Sobremesa chronicles

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bienmesabe2In the last few days, a document has been circulating. In it, sixty well-known Venezuelan economists (most of whom I appreciate and admire) make a list of urgent measures Nicolás Maduro has to undertake.

You know what’s missing from it? The pressing need … to privatize.

Oops. Did I say that out loud?

In Venezuela, it seems, the mere mention of the word makes you the target of scorn, bile, and the occasional rock. Yet it’s urgent that we begin arguing about it – not so much the need for privatization, but where to begin.

I went to town with this idea in Prodavinci. Here is my favorite part (sorry, in Spanish):

Esta idea genera muchos anticuerpos, pero hay que superar ese trauma. ¿Acaso un Estado quebrado e ineficiente va a darle a la CVG los recursos que necesita? ¿Acaso el Estado ha logrado solucionar los problemas serios de agua potable, de nuestro lentísimo Internet, o de los apagones que frenan el desarrollo? Con la crisis fiscal que tenemos, ¿de dónde van a sacar Corpoelec o CANTV los recursos necesarios para invertir en una infraestructura de calidad?

El por qué la privatización es un tabú probablemente responde a los veinticinco años continuos de ataques injustos que ha recibido. Desde que se comenzó a privatizar a fines de los años 80, la idea de sacar al Estado de actividades que no le incumben ha generado virulentas acciones por parte de actores políticos, tanto del chavismo como de la oposición.

La razón principal radica en que las empresas estatales son un instrumento fácil de fomento del “pónganme-donde-hay.” Lo que más disgusta a nuestros políticos clientelares es que se les limite la capacidad de colocar a “compañeritos” o “camaradas” en lugares donde puedan disfrutar de una cómoda vida a costillas del erario público. SI bien en teoría una empresa estatal podría ser viable, nuestra praxis criolla nos indica claramente que creer eso es alimentarse de ilusiones.

The key issue here is why we shy away from this debate.

Let’s see if my Friday afternoon “sobremesa” topic generates as much controversy as the last one.

1 COMMENT

  1. You hit the nail on the head with this. But given the disgusting populism that permeates most politicians discourses this opportunity will be wasted with vague hollers of “para el pueblo siempre”. Can’t help but feel that massive carpet bombing and selective genocide would still be the best solution for this country

      • Where do you see any acceptance? OK it is unchallenged but that perhaps not feeding a troll is best.

        Re privatisation, one simple has to ask:

        Are politicians better able and qualified to run the transport system?
        Are politicians better able and qualified to run the energy supply?
        Are politicians better able and qualified to run the national food production?

        …etc

        Are politicians better able qualified to run anything?

          • so, (1) in your opinion every single commentator and reader here – except you Rory – has ‘accepted’ this comment and (2) you’re against free speech.

        • Perhaps John didn’t use words that are politically correct but what he meant is actually true.. if politicians keep using populist bullshit speeches and backing them up with absurd populist policies then maybe in a near future there will actually be no solution.. and Venezuelans will have to kill each other to feed the country’s population. Leading to genocide or civil war… I mean it’s possible isn’t it? And it has happened in other places… it seems to be a cycle that most countries go through to reach political maturity.

  2. What you say sounds reasonable.

    Let me however, introduce a number of situations in which privatisation has been a failure:

    The privatisation of British Railways. Now the service is more expensive in real terms and worse in every sense in privatised lines. Many of Thatcher’s privatisations created inefficient and expensive industries that succumbed to foreign competition. Unsurprisingly, the British public strongly rejects privatising the NHS (although the tories want to do it).

    The privatisation of public schools and care homes in Sweden. Although citizens continued to receive free services, those were provided by private sector companies, under the belief that this system would be cheaper. The providers started cutting corners to increase profits and services decayed badly. As a result the conservative government was ousted of power.

    The privatisation of the American healthcare system. Well not really, it has always been mostly private with three main exceptions: Medicare, Medicaid and the Veteran’s administration (roughly the old, the poor and the military are covered by these). The rest is a private sector behemoth. American healthcare is less efficient, less inclusive and much more expensive than completely public systems in industrial countries.

    The privatisation of war. During the Irak war private “contractors” went to war with the regular American army. They have been found to be involved in war crimes and human rights violations just as the public sector have but, crucially, the contractors waged war for profit and menaced American officials on the ground if they impeded their operation. Which means of course, that private armies were just as cruel as the regular one and had a penchant for rebellion against the rule of law.

    The privatisation of Arolineas Argentinas.

    The privatisation of Viasa.

    The privatisation of YPF.

    The privatisation of higher education: for all the prestige attached to some privately owned universities in Venezuela, the best are still public. USB, UCV, ULA are quite mediocre, but private universities do even worse and produce even less research (with precious exceptions in the social sciences, not hard core stuff).

    Although I am in favour of privatisation in general, and of the privatisation of Venezuela´s “basic industries” in particular, I have to say, it doesn’t always work.

    • Privatization is a must in corrupt and institutionally weak countries like ours for basically two reasons: it represents (1) less money being sent to the Cayman Islands, and (2) less public money will be used to create a dictatorship/undermine the opposition. All the other advantages (i.e.: better services) are just collateral benefits.

      But yeah, Cabello agrees with you that privatizations are “very dangerous”. And he’s got a point, because with a privatized PDVSA, the Chavistas wouldn’t have the funds required to finance their populism like they have been doing until now. And they would already be out of government by now.

    • Hmm, I take issue with some of your examples (although I agree with you that privatization shouldn’t be taken as dogma).

      Viasa was bankrupt. There was no option BUT to privatize it.

      Aerolineas was bankrupt. It’s now public (and bankrupt) again,

      Private universities are actually much more cost-efficient than their public counterparts. And the reason they produce more research than public universities is that the government keeps them choked under its foothold. For example, why doesn’t UCAB offer medicine? Because government.

      As for your other examples, you’re probably right, who knows. I’m not an expert on those cases.

        • Privatisation between 1989 and 1993 followed a single rule: the highest bidder wins, regardless of business plan. That’s the reason both Cantv and Viasa were sold under the same rules and ended up rather differently.

      • Viasa was bankrupt under public, and later private, hands. So its privatisation failed.

        The government is also choking public universities. That’s not the point here; the point is, none of these universities has ever invested in research. Now or before 1999, The MIT doesn’t have medicine.

        Higher education is not a matter of cost efficiency, it’s a matter of quality and research results. In that sense, private universities in Venezuela do worse than big, public ones.

        • Get your facts straight. According to most rankings, the best university in Venezuela is UCAB (private).

          http://www.topuniversities.com/university-rankings/world-university-rankings/2014#sorting=rank+region=349+country=+faculty=+stars=false+search=

          The one that has grown the most? The Metropolitan University (private).

          La casa vencida por las sombras is just a shadow of what it used to be. Even the USB has fallen a lot in the rankings.

          So, no. It’s the public universities that do worse than little, private ones.

          • ?

            Well, I read once an extended version of the Shanghai and other of the Times rankings, Venezuela didn’t show up until position 1300 something, and the first was ULA. Far from a stellar performance.

