Cry for Venezuela

The dream of a socialist Venezuela has turned into a nightmare.

It’s depressing to see the disintegration of President Hugo Chávez’s attempt at political reform. Chávez, elected in 1999, was part of the “pink tide” that swept Latin America in the 2000s. He was one of the three musketeers of leftist governments in South America which included Lula da Silva of Brazil and Evo Morales of Bolivia.

The three denounced the Washington consensus of the 1990s which saw neo-liberal policies implemented: privatization of public companies, cuts to public spending on education and health care, foreign investment, and free market strategies.

The Neo-liberal experiment in the Latin Americas collapsed by the end of the 1990’s, leaving unemployment, corruption, inflation and increased inequality. Strained relations with the U.S. left an opportunity for China to partner with leftist governments.

The seeds of Venezuela’s collapse were sown from the start of Chávez’s presidency. Part of it had to do with the ego of the populist president. He believed that he was the people’s true champion and to ensure that he remained in power, he abolished the legislature’s upper house. Despite his public rhetoric of democracy, Chávez was consolidating power in himself.

Chávez’s policies were popular as many were lifted out of poverty with food subsidies, education, and welfare; all funded by the state-run oil company. But things went downhill after the workers of the oil company went on strike in 2002. Chávez fired 18,000 of them and replaced them with 100,000 of his supporters. Since the new workers had few of the technical and managerial skills necessary to run the plant, production fell even as global oil prices boomed.

To make up for falling oil revenues, Chávez borrowed money to fund popular programs leaving Venezuela the most indebted country in the world.

Chávez’s successor, President Nicolas Maduro, worsened the crisis. Unable to pay for subsidies and welfare programs, he printed money. This drove up inflation making basic goods unaffordable. He instituted price controls and fixed the currency exchange rate, so that imports became prohibitively expensive. Businesses shut down. Maduro printed more money, and inflation grew again. Food became scarce. Unrest deepened, and Maduro’s survival grew more contingent on handouts he could not afford.

In a country with the world’s largest proven oil reserves, food has grown so scarce that three of four citizens reported a weight loss averaging 19 pounds in a year.

The collapse of Venezuela’s economy surpasses the Great Depression of the dirty thirties says Ricardo Hausmann, former minister of planning of Venezuela:

“Put another way, Venezuela’s economic catastrophe dwarfs any in the history of the U.S., Western Europe or the rest of Latin America.”

Where words fail to describe the calamity, numbers help. Instead of thinking of lost of wages in currency, think of them as measured in the cheapest source of calories. Minimum wage, so measured, declined to just 7,005 calories per day. This is insufficient to feed a family of five, assuming that all the income is spent to buy the cheapest calories. One-half of Venezuela works at minimum wages.

City streets are marked by black markets and violence. The last reported murder rate, in 2014, was equivalent to the civilian casualty rate in 2004 Iraq.

Venezuela’s heartbreaking fall leaves dreamers of a better world in mourning.


B.C.’s poor a convenient target in the politics of class rivalry 

Premier Campbell has a New Year’s resolution for B.C.’s poorest – – get off welfare and get a job.  It’s more than a suggestion.  In four months, thousands will be cut off welfare.  The B.C. Liberals refuse to say exactly how many.

The resolution won’t apply to Campbell, however.  Oh no, he prefers welfare, defined as “well-being, happiness, health and prosperity” by the Canadian Oxford dictionary.

The semantic difference between being on welfare and possessing welfare may be slight but they are worlds apart.

While the welfare of the rich is improving, welfare for the poor is under attack.  That wasn’t always so.  Welfare was once a good idea supported by nearly all governments.  Especially in the past when 80 per cent were poor compared to today’s 20 percent.

Modern welfare began over one hundred years ago as a response to disease and child poverty.  Welfare first depended on the philanthropic inclinations the wealthy and was generally treated as a local and private concern.  The government run welfare state soon became the sign of a civilized society.

Welfare was expanded after the First World War when soldiers returned to jobs held by women.  Many of those women lost their jobs to men, and lost husbands on the battlefield. The “mother’s allowance” was established to help those single mothers.

The failure of capitalism during the great depression of the 1930s left all but the wealthy doubting about the supposed restorative power of the marketplace.  It became abundantly clear that philanthropic inclinations and a mother’s allowance was not going to be enough to pull most Canadians out of poverty.

The post-war economic boom of the 1950s and 1960s was a contrast to the dirty thirties.  Wages improved and the number of middle-class Canadians increased.  But they never forgot the depression and poverty was a persistent memory passed down through generations.

That memory of poverty gave political impetus to our modern welfare state with its three cornerstones – – Medicare, the Canada Pension Plan, and the Canada Assistance Plan.

The post-war economic upsurge was followed by a downturn in the 1970s. North American economies have never really recovered since. This period is characterized by an aging population, stagnant wages, growing unemployment, failure of large corporations, cuts of transfer payments to the provinces, and growing welfare ranks.

The growth of food banks are reminiscent of soup lines that my parents saw in the 1930s.  Poverty has thrown Canadians out on the streets.  The number of street people has also grown by the closing of institutions like Kamloops’ Tranquille Sanatorium in which many mentally ill patients were left to fend for themselves.  The generational memory of the depression is fading.

“The modern conservative conception of the welfare state is guided by principles of 19th century liberalism, i.e., less government equals more liberty (Canadian Encyclopedia).”

In this view, the reduction of inequality by the welfare state is seen as the antithesis of pursuit of freedom and material progress.

This is what the welfare state has come to.  Canada’s poor have been targeted, not only as a drain on taxes but as lacking the work ethic of the deserving rich class.  The failure of capitalism to provide a living for all is seldom mentioned.

The poor make a convenient political target because they don’t have the resources to fight back.  Politicians remind the middle class that their taxes going to support able-bodied people on welfare.  B.C.’s working poor don’t need to be reminded that their standard of living has been slipping.

In 1970, low-income Canadians had to work 50 hours a week just to keep above the poverty line.  “In the 1980s, this rose to 87 hours, in the 1990s, to 100 hours,” says University of Regina professor John Conway in his article for the Canadian Centre for Policy Alternatives.

The politics of class rivalry have worked well for the B.C. Liberals.  By attacking the poor who are on welfare, Premier Campbell can avoid questions about the excessive welfare of the rich.

B.C.’s rich are doing just fine.  Our province has the wealthiest citizens in Canada.  In 1999 the net wealth of the richest 10 per cent was $1,278,534.

Premier Campbell will promote welfare for the rich but not for the poor.   Until the poor have a voice in government, they will continue to be a convenient target.