You don’t have to tell me. I know. Arguing about “socialism” is, in the grand scheme of things, one of the top 5 or 6 most pointless way you can spend your time. Believe me I know. I mean, it’s obvious: there’s nothing like a settled definition of “socialism”. For every Bernie Bro that sees “socialism” in Denmark there’s a doctrinaire Marxist who argues socialism has never existed yet, since there’s never been a classless society. Socialism can mean government-run dental care or Pol Pot’s killing fields, it can mean the CLAPs or HydroQuebec. Arguing about a thing-that-isn’t-one-thing is idiotic, pointless, ridiculous, an extravagant waste of time and energy that can’t be defended and that sophisticated people shy away from because they have better things to do with their time.

Trust me:



…and yet…

There’s something about this debate that I can’t resist. Because idiotically compromised though it is, “socialism” is obviously a category that means enough to people to keep going back to again and again for different reasons and in different ways. It’s like the scab you know you shouldn’t pick at, but it just sits there calling at you, beckoning you, so irresistible until you just can’t help yourself and you just give it a tug.

That, at any rate, was what was going through my mind as I wrote this thing about the vastly different experiences with “socialism” in Venezuela and Bolivia for the Washington Post. 

Since 2006, Bolivia has been run by socialists every bit as militant as Venezuela’s. The country has experienced a spectacular run of economic growth and poverty reduction with no hint of the chaos that has plagued Venezuela. While inflation spirals toward the thousand-percent mark in Venezuela, in Bolivia it runs below 4 percent a year. Shortages of basic consumption goods — rampant in Caracas — are unheard of in La Paz. And extreme poverty — now growing fast in Venezuela — affects just 17 percent of Bolivians now, down from 38 percent before the socialists took over 10 years ago, even as inequality shrinks dramatically. The richest 10 percent in Bolivia used to earn 128 times more than the poorest 10 percent; today, they earn 38 times as much.

Going through the comments on the WaPo comments section, it’s clear that some people got it and some people didn’t in all the predictable ways for all the predictable reasons. You could just call the whole thing a waste of time…but I don’t think we should, and here’s why.

For all the differences between them, Evo, like Chávez, successfully established himself in power as the voice of the radical left. Like Chávez, Evo’s stance is definitional: he defined what it means to be a radical leftist in Bolivia through his positioning. This, I think, is what makes each of their claims to “socialism” plausible: each was credible (and, indeed, widely believed) in his national context as he set out a line of action as socialist.

That, substantively, those lines of action are in fact very different is…sort of my point! A skillful politician can establish the left-bound of political action as a radically destructive force in society, or as a relatively benign one.

And it just depends. On many of things. But key among them is their basic approach to the spending of the public’s money. Are you willing to be broadly prudent about it, or do you insist on approaching it like a junkie approaches his next fix?

To define socialism as a pathologically destructive approach to public sector financial management is to rig the game: to win definitionally. It isn’t realistic, and it isn’t fair.

Listen, I know this isn’t a debate worth having, because the signal-to-noise ratio it generates is simply dreadful. But sometimes there’s a scab there and you just gotta pick at it, y’know?

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    • don’t know if they do the same in Bolivia, but I heard an endless battery of economists for more than a decade in Alo Ciudadano predicting on daily basis that it would happen exactly what is happening

      • Forecasts have Bolivia essentially flat for half a decade or more. Socialism can produce seemingly good results for 10-15 years, after that it needs to be removed.

  1. Tim Worstall, a contributor to Forbes, regularly uses Venezuela as his “how not to” example. In his articles, he separates “socialism” from attempts to eliminate the market from the economic model. From his point of view, all economic evil stems from trying to eliminate market forces from the economy, and not from state participation in the economy. From the article below:

    “And to our larger economic lesson, one we really must learn from this disaster. We have a range of viable economic policies which we can use. From a market based near laissez faire like Hong Kong all they way through to a market based social democracy like the Nordics. We can indeed decide to tax more or less, run more of society through the government, as we wish. But the most important word there is “market.” Non-market economies and societies do not work, ones that contain markets at least have the possibility of doing so.”

    I think that in order to have any conversation about Socialism, it is absolutely necessary to define your terms first. The difference between taxing and redistributing wealth and trying to eliminate market forces needs to be addressed as part of the discussion.