            Private universities didn’t appear, which is logical since they do not do research.

            More to the point: no Venezuelan university is good, full stop. People kind of fool themselves, thinking UCAB is a Venezuelan SciencesPo, USB is the MIT and UCV is I don’t know, Classical Athens… but it isn’t so.

            I do recognise however that Venezuelan university students have saved democracy for the future and are much more brave and intelligent than my own generation. Both in public and private centres.

    • You are totally wrong about the UK.

      “Now the service is more expensive in real terms and worse in every sense in privatised lines”

      This is utter nonsense.

      Many of Thatcher’s privatisations created inefficient and expensive industries that succumbed to foreign competition.

      Wrong: it created streamlined and efficient industry ripe for take-over. That is the nature of the market place. On the other foot, the same is true in reverse with many British companies dominant in their fields taking over foreign companies: it HAS to work – and be allowed to work – both ways.

      “Unsurprisingly, the British public strongly rejects privatising the NHS (although the tories want to do it)”

      The only privatisation so far is about 6%: of this 5% by the last Labour government. The Conservative Party (rightly, forgive the pun) feels the hugely inefficient monster needs help. It is in the top 5 for numbers of employees IN THE WORLD!!! That stat alone proves that major surgery (reform!) is needed. More money has consistently shown less efficiency. Just privatising procurement procedures would save £££ billions.

      • Come on man, you know the government (this one, and the previous guys) had to shell out money to subsidise privatised lines in the UK.

        If you pay an expensive ticket, and also pay taxes to subsidise that company, isn’t the ticket even more expensive?

        You know parliament opened an investigation last year on subsidies to privatised companies. It was all over the news.

        Thatcher’s privatisations were a mixed business. The financial sector grew enormously, but north of the Home Counties, who is a tory? Thatcher effectively de-industrialised the UK. Look at Scotland, the only thing they didn’t do when she died was to celebrate the New Year.

        Yes, the NHS is by far the biggest employer in the UK, but the public is not for privatisation. Is it a monster? I see it as a guarantee of healthcare for everyone. But can you tell me, how much, in GDP percentage, does the UK spend in the NHS? how much do the Americans spend on their own privatised healthcare system?

        I can:

        9,4 % the UK

        17,9 % the US. SEVENTEEN POINT NINE PERCENT, HOW IS THAT MORE EFFICIENT MAN?!?

        • The subsidies cover the extreme high cost of investing in modernising the stock and lines, things that lacked sufficient funding when nationalised. This takes decades.
          Manufacturing increased under Margaret Thatcher; I think you mean heavy industry: you of course think that the UK should have struggled on subsidising steel and ship manufacture for instance that then has no market being multiple times the cost what the competition produce? You sound like a Chavista!
          The Scotland thing is amusing: they hate Margaret Thatcher yet she was trying to help them, they really cut their nose off to spite their face.
          Home Counties refers to the very South East: in England a line from the Wash through to the Severn Estuary has only 10 Labour MPs; the whole of England is majority “tories”.
          The alternatives with the NHS are not “NHS free”, the changes merely wish to improve efficiency: the healthcare guarantee will not be effected in any way. Comparing with the US is a false comparison as nobody in the UK (of any party) is suggesting anything even remotely similar.

    • American Healthcare is not at all private. It is a vast government Ponzi scheme where the ACA exchanges are basically government utilities. The government tells the insurance company what they can sell on the Exchange, they provide subsidies for users. It’s a government store where the products grow more expensive by the day. Government is a vast wasteland of fraud and taxpayer abuse. Also, i don’t know why people keep saying healthcare is free. Healthcare is enormously expensive.

    • I commuted on British Rail, Southern Region in the 1960s and early 70s. The service is far superior today than then, though fares are high by European standards. “Worse in every sense”? This is just prejudiced, anti-factual guff. Many English students are brought up on Anti-Thatcherite dogmas such as are reproduced here.

      A big, less frequently mentioned, advantage of privatization is that inefficient administration, excessively high prices and poor service are much more noticeable in the case of private companies, which are subject to more visibility than state-run enterprises nested within in a huge bureaucracy impervious to independent inspection. Using today’s political cliches, they private firms are usually more “accountable”.

      • So the trains in Britain are better now than in the 60s.

        The only places in the world where transportation is not better now are Cuba and North Korea.

        Honestly, can you compare British private rail to public French or Spanish rail? Really?

        Private firms are more accountable. Some are. some are not. British banks cooked the books for decades. didn’t they? accounting not good chap. Sorry.

  3. We had some very succesful privatization experiences in Venezuela (which unfortunately were reversed by the current regime) . Sidor and Cantv come to mind . The pre 2002 Pdvsa might appear to vindicate the case for the public ownership of assets but what we must not forget is that organizationally and culturally that Pdvsa was inherited from international private corporations who built those organization through decades of effort so it had to be considered more a private kind of organization than a typical state organization , specially to the extent the pols agreed to keep the legacy intact at least for a time.

    I think that at least in Venezuela the odds are that private control of the runnning of some public activities can help improve their management considerably but that we must be careful in not thinking blindly that just because an activity is private its automatically well and honestly managed , there are a lot of exceptions to that.

    My own dream is that some day most public functions will be run and operated on a technocratic basis totally isolated from political or partisan influences , either by organizations that merge the private and the public or by public organizations that in all respect work as if they were private corporations , seeking optimal results , monitoring their performance for constant improvements , recruiting and selecting their personnel on the basis of pure technical and managerial merit . I think that long term the dream is not only doable but the only thing that can save us .

    The political establishment must learn that even if they can help inspire and guide policies they cannot run or manage anything because the competence needed is one which can only be acquired outside the domain of pure politics. That would be a hard lesson to learn but the last 15 years have been a poignant example that running a country is too important to leave it exclusively to practicing politicians .

  4. Oh, privatization WILL happen.

    The only choice is whatever is done on actually fair conditions or just setting up “special zones” without any respect for human rights as all other Eastern Block colonies.

    The corrupt syndicates that sold their soul to the dead bastard for power are going to learn that the hard way.

  5. One of the advantages of having lived in Venezuela for more than 27 years is that you get a broad outlook of the way things have ebbed and flowed over the years.

    Bill Bass mentions CANTV.

    When I arrived in Venezuela thre were no phones where I lived.
    We applied for a business line & then sat and waited while nothing happenned.
    When we had access to a phone you would have to wait for 10 – 15 minutes for a dial tone.
    Companies here had employees just to dial numbers & get connected with the other end.

    Then CANTV was privatized. In months you could see the difference.
    Phones were being installed & we finally got ours after a 5 year wait & some 6 months after CANTV was turned over.
    There were still initial dial tone problems but within months that was resolved.

    Shortly after we got a private line as well. Then came cel phones.

    It was a dramatic turn around that would never have happened under government management.

    Of course the communists are now earnestly trying to take it back to the early 90s like everything else in the country.

    • Argentina had a similar experience with telephones. Before privatization, in order to get a landline you had to pay several thousand dollars- and wait 6 months. It was much better privatized. OTOH, what Mexico did with privatizing telecommunications- give Carlos Slim a monopoly, making him a gazillionaire- was not the way to go.

