Historical trends as revolutionary achievements

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Chavista deputy Aristóbulo Istúriz was heard today mouthing off about how Venezuela’s income distribution, the less unequal in Latin America, is a revolutionary achievement, only possible thanks to Hugo Chávez’s leadership.

Two things about this:

a) It’s probably true that Venezuela has the continent’s least unequal income distribution.

b) It’s pretty much been this way since the mid 80s.

I think the graph speaks for itself. In case it doesn’t, here is a breakdown: the Gini coefficient measures income inequality. The lower the coefficient, the less unequal a society is.

Venezuela has been at or near the bottom of the pack when compared to other large Latin American economies for the last 25 years or so. This has a lot to do with two things: oil, and poor distributional policies in other countries.

Why, notice that in 1993, the apex of neoliberal Venezuela, the Gini coefficient reached quasi-Finnish levels!

If we wanted to fall into this debate with Istúriz, we could point out to him that Chávez’s Venezuela is more unequal than CAP’s.

That’s assuming it’s even worth debating these stooges.

HT: Indexmundi.com

1 COMMENT

  1. By the way, Indexmundi puts the 2009 index at 41, so there should be a small dip after 2006 for the Venezuela line. I don’t know why the graph didn’t include that data point.

  2. Good post. Juan: it is worth debating against them, not with them.

    This is what I keep repeating: Venezuelans left or right, bottom or top, need to understand the meaning of a political debate. It is NOT to convince your enemy. It is for a public to see as best as possible a real-time fight of ideas. So: yes, we must put forward this. We must challenge Chavismo to hold permanent debates outside parliament, invited some international mediator or the like and challenge chavismo to come forward.

    One of the problems we have is that journalists have no idea how to put things in perspective. So: they repeat the numbers they get, but they don’t analise those numbers. This has to do with the fact most journalists just studied “comunicación social” or something like that.

    As we discussed via email: inflation. Chavismo says inflation was highr during Caldera II. What they don’t say is that it was lower than in other Latin American countries back then.

    Take child mortality. It is – if stats are not manipulated- lower now than in 1990. But then: the rate of decrease has kept absolutely constant, could be described with a linear function.

    etc etc.

    We need to show this to the general public; how do we do that? Not by talking about that in Globovision but by challenging Chavista honchos through flyers everywhere to hold monthly debates live, with neutral moderators. Worst case scenario: that we don’t know how to speak and then we can only blame it on ourselves. Second worst case scenario: that Chavistas reject those conditions. In that case we win by default.

  3. Here’s another curious thing about these measure: anyone else notice how periods of dramatic drops in inequality coincide with periods where it’s not been clear which exchange rate one should use? Recadi + Cadivi anyone?

    Makes you wonder…

    • In fact, does anyone even know how the GINI is calculated in Venezuela? And I’m not talking about the formula, I’m talking about the values used in the formula, like the income at the different levels of society. Somehow I doubt the TSJ’s bono gets counted in there. Or the money earned in “commissions”. Or the drug trafficking, for that matter.

  4. I have vague memories from high school about GINI coefficients being extremely finicky tools, and particularly ill-suited to international comparisons. The data requirements are steep, the coefficient’s sensitivity to junk data is high, and small differences in data collection practices can cause wide swings in the outcome. GINI coefficients are theoretically interesting, but the empirics are anything but straightforward.

    (c.f., Fco Rodríguez’s idiot spat with Weisbrot over whether you include zero-income households in your GINI calculations – the kind of recondite technical issue without a straightforwardly right answer that can have a massive impact on your results depending on how you choose to go about it.)

  5. So the GINI was lower the day Lieutenant Colonel Chavez attempted the coup in 1992 than it has been for President Chavez’s entire term in office?

  6. It’s always worth getting the facts, and understanding the context. To this day, here in Canada, people tell me that, while Chavez might be a dictator and all, he really did reduce make Venezuela a more equal society. The Gini graph, despite methodological uncertainties, shows that for the most part, that’s not true.

    • And don’t forget, it’s all but proven that they are fudging the data. They’re not as good at that as, say, Argentina, but they’re sure trying.

    • Well, technically, that *is* true. During the Chavez years, inequality has gone down. It’s just that his accomplishment is similar to that of Luis Herrera and Lusinchi, i.e., not much at all.

  7. In a recent video chat in El Universal, Puzkas used data which showed, contrary to what we have been led to believe, that class E has actually gone up in terms of percentage of population during the chavez period! Not sure where he got his data, but I was shocked.

    • Dirty little secret: there is no consistent definition of Class A, B, C, D and E in Venezuela!

      All pollsters and several government agencies use the 5-class breakdown, and call the five classes A, B, C, D, and E. But each has different and conflicting definitions from the others!

      Until recently, Caracas pollsters had a working group working behind the scenes trying to draft a common standard. But of course that poses serious problems in terms of comparability with each pollster’s own historical data. It’s a mess! And one of those dirty little secrets you never hear pollsters talk about in public…

      • Hmmm…I was wondering about the class breakdown. Just how does/did that happen? What’s the criteria for the different classes, either in the past or in the present? Just by defining different classes doesn’t sound socialist to me, at all!

