XIIIth Century Socialism

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So far we haven’t commented much on chavismo’s batty new Law on Fair Costs and Prices – mostly because it’s too depressing. Criticizing the economics behind it in detail would be farcical, like a point-by-point scientific refutation of the idea that a cow can jump over the moon.

Suffice it to say that the law is medieval, and not in some overheated, rhetorical sense, but as a straightforward matter of intellectual history.

Flipping through the advice Caracas lawyers are having to issue to their clients about it, it’s hard not to fall into a complete morass of despair. The new law regulates all prices. Not just of products for sale to final consumers, but of intermediate goods too. In all markets. For all producers. And this is presented as a means of…fighting monopolies!

The net effect here is to erase what was left of the difference between a state owned and a privately owned firm, to dissolve the distinction between them. Chavismo has been walking down this road for a long time, weaving a regulatory straightjacket so tight around the private sector that virtually no decision of any importance is left to nominal owners. This law closes the circle, hollowing out the concept of property to a point where to own a business becomes indistinguishable from working as a compliance agent for a state regulatory agency.

At this point, what’s sad isn’t just that chavismo never really grasped why the “real socialism” of the 20th century could never compete with the dynamism of the capitalist west. It’s that they don’t have the tools in their intellectual toolbox to understood why Feudal Societies couldn’t hold off the capitalist order that replaced them.

1 COMMENT

  1. Interesting that you use the term feudal several times. That is also the term I have been using lately describe Venezuelan society as a whole.

    When I hear the Chavista honchos I wonder in what kind of coma they were since they were born. Basically they say things such as “socialism died in the Soviet Union because bureaucracy killed it”. That’s what Jesús Farías, former PCV member and now PSUV, said. That is also what pseudo-intellectual Britto García has declared on several occassions. They don’t know further.
    What this actually means is that they are pissed off with some employee at Cadivi fo not approving their dollar quota on time and that they are very angry because they are having problems with their Internet connection. That, they have figured out, must have been what killed their wet project in colder climates.

    Venezuelans came from the Middle Ages and suddendly found out
    a substance called mene is allowing them to get cargo, lots of it, and that mene is somehow theirs because – so the military legend goes- a guy called Bolívar made it possible.

    Within these Middle Age people there came those who read the first 3 pages of some communist book and keep trying to explain the world through those now ear-marked pages, of which 1 is probably missing. Their knowledge about history is weaker than that of the New Guinea tribes of 1930.

    • It’s not unconstitutional to poop in your pants either, and yet you will find most people avoid that strenuously.

    • You cannot write a constitution that is foolproof. The world will always invent a bigger fool. By making the world safer for fools, all we are accomplishing is to breed even more foolish fools.

      • You are right, a constitution cannot be foolproof. But, how did this happen? The government passing legislation against private property (2000-2001), overthrowing the elected government only to bring it back 3 days later so it recovers some of their popularity (2002), call for a general strike so they recover ALL their popularity that leaves us losing the referendum revocatorio (2002-2004). After that, we can’t accept the fact that we lost so we stop doing politics and give away the National Assembly (2005). And after that it just became a horror movie in political sense (TSJ all PSUV exept for one lady, CNE all PSUV except for one guy, Consejos Comunales corrupted and partisans, ley de precios justos, and stop telling). At the same time, countries from the international community rendering pleitesy to Chavez. I can see Russia, China, Cuba, North Korea, Iran, etc., trying to partner with Chavez. What really hurted was to see the Chilians, the Spanish, and many other countries for Center-America denying the grant for political exiles. That is a shame (http://webarticulista.net.free.fr/vzlachilespana.html)