      Having seen YPF before privatization, I am unable to see how a private YPF was worse. Lemme tell ya, public YPF was the pits- no comparison whatsoever with PDVSA.

      Part of the problem for private YPF was that Evita III and Nestor froze natural gas prices for years. That creates NO incentive for drilling for natural gas. One of the pretexts for re-nationalization was that YPF wasn’t drilling enough. Freeze prices, that’s what will happen.
      That is a typical problem for private companies under a government that is straining at the bit to nationalize. The government freezes prices, which is a profound disincentive for private investment. The government then nationalizes because of lack of said private investment.

  6. The argument for private rather than public ownership goes beyond economic efficiency. Private ownership creates independent centers of power that makes the consolidation of political power more difficult. A political party that controls both the government and the means of production and distribution is well positioned to jettison democracy which is exactly what the fascist and communist parties did in Europe.

    • This is a key issue , because in inmature democracies power is vested in the politicians controlling govt because of how they movilize political support by using the resources of govt to rewards their followers allies and partisans through a patronage system and gather popular support by advancing irresponsible populist measures .

      The way fukuyama tells it all young democracies suffer from this malady and it takes a great deal of effort for a country to transform its machinery of govt into an institutionalized technocratic system independent from political meddling and exploitation . It took the US one century to rid it self of this kind of populist govt. Inmature democracies work not on an institutional level but on a patrimonial level , the resources of govt are used to benefit the private interests of the pols in control of govt.

      A mature democracy is one where a way is found to run the functions of govt on an institutional basis not on a patrimonial basis , the process whereby such type of democracy is achieved is modernization .

      To simply privatize the functions of govt may ameliorate the malady of populist clientelar govt but it doesnt solve the problem , the goal must be to institutionalize the functions of govt and depatrimonialize the political colonization of govt. Anything else is just a band aid fix, not a permanent solution.

  7. Is there a distinction between privately owned or publicly owned ? In the old Venezuela the former ownership style was at the forefront and usually went no further than the family, for better or worse.
    And today a few Chavistas privately own a lot, for better or worse too.

  8. The interesting thing about Venezuelans is that we seem to not like that people may have profits, the idea of a large private company that makes profits seems to be disgusting to most people, even though we all know for sure that the state is only able to bankrupt companies.
    We seem to not care too much about bachaqueros, buhoneros or taxi drivers making getting wild margins tho.

    • It all stems from the egalitarian myth:

      All men are equal. Therefore, if my neighbor has more money than I do, he must have cheated to get it, and thus deprived me of some of what should be mine.

      And zero-sum thinking:

      There is a limited amount of wealth and in order for one person to have more than an equal share, that person has to take it from others.

      These are the myths that Venezuela must leave behind in order to grow into a mature modern country.

      • Behind the tender noble notion that all man are naturally equal and become unequal only through the predatory abuse of the powerful and their defense of unjust social conditions exists our hurt pride and resentment at the thought that there are other men which fortune or nature or inborn talent or blind circumstance have favoured more than our selves . Because the thought of our own inferior status is unbearable to us we adopt embroidered narratives that explain that disparity between us and them as the result of henious injustices which those men ( or the system that favours them ) perpetrate against ourselves . Of course by adopting such narratives we are lifted to the most lofty and grand moral heights of righteous indignation , we feel morally superior to all that we condem, which delightfully inflames our conceit no end .

        The above can be illustrated by a homespun example all can understand , if an ordinary man is given a raise of 20% of his salary he will be content with that raise until he discovers that his co worker has recieved a 25% raise at which time he will consider himself the victim of an act of gross injustice .

        Life is not equally kind to all men, there are many which it treats with niggardly harshness and others that sometimes it favours with absurd largesse and bountiful generosity. but we cannot accept how unevenly and whimfully fate and nature treats us and our fellow men . thus our love of equality , thus our bessoted obsession with fighting for a perfect social justice .

        • A most perfect summary of the human condition, BB. The only variable I would have mentioned would have been the issue of mental balance, the last frontier that humans shy away from discussing or owning, if they be so afflicted. (Oh, the narratives!) For those in the know, know how pervasive are the imbalances, at times contributing to the inequality — for better (at the expense of others) or worse (at the expense of the afflicted).

          • Thank you Syd for your addition to my comments , which did not attempt to explain the human condition in a couple of paragraphs -that would be madness- but simply to explain why extreme equalitarism is not the sole result of pure snowwhite noble motives but also of some obscure promptings of the human heart .

            Your point deserves attention , there is a book by Barbara Tuchman (‘The March of Folly’) which goes a long way towards providing historical examples of what you mention . Closer to home there was something not quite normal in Chavez crude megalomania which became embedded into the mental DNA of his followers .

            I understand that strictly speaking Chavez was not deranged but that he did suffer from a personality disorder which made his mind work in irrational ways for long periods and which some psychiatrist have named ‘malignant narcicism’.

  9. I think, that these 2 first sobremesa chronicles, are in many ways, intertwined. Let me explain my idea: We all know, that politicians are corrupt. It happens very often, here in Europe, or in Vzla, as in the case We’re analyzing. But in Europe, some of them, go to jail. They go to courts and get dismissed from their public/private jobs. And get some punishment. We can argue how much punishment they deserve, but that’s another question. In Vzla, well, except the world famous RECADI chinese, nobody has ever go into jail or get even one foot in a Vzlan court of justice (except Marcos Pérez Jiménez), for a corruption trial. Here, I lay the ground for my point. Politicians are corrupt. But what happen when the corrupt is also the voter? I think it’s wrong to steal money from public treasury, specially when you used to do it in galactic quantities, as chavistas used to do. But What happen when the corrupt is the citizen?. Let’s be clear: no matter the reasons, nobody pays their taxes to the 100% of their duties in any country. But, in Vzla, the taxes evaded are at least, over 50% or more of what they’re supposed to be. It’s wrong to steal money, but it’s ALSO wrong to get away with the taxes you must pay. And here, my friends, I can see many, many millions of people. Many opposition voters. Many oppo speakers. Many people. And this brings me to this: I know politicians aren’t better than me, for example. But here in Europe, where I live, I pay my taxes because I know I can demand my goverment to explain me how they are spending my taxes and why. And they answer. But, in Vzla, neither the government brings information to their voters, nor the average vzlan fulfill his duties as a citizen. Under any president. So, the point of privatization and the lack of privatizations themselves, maybe is explained for this: Yes, Vzlans have a corrupt government, but they ALSO HAVE a very corrupt society.

    • Well, you dont seem to remember El Gocho (Carlos Andres Perez) and the whole Partida Secreta shenanigans.

      To be honest, I dont have much memories of that because I was a kid back then, but for what Ive read… its not that the guy was a saint, but they crucified him for subatomic fundamental particles/strings/waveforms of peanutty matter compared to what worse people (campins, lusinchi and friggin chavistas) have done…

      On the rest, a 100% agree on what you say, the avg venezuelan is corrupted to the core, “viveza criolla” que le dicen…

  10. I think part of the reason why we shy away from this debate is that the “pónganme-donde-hay” disease is not strictly limited to state companies. Our culture of corruption permeates all aspects of society, including private companies. There are permits, concessions, tax incentives, union negotiations… a million ways in which unscrupulous people in the private sector can make big bucks by ripping off the state. Of course, this possibility represents only a fraction of the money that goes to the garbage when public companies come to town, but the PR efforts of public companies compensate for it.

