Comment by aclsid | Hacker News Reader

Comment by aclsid | Hacker News Reader

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As a Venezuelan, living in Venezuela but having lived in the US and China, I can tell you that people here enjoy some very ridiculous subsidies and have to suffer some very draconian laws, which aside from corruption, mismanagement, etc. represent the main factor of how we got here.

College is free, hospitals and medicine at those hospitals is free (quality in those places has gone down the drain over the decades, so if they can afford it, people prefer the private ones), a 37,000 liter gas truck is actually cheaper than buying a box of eggs. Govt tried to replace the gasoline subsidy with a switch to natural gas in vehicles, and the NGV was being provided for free.

On the economic laws front, since 2013, they have imposed strict currency controls, meaning that you can only buy dollars legally through a government sanctioned auction that is next to impossible to make it work, unless you are a relative of somebody there. That in turn has created a massive chaos on the supply chain, from car parts to medicine and basic goods in general. And as always with these restrictions, flourishing black market with skyrocketing prices that led to the current hyperinflation.

Oh and the vast majority of the population pay very little, if any, in taxes. They just have to "declare". Most tax revenue comes from private companies profits and the state oil company of course.

So people want to have the same socialist services as people enjoy in France without the tax rate, while at the same time you have a govt making it hard for business to operate and massive oil income to support the whole craziness. Recipe for success in the wrong way.

> College is free, hospitals and medicine at those hospitals is free

This labeling of public or subsidized services as "free" always bothered me. They aren't free. The citizens are just paying for it indirectly.

> So people want to have the same socialist services as people enjoy in France without the tax rate

Venezuela was experiencing food shortages and other issues well before oil prices crashed. Even when they still had plenty of money to bandaid these issues the cracks in the system were already very apparent.

The problems were largely a result of the fundamental flaws of a centrally controlled economy and the corruption that system opens the door to, not necessarily their ability to pay for it all.

For example, Venezuela wanted to make food much cheaper so the poor can afford it easier, so they created price controls. But historically price controls have repeatedly resulted in the opposite happening with more expensive food and shortages. Venezuela was no different.

There are plenty of reasons why, one big one is that no country produces all of their own food domestically, they have to import it, and no country is going to sell to Venezuela when they can go to Brazil or Colombia and make more money. So the government has to operate as a middleman and pay the cost difference to keep imports coming in. But this is easier said than done, as it involves plenty of guesswork and projections and micromanagement that wouldn't otherwise be there in a normal market.

It also highly disincentives local businesses from operating efficiently as their margins were gutted and they can no longer compete by winning over customers with better quality products or variety. So Venezuela started to nationalize these businesses and reduced the variety of food available to make managing it centrally easier. People were flooding across the border to Colombia to buy the products they can no longer find in Venezuela.

The same issues happened in plenty of other industries they got involved with, after Chavez announced capitalism was a dead old ideology.

Wikipedia has a good overview: https://www.wikiwand.com/en/Economy_of_Venezuela

Agreed and nice overview btw of the food situation. The main woes started because of the draconian laws I mentioned and plain ugly politics. Since the majority of the private sector was against Chavez policies, they were deemed "the enemy" and that is when the whole import lots of food movement started. That food was sold with subsidies in newly created govt stores as a way to bypass the "big bad" expensive private sector. It must be noted that the private sector also ended up trying to boycott the food supply by hoarding products to make prices go up, which is part of what lead to the whole movement.

But long story short, it is the typical situation of two sides fighting instead of reaching an agreement and compromise. The major blow to the industry came in the nationalization of an agricultural products supplier called Agroisleña, which ended up affecting farmers because the new structure that replaced it, was as effective as the Virginia DMV :).

In summary, trying to impose socialism in the economy will always be a big fail.

> College is free

As in most EU countries, even poor ones.

> hospitals and medicine at those hospitals is free

See above.

The other subsidies do seem ridiculous, but unlikely to be the main problem.

But in the EU you pay for those with your taxes, so it is self-sustaining.

It's that plus the corrupt totalitarian government. A free market country with a moderately corrupt govt can work, a mostly socialist country with a good govt can work, but when you put the management of the entire country exclusively into the hands of crooks, this happens.

Socialism mainly fails because it requires a totalitarian government to pull off in its fullest form (everything managed by the state).

I don't think that's entirely it - Socialism fails because we're not post-scarcity.

If we were post-scarcity (in the sense it's commonly meant) it would still fail, because no two desires are the same (either in actual shape/scale or desired implementation). What you want, versus what I want, will never be the same and in most cases it won't be even remotely close to the same. That's true about life ambitions and it's true about basic material desires.

You'd have to reach a state in which all people can have all/any things at all/any times. It's an impossible condition. Humanity's desire for things is unlimited (as witnessed by the last 5,000 years of development).

Conceptually if Joe's neighbor has seven boats, Joe is going to want 10 boats. That's human nature and it can't be smashed out of humanity with force and or mental conditioning. Then what? It requires infinite materialism. And that's to say nothing of the basic human desire to be different (frequently via material objects), to want to stand-out, to be unique, to own unique things, to have a unique expression, that by itself destroys the post-scarcity premise (ie there are many other factors that confound systems like Communism beyond base materialist scarcity questions). That aspect is as old as humanity, is represented even in most primitive tribal systems and it perpetually clashes with Communism's collectivist ethos (which you routinely would see in the rebellions against Communist rule in the 20th century).

The sole means for it to work, is to convert humanity into something else.

State socialism - the precursor to communism according to Marx/Lenin/Engels - does not just 'need' a totalitarian government, it also needs automatons instead of evolved primates to be implemented successfully. While 'by each according to their means, to each according to their needs' may sound fine it only works in the confines of the circle of personal acquaintances - from family to small-scale collective. Large (state) scale socialism inevitably fails because it has its feedback loops twisted: it rewards slacking and punishes those who go the extra mile. As long as the providers have social control over the consumers this can be worked around but this fails on a larger scale.

Douglas Murray wrote an article on the subject of the mysterious glamour which socialism and communism manage to retain, even though these doctrines have been at the base of several of the largest-scale massacres in the history of the world. Venezuela is mentioned a few times but he focuses on the apparent resurge of openly socialist and communist politicians in 'the west':

http://www.nationalreview.com/article/453223/russian-revolut...

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