        “La comunidad internacional no debiera permanecer impasible ante este asalto a mano armada a la democracia venezolana, a la que tanto le deben. Dos presidentes democráticos están próximos a visitar nuestro país: José Luis Rodríguez Zapatero, de España, y Ricardo Lagos, de Chile. La opinión pública venezolana tiene todo el derecho a preguntarse si vienen con el fin de legitimar este estado de cosas, a aceptar los suculentos negocios con que el caudillo pretende comprar sus anuencias y a terminar por blindar la apariencia de legalidad de un régimen que hace ya tiempo traspasó la raya amarilla de lo permisible, o si, por el contrario y de acuerdo al pago de una gravosa deuda contraída en tiempos de sus dictaduras con nuestra democracia tomarán nota del perverso estado en que se encuentran las libertades públicas en nuestra patria y darán pie a las iniciativas que los demócratas venezolanos esperamos de ellos.
        (…)

        Por su parte, un Rodríguez Zapatero que parece no tener razones para agradecer lo que la democracia venezolana, y muy en especial AD, hicieran en su tiempo por el PSOE y la democracia española, tendrá razones de peso – digo de pesetas – para sacarle a la esquilmada Venezuela petrolera tantos euros como sea posible, poniendo en venta su chatarra armamentista”

        Spain sold the Venezuelan government much of the tear gas they use everytime a student is protesting, or a retiree is claiming for a pension. This is something we should never, ever forget.

        I deviated a little bit but in conclusion, I prefer to say that the constitution sucks because in reality I want to hide the fact that we suck and our “friends” from the international community suck even worse.

    • Good Constitutions limit the powers of government. Primarily to safeguard the rights of citizens.

      Secondarily, to avoid the self-destruction of government through the cancerous growth of useless and unenforceable laws.

      This sorry freak is unenforceable, abortive. It’s worth less only than the (used) toilet paper on which it should have been written.

      Our Constitution should protect the rights of citizens, and also prevent such stillbirths.

  2. I cannot wait for these idiots to come to our factory. I can guarantee there will be “offers” to “be gentle” on our cost structure in exchange for “future considerations”.

    I’d love to be there, but unfortunately cannot. I will ask my partners to give me a rundown of how it goes, warts and all.

    Here I thought we’d invest a couple of million dollars in new machinery this year; at this point until we see what’s what that decision will have to be put on hold. Now, I feel I should address them thus:

  3. These morons cannot even control a prison, how can they dare to think of controlling even the smallest detail in each and every factory, shop or market? And these guys pretend to have everything set up and running in 3-4 months? Is that remotely possible?

    I guess these guys are going to enforce in a few companies they’re interested in – Polar, perhaps? – while the other company owners will sigh, alleviated because it was not their turn and will try to negotiate with the government.

    It’s gonna be like the other time with the butchers/tv channels/oil companies/etc all over again…

  4. Like all recent chavista laws and actions, it’s intended to fulfill two purposes:

    (1) to reduce the amount of money that could go into funding an oppo presidential campaign by strangling the private sector.

    (2) to increase the amount of money for the Chavez campaign either directly (fines for companies who “break” the law) or indirectly (by encouraging corruption of officials who will be later coerced into “donating” money for the campaign).

  5. I wonder if the geniuses that propose that Socialism could work with enough computational capability would take into account that the same computational capability can be made available to individual economic actors. Supposing you had a theory capable of predicting human behavior, algorithms and computers sufficiently powerful.

    If anyone else avails themselves of the theory and predicting algorithms, the system will include now most of the former interacting elements who are ignorant of a tool to predict the behavior of the rest of society and an element or actor that is intelligent (sophisticated) and can possibly use the knowledge to gain advantage.

    Suppose enough actors avail themselves of the theory,algorithms and computer. They will be using the theory that is supposed to predict their previous blind behavior… Well, the theory ceases to be useful as we deal with a different system.

    Of course I should not underestimate the levels of delusion of minds who cradle the illusion of total control, who conceive of closed societies where no one but a secretive elite produces and possesses computing power/scientific knowledge.

    • I don’t think the communists intend to go that far. They seem to think market pricing is analogous to a huge worksheet. Plug in the price of the goods you buy and the price of labor and running costs, and you can calculate your price by adding a percentage. That gets then plugged into the cost of goods of other cells together with their labor and running costs, and they can calculate their prices by adding a percentage.

