has condemned them to live.
– Capitalism or socialism, market or state? –
I believe in a strong state and that it executes well the things that the market and the private sector cannot do or should not do. Police, justice, defense and so on.
The market will not solve education, health, or the insecurity of people in the neighborhoods. That has to be done primarily by the state. But to be effective, the State must be selective. It cannot do everything. The Manichean debate between state and market, between capitalism and socialism is a waste of time and serves only to deceive the unwary. It is obvious that it takes both. It is not one or the other, but how to cleverly combine government and market.
– What do you think is the most serious problem in the economic sphere? –
There are many and they are all well known. But perhaps one of the main mistakes President Chávez has made is to fall in love with an economic model that depends for its success on this country’s scarcest resource: efficient government officials. When the President nationalizes companies right and left, they are handed over to officials who don’t have the faintest idea of how to manage such activities. And what we’ve seen is that despite the efforts and good will, or sometimes simply because of laziness or corruption these nationalized companies quickly collapse. And if the government officials are efficient, why distract them, forcing them to produce sardines or operate cement industries? Top officials should be put in charge of the public functions that are a priority for the country, those that if are not carried out by the state no one else will perform. If the state does not produce sardines, rice or cement, others can do it. But if it does not ensure that people are not kidnapped or killed when returning from work, then who will? Protection and personal safety is a service that the rich can buy from the private sector. But the overwhelming majority of Venezuelans depends on the government to protect them and their family.
For Venezuelans it matters less who is the owner of this or that company, than the fact that their children are being murdered on a daily basis while the President does not seem to be too concerned.
– What will be the result of all these policies? –
When a credible accounting of what has happened in Venezuela in these last ten years is carried out, we will discover that we lived through one of the most important episodes in the economic history of the world in terms of wealth destruction, loss of productivity and waste of resources that the country desperately needed to lift people out of poverty. Many wars have produced less material damage than the economic policies of these times. Today there are more murders in one weekend in Caracas than in Kabul.
-If you had the power for deciding measures an taking decisions on economic matters, what would you do?
One of the paradoxes of the situation we find ourselves in is that it is not even worth talking about what should be done on economic matters. What good is it to talk about the devastating effects which has the fact that the Government steps with one foot all the way on the accelerator of consumption , while at the same time pushing strongly on the pedal that brakes the supply. It maintains an aggressive monetary policy and massive public spending which stimulates consumption , while at the same time and almost daily it announces decisions that cuts the supply needed to satisfy the booming consumption. We see how the President constantly thunders against speculation and corruption only to follow his laments and threats with measures that everyone knows boost speculation and provide even more lucrative opportunities for corruption. He claims to suffer for the poor while his Government has become a very efficient poverty producing machine.
–Do you think the Government will abolish the capitalist system and replace it with a socialist system? Do you think it will be able to achieve it?
I only know what the President of the Republic says. And Chavez is sincere, repetitive and emphatic with that. Why should I not believe him when he says he hates capitalism and adores socialism? It is one thing for us not to like it, but it is something else to refuse to listen to what a leader say. Until now he has maintained all of his promises on matters of public policy, even if the policies don’t work and lead him not to failure regarding his promises about results.
-Why do you think the President is so committed to policies that have not worked?
Because he suffers from ideological necrophilia. He is in love with dead ideas. I don’t know what are the psychological motives that lead him to be in love with a vision that he has proof that has not worked anywhere. And he does not need to know history. It should be sufficient for him to see what is happening to him and the country. At the beginning, the socialist promises and the rhetoric of resentment, racism and revenge gave him political dividends, but the bet on fundamentalist socialism has not been won by anyone in the world. At the end those attempts have always created immense human suffering and the political failure of the fundamentalists that promote them. I don’t know if the love for those dead ideologies that the President has are chronic and addictive. Perhaps he will fall out of love with those bad ideas that he is infatuated with once he finally realizes that things are not working. But for now that love has blinded him. It is a pity that millions of Venezuelans have to pay the immense human costs engendered by Chavez’ blind passion.
-How do you judge the performance of the Venezuelan opposition?
With frustration, understanding and hope. Frustration, because it is difficult to see how it makes mistakes over and over again. Understanding, because the opposition to strong regimes is always fragmented, clumsy, easily sabotaged by the regime and prone to score goals against itself. And hope, because there is no doubt it has matured and learned from its errors. It is admirable to see the persistence and disposition of many in the opposition to continue their fight despite the risks that implies. How dangerous and costly is to be part of the opposition and how easy and lucrative it is to be Chavista! And it is quite revealing that despite this there is opposition everywhere: in the universities, high schools, the workers movement, the business sector, the farmers and cattle ranchers, in the world of culture and science. From the statements of some military that we have read recently in the press even in the Armed Forces. And even within Chavismo. Even the Cubans that come here end up being anti-Chavez.
–What are your projections for the parliamentary elections?
