“Prior to capitalism, the way people amassed great wealth was by looting, plundering and enslaving their fellow man. Capitalism made it possible to become wealthy by serving your fellow man.” Walter Williams May I suggest that figuring out how to provide for the needs and wants of your neighbor Read more…
How do we get enough of the respirators, personal protective equipment, and medicine we need to get through the COVID-19 pandemic?
Fascinating to watch the press conference Saturday 3/21/20 with various federal officials and members of the coronavirus task force. Most fascinating feature was looking at the various comments and questions/answers from an economics perspective. Thought about Friday’s briefing as well.
Here is the difference in perspective I perceived: do we rely on capitalism or fascism as our model to get things done?
Underlying the comments from all the federal officials is the idea that the private sector can figure out how to provide everything we need.
The common thread underlying a huge portion of the questions from media is the idea that the federal government should tell which specific companies how much of which specific products to produce, specify they price they will charge, and provide the addresses for where to send each pallet of supplies.
In other words, should we use a capitalist model to provide goods we need or should we use the fascist model?
As a thumbnail description, in the fascist economic model the means of production are owned by the private sector but the central planning authority tells companies how much of which product to produce. In contrast, the next step away from freedom is communism, in which the means of production are owned by the government and a central planning agency decides how much of each specific product to produce.
In the Soviet Union and Venezuela, grocery shopping involved/involves listening for rumors of which store got a shipment overnight, standing in line for hours, looking at lots of empty shelves, and going to the store daily to see if what you need might actually be on the shelf today.
If you have been awake the last seven days, you know that is what grocery shopping looks like in the U.S. today.
The difference between the Evil Empire and the worker’s paradise of Venezuela on one hand and the United States on the other hand is that the supply chain in the U.S. is still stocking the shelves and in a week or two or three will have them filled up.
Central planning is one of the major features of socialism. A major consequence of central planning is shortages. The widespread shortages are even more severe in the purest variation of central planning: communism.
Chelsea Follett points out The Shocking Sexism of Central Planning in Human Progress back on 12/6/17. She reports on a book How We Survived Communism and Even Laughed which explains that central planners in the Soviet Union placed low priority on many products that women needed.
Oh, Frederick Engels considered housework unmanly, so the burden of no washing machine, dryers, or other time saving devices fell on women. Severe shortages of makeup, hair dye, and even sanitary napkins (yes, you read that right, basic hygiene was not a production priority in the worker’s paradise) made for a harsh life for women.
The elections in Venezuela were stacked.
Oh, by the way, what economic system produced this human suffering? What political system produced this all-but-in-name dictatorship?
- Hints of the fraud before the election.
- In spite of polling and expectations, a mere 5 opposition candidates won a governorship.
- Oh, the few in the opposition who won are denied their position; initial reports said that government hacks were sworn into office instead.
- Four of the five opposition governors actually sworn in.
(Cross post from my other blog, Outrun Change.)
10/15/17 – Wall Street Journal – Venezuela’s Latest Election Fraud – More details on how the election results were cooked. Reporter describes more details on manipulation.
Venezuela is in danger of defaulting on bond payments in the next few weeks.
10/17/17 – Miami Herald – Maduro faces financial nightmare in Venezuela – just in time for Halloween – The government has bond payments of $1B due on 10/27 and $1.2B due on 11/2. Total due in next six weeks, which would be the end of November, is a total of $3.53B. Both S&P and Fitch are rating Venezuela as having a high probability to default within 6 months.
Here some more of the detailed numbers:
10/20/17 – CNBC – Venezuela is blowing debt payments ahead of a huge, make-or-break bill – Here is a schedule of upcoming required bond payments:
The bad news from Venezuela just doesn’t stop:
- Protests have stopped because of lost hope
- Professionals become prostitutes just to get enough food to keep the family life
- Elections for state governors finally to be held on Sunday
- Former executive of Brazilian construction company admits to paying $35 million to Venezuelan president’s election campaign
- Guess on inflation rate for 2018 is over 2,300%
(Cross post from Outrun Change.)
8/31/17 – Wall Street Journal – “Hope Is Gone” as Venezuelan Protesters Vanish From Streets – The protests have faded away. The ongoing massive arrests, torture of detainees, widespread human-rights abuses, and frequent shootings seem to have broken the protest movement. A number of senior leaders of the opposition have fled the country in fear for their life. Reports indicate 125 people have been killed and somewhere around 2000 have been wounded, with many of those people with permanent injuries.
One outside observer, who is safe because he is an American living in the United States, observers the president has gained effective control of the entire government. I think if we look at the typical definitions that makes him a dictator.
In the meantime the oppressed people of the country continue to scramble for food, trying to find enough so they don’t starve to death.
9/22/17 – Miami Herald – In Venezuela, they were teachers and doctors. To buy food, they became prostitutes. – A large portion of the prostitutes in Columbia are women who escaped Venezuela. Before transitioning to the world’s oldest profession, many of them were teachers, doctors, professional women. One brothel even has a petroleum engineer.