Socialist Venezuela Has Only $10 Billion Left

Socialism fails again

Venezuela – a country with among the largest oil reserves on Earth – is almost out of money. The country now has just $10 billion in foreign reserves, down from around $20 billion one year ago, and $30 billion two years ago.

At the rate they are going now, they won’t have any foreign currency left.

Venezuela Running Out of Money
Chart – CNN Money

Why is this such a big problem?

The Venezuelan currency – the Bolivar – is now experience hyperinflation, rendering it more and more worthless every day. Without foreign reserves, Venezuela’s ability to import desperately need products – they have shortages of almost everything – will be eliminated, which could precipitate the final descent of the country into total anarchy and collapse.

How did Venezuela get so bad?

They took socialism to its ultimate conclusion. When the economy started to decline, both due to lower oil prices and massive government corruption and incompetence, businesses owners did what you would expect them to do. They reacted to events and tried to stay in business. I’m not talking about big business here, I’m talking about grocery stories, corner shops, and countless independent business people through the country.

As the currency started to decline, imports became more expensive. So, they raised prices. The government didn’t like that, so it set price controls. Business owners couldn’t sell their products for more than the dictated amount. As you can imagine, most businesses couldn’t make a profit, went bankrupt, and shut down.

That led to massive shortages that are only getting worse. Food, medicine, even toiletpaper is now scarce.

The government tried nationalizing businesses, but that failed even more. Then, they put the military in charge of emergency food distribution. While that seems like a good idea, but the Venezuelan military is not the same as the Canadian or American one. The Venezuelan military has been corrupted by the socialist government, and serves the regime exclusively. As a result, thousands of tons of food sits rotting in ports, while desperate Venezuelans starve and are forced to eat their pets, garbage, and even zoo animals. There have even been reports of cannibalism in a prison.

All the remaining wealth, and most of the remaining food in Venezuela has been sucked up by socialist government, who are rich and well-fed while their people suffer horribly.

This is perhaps the best example of the total failure that is socialism.

If any country should have been able to make socialism “work” it would be Venezuela. A country with one political party totally dominant (at least until recently) and massive oil reserves, they should have been able to at least buy everyone off. And they did, for a while. But underneath the surface, the failed ideology of socialism did its damage.

The country rotted from the inside, as economic activity slowly ground to the halt. The market was replaced with a small central group trying to direct the decisions of millions of people in the economy, and it failed miserably. Crime is rampant and it’s Venezuela is now considered the kidnapping capital of the world.

Now, Venezuela is down to their last $10 billion, and their neighbors fear an impeding humanitarian disaster on their doorstep.

That is the failure of socialism taken to its logical conclusion.

Centralized government cannot run an economy, and taking away people’s political and economic freedom always ends in disaster. Venezuela is just the latest example of socialism’s seemingly endless string of failures.

Spencer Fernando

Photo – Twitter