That the opposition will have more representatives in the Assembly that at any time during the Chavez era. It will be interesting to see how he will adapt to a situation in which he no longer controls everything and everyone, all of the time. The muscles you don’t use for a decade become atrophied. And the President has spent too much time without exercising the muscles that allow for the reaching of compromises with those that do not share your ideas, the negotiation with opposition politicians and the search for agreement with other social forces. All of this is known in other countries –and was known in the old Venezuela– as democracy…
The Devil's Excrement 
May 19, 2010 at 5:03 pm
JC, it may shock you to know that there are few Capitalist country in the world, and certainly none of them are first world nations. Pure capitalism does not work.
While Canada is largely a capitalist nation, it has many goverment run institutions. For a while Bell, which was the main provider of land line phones, TV and and cell phones at the time, was goverment run and got chopped up and privatized in the later part of the ´90s. I forgot which province nationalized auto insurance. Healthcare is nationalized thoughout the country, and I’m not talking just insurance. You have wellfare, and many other socialist institutions on top of it. Even the US has some anti Capitalist initiatives such as subsidies.
Your claim that Canada is capitalist is therefore false as it engages in many socialist practices, goverments involvement in the market is heavy via regulations, subsides, and goverment run businessess.
May 19, 2010 at 1:35 pm
Rafael,
Believing in a strong State, in the context Naim was using it which has to do with LA and the third world, has nothing to do with Socialism or Capitalism.
The definition refers more to strong vs ineffectual State.The latter is the rule in most underdeveloped countries.Without a basic structure and ground rules even Capitalism cannot grow.
In the US context where there is already a functioning structure, when you refer to strong State it implies ” more interventionists” or ” bigger government”.That is a totally different world.
May 19, 2010 at 11:52 am
Naim doesn´t understand why chavez loves a vision that hasn´t worked in other places. He misses the strategy of chavez. chavez only used the money and economic changes to gain popularity. He has no plan or desire to improve the economy of Venezuela. He doesn´t care about the economic condition of Venezuela or the condition of the people. He will rule by force not popularity. Unfortunately the vision that chavez follows has worked well in China, Cuba, North Korea, and other places. He wants power and the money from the oil to be a big international player. A country that has driven out the educated and motivated is simpler to control by force. And tough living conditions like outages and shortages work well to force such people to flee to other countries. His economic concerns right now are not about Venezuela but getting dollars for his use.
May 19, 2010 at 9:21 am
Merida, it may shock you to know that Canada is a capitalist country. If you like Canada, you like capitalism. Better face up to it.
May 19, 2010 at 8:06 am
“For once, I would like somebody, when asked the question “Capitalism or socialism, market or state?”, to answer what they are really saying: “capitalism” ”
All those opposing Chavez aren’t strong believers in capitalism. Capitalism to me is just as flawed at it’s core as communism is. Finding that important balance is what I believe works. Maybe it is because I am a Canadian, having seen our health care system and what they have in the US, and I am happy our goverment is deeply involved in our health.
Yes, here in Venezuela the public health care system is a bust, but I feel some form of public health care is needed. To see the US get their knickers in a bunch over what Obama and his administration passed seems nuts to me.
And this is not going into our regulations on our banks. Canada weathered they latest economic crisis better then most countries, and that is due to our regulations placed on our banks.
Goverment controls, and the goverment fully controling some things just makes sense. Prisons should not be privatized for example. Capitalism is not what I want, and I don’t think it is a cop out for him to state that he doesn’t believe in a capitalist system all the way, I just think it is a belief that disagrees with your vision.
May 18, 2010 at 11:55 pm
“The bet on fundamentalist socialism has not been won by anyone in the world. In the end, all these attempts have created immense human suffering and the political failure of the fundamentalists that promote them.”
The operate word here is “all.” The hardest thing for many to grasp is that this is the plain and literal truth. It’s not an idea or evaluation.
Bottom line: Chavez style socialism has and never will do anything but bankrupt a country and punish its citizens. By refusing to believe that fundy socialism is in fact impossible to sustain, Chavez is mortgaging the countries future. I’ve said it before: If any country could have pulled off fundy socialism, it would have been East Germany, with managable corruption, high education and Germanic discipline. And they failed entirely.
Juancho
May 18, 2010 at 9:33 pm
“He is in love with dead ideas”
+100
I feel so ashamed of my own country…
Have anyone noted here, that whenever we go abroad, when a taxi driver ask you: where are you from,? and you say: Venezuela!!…
a sarcastic, subtle and evil smile appears in drivers face.. and tells you: … “AHHHH, CHAVEZ….. ja..ja, you are so funny Venezuelans”
Very humiliating..
May 18, 2010 at 8:22 pm
I think there’s some interesting comments from Moises Naim in the interview, something that could be noted is that if Hugo was to be a part of this interview, it would have ran for hours … days? and if Hugo was only to read the responses, there is very little the autocrat would accept as constructive criticism.
There’s plenty that he would simply label as being part of the ______ whatever is his hate mostly reserved for today.
full points for “ideological necrophilia”
May 18, 2010 at 4:13 pm
Bilis Negra,
For someone who uses “Bilis” as a first name, you sure have strange quibbles about rants.
I would suggest we have this discussion over at CC and not hog Miguel’s hospitality.