    • Amen Quico and Amen Roy. I think we’re still using the language of the twentieth century to describe the ideas of the nineteenth century when we should be trying to understand how some of the values expressed by these two-hundred-year-old ideas might be implemented in healthy ways in the context of current knowledge of economics, human social psychology etc. We could start with some good information like that which Johanna Brockman has done in “Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism” and etc. Thanks for taking up this subject, Quico!

    • Thanks Roy, this confirm that Socialism is a parasitic ideology that lives of the market. Kill the host, you eventually kill the parasite as well, what happened in the USSR.

      • Again, it depends on the definition. If you define Socialism as state control of the economy to the point of eliminating the market, than you are correct. However, others view Socialism as a high degree of government participation in the economy, such as the government owning and running businesses (Services and Health care), and being a major employer.

        Personally, I don’t think that there are very many things that the government can do better than the private sector, but that doesn’t mean it doesn’t work at all. What DOESN’T work at all is trying to eliminate the market by dictating prices and exchange rates. That is why the terms need to be defined. When we use words that have different meanings to different people, we end up talking past each other.

  2. The Spanish intellectual Antonio Escohotado spent the (probably) last 10 or 15 years of his life writing 3 thick volumes (Los enemigos del comercio) about all this. If for you the debate “is not worth”, for him it has been the center of his life. I still remember your post here written some years ago explaining why, after attending a communal meeting to decide how to build houses for the misiones in Caracas it was clear for you that you have nothing to do with communism. It wasn’t your main purpose but it explained clearly what is in my view the main flaw of this way of thinking, why it will fail over and over again and even, if you let me stretch your words, why it may end up returning the same number of times.

    In 5 or 10 years another person may still remember the words you have written here today in what you call a worthless debate and then, who knows, he will prove that, after all, it wasn’t worthless at all.

    • OK guys: lets assume you have more in mind than “I told you so” or “the government needs to go”. How (step by step) can this be turned around to benefit the people? Then again maybe you are just doing an autopsy.

  3. A veces hay recetas malas que un buen cocinero compone y transforma en platos deliciosos ,y otras recetas buenas que un mal cocinero convierte en platos incomibles , sospecho que el socialismo a la boliviana (y quizas lo mas realista es hablar no de EL Socialismo sino de Los Socialismos , dada la variedad de versiones que de el se conocen) debe su presente exito mas a la sensatez y habilidad de los ministros del gobierno de Evo que a Evo mismo……!!

    Esta reflexion no es sino una reedicion de la celebre frase de Den Tsiao Ping ‘ no importa el color de la pelambre del gato sino cuan bueno es cazando ratones’….

    Tuve ocasion de ver la respuesta que un ministro Boliviano de economia daba a un periodista que le preguntaba sobre la pesima situacion economica de Venezuela …..’es terrible lo que pasa en Venezuela por que desacredita ante la opinion latino americana la capacidad de las izquierdas para desarrollar economias sanas y prosperas ‘ lamentandose que ‘lo que pasa en Venezuela pone atras el reloj del avance de la causa de las izquierdas en america latina’ ……..

    Sospecho que el socialismo es una receta muy inferior a la receta del libre mercado , mucho mas propensa a producir fracasos y desastres economicos, en buena medida por que atrae las mentes mas devotas de los delirios justicieros y las utopias que suelen ser las mas ineptas para haberselas con los retos de la realidad .El socialismo para que funcone necesita de implementadores mucho mas habiles de los que exige el modelo liberal del libre mercado y en america latina estos no abundan !!

    • “El socialismo para que funcone necesita de implementadores mucho mas habiles de los que exige el modelo liberal”
      Totally agreed with this statement.
      However, with Chavismo. It was never a genuine intellectual effort to improve things but just raw class resentment and blind ideological devotion for the lack of true understanding how the world works.

  4. Is it any more pointless than writing “The Seven Point Plan” when there isn’t a political framework to do any of them?

  5. Los hechos y los resultados hablan mucho más fuerte que las palabras.

    No importa cuántas veces se diga que el socialismo es otra cosa, el socialismo ES lo que ha pasado en Venezuela, Cuba, Corea del Norte y Camboya, y no hay nada que hacer para cambiarlo.

  6. A couple of things:

    – Even after all of this Bolivia is significantly poorer than Venezuela. This could mean that down south there is more developmental low hanging fruit to pick, and that could cover shortcomings in the economic model.