      They seem to believe that the worksheet need only be large enough to have a cell for every seller of good or service. They wouldn’t include factors such as need or desire or market fluctuation, basically because those are all things with which they wish to do away, new men, no capitalism, and all.

      All I can say to true believers of such proposals is that that’s giving yourself a lot of work for something that can be done much more easily, and saving yourself the overhead of keeping the worksheet updated. But, I know, to them it’s more about zookeeping the animals rather than letting the animals roam free.

      • Still, they ignore the fact that human society is composed of human individuals with human intelligence.

        And human desires too, even if they did those away, I cannot imagine how! Some of the most important desires are determined by very reasonable needs of living beings, to survive and procreate. These needs are bounded and limited by the laws of physics. No, it’s not about luxury goods you don’t “need”. It’s about putting food on the table and the laws of nature.

        Or that human society might actually, I don’t know, might require all that intelligence to keep things going as we recognize them and progress then.

        That means that a worksheet or a deterministic algorithm is out of the question.

        If some idiot says that it would work if everyone was sincere and objective about their needs and capabilities, reported them wholly to a central authority, and that somehow this could be factored into prices, I would counter that only robots, devoid of motivations, strategy, or brains at all would willingly do that. Another matter is that they would be able, to assess their own needs and capabilities that depend on uncontrollable factors.

        Then, there’s the fact that you cannot know everything about a complex system. Then, there’s also the fact that there are random events. This is the “chaotic” part.

        Maybe they want a society of ants or similarly unintelligent beings that can however produce something and report faithfully and opportunely on their needs and abilities. But even then, natural randomness would destroy their calculations.

        • “only robots, devoid of motivations, strategy, or brains at all would willingly do that”

          Exactly, their “new man” requirements. Either that, or the use of persecution and shunning. They want to be zookeepers of everyone else…

  6. How long until everyone is herded into anti-competitive guilds? FDR tried this and it does not work. Not to mention a total infringement on freedom.

      • I really don’t understand. I’ve tried it in all kinds of browsers and it looks very nice indeed.

        Send a screenshot!

        Better yet, upgrade your browser from Netscape 1.0 or whatever paleolithic thing it is you’re using…

        • When you’re through being a smartass, FT, you might reflect on the fact that we’re not all Mac users like you. Try viewing CC on a PC, using various updated browsers. (What? You didn’t do usability testing?)
          Then also check the differences in layout/font between the english and spanish versions of CC. In English (Trebuchet?), there are font size discrepancies between posts (a little too small), comments (good size), and Recent Comments (a little too large?). In Spanish (Verdana?), the font size is consistent and proportional throughout the site, but outside of the headings, the main bodies have a font size that’s too small. Also, in the Spanish CC, the headings for Previous Articles don’t have enough space, or need to break up the words at the appropriate places (I can’t recall what’s that called in websitetinkering101 — carriage return?).

        • “I really don’t understand. I’ve tried it in all kinds of browsers and it looks very nice indeed.”

          This from Mr. Poll manipulator hisself.

          Or you don’t think we noticed the cut and paste job you did on the results?

          Seriously FT, it seems like Firefox on Windows machines makes it look bad.

    • I cannot stand it either ! I come here much less because of it. Of course that might just one more reason why some might like it 🙂

  7. On top of this stupid law they have also approved the rent control law which obliges property owners to rent with no security deposit & a minimum of a 3 year contract..

    With the difficulty of removing tenants I would guess that just about will kill the new rental housing market. Good job!

  8. When was it that the government ordered the new exchange control rules, but Cadivi failed to implement or define the rules for 3 months? As a consequence nobody could import or export during that time and the country was facing impending shortages until the rules finally came out.

    Depending on how the government enforces the compliance of rules that have not yet been defined, Venezuela may expect a similar scenario until the government just decides to hack a bunch of emergency exemptions to allow products to be actually sold on the market.

  9. I just want to say to all comunism bashers out there… the frame of reference you use to um, DESCRIBE ANY AND ALL PARTS OF ECONOMIC SOCIETY, is a comunist frame of reference.

    booya, go Anarchy.

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