The choices we make

Quico argues that it was morally wrong to lead the UNASUR economic policy mission to Venezuela. I believe it would have been morally wrong not to do so.

There are many definitions of friendship, and to me most of them sound vacuous. Saying that a friend is someone with whom you have a mutual bond of affection, for example, seems to me to be circular at best. Perhaps a more useful definition is someone whom you want to hang out with, with whom you share interests and passions, and whom you find engaging and fun. By my definition, you cannot be friends with someone you get bored talking to. And a true test of friendship is when that person can look you in the eyes and tell you that you are doing something wrong.

By that token, I consider Quico’s lucid piece on my public positions a true act of friendship. Quico takes me to task for giving economic policy advice to the Venezuelan government through my role as technical coordinator of UNASUR’s economic policy mission to Venezuela in 2016. Drafting a report to authorities outlining the measures needed to stabilize the Venezuelan economy, Quico argues, is nothing more than a “monstrous conceit.”

Those are harsh words, and coming from someone whose views I respect and value, they merit careful reflection and consideration. At the very least, they are examples of my failure to communicate my views and reasons transparently enough so that those that I hoped would be on my side could understand them. I therefore put immense value on the opportunity given to me by Quico and Caracas Chronicles to engage, react to, and learn from these criticisms.

Just so you know what I did last summer

“Garden Leave” is Wall Street lingo for the time that you are forbidden from taking up employment at another financial institution after leaving your job. For most people, it is a couple of months of drinking margaritas and reading John Grisham. For me, it was time to write the longest unpublished piece of research that I have ever been engaged in.

In May of 2016, right after leaving Bank of America, I accepted an invitation from UNASUR to act as technical coordinator of a report outlining economic policy recommendations to stabilize the Venezuelan economy. (Why UNASUR? Simple. It was the only international organization that the government was willing to take advice from). Given that the Venezuelan government decided not to publish these recommendations, I am bound by my agreement with the organization not to discuss the contents of the report, though nothing precludes me from posting a link to a story that does. I did not request nor was paid any remuneration for my participation in this project, for which UNASUR only covered my travel expenses (including a terrifying Dynamic Airways CCS-JFK flight whose landing made me feel like I had just won the lottery).

I have yet to find a neoclasically-trained economist who has had access to the UNASUR report and disagreed with its key policy recommendations.

As Quico suggests, there is little in the substance of the report that would be very controversial among economists, and I have yet to find a neoclasically-trained economist who has had access to the report and disagreed with its key policy recommendations. But Quico does not take issue with the report’s recommendations. He takes issue with the ethics of writing it given the possibility that the government could have actually paid attention, stabilized the economy, and as a result consolidated its hold on power.

The humanitarian aid debate

To get a better sense of the arguments being made here, it may be useful to consider for a moment another dimension of the current policy debate: the Maduro government’s decision to block the receipt of humanitarian aid of food and medicines that could alleviate the country’s shortages of essential consumption goods and attend to the acute deprivations faced by thousands if not millions of Venezuelans.

To most of us, the government’s refusal to accept humanitarian aid – going as far as confiscating a shipment of 600 boxes of medicine by Caritas international – is the most blatant example of chavismo’s hypocrisy. Certainly, we say, if they cared at all about the Venezuelans who are dying of hunger or lack of medicines, they would have no problems in accepting the obviously needed donations of essentials that could directly and immediately help many Venezuelans live through the current crisis with a greater measure of dignity.

By the same token, the opposition’s insistence on the government’s acceptance of humanitarian aid, including its inclusion in the conditions for a broader proposed negotiated agreement with the government, serves as a clear and present demonstration that it continues to occupy the moral high ground. The opposition – so the argument goes – cares about Venezuelans and wants to help solve their problems. The government does not.

I fail to see how it can be morally right to advocate for humanitarian aid but morally wrong to advocate for economic policy assistance to Venezuela.

I have yet to see anyone make the argument that the opposition should block humanitarian aid to Venezuela to help provoke the regime’s demise. And I have yet to see anyone criticize aid organizations trying to organize assistance to Venezuela as collaborationist stooges helping to maintain a murderous dictatorship in power.

Yet I fail to see how it can be morally right to advocate for humanitarian aid to Venezuela but morally wrong to grant economic policy assistance to the government. In fact, if the estimates that other economists and I have come up with of the efficiency and corruption losses from exchange controls are even remotely right, fixing the country’s dysfunctional FX regime would generate increases in the actual supply of essential goods on store shelves that would dwarf those that could be obtained through any humanitarian assistance initiative.

This, in essence, is my problem with Quico’s argument. He believes it its morally wrong to give economic policy advice to the current government. I believe it is morally wrong to withhold it. This is not because I want to help the government. It is because I believe that fixing the Venezuelan economy would alleviate the sufferings and hardships of Venezuelans, and that goal for me is more important than any political objective.

Quico and the theory of textbook sanctions

Taken at face value, Quico’s argument is that we should do everything possible to make the Maduro government get economic policy – and possibly everything else – wrong. In his view, giving economic policy advice to this government is irresponsible: God forbid they actually listen, do the right thing, and as a result consolidate their hold in power. Flying to Caracas to give the equivalent of an Econ 101 lecture to the economics cabinet and their Spanish advisor is morally suspect: why would anyone in his right mind do anything that could help this government survive, and especially, of all things, tell them what they need to do to fix the economy?