    – Also, how much dicking around with prices have the Bolivians done? This has to do with Worstall’s comments about markets. Also, how are property rights outside the resource sector?

  7. Socialist POLICIES will be socialist POLICIES. It doesn’t matter if they eat arepas or maple syrup.

    The difference between being Venezuela (with a ruined economy), or just having a stagnated shitty economy like Canada current has, is the INTENSITY of these policies. The dosage of the medicine is where the difference between life and death lies.

    Uruguay, Bolivia and Ecuador were used as examples in this blog as success cases on how to correctly manage economies. Since Uruguay and Ecuador have already gone to hell, now it’s Bolivia the lonely poster child of ‘sane socialism’ that remains. Until when? Not much, I presume.

    Meanwhile, Paraguay has far more impressive figures than Bolivia, but no one seems to care.

  8. There is nothing more Capitalist than a Private Company, yet because it is Capitalist it doesn’t automatically make it successful. Lots of companies going broke all the time. The major difference is WHO runs the company and the collective talent of its employees.

    I think the problem with Chavez/Maduro Socialism is that the easy money corrupted everything and both were utterly incompetent and morally deficient to begin with.

    I believe you can drive to prosperity, through Socialism or Capitalism, or any combination of both. The success or failure is in the details.

    • I tend to agree. However, I would point out that when a private corporation fails it is the shareholders, who willing put their capital at risk, who lose out. When a public enterprise fails, it is the taxpayer, who didn’t really have any choice in the matter, who loses out. Of course, you can argue that they voted for the politicians who made the decisions but, in general, the chain of accountability for public enterprises is longer and more tenuous.

      • The problem is not really Socialism vs Capitalism.
        The problem is the deeply flawed electoral democratic system that appoints very unqualified people, in positions of power.

        At least in the private sector, your ascend to power and decision maker is more organic, deserving and accountable. In the public sector not so much.
        That is the main difference.

        No company in the right mind would hire a bus driver with no experience nor education as its CEO.
        But such things are totally possible under the current political system, hence the predictable results.

  9. There is a distinct difference however between a State investing in Development vs. traditional Latin American socialism. They are often confused, but in general you can say one is economically constructive, and one is economically destructive. For example, few would argue that improving education in a developing economy is a bad thing. Another example, spending money on roads. However, spending money on education when you don’t have the money, nor a way to pay for borrowing the money, is destructive.

    That is what is very common among the different attempts at socialism in Latin America is the inability to balance the books, that rapidly leads to socialism just being a cover for outright corruption striping the country of resources.

    So, we end up with everyone confusing corruption in Latin America with socialism, and even worse just regular development.

  10. One question that this article poses implicitly but does not explicitly state is whether we can imagine a Venezuela run on the Bolivian model as producing much better results for the Country than that which Chavez and his succesors have applied in Venezuela,? if we can, how do we account for the difference in the results !!

    Another maybe crazy question …if Chavez had never happened and Venezuela had continued to be run as per the policies of the defunct 4th Republic, would we now be much better off than we are now or worse off or about the same …….??

    I think that intuitively we know the answer to these questions , the thing is how do we explain our conclusion ??

  11. 10% of Bolivia’s population lives abroad and send money back home. The economic center of Bolivia is Santa Cruz, dominated by highly competitive, young capitalists. They provide a very large percentage of the Bolivian GDP. The Altiplano, the political center is rather parasitic of the low valleys of the so-called Media Luna.
    I would hesitate to call Bolivia a socialist success. Compared to Venezuela, of course, it’s a marvel.
    Bolivians are also more aggressive than Venezuelans. They hang presidents from lamp posts and stone ministers to death. This attitude offers a high incentive for politicians to keep on their toes.

    • “They hang presidents from lamp posts and stone ministers to death.”

      Now we are talking! That is the kind of accountability we need here.

  12. Political affiliation is increasingly reaching levels that look like religious sectarianism, as it had in Venezuela under Chavez, and debates about “socialism” and “capitalism” are the doctrines behind this sectarianism. Like most religious doctrine, these debates obscure more than they reveal and are ultimately meaningless, except that the debates are generated by opportunists who seek to consolidate their power and influence, and that people cling to them for a sense of identity, a sense of belonging, a simple way to make sense of the world, and in order to conjure an enemy that is responsible for the world’s troubles.