    Speaking of PR, the employees in these public companies usually get crazy benefits when compared with their private colleagues, which does wonders for the PR profile of state-owned companies. You mentioned the CVG. Have you been around Bolívar? Everyone and their uncle dreams of landing a job at one of those companies. They know the benefits are beyond the limits of reason, and they’re well aware that a good chunk of those benefits would vanish with privatization. That maintaining those benefits hurts profitability is beside the point for most people.

  11. It’s appalling that this subject is “tabu” specially in opposition circles. I hear a lot of crap from politicians saying it is not politically feasable to talk privatization. I don’t know if you can get or loose votes talking privatization, but that’s beyond the point. It’s like saying that talking gravity it’s a bad idea when campaigning.

    The point is that from an Agency Therory standpoint, privatization is invitable if you really want to improve people’s lives and public finances at the same time.

    It’s truly beyond me why, there are still doubters. If for profit ventures are better manged in public hands, why isn’t anybody arguing for the nationlization of Apple, or Google, or Facebook, or any other successful enterprise. Be it a large corporation or the corner “bodega”. I hope that the “strategic or basic industries”, crap, a concept from the early 20th century, is deeply buried along with Lenin, and other communists after him, otherwise let’s also advocate for nationalizing ExxonMobil, Shell, Samsung, Mitsubishi, AT&T, Mexichem, Terninun, or whichever strategic company might be in private hands.

  12. Privatize is as taboo as:
    Dollarization (Stupid patrioterism)
    Speaking the truth about the wax doll (Stupid pride to not accept that chavistas made the worse mistake ever)
    Educating people as one measure to attack crime (Stupid love for the “viveza criolla” myth, which is actually be a fucktard asshole)

  13. Privatization is better 90% of the time. Punto. Arguing it though is a bit irrelevant as the opposition is not in power. Focus should be on the message track of the incompetence of the current government overall (across all sectors) and clarifying the negative motivations of those in power…they are not with el pueblo, they are against el pueblo and only for themselves…

    Regardless, I am really interested in tomorrow as I think it is the moment of truth. Will there be only a couple hundred thousand people at the March and be made up of the usual opposition forces, or will people from the barrios take the street and we reach well over a million so the government has to take notice (even as the state controlled media downplays it)…if the later, Maduro and Cabello and start to panic and the military may be forced to take a clearer stance for what is to come…

  14. There are two types of privatizations:

    The first, where you hand over the entity to what offers to be the one capable to put it at the best use; for instance, if electricity distribution, the one who offers the lowest tariffs for the consumer.

    The other privatization, that who offers you paying the most money upfront for it, so that you can lay your hands on the most money… NOW! … Guess which type government’s favor.

  15. Privatization of Viasa failed because it was a bankrupt State-owned airline sold to another soon-to-be-bankrupt State-owned airline. Viasa’s wasn’t so much a privatization as it was the transfer of an airline from one State to another.

    I think the key to a successful privatization is what rules and agreements they have to comply with. Take public transportation; most of the well-privatized examples run a deficit, but they get compensated by the State, city, or whatever, until an agreed profit margin. This is because public transportation is a service essential for society so it can’t really follow pure market rules, i.e. get rid of unprofitable routes/times, charge the real cost, etc. Granted, if a bus line constantly runs with only one or two passengers per bus, then it’s bound to be eliminated, but other, less extreme examples would have to continue because of public need. Privatization in this manner works for public transportation because the State/city doesn’t have to run it, so there is less risk of payroll bloating and other public company vices. Plus, by having someone else run it, responsible governments have someone to “blame”, or rather press, when things are not right. Accountability is a good incentive.

  16. Recent cases of corruption in the private sector:

    1) The manipulation of the Libor rate by banks of the City of London up to 2014.

    2) The Subprime Mortgage Crisis in the US. Here private banks irresponsably gave mortgages to insolvent people and used them to back financial products. They got bailed out by the American government.

    3) The housing and private credit bubble that exploded in Spain in 2008. More or less the same.

    4) The CajaMadrid-Bankia corporate corruption up to 2010.

    5) The Enron scandal of 2001.

    6) The use of human subjects in East Germany for drug testing by private pharma companies from 1955 to 1988. Here we see clear collusion between the public and the private sector.

    7) The thalidomide disaster.

    8) The Fukushima nuclear incident. Here TouDen (Tokyo electric company) cut corners in the building of a nuclear plant in a seismic zone. An earthquake provoked a tsunami that overran the plant’s faulty safety infrastructure and put Japan at serious risk of national collapse.

    9) IG Farben, SIemens, Bayer, Krupp. You know the story, these companies engaged in mass murder for profit during the Holocaust.

    10) The Blackwater Baghdad massacre in 2007.

    11) The Bernie Maddoff scandal.

    I could go on, since the 2008 crisis unveiled many cases of shadowy banking and accounting.

    Just to show that corruption can also be privatised.

    I understand, the Venezuelan state is an overwhelming mess and that pushes reasonable people to believe in the private sector to be “90% good”, but that just isn’t true.

    Yes, CANTV was successful, ELECAR was well run, but these are exceptions, corporate governance in Venezuela is as bad as the rest.

    Or no private companies have defrauded the Venezuelan state since 1999????

    • Both the politically controlled public sector and the private business sector are often guilty of dishonest dealings , the dishonesty of the private business sector is motivated by greed , the dishonesty of the politically controlled public sector by the desire for power (which feeds the gargantuan conceit of the politicians) . Where they do differ is in two respects , one that private businesses are usually better organized more practically competent than public bodies , the second that business misdeeds arent usually as destructive as political public misdeeds (although thats not always the case) .

      The greatest damage is caused where both the dishonest politicians and the dishonest businessmen enter into corrupt alliances . (which is a common enough ocurrence) .

      Clientelar Populist Democracy has probed very inept at controlling the corruption of the public sector and the govt equally inept at controlling the corruption of private businesses.

      • But, the dishonesty in the private sector is usually a matter of taking illegal advantage of the distortions created by government policy. In an environment of open and transparent markets, it is difficult for the private companies to cheat the public for any significant length of time.

          • Lots of them…

            What is a weekend farmer’s market but open and transparent? A middle eastern bazaar? How about E-Bay? Mercado Libre?

          • Yeah Roy, those are perfect markets. Sure.

            I think “perfect markets” have become an obsession to rival that centred on the “proletarian government”. It may be difficult to understand that perfect human societies do not exist, have never existed.

            We owe this to Plato, of course, who invented the notion of perfect things (platonic ideals) as opposed of everyday imperfect reality.

            Marxists and free marketeers both nourish these illusions of perfect constructs with tender love. In reality, perfect markets and the worker’s paradise were both only abstractions used with malicious ends.

