The Case for Chavismo

Moneybox
A blog about business and economics.
March 7 2013 12:30 PM

The AP Makes the Case for Chavismo

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Supporters of the late Venezuelan President Hugo Chavez queue outside the Military Academy chapel waiting to pay last respects to the leader on March 7, 2013, in Caracas.

Photo by Guillermo Legaria/AFP/Getty Images

To veer off-topic a bit, the late Hugo Chavez is controversial because of American aspirations to global military hegemony. People who vocally oppose those aspirations find themselves subjected to a massive amount of scrutiny of their human rights record that leaders who support it manage to completely avoid. Thus Chavez is an authoritarian strongman while King Abdullah II of Jordan does cameos on Stark Trek Voyager. And since American aspirations to global military hegemony are uncontroversial inside the United States, critics of said aspirations develop an outsized level of emotional affiliation with foreign leaders who are subjected to this kind of hypocritical scrutiny.

Throat clearing aside, my overall impression is that Chavez has not been especially successful at transforming Venezuela's oil wealth into the foundations of lasting prosperity. But this Chavez-critical piece in the Associated Press accidentally makes the point that you could do far worse than Chavez:

Chavez invested Venezuela's oil wealth into social programs including state-run food markets, cash benefits for poor families, free health clinics and education programs. But those gains were meager compared with the spectacular construction projects that oil riches spurred in glittering Middle Eastern cities, including the world's tallest building in Dubai and plans for branches of the Louvre and Guggenheim museums in Abu Dhabi.
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Using your oil wealth to finance a broad-based political machine isn't optimal public policy, but it's a heck of a lot better than squandering it on prestige projects. The small Gulf autocracies manage to turn their oil into great riches despite terrible economic policy through the simple expedient of having very few citizens. Venezuela has 29 million people; Qatar has 2 million. When you're talking about a resource-oriented economy, those population gaps make a huge difference. The Gulf states then import lots of guest workers to execute various undertakings. It works fine for them, but it's a terrible model, and if you tried to apply it to Venezuela, you'd just have everyone impoverished all the time—roughly the pre-Chavez status quo.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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