    I’m still in the Chavismo is more fascist than socialist camp, or maybe fascism is a form of socialism, but really, who cares? Chavismo was reckless in spending a huge bounty, and it is heartening that there is another example whose relative success cannot simply be explained by the Church of the Doctrine Against Socialism. It is heartening because it pulls us back to reality and away from these meaningless and abstract debates.

    The bottom line is, we need to elect leaders who inspire us, but not in ways that prevent the attainment of the practical over the reckless.

  13. “Turns out the difference between Bolivia and Venezuela has nothing to do with abstract ideological labels, and everything to do with fiscal prudence.” (from the WP article)

    That’s over-simplifying it.

    As in all conundrums, the answer usually consists in a combination of multiple factors.

    – In Bolivia, the prices of their resources went dramatically up, and they have a much more diversified economy, including gas, mining, agriculture etc. In Vzla, the only resource they produced went up, and then dramatically down. And they can’t even fish fish or grow some coffee for export.. Meanwhile..:

    – In Bolivia they did not Steal every penny. There is corruption, of course, but not anywhere freaking near the astronomical Venezuela corruption, which is everywhere, public and private sectors. Thus, they saved, paid debts, increased reserves. Why? Much less corruption than Kleptozuela. Bolivians steal, but they are satisfied with stealing much, much less than Venezuelans..

    – At just 11 M, Bolivia has a 3rd of the population to maintain, compared to Vzla. And a vast majority of them were poor, uneducated indigenous people, with little expectations. As soon as they saw a government willing to give them some education, health care and more jobs, they were happy. There was virtually no middle class there, so people began to have some $$ to spend, activating the economy. In Vzla people expected much more after the oil boom and Chavismo’s gifts, the middle class disappeared (gone, reduced to poverty, or.. very rich now, you know how..). Thus, an indigenous dude like Morales became popular, looking just like all the other Indians.

    – Bolivia is really a Capitalistic Socialism of sorts. Un arroz con Mango. They still allow, and even prefer many private companies to make profits there, in mining, and other areas. It’s disguised as ‘socialism’, to sell it around.. but behind the “nationalized” industries, they hide middle-upper class shrewd entrepreneurs living the Capitalistic Dream:

    There no real “Capitalism” or real, true “Socialism”, certainly no ‘Communism”, plus no-one really knows what they really are. In countries like the USA or in Europe, you have numerous Socialist programs.. In places like China you have intense Capitalistic competition for riches.. Bolivians love international trade now, personal bank accounts, having money to spend, malls, cars, vacations, good restaurants..

    So it’s a combination of all ideologies. What matters is how much Corruption exists, how much they steal. Depends on the skill of the governors and leaders (Evo has very good ‘advisers’ who make the Economic and Financial policies, Evo only knows how to run a Coca farm, if that)- while Maduro has had horrible ministers and advisers, all corrupt and inept). Depends on the Judicial and penitentiary systems. You have to have laws and punishment, instead of 98% impunity as in Venezuela. I bet Bolivia is better there too.

    Fiscal Prudence? Socialism? yeah, yeah, yeah,, it’s really less Corruption, lots of disguised Capitalism, Competition, profits, and a few educated leaders, shrewd economists and advisers to run things. Better education, better security, and over all, some white-collar thieves, politicians, bankers going to jail.

    • Corruption alone or stupidity alone don’t force a country to implode. Putting them together, and you got a real disaster. Compound it with a market that is very singular in nature, and you just added gasoline to the house on fire.

      I don’t think the author was implying that, but, some clarification is definitely in order.

      VZ has 3 strikes against it. Corruption, stupidity, and a single source of income.
      Bolivia has just 2, compared to VZ. Corruption and (now) stupidity. But the market diversification is not nearly as dire. Bolivia and VZ are close enough to each other to draw very similar comparisons (as well as ethnic makeup), but… They are not the same.

      Canada is facing (far) less corruption than VZ or Bolivia. But it also has a much more diverse economy that can support the population through more difficult times and still maintain “social” programs. Where the danger lies for Canada is the increased number of it citizens who either work for or rely (almost) exclusively on the gubmint handouts. That is a VERY dangerous thing.

      The United States has its share of corruption at different levels (I won’t waste this forum on the laundary list) but there are more checks/balances in place to avoid this. Namely, a free press (even as biased as some outlets are) and a representative republic. But again, the number of people on gubmint assistance (freeloaders) and gubmint employees continues to skyrocket.