            The aspiration to build the dictatorship of the proletariat justified genocide, destruction and tyranny.

            The persecution of the “perfect market” opened the way to the cruelty of the Gilded Age and rationalised the exploitation of human by human.

            Cuidado con las ideas absolutas, que las carga el diablo.

          • Alberto Quiros Corradi left a collection of reflexions in some 6 books which on the ocassion of his recent death Ive started perusing . He can of course be blamed for many things but never of being an opponent of private business or at least of the benefits of competitive markets . Still one point he made on several ocassions is that there were no perfectly competitive markets and he gave several examples taken from his vast knowledge of the international oil industry,

            Then Ive read other books by highly reputed economists which say the same thing . One of the most eloquent expositions of this point is that made by Mr Joseph Stiglitz ( a noble laurate).

            That doesnt mean to say that a state run economy offers advantages that a free competitive market economy can not offer , quite the contrary , a market economy is much better than a state run economy at providing for the greatest welfare to society . but he is careful to underline how an effective modern state can through wise measures contribute much to the development of a healthy prosperous market economy. This is also Francis Fukuyamas point when examining the history of modern institutions of government in both the western and far eastern world .

            I think that this is one point where Alejandro perhaps holds the better view .!! .

    • Alejandro:

      Recent cases of corruption in the private sector:
      2) The Subprime Mortgage Crisis in the US. Here private banks irresponsably gave mortgages to insolvent people and used them to back financial products. They got bailed out by the American government.

      Yes, it was irresponsible to give mortgages to insolvent people. We see the results. However, it was the government which encouraged giving those mortgages to insolvent people, in the interest of “social justice.” And we all know how strong government “encouragement” can be.

      Furthermore, the large magnitude of the bailout was the consequence of a provision which Senator Chris Dodd added to the a 1991 law known as the FDICIA. From Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. From pages 40-41, hardcover edition:
      Walter Todd, a counsel at the Federal Reserve Bank in Cleveland, examined the provisions of a 1991 law known Federal Deposit Insurance Corporation Improvement Act.

      But in scrutinizing the FDICIA, Todd had unhcovered an obscure amendment to the law that dramatically expanded the federal safety net, increasing the likelihood of taxpayer bailouts in the future. While previously only commercial banks who were members of the Federal Reserve system could request emergency financial support from the central bank in times of crisis, the amdnemdne to FDICIA increased the availability of Fed assistance to include investment banks and insurance companies.

      The amendment had not attracted much attention before or after the bill was passed. Todd discovered that the change had been quietly inserted late in the legislative process by Christopehr Dodd, the Connectituct Senator whose constituents include most of the natin’s large insurance companies. During a debate about the bill on the Senate floor, Dodd said that his provision would give “the Federal Reserve greater flexibility to respond in instances in which the overall financial system thtreatners to collapse. My provision allows the Fed more power to provide liquidity, by enabling it to make fully secured loans to seurities firms in instances similar to the 1987 stock market crash.”

      Did the investment banks and insurance companies make reckless moves in the subprime mortgage sector, knowing that the federal government would now bail them out? You betcha. This added bailout was the work of Senator Dodd.
      The “corruption in the private sector” was the result of crony capitalism, by such people as Chris Dodd. Put the blame on Chris Dodd for this crony capitalism amendment. Also bear in mind that Chris Dodd is NOT one of those free-market types, but a “bigger government is best” Democrats. Ever heard of Dodd-Frank? More Chris Dodd to the rescue- which unsurprisingly will only make things worse. Chris Dodd also supported the Sandinistas- more big government- back in the day.

      [Unfortunately, Chris Dodd is from my home area. Chris Dodd used to be my Congressman. His cousin was in my sister’s high school class, and in my gym class. A friend of mine once ran a quixotic third-party campaign against Chris Dodd. I am deeply ashamed that a sleaze like Chris Dodd once represented me. ]

      Anyone who blames the 2008 Subprime debacle on “corruption in the private sector” doesn’t know the facts.

      • Boludo,

        The subprime mortgage disaster was an invention of private sector bankers. They invented the subprime mortgages, then they used them to back up financial products they sold as first quality investment.

        Private sector bankers engaged in this risky behaviour because regulation was dismounted.

        These speculations were carried out by Wall Street, not the public sector. When the bubble burst, these shaky practices came tumbling.

        That is not opinion, that is fact. You can of course check any serious data source you want, you will find the same, private sector recklessness.

        • Private sector bankers engaged in this risky behaviour because regulation was dismounted.
          Is it the fault of the private sector that the government, in your words, “dismounted regulation?” Methinks not. Regulation is the responsibility of the government. I refer you to my previous comment re Chris Dodd, a lifelong fan of big government. If the government promises bailouts, risky behavior will ensue.

          These speculations were carried out by Wall Street, not the public sector.
          What you blatantly ignore is that the federal government spent two decades in pushing, in your words, “mortgages to insolvent people.” The subprime speculations were a response to this government push. Had the government not intervened in the interest of “social justice” to provide “mortgages to insolvent people,” there would have been no subprime market.

          I am finished with this conversation, This is not the first instance where you have shown you believe you know more about the US than you actually do. This is a common problem with many educated people who do not live in the US.

          When you have read Reckless Endangerment, get back to me.
          Ciao.

          • Alejandro,

            I have to agree with Boludo Tejano. Consider the frustration of Venezuelans with foreigners who lack the knowledge of the history of Venezuela and the cultural nuance opining about Venezuelan politics. As much as you may read about U.S. politics in the press, there is more to the story. The truth is that financial institutions were strong-armed by the government into making these risky home loans. In fact, this practice by the Government began as early as the early 60’s. Eventually, the exposure became so worrisome to the banking industry that they invented ways of insulating themselves from these risky assets.

            Boludo Tejano has provided you with solid information and links that you can verify for yourself. You owe it to him to investigate these before dismissing them (and him) by repeating what think you know about the issue.

          • Roy, where is this perfect market that existed at some point, according to you?

            One thing, boludo here provided some solid information about the bailouts, i.e the rescue of bankrupt banks by the government they despised.

            He hasn´t provided information about how they were bankrupt. He did say dismounting regulation is bad, which is what I said in my first post.

            The nuance in Texan politics are lost to me, it is true, but, you know, from there to say that the 2008 is beyond the understanding of anyone not living in Manhattan in September 2008 is, I think, a bit of an exaggeration.

          • Alejandro:
            You have to provide proof of this “government intervention to push banks to give out money to people who can’t pay”

            As I PREVIOUSLY STATED:

            When you have read Reckless Endangerment, get back to me.

            An additional source for Reckless Endangerment which is a freebie but does not provide the complete text: Reckless Endangerment in Google Books. BTW, one of the co-authors is a reporter for the New York Times. There are also reviews. You want proof? READ THE BOOK. I repeat myself: READ THE BOOK.
            I repeat myself, but apparently the first time didn’t get through.
            Ciao.

          • Let’s see, effectively, the government dismounted regulation, specially the Reagan administration, precisely because the believed in the magic and rationality of markets. i.e, they believed in small government.

            That was the whole point of privatisation.