        • Not that I were socialist but defining classes is not against socialism. What socialists and commies originally said was -usually- that they wanted a classless society but for that there was the need for class struggle.
          Chavistas, anyway, claim they are on the road towards socialism, not socialism itself.
          And at the end they will never say they have reached socialism and much less communism, which is a state more difficult to reach than Nirvana.
          Contradictions are and were everywhere else in their statements.

          Back to social classes: as Francisco said, it is a total mess.
          It should be about who lives in what kind of house, how much of the absolute needs they cover and what education level they have.

          In other countries you have the data fo taxes, for instance…and some on housing and certainly on education. In Venezuela oficially 50% of th population is in “empleo informal”, which means very little concrete data about their income distribution. Within them you have people who live under a bridge and people who earn much more than a physician with a specialization.

          Most people – not just that 50% of the population- do not even fill in tax forms. The data about what constitutes a street, how many live in a municipio – is scarce to say the least.

          And as Venezuela has such inflation rates and such oil booms and thuggery that create and bust capitals all the time, pinning down who is what is particularly hard.

          Last but not least, Venezuelans since time immemorial have disliked recording things in any systematic way.

          • To me there are income classes with incomes that are freely quantified.

            Social classes are like “race”, fantastic constructs not based on experience but on a lot of prejudice. Except where they are enforced by law and custom. Not the case of Venezuela for all I know.

          • No, but they are greatly influenced by education.
            And I learnt that from someone who came from utter misery and attained the best education he could and got to a better economic status.
            Few of those who got the right education from family are aware of how much easier they had it and that perhaps they wouldn’t have had the strength to do it themselves, as they think they would…so they would be careful to be saying it is all will, as perhaps they don’t even have the will they think they have, just the schooling their parents provided them with.

          • Kepler, I agree on the importance of education.

            Income does not entirely define a human being either, though it’s quantifiable. In fact human beings are wonderful and complex and multidimensional.

            I find it demeaning and prejudiced to entirely define persons as “black” or “white”, and put them in separate categories. Worse even, when categories such as race cannot even be defined reliably except as a product of prejudice. Just as it is to categorize people as “bourgeois” or “proletary” or whatever, which is prejudice.

      • No, I did not know that, but does not surprise me. However, regardless of how you define it, his data showed that the poorest section of the population had grown as a percentage of the total. This is contrary to the touted logros de la revolucion.

  8. I cannot really imagine what the GINI coefficient is supposed to in Venezuela. That we are equally buggered? Situation on the ground: Unless you are frigging filthy rich in Caracas, of which I have direct experience, or have inherited savings, or earn the equivalent (in absolute terms) of a decent first-world salary, you cannot: Rent housing, much less buy housing, afford emergency health care (or any health care), buy a new car (or an old one), afford to eat out…

    That the really rich are now a tiny minority now? These incredible luxuries (Affordable to the lowest tier worker in Europe) are equally outside of ordinary people’s reach.

    • And did I mention crime? There also the same happy situation, only there’s no relief… If you are poor you will not be able to drive a car and chances are you will be robbed at gunpoint by a guys with more deaths on themselves than most American serial killers at a bus or on the street. If you are rich enough to afford decent security the same guys will be actively out to get you. If you are in the middle, congrats, you have a risk of violent death that would make Iraqis run for it (in 2004, now now!). Quality of life in Venezuela by any measure people can relate to, went South, and I don’t mean towards Argentina.

      To finish the rant: The GINI coefficient measures inequalities in income. But it really means very little when most people live under the waterline, and the ship is flooding.

  9. I wonder if the GINI coefficient takes into account fortunes acquired through corruption. Methinks all the millionaire Chavistas who acquired their illicit fortunes would have increased income inequality. Has this been measured?

    • Boludo, you usually make intelligent remarks, so why are you asking that?
      Boliburgueses are REAL SOCIALISTS, they have already thought about income inequality and because they did they took their money to Swiss and US and Luxemburg accounts and they usually did that in the form of obscure commissions
      and payment to empty companies

      • Kepler, both your remark and my remark were made tongue in cheek. I made the remark because I am not an economist and do not know the details about how GINI is calculated. My admittedly uninformed guess would be that because corrupt acts are off the books, they are not found in the data from which GINI is calculated. Certainly a traffic cop does not report his run of the mill mordida money as taxable income. My point was that the mega-corrupt cadre of elite Chavistas increase inequality, but that this inequality is not reported.
        The reply of the corrupt Chavistas might be that as they were once poor, their new-found riches have decreased inequality.

  10. One thing I always demand to know when this sort of statistic is debated: where do rich people having bad years go?

    A billionaire trader who takes a loss one year may have “negative income” of $100M. Does that make him the poorest fellow in the country? Suppose there is a great bubble-burst crash, and many big investors and entrepreneurs get hosed – that “poorest” 1 percent, by current income, may cancel out the income of the rest of the bottom decile.

    This is a chronic problem, as the incomes of investors and entrepreneurs can vary considerably from year to year. The most aggressive investors score both the biggest gains and biggest losses. If the losers are always counted at the bottom, and the winners at the top, that would consistently exaggerate GINI – even if the two groups are, over time, a single interchangeable set.

    Also, does confiscation of property count against income? That is a real issue in chavista Venezuela, though not so much in general.

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