      Canada and the United States may share a border, but, the economies are different as are the makeup of the populations. (Canada has 1/4th the ethnic diversity compared to the USA)

      The whole point of putting this information out there is that “social” programs need to be kept in check so as to avoid becoming “socialist” programs that undermine both the economy of the country and the ability to grow the market. This is what lets a country weather bad times.

      There is no one silver bullet to avoid a downfall. Nor does “socialism” in of itself lead to failure of a people. Stupidity and Corruption at the gubmint level make life hard for everyone.

      And in the case of VZ, it is a lethal combination.

  14. Most modern economies follow hybrid models that mix in varying combinations free market features and statist features while attempting different ways of making them compatible with each other …., pure statist or market economies are rare …….sometimes the market features aren’t ideologically so sexy so they are allowed to operate under a heavy mantle of fervent ‘statist’/socialist rethoric …including some showy gestures that emblematize the govts socialist identity ……(like the nationalization of some very visible company) ….I suspect that pols knowing this ideological appeal of the ‘socialist’ brand but understanding the realities of how economies actually function will sometimes practice an Ornamental Socialism while protecting a less visible Functional market based economy…….!!

    Sometimes I fear the problem is not primarily ideological but a question of organizational or functional competence , where even if the model ideologically adopted is flawed the management of the model is so full of blunders that things are made worse than they need to be because of the model !!

    The governance in Venezuela has been particularly chaotic and incompetent because an ideological lofty discourse alone and by itself was supposed to lead to magically good results ….which of course is never the case . The corruption I see as flowing from cultural causes compounded by the opportunities for graft and corruption which such chaotic and incompetent governance fostered and protected and the flood of wealth which high oil prices showered on the govt…!! Chavez megalomania of course could only make things worse !!

    • Clear example of false equivalence.
      One thing to remember is that Labels as in Ideologies always fall short to describe accurately the reality.
      Currently Venezuela is more like an Anarcho-Kleptocracy pseudo Marxist failing populist State with remnants of capitalism here and there.
      Chavismo no so secret ultimate goal was/is to bring about a Castro-Marxist State, slowly phasing out Democracy as a means to that end.
      The whole thing has devolved in this chaos of improvised inept policies to put out the constant daily fires while maintaining power at any cost.

      Bolivia is still more like a populist functioning Democracy with heavy social oriented policies.
      Evo might not have the conditions or the money to do enough damage, similar to what Chavistas have done, so he has to tolerate the productive sector of the country and be somehow moderate and more accountable in his approach.

    • It started as the hijack of Democracy and implementation of a Castro-Marxist state by an inept megalomaniac.
      It quickly degenerated into a Kleptocracy / Dictatorship as a means of survival.
      The power is now maintained by force rather than populism.

  15. Venezuela has been giving away dollars to businesses and well connected folks for cheap to almost free since 2003. As far as I know Bolivia hasn’t taken that particular path to socialism.

  16. Is that a Crucifix in the shape of a hammer and sickle? 😛

    How bad do you have to be at Marxism to come up with that gem?

  17. “Socialism” is so has-been with Venezuela and all too confusing with European Socialism. Besides, it’s not what is happening in Venezuela. Venezuela is 21st century Communism. Narco-Comunism to be exact. All this crap is transition to Communism.

    Venezuela today tops the list of narco-states with the designation of Tareck as VP. This means that Venezuela is above Afghanistan and Guinea-Bissau in the narco-state rankings. Venezuela is the undisputed leader of the top tier of narco-states with most of its senior leadership in the cocaine business. The cocaine biz is roughly a billion dollars plus annually for them based on 2016 revised tonnage estimates.

  18. The failure of the “socialismo del siglo XXI” is not so much the monetary vs. market economy models as much as the degree, scale and magnitude of corruption, graft, thievery and pure mismanagement which this country has been subjected to. And consequently its the “state” run economies which are more prone to this type of mismanagement than the market run economies. The failure of this “experiment” was that no one was able to control the venality of the white collar apparatchiks, sons and daughters of the new elite and just the plain greediness and “revanchismo” of a social class which was left by the roadside while the “others” filled their pockets.
    The tragedy is that the worst in history is always what repeats itself.

  19. But isn’t Bolivia spending in large part monies that have been given to them by Venezuela over the last 10 years? Socialism, spending other peoples money”, isn’t that what has been going on?


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