            You have to provide proof of this “government intervention to push banks to give out money to people who can’t pay”. Bacause that is your story, the US government twisted Wall Street’s are into giving out money for free.

            Bullshit.

            This Dodd guy, your neighbour, he forced banks to give out money?

            In any case you are saying I am right: the private sector needs strong regulation to avoid dodgy business.

            See?

            Imagine you had to live in a country to know it, then knowledge would be impossible. Don’t you think? Moreover: How do you know I don’t live, or have lived, in the US?

            One point: the 2009 bailouts were preceded by the 1995 bailouts the Caldera government offered to banks that engaged in risky behaviour. The data from 1994 Venezuela was used to understand the collapse of 2008, because you can actually know quite a bit of anywhere nowadays.

            Usually the acquisition and use of knowledge not acquired from direct experience is called “education”

          • In the 1990s, under President Clinton, Federal regulators pressed banks to expand lending to “underserved” areas and population segments. This pressure was exerted under the authority of the Community Reinvestment Act. There was a great deal of talk about “redlining”: the supposed exclusion by mortgage lenders of black neighborhoods (outlined in red on maps).

            One effect of this push was the increase in lending to “subprime” borrowers, who were disproportionately black (and hispanic). A secondary effect was expanded lending to marginally qualified non-minority borrowers.

            It should be noted that many mortgage lenders were willing, even eager, to make such loans. In a rising real estate market (which existed in 1990-2008), such loans are profitable. Easy availability of loans drove up the prices of real estate, further inflating the market. Banks and other lenders and also developers recorded huge profits. It was a great party until the music stopped.

            Thus it would be unfair to blame state intervention solely for the mortgage crash. A good analogy could be drawn from American football: the government was the quarterback, calling the play and handing off the ball. The mortgage lenders were the running back, who took the ball and ran with it.

            Two final notes: a major factor in the bubble was the acquisition of mortgages by the quasi-governmental guarantors FNMA (Fannie Mae) and FHLMC (Freddie Mac), which ended up holding a substantial fraction of all U.S. mortgages, and ultimately lost several hundred billion $. The management of Fannie and Freddie was closely tied to the leadership of the Democrat Party; but they were also protected by Republican House Speaker Denny Hastert and Rep. Mike Oxley (co-author of the Sarbanes-Oxley corporate reform bill).

  17. Bill,

    Less destructive? the Japanese government considered the evacuation of the Tokyo region, TOKYO, after the Fukushima incident.

    That is equivalent of evacuating the whole of Venezuela (around 30 million).

    Can you imagine what a Japanese national collapse in 2011 would have done to the world economy? To you personally?

    You can´t get more destructive than that. That is a nuclear catastrophe of historic proportions caused by private sector profiteering.

    More organised? again, have you taken a look at the insurance-hospital complex in America? that is a mess of epic size. Private bureaucracy at its summit.

    Populists? Have you checked the result of Reagan’s and Thatcher’s reforms on banking regulation? Did you hear about the 2008 financial meltdown? Ever heard of George W Bush´s role in watching over the housing market and Wall Street? all of them conservative right-wingers and quite blind to their own side.

    The private entities are more”practically competent”? Have you heard of CERN, the publicly financed research institute? It is a model of efficiency and innovation, publicly financed and staffed by people mostly trained by public universities.

    Have you heard of Kodak? Polaroid? Barings? Enron? private corporations that were poorly managed and disorganised.

    Corruption is not exclusive of either the public or private sector. However, it is up to the public sector to enact and execute rules and regulations to protect the people from corrupt criminals. A strong, clean state is necessary.

    • “That is a nuclear catastrophe of historic proportions caused by private sector profiteering.”

      It was caused by profiteering? I thought they didnt build the seawalls high enough.

      In any event, Chernobly, the mother of all disasters nuclear, was not caused by profiteering.

      I think this whole argument is besides the point though. Privatization is no panacea, nor is it a necessarily a good thing…it depends on the industry, the country, and its implementation and controls in place. But in the case of Venezuela, privatization of several industries with strong oversight would drastically improve the services of the population.

      I think privatization of industries, with partial government ownership (like in Norway) is probably the best way to go.

      • I agree very much. Unfortunately, some people left and rght just see easy, simple solutions to our problems: either interventionism or full privatisation. It depends a lot on many factors.

      • I think because of our history there are certain industries that should be out of the government’s hands. briefly:

        Mining

        Oil

        Tourism

        Food production and distribution

        Telecom

        Heavy industry

        Postal service

        More or less. So yeah, I totally agree with you on this point.

        • Effectively, postal service already is out of the hands of the government. Ipostal is defunct, and the service is being provided by MRW, Zoom, etc…

  18. Pero vamos a ver, la mejor empresa que este pobre país ha tenido, ¿no es PDVSA 1976-1999?.

    Y la mayor crisis bancaria que este país ha sufrido, en 1994, ¿no tuvo su origen en el sector privado?

    ¿Deben privatizarse la CVG, lo que queda del negocio petrolero, las telecomunicaciones en Venezuela? Sí, seguramente, pero solo cuando haya un estado capaz de privatizar y regular. De otro modo será un desastre, como siempre: Bochinche, bochinche.

  19. One thing:

    Placing corruption, delinquency and abuse of power in terms of public and private plays into the hands of politicians such as Chávez.

    In reality, one should ambition to become a citizen, not an ideologue. One should push for honesty and transparency in every field, not believe (foolishly in my opinion) that corruption is exclusive to either greedy capitalists or rotten bureaucrats.

    Privatisation is a policy that can succeed or fail. that is not the issue here. the issue is how to build a Venezuelan society that becomes resistant to corruption.

    That is more difficult to plan and do.

    • Alejandro I simpathize with much of what you have posted , moreover I am equally skeptic of looking for magic bullets as panaceas to all forms of mismanagement and corruption , for one reason or another private businesses for the most part are better organized and more competent and effective than govts but there are lots of cases where they are not that much better than public run bodies , In the end just privatizing will never be enough if you dont tackle govt mismanagement and corruption .

      I dont think human nature will ever allow the total erradication of corruption , at most the best that one can hope for is to control it so that it doesnt absolutely ruin the possibility for organizations to achieve some reasonable level of performance , be they public or private.

      Maybe control of business corporations by their shareholders is easier and more effective than popular control of the politicians acting as administrators or managers because in a modern corporation if you dont show concrete measurable results you ve had it , that helps them achieve greater competence but not necessarily to avoid corruption (specially if the shareholders are in on the gain) .

      Popular political control is very ineficient beause standards for the measurement of performnce are very inexact and hazy and can be manipulated by cunning demagogues too easily.

  20. Juan hasn’t learnt throughout all these years that he is repeating to the usual game as dictated by his gringo teachers who NEVER, NEVER, ABSOLUTELY NEVER really implemented those lessons they teach all the time.

    The privatisations he so often promotes are going to play along the ways they played in Russia from 1989: it is going to be a complete disaster that will benefit the next autocrat.

    Like in Russia a lot of people, from the opposition and from the regime and from the rest haven’t learnt we were and are still a FEUDAL society.

