Photo: Noticias Canal retrieved

“IT’S NOT A GIFT!” I yelled at the unresponsive car radio (at least three times), while listening to a chavista talk about the awesome “revolutionary gift” the Maduro government would hand through CLAP this December: pernil—the traditional Venezuelan Christmas leg of pork.

Do you consider that the resources administered by the head of the homeowners’ association or your condo board belong to him? Do you thank him every time he approves a maintenance expense? If he buys ornaments for the Christmas tree in the entrance do you consider it a gift? I dare say NO.

The same applies for the government: governments do not own public resources; governments are mere administrators of those resources.

Governments do not own public resources; governments are mere administrators of those resources.

However, the Venezuelan governments of the 20th century have been traditionally paternalistic, a phenomenon that sat on the massive amount of resources generated due to the black gold: oil. And if you take this and add two cups of 21st century socialism, you end up with the most inefficient government Venezuela has ever seen.

And this isn’t a Venezuelan novelty.

This is actually related to the so-called “soft budget constraint”, originally formulated by Janos Kornai to illuminate economic behavior in socialist economies marked by shortages, and regularly invoked in the literature on economic transition from socialism to capitalism.

According to Janos Kornai:

“The soft budget constraint phenomenon is a joint outcome of two closely related socio-political trends. First, the increasing, and often overloading demand of society on the State to become a ‘protector,’ responsible for the welfare, growth and the national economic interest, and second, the self-reinforcing tendency of bureaucratization. The softening of the budget constraint is an indicator of the fact that many basic allocative and selective processes are not left to the market, but are highly influenced or taken over by bureaucracies and by political forces.”

What has this done in our case?

Chavismo has done everything to make Venezuelans economically dependent on the State, forcing them to remain loyal. Hence: it’s not quite right to say chavismo wants people to be poor; it wants them to depend on the State.

Chavismo has done everything to make Venezuelans economically dependent on the State, forcing them to remain loyal.

And right now, given the current hyperinflation and shortages, the Christmas celebrations depend on the State. So the whole #FelizChavidad isn’t mere propaganda.

Interesting enough, social dependency on the State is turning against the resourceless Maduro government and chavismo has been having a hard time defending itself. So far, Rangel Silva takes the Christmas trophy for the most ridiculous statement: “There are people who have never eaten pernil and now they protest because it hasn’t arrived”.

So this Christmas, everytime you hear someone talking about the the awesome “revolutionary gift” the Maduro government gave them, remind them that it’s because of the economic chaos that 21st century socialism has generated that families can’t buy their own pernil.

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  1. Not just the “soft budget constraint”, it’s the “soft taxation constraint”. Probably 80-90% of Venezuelans don’t pay income taxes (too-low incomes), municipal taxes (evasion), or any other direct taxes, so that the little taxation collected is indirect VAT/Sales, and thereby Venezuelans don’t feel that Govt. largesse comes from them, Er Pueblo, but rather from the Beneficent Big Brother Government, making Venezuelans Petro-State Pueblo. The pernil last year/this is simply another empty promise, with probably only a very small minority receiving any (I don’t know even one).

  2. We expect everything from the state since times inmemorial , the oil wealth made it mandatory , there is an essay by Coronil on the development of the cult of the Magical State in Venezuela, well worth a second read. Venezuela was always a very poor country, capitalist initiatives were before the coming of oil weak and marginal , all wealth was to be obtained from participating in the political civil wars and winning .!!

  3. …governments do not own public resources; governments are mere administrators of those resources.

    WOO HOO! Someone in Venezuela gets it! Now, if there was a political party there that believed that…

    • In The People’s Republic of Minnesota there is a very good chance that the state government owns the mineral rights. It varies by county to county, deed by deed. Up until about 15 years ago folks living near the Mesabe iron range received a nice tax break due to the iron being removed from our public and private lands. But, alas, the state legislature decided we weren’t spending the money we saved wisely so politicians, always helping us out, began holding on to all the money from the mines and spend our share . The question is, how do citizens regain control of public wealth when so many, not only in Venezuela but in the US of A as well, only want to sit back and collect the free stuff?

      • My impression of a growing number of my fellow Tropical Southern Minnesotans is that they, like their Venezuelan brethren, are happy to let our local, state and Federal government take care of their lives, so long as they don’ have to think about it. (and in the end, have someone else to blame for their misfortunes.)

        You would be surprised at the number of people I know who don’t even know where their local city hall is nor the name of their mayor, let alone where they are supposed to vote. The vast, vast majority here are willfully ignorant and entirely apathetic. But, by God, they love to bitch about things.

        • I live in Coral Springs, Florida. A pretty affluent area (except for me). Look it up.

          Nine out of ten people don’t know the names of the Mayor or any of the City Commissioners, whom they’re supposed to vote for.

    • It’s a fuzzy issue, but of course, Chavismo crosses the line into outright nonsense.

      In the states, millions of acres were given to the railroad companies way back when. How else to get them built by the private sector? And railroads were considered to be for the common good.

      As for mineral rights, the argument can be made that they do belong to the state, with monies earmarked for the common good, i.e. the budget.

      It gets tricky when pols spend that money in ways not everyone agrees with, but what’s the alternative?

  4. it’s not quite right to say chavismo wants people to be poor; it wants them to depend on the State.

    Yes, so true but a corollary helps to make it more accurate. It is totally incorrect to think that Chavismo wants to make people wealthy enough to lose it’s control. The sweet point for Chavismo and like minded groups is a status for it’s dependents lower than that achieved by capitalism. Control is the name of the game.


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