I like to think of this argument as Quico’s theory of textbook sanctions. Mind you, this is not the same thing as a textbook theory of sanctions. Rather, it is the theory that denying the knowledge contained in basic economics textbooks is a useful way to pressure for regime change. Deny chavismo access to basic knowledge and the regime will collapse faster.


This set of ideas take me back to 2002. Chávez was at an all -time low in approval ratings, polls showed the opposition handily winning any election, and the economy was in recession after a poorly managed balance of payments crisis. Sound familiar?

In order to try to force the government to call a national election , the opposition coalition decided that year to call an indefinite general strike, bringing the economy to a standstill for over two months and causing losses estimated at upwards of 10 percent of GDP. The thesis was that the deeper the economic crisis, the easier it would be to force Chávez from office.

The result was that the opposition managed to convince Venezuelans of something that Chávez had not been able to on his own– that the Coordinadora Democrática couldn’t care less about the well-being of regular people, and that it was willing to do anything, even if it meant causing lasting harm to the nation’s economy, in order to put itself in power. The 2002-03 strike lent credence in the eyes of many Venezuelans to the characterization of the country’s opposition as led by an upper class group who could, of course, afford a luxury that regular people could not: spending two months without a paycheck.

Invisible peoples

Most of the useful things I know, I learned through or by the side of my love and lifetime companion María Eugenia. One of them is that anthropology is perhaps the most valuable – and definitely the most interesting – of the social sciences. It was almost twenty years ago that I borrowed her copy of Clifford Geertz’s The Interpretation of Cultures and immersed myself in it. Halfway through it, I found myself in the midst of a harrowing description of Indonesia’s 1965 coup and the ensuing violence during which 250 thousand persons, most of them Communist party members, were killed.

What struck me most deeply about Indonesia’s case is that the violence was ideological rather than ethnic or religious. I remember thinking to myself at the time that I had no institutional referent for a society in which mass killings of that type could take place. I did not know a place where people could hate those who held to different ideas so profoundly so as to usher such massive acts of violence.

What I began to learn that day is that violence begins by making people invisible. In order to do real harm to your opponents, you first need to convince yourself that they are not persons. Only when you can fully characterize them as the embodiment of what you are not, can you justify using all means available in their destruction.  And there is nothing more terrifying than understanding that my country has now become such a society.

One quarter of Venezuelans consider themselves chavistas, two-thirds have voted for chavismo at least once, and more than half think that Chávez did a good job as President. We ignore these facts at our own peril.

When I hear Quico characterize chavismo as the “people who’ve destroyed the hopes and aspirations of a whole generation of Venezuelans and turned our country into a goddamn dystopian nightmare,” I get scared. I am not talking about whether his statement is true or false. I am talking about the way in which that statement disappears chavistas from view. We are no longer facing a political movement made up by real people. They have become invisible, hidden behind the description of a thuggish narco-state that has jailed our friends and driven us into exile. What this statement says to me is that we are very close as a society to having reached that point where, as Geertz put it, we can no longer tell the difference between staring at the abyss and staring at the sun.

Stepping back

Like it or not, chavismo is part of Venezuela. One quarter of Venezuelans consider themselves chavistas, two-thirds have voted for chavismo at least once, and more than half think today that Chávez did a good job as President while he was in office. We can dislike these facts, we can disagree with them, we can even make it our project to try to change them. But what we cannot do is ignore them.

For me, chavistas are infinitely more relevant than the governing clique. Politicians come and go, but political movements and the people who form them remain. Forgetting that chavistas have ideas, aspirations, and a concept of the country that they want does little to help build the bridges that we are going to need to overcome Venezuela’s current malaise. Ignoring chavismo simply perpetuates the idea of that invisible otherness, as if they were inhabitants in a bad dream that we are hoping to wake up from. It pushes us to try to build a country without half of its people.

There is a more difficult but ultimately more worthwhile route. It is that of trying to build a shared vision of a country that captures the aspirations of the Venezuelans who have felt represented by chavismo as well as those who have felt represented by the country’s opposition. It requires deep thinking about what it is about chavismo that many Venezuelans felt identified with, as well as an earnest attempt to incorporate it into a national vision that all of us can share. It requires searching for areas of common understanding while finding spaces and mechanisms through which those who hold different views about society can resolve those differences.

There is a reason that Venezuelan politics is so polarized. Most leaders who have tried to occupy the space of the center have seen themselves demonized by both sides. It is much easier to find comfort in the automatic solidarity of one of the two blocks than to try to make tent in the middle of the cross-fire. Not being a politician myself, I have neither the privilege of a tent nor a loyal group of followers to help shield me from the bullets flying to and fro.

I would like to say that I don’t mind the attacks and criticisms, but I’d be lying. Like any normal person, I would much prefer to be praised by all my colleagues and friends. And trust me, it wouldn’t be hard: I would simply have to place myself full-square in the middle of one of the ideological extremes. If I’m half as smart as Quico says I am, I should be able to play that game very well. It’s not that I can’t. It’s that I choose not to. I prefer to take a stance that I believe in.

Francisco Rodríguez

Chief Economist at Torino Capital LLC, a New-York based investment bank and broker dealer that engages in the trading of sovereign and corporate fixed-income securities.