    When are you going to talk about land reform, for both rural and urban areas?
    Others have mentioned already the issue of privatising health and security…Juan continues to see the US system on that as the non plus ultra. The US might have a lot to teach on technology, universities, etc, but the items mentioned here? Please!

    • There is a difference between what the US government does and what economists study, teach, and recommend…

      The US is getting more socialist day by day as entitlements are not reformed and new ones are added in. Further crony “capitalism” (which really isn’t capitalism as it is anti-competetion) gets worse and worse as then rules and regulations are written by lobbiests who have the most to gain. Finally, while other countries actually lower their corporate taxes, the U.S. is at an appalling ~40% (adding federal and state) which only encourages mass exodus of businesses and opporations outside the country…

      Private entities are simply more efficient than public ones in most cases because of the incentivation to continually improve to help the bottom line (which can be both a positive force and a negative one, but in most cases positive). Competition further encourages this improvement and why in most cases you want to ensure you don’t set up a monopoly in the process….

      • CP,

        Socialist? Well, that is according to people in the USA alone.

        I am not talking about the USA now, I am not even talking about the US since Ronald Reagan. I am talking about the US (and the UK , for that matter), since their VERY APPEARANCE in the world stage.

        Please, learn a little bit about how those empires became empires in the first place.
        And try to learn how every single nation that is now developed got there in the first place.
        It was definitely not by the credo Juan keeps repeating here.

        • I have no idea what your saying and I did study economics in undergrad. England came to prominence, especially as it was the first to truly industrialize. US did as it industrialized as well. It has little to do with the government and the industries it controls/regulates with the exception of the military during times of war (which is debatable in and of itself of whether this is really beneficial…)…

          • The division of history in “since industrial revolution” and “the unknown past” is rather naive and very much outdated.

            The US kept regulating industries of all kinds as long as it needed and I am talking from its very beginning.
            It also kept copying trade secrets as long as it needed, just like China was doing for so long (actually, both keep doing that but less openly, albeit not more legally).

            The US kept protecting its internal markets for those products it was weak on (manufactures until very late), it didn’t do it for products where it had an advantage at the time and while the time lasted – cotton up to Lincoln times.

            The United Kingdom was a power much before it went into industrialization mode. It claimed, just like the US, to be for open markets every time it needed to sell its goods to those places where it had absolutely no competition. It prevented the import from those markets of a lot of things that could compete in its national markets – that goes for India and the rest of the world.

            The very same is happening at this moment in China.

            The Japanese believed in the same crap Venezuelan compradores believe in during the Bakumatsu period.
            http://en.wikipedia.org/wiki/Bakumatsu
            Then they realise what the Venezuelan old elite hasn’t got: things are a wee bit more complex. That made the Meiji period possible.

            Something you don’t even seem to mention: the UK and the US had a huge advantage when they started to trade agressively (talking about open markets with those that had not a chance) as the average educational level of its citizens was clearly superior to that of those other countries.

            Los chinos no son tan pendejos.

          • Your worldview seems a bit tainted and you are talking as if everything was caused by single events or government actions. Most breakthroughs in economic productivity (during or post industrial revolution) are born outside of the government, not inside. Government can enable economic growth (via providing a stable & predictable environment for business). Further, they may try to set up policies that can advantage its country over others (via tax incentives, monetary policy, etc.). I don’t think most economists would argue people won’t that…But the more a government tries to outright control and regulate vs. simply encouraging (ethical) competition, the more it actually destroys in the process.

        • What *is* my credo exactly. It’s funny how you, once in a while, make straw men about my beliefs, as if I’d been indoctrinated by Milton Friedman himself, as if what one learns in the US is a cookie cutter version of economics.

          These kinds of comments are really not very serious.

  21. http://goo.gl/dRgXgt
    The late and eminent Arturo Uslar Pietri said it all. Venezuela is a politically immature country that does not know (nor can face) its weaknesses and that caters to a largely parasitic population. It is an unproductive and vulnerable state, poisoned by ideology, instead of proposals of work, production and organization. In Venezuela, there is no viability for a national project.

  22. Changing subject:

    For reasons known to all a substantial amount of Venezuelans left the country. There is not an exact figure but people say between one and one and a half million Venezuelans have emigrated, most of them middle class and educated (any similarity with the “Migration to East” prompted by Boves in 1814 is coincidental) .

    We are not, it appears, poor immigrants hiding in the bush, but proud Venezuelans. Many of us still have memories of dollars at 4,30 (as in, 0,0043 BFs per dollar) and Uslar Pietri on TV.

    And yet immigrants we are. Most of us have gone to the US and Spain, but you can find us pretty much everywhere now.

    I think, precisely because we do not want to look like poor old immigrants from Bolivia or Mexico, clinging to the traditions of the native land, Venezuelans have developed a tendency to acquire the culture of their new country, sometimes quite forcefully.

    For example, I have this friend, never interested in sports, a hippy peacenik, that went on to live in Boston, became an ardent New England Patriots fan (in spite of his lack of understanding of American football) and even bought a gun!! Needless to say, he votes Republican and hates Obama, although he would do much better with a Democratic government, just to show he is an American Patriot.

    This other friend, a lifelong Catholic after our own way (i.e a religious fetishist who profited from Catholic holidays to drink, fornicate and have fun) went to NC, discovered the protestant God and became a born-again Christian; not really, I think, because a spiritual reasons but, I suspect, because being protestant looks more authentically American. This person goes to “Church” every Sunday.

    I am an atheist, but protestantism is to religion what McDonalds is to food. A bland substitute of the true sensual Catholic experience.

    I mean, we all know the story of the Venezuelan in Florida who, in the middle of a hepatic insufficiency, was visited by the evangelical Jesus in Miami (of all places), was cured (by Jesus, not the doctors), became an Anglo-saxon protestant and went on to become mayor of a wonderful place called Dade County, where many of our own kin have chosen to live because of rather unexplainable reasons (I mean, America has so much to offer, why Dade?).

    And who doesn’t have a friend in Spain who has started to use “vosotros” and pronounce the Spanish “c” and “z”?

    What about that peaceful Jewish boy who goes to Israel and becomes a settler?

    I myself, after 15 years out of the country, have acquired many ridiculous mannerisms that look totally weird and imposted. Like drinking tea. Who the f$#ck drinks tea in Venezuela, I ask you?

    One thing that attracts my attention is this inclination (having ran away from leftist animalism), we have to chose conservative politics. It’s like an allergic reaction, we have to the left spectrum of things.

    I mean, Venezuelans in Spain love PP, despise PSOE and loathe PODEMOS. Once I ran by chance into a group of Caraquenos in the basement buffet of El Corte Ingles at Serrano (a sort of temple of Spanish poshness) the only thing they didn’t do was to scream “Viva Franco!”

    In the UK we go tory europhobic.

    In France we take to drink “eau a la menthe” and Pastis (which is disgusting, but we say is just like Anis). We even simulate being wine experts (oh yeah, I have seen this).

    In America, well, you know: Republican, guns and religion, even protestantism. Some guys go to the extremes, like the John Birch Society.

