Caracas Chronicles

or, the bolivar bond market is soooooooooo boring…

So Justin’s whole argument dissolves into what people used to call vulgar Marxism – the assumption that economic positions in society mechanically and automatically dictate people’s political position. The rich are against Chavez because Chavez stands against their interests. Anything else is pretext or rhetoric. Moreover, since material position mechanistically determines political positions, Justin actually has a clearer understanding of why Teodoro Petkoff or Miguel Henrique Otero think the way they do than Teodoro or Miguel Henrique.

Good! It’s a position that fits neatly into the logic of Chavez’s central idea. A neat, morally satisfying ideological position. A position so neat and tidy it does away with the need to consider actual evidence.

Actual evidence, as we know, is boring. The Venezuelan public bond market, in particular, is a source of nearly limitless boredom to a good first world revolutionary. So it’s maybe not surprising that Justin hasn’t quite inquired into the dynamics of Venezuelan bolivar denominated public debt since 1998, the way it’s grown more than six-fold in bolivar terms, coming to take up as much as half of banks’ loan portfolios, setting off an interest-rate spiral, and – incidentally, becoming a huge, massive free lunch to the nation’s barriga-verde oligarch bankers.

But wait, it doesn’t make any sense! How could a government run by someone that talks like Chavez run a financial strategy that ends up yielding a massive redistribution in favor of oligarch bankers? This is not in the chavista script! It falls entirely outside the logic of his ideas. It is not explainable within the frame of reference of chavista ideology. Therefore, Justin’s reaction is to assume, as a matter of course, that this must not be true. It cannot be true. It runs counter to his ideology – and when facts run counter to ideology, what does an ideological thinker say? Peor para los hechos…

Yet if he took a bit of time to look through the private banks’ financial statements since 1998, he’d notice that while small and mid-sized businesses have collapsed en masse, while over half of industrial employers have folded, while informal employment and unemployment rise to the stratosphere, the banks wallow in pools of government cash, free money generated by the sky-high interest rates generated by the government’s hyper-aggressive borrowing stance. This is, if you’re willing to look at it objectively, a huge transfer of resources from small and medium employment-generating businesses to huge financial interests. However pretty Chavez’s speeches might be, this is the actual legacy of his government.

Interestingly, almost all the bankers who’ve benefitted from this manguangua are virulently opposed to Chavez. Because they have interests, but they also have values, ideas, principles, and – just as importantly – children and grandchildren. Money is nice – but as any banker can understand, it doesn’t do you any damn good to have money in a country with 13,000 murders a year, where you can’t go outside at night and where it seems like a civil war could break out at any second.

The danger in exchanging the necessary insecurity of critical thinking for the total explanation of an ideology is not even so much the risk of falling for some usually vulgar, always uncritical assumption as of exchanging the freedom inherent in man’s capacity to think for the strait jacket of logic with which man can force himself almost as violently as he is forced by some outside power.