I would only say that mine is not a “gratuitous rant.” I would characterize it as an extremely interesting, well written, thought provoking, against-the-current rant. 😉
May 18, 2010 at 3:55 pm
JC: I am puzzled with your gratuitous rant against Naím here and in CC. It is not my intention to defend him or anything like that (I don’t even know the guy in person), but I can’t understand why you infer that he has nothing to say at all because he didn’t say anything we don’t already know in some interview in El Nacional. He wasn’t asked to give a lecture or to submit a ‘paquetazo’ proposal for recovering the economy. I think that the value of the interview lies precisely in the fact that the ‘intellectual’ and senior pundit confirmed something we all know: diagnosis? “The same as that of all Venezuelans” Of course this is obvious and is exactly the point that the oppo should use to gain seats in the Assembly.
Besides, your suggestion that he is a ‘coward’ subservient to the opinions of his ‘leftie’ friends because he didn’t formulate the problem in your own terms of black-or-white-us-versus-them-terms-capitalism-or-socialism is uncalled for and damages your own credibility as a serious analyst.
May 18, 2010 at 2:17 pm
Kepler, Borges is a politician, Naim is an academic, an intellectual. The standards we should hold Naim to are much higher than that, which is why you should check out my latest post.
May 18, 2010 at 11:01 am
I think one fragment resume the results of the Chavez regime:
Nothing can avoid: “…the impact on the poor of the combination of inflation, unemployment and murders in which it has been condemned to live.”
The mix of capitalism and socialism as Naim say is the existence of an efficiently State that takes care of Police, justice, defense and health.
Even more, if you have a wealth economy, with a majority of Middle Class, you can reduce a lot of the State’s action on health policy; by mix it with private systems in combination of efficiently Health Insurance Companies.
The only I am not agreeing is in the good intentions of Chavez as Leader. I think Chavez plot a fraud with socialism as smoking curtain. Now Chavez family is one the wealthiest of Latin America, and near all Barinas State is their farm. Like I said before, this is “stealsialism”.
May 18, 2010 at 10:44 am
In reality almost all Venezuelan politicians are afraid to publicly say other things that anyone, whether centre, right, left, blue, pink, up or down, should recognise: price of petrol (yeah, we all say it in blogs), overpriced Bolivar last year, etc.
Juan, I think the strong state is much more difficult to explain within the framework of Venezuela (or the Americas in general) than “no more free petrol”/stop subsidizing the rich who buy cheap dollars.
I remember you got mad at Borges because he said that simplistic thing about the devaluation. He said that either because he had little economic knowledge or – more likely – for populism.
Was that less cowardly than this? I don’t know.
One way or the other, I haven’t seen a single politician or thinker in Venezuela with cojones: either regarding the overvalued currency
or the price of petrol or anything else.
I hope one day the discussion in Venezuela gets more nuanced than “right” or “left” and that does not mean necessarily “centre”
What do you mean by “capitalism”? What do you mean by socialism?
Limiting the discussion to slogas as “I am for …ism”
is at this stage no more sophisticated than
this:
May 18, 2010 at 9:15 am
Deanna,
Nobody disputes we need a strong state. His non-answer is simply a way of avoiding the question he was being asked. He should have responded what he is really saying, that he believes in capitalism, but perhaps he was afraid of offending his leftie supporters in Washington, DC. It is an exercise in cowardice.
May 18, 2010 at 8:42 am
His statement in believing in a strong state is strange when reading the rest of the text. He believes in the government regulating industry but not doing what others would do. Which in others terms he does not believe in government being a producer, quite different than believing in a strong government implies.
May 18, 2010 at 8:29 am
Jasmine, Rafael.
I think it’s a disservice to have stopped reading the interview after Mr. Naim’s answer which began “I believe in a strong state…” Beyond that sentence, I believe that he does tell you what the state should be strong in, i.e. police, justice, defence. His analysis of the situation in Venezuela is excellent and I don’t really think that one person alone can give economic solutions to the present disaster. As to state vs. market, there has to be a balance of both, as Mr. Naim mentions; this has been the struggle that the US as a democracy have gone or is going through since its existence and which now is in danger of the government having too much control in spheres that should be determined by the market.
May 18, 2010 at 8:06 am
I could not get much further beyond where you stopped Rafael! As a very recent reader of this blog, I stopped reading and started to investigate comments on the post!
May 18, 2010 at 7:35 am
“That the opposition will have more representatives in the Assembly that at any time during the Chavez era.” Ugh, what a lame answer.
Miguel, kudos to you for translating this interview, but my admiration for Naim has been pared down quite a few notches after I saw his sorry performance against Insulza in this debate,
http://miguelangelsantos.blogspot.com/2010/04/debaste-en-cartagena-el-ayer-07042010.html
May 18, 2010 at 7:30 am
For once, I would like somebody, when asked the question “Capitalism or socialism, market or state?”, to answer what they are really saying: “capitalism”
May 18, 2010 at 7:23 am
“I believe in a strong state”.I stopped reading after that comment.No wonder Venezuela is in trouble.You guys think that “Socialism lite” is the way to go & keep facilitating Hugo Chavez’s agenda.