    Deep down, I think, this is just a sign of insecurity. Yesterday we didn’t want to be Colombians or Ecuadoreans, today we don’t want to be immigrants from the Third World.

    There is also this uncomfortable sensation with our own identity. I believe we though we were something and then Chavez showed us the ugly llanero, tierruo face of our collective unconscious. We don’t like it or accept it.

    But we remain Venezuelan. The other day I called to a fruit distributor in Sweden. The guy was Venezuelan and immediately suggested for me to pay for the fruit evading VAT and talked to me in confidence, like we were longtime friends.

    Venezuela se lleva en la cabeza.

    • This stereotypical assimilation that you speak of is nothing like the experiences I have had with my own family or Venezuelans I have met abroad. Also, “poor old immigrants from Bolivia or Mexico, clinging to the traditions of the native land.” Maybe you don’t realize the dumb classist tone you are projecting but most Venezuelans I know try to keep as many traditions alive as possible in foreign lands.

      • Well, you have understand, I was being cynical. I am mocking a stereotype that exists. Nothing to do with you, so don’t get angry.

        I think Mexico is a great country, with a fantastic cultural richness. with problems but also with great successes in the last 25 years.

        Bolivia however, is a half-cooked Venezuelan invention, born of our meddling in other people’s business. Like us, they seem incapable of building normal institutions.

    • Tea? In Vzla I was addicted to Nestea. As in the really really sweet pre-mixed stuff. That and a canilla were my after-school snack. Then again, perhaps I got that from our British friends in the oil camps…

        • Waayyyy back in the day, Shell Oil exploited oil in Vzla.

          Shell Oil was a British Dutch company, known officially as Royal Dutch Shell.

          Hence the British camps…………………….like in the 50’s, 60’s. 70’s and 80’s.

    • Assimilation is for the benefit of both the inmigrants and the countries that recieve them, nobody wants stuff like the hostile Arab encampments on Europe.

      Also:

      “Deep down, I think, this is just a sign of insecurity.”

      What a condescending comment. Also, a classic example of projection, coming from a guy that likely calls himself a Leftist because “that’s what smart people do”. The Spain example is particulary obnoxious, given that PODEMOS is a political ally of the Venezuelan regime, but I notice how all your examples talk about the “dumb Right wing” people.

      • moi? a leftist?

        In North Korea I would be a nazi, in Cuba a fascist, in China a right winger, in Greece a conservative, in France a liberal, in Japan a centrist, in Denmark a socialdemocrat and in America a would belong in the wing of the Democratic Party.

        Without changing my views.

        And assimilate away, my friend, assimilate away. Don’t think I think right wing people are dumb… dumbness is well distributed across the whole political spectrum

    • I worry about the extra baggage on Cubana de Aviación. I’m talkin’ about Maduro’s expanding panza. Recent photos would indicate a weight gain of at least 20 Kg.

      • Yes, this could be tragedy for 21st century socialism. Perhaps on his return he should appoint a committee to do away with the bourgeois concept of gravity.

    • The flocking of leaders to Saudi Arabia is further proof that you get a pass on the Universal Declaration of Human Rights and all other norms of basic civilized human conduct if you produce a lot of oil. Of all the leaders present, Maduro is one who can safely say he is with a natural ally, and in this regard, Venezuela is becoming more like Venezuela Saudita (although not in the sense that people generally use the term as a description of past prosperity rather than the medieval condition of their self-governance) every day.

      • This is going to get talked about in capitals all over Latin America. The tide of opinion is turning, and as long as the Chavistas keep showing their ass like this, they are going to generate a wave of condemnation that will affect them.

  23. There are privatizations which are a disaster, and which produce more corruption, inefficiency and poorer service than the public service they replaced; there are privatizations which require high levels of regulation to prevent predatory or monopolistic behaviour and therefore give rise to administrative structures and external costs that replace the thing being directly administered; and there is the privatization of something like, yoghurt production or beer sales, which I think anyone of any political stripe can say is defensible. In other words, I don’t think a general theory of privatization is useful: each case is different. Having said that, with the very high levels of Venezuelans employed by the government or government companies and agencies, one can understand why the subject would not be popular. You would get a similar reaction, quite understandably, from a poll of similar employees anywhere in the world, its just that in Venezuela, the exceptionally high numbers translate to a kind of national consensus. Which doesn’t mean the argument should be tabu; it just explains why.

  24. “SI bien en teoría una empresa estatal podría ser viable, nuestra praxis criolla nos indica claramente que creer eso es alimentarse de ilusiones.”

    Glad to see that when it comes down to it you guys are still basing your theories on racist ideologies. Nothing has changed over here at Caracas Chronicles!

      • No nada JC, solo me da risa ver que después de tantos años sigues con el mismo análisis superficial y vacío, como cualquier analista chucuta, cualquier taxista en cualquier esquina de Venezuela…

        <>

        A la raíz del análisis de Toro está la misma ideología errada de que los problemas del subdesarrollo tienen algo que ver con la cultura, la mentalidad, el interno del Venezolano. Es absurdo, y en cualquier departamento de desarrollo económico se morirían de la risa al escuchar sus teorías chimbas y racistas.

        • Todos los problemas, taras y traumas del venezolano se pueden rastrear a algo muy fácil, la exaltación de aquello que para ponerle un nombre bonito le dicen “viveza criolla”, pero que el chigüire bipolar definió en una tautología, a pesar de ser un roedor chiflado:

          http://www.elchiguirebipolar.net/10-10-2014/hombre-que-guarda-puesto-de-estacionamiento-sigue-siendo-un-mamaguevo/

          Cuando “ser vivo” deje de ser visto como algo bueno y sea visto como lo que es, que es comportarse como un mamagüevo hijo de puta que lo único que merece es un puñetazo en la jeta, este país cambiará su anti-cultura y tendrá chance de progresar.

          Y sí, eres un racista, porque el fiambre podrido te metió el racismo en el coco, bolsa.

          Me dan risa los chabobos, que pretenden ser racistas en un país donde el 95% de la población tiene el mismo fenotipo racial.

  25. One cannot accuse of racism persons who say that people of one same race can do thngs well when working within a business corporation and bdly when working for a govt corporation. They are really pointing to the fact that certain organizational cultures can make men more competent than is the case when they work in a different culture. I know of transnationals (in the past ) which in the past sent their criollo professionals to work as managers in europe or the US , heading organizations staffed or manned by europeans or americans , precisely because they were so good at their jobs , When it comes to business all that matters is competence , being able to produce . When it comes to poltized govt companies all that matters is ideological loyalty even if the people they appoint are absolute fools .

    • two examples come to mind . Polar is responsible for producing something like 80% of the cornmeal produced in Venezuela yet they control about 50% of the countrys capacity , the rest being controlled by the govt . Ergo Private companies producing corn meal are more competent and productive than socialist companies controlled by the govt .

      The other is sugar , aside from the sugar which is imported by the govt , again 80% of the sugar produced in Venezuela comes from the 6 sugar mills which are privately owned , the remaining 10 socialist mills (which are govt owned and run ) produce only 20% of the total . Ergo private surgar mills are more productive than socialist govt run sugar mills .

      Is the above comment racist ???

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