Utopia Unmasked
2019-02-01 · Guest: Clifton Ross (Writer and filmmaker) · 52:14
The tragic decline of Venezuela
Bob Zadek interviews Clifton Ross about the tragic decline of Venezuela from a wealthy petro-state to a humanitarian disaster. Ross shares his personal journey from a socialist activist to a critic of the “synoptic delusion” of central planning, detailing how populist socialism and corruption under Hugo Chavez and Nicolas Maduro destroyed the nation’s economy and institutions.
Topics: Venezuela, Socialism, Hugo Chavez, Nicolas Maduro, Petro-state, Central Planning, Corruption, Latin American History, Social Democracy
Speakers: Bob Zadek, Clifton Ross
Introduction to the Venezuelan Crisis [00:18]
Bob Zadek: Hello, everyone. Welcome to the Bob Zadek Show, once again the longest-running live libertarian talk radio show on all of radio. Thank you so much for listening this winter Sunday morning. We are always the show of ideas, never, ever the show of attitude. And we have a show chock-full of ideas, concepts, foreign policy to discuss this morning.
I have, like most of my audience—or just as most of my audience does—I try to pay attention to what’s happening in the world to see what lessons can be learned from the events. Sometimes I’m looking for a reading for a confirmation bias to show that I’m right; other times to learn that I’m wrong. But I am learning nevertheless. One of the events in the newspapers all the time these days, every single day, is what’s going on in Venezuela. In Venezuela specifically, and in Latin America in general.
I don’t really understand, or didn’t understand until I prepared for this morning’s show, what exactly was happening. How Venezuela, with the largest oil reserves of any country—I believe that’s true—of any country on earth, how its people, its population, is starving to death, how inflation is rampant. Why are they not a Qatar located in Central America, with gleaming cities, wealth abounding, and living, if you will, the good life both politically and materially?
Clifton Ross’s Journey to the Left [01:18]
Bob Zadek: And I looked around for a guest who could help me learn and understand the arc of Venezuela. How everything has gone so wrong, and what are the political and economic lessons to be learned from Venezuela? In short, is Venezuela simply a country run by thieves and it proves nothing, it just proves that there is thievery in the world and dishonesty and autocracy? Or are there deeper lessons to be learned from what is going on in Venezuela?
I found the perfect guest to help me and to help my friends out there understand the past, present, future, and lessons from the failed experiment in Venezuela. And with that introduction, I’m happy to welcome to the show Clifton Ross. Cliff is a writer, director, producer, poet, and co-author of Until the Rulers Obey: Voices from Latin American Social Movements. Cliff has been reporting on Latin America and revolutionary social movements there since way back in 1982. He has produced and created a documentary film—it’s his own work—called In the Shadow of the Revolution. Cliff’s background will explain, as Cliff will show us, how he has acquired this greatly in-depth knowledge of Venezuela specifically and Latin America generally. Cliff, welcome to the show this morning.
Clifton Ross: Thank you, Bob. It’s great to be here.
Bob Zadek: Now, Cliff, the headlines of your bio—you will fill in the story after I give the headline—is you were, you grew up a bit in the Midwest in the red state middle of our country, and you evolved from that red state, somewhat typical upbringing, as you will explain, into—if I may use the phrase in a non-derogatory sense, just trying to be descriptive—perhaps a socialist, perhaps a leftist, very active in that sphere of politics and thinking. And that led you to Venezuela. Tell us your background and your relationship to Venezuela. How did you acquire an interest in and then intense knowledge about Venezuela?
Clifton Ross: Well, it’s a long, strange trip. It’s been… I didn’t really grow up in the red state. I lived there for five years. My father was an Okie Master Sergeant. He joined the military to fight in World War II. He lied about his age and went into the Navy. And then when he got out, he couldn’t reenlist because he was too young. They said, “Go get your daddy, son, and have him sign for you.” And he got angry and joined the Air Force.
So, I was born in South Dakota but lived in many states of the US and England and Germany. Grew up in England and Germany and then back to South Carolina, where I spent a good part of my childhood and late adolescence. And then we moved to Oklahoma, where my father retired and bought a farm. And in all that time, I grew up in the ’60s, right? So, the Vietnam War was going on. I was a patriot. I grew up in the military. I grew up with the flag. I grew up with the military and trusting the military above all institutions.
And at some point, my good friend came back from Vietnam when I was around 14. He was much older than me. He came back from Vietnam with a metal plate in his head, paralyzed on one side. And that was when I really wanted to know what was going on in the world. It really jolted me. And I asked my father, and he said, “Well, son, we got a war economy in this country, and we’ve got to have a war to keep the economy going.” And he was a conservative, a very, very conservative man. But he was an honest man, and he told me the truth when I asked him a question. And that just totally turned my world upside down.
I rebelled and became a hippie, started taking drugs and drinking and doing all those things, and got in trouble with all that. And eventually became a fundamentalist Christian. This was in South Carolina, of course. They didn’t have anything like recovery programs. They didn’t think little kids could become addicts. And so I became a Christian. And when we moved to Oklahoma, I pretty much stayed on my father’s farm and read the Bible and studied theology, read a lot of books.
And eventually got in touch with a radical Christian community in Berkeley, California, and moved out to Berkeley to see what was going on there and be exposed to more enlightened people, because I think I was already starting to have problems with Bible Belt Christianity. I was a Jesus freak, right? I had long hair and I wasn’t that welcome in the First Baptist Church of Madill, Oklahoma.
So anyway, it’s a long story, but I ended up in the Christian community in Berkeley. It had a number of houses. People lived collectively in houses. And in some parts of the community, they even shared a common purse. They were… I guess they were communists, you could say. Christian communists. And at some point, I wrote poetry. I ended up getting involved in the poetry scene and organizing readings in the church. Got to know William Everson, Brother Antoninus, and that really was extraordinary.
And at some point, I got exposed to liberation theology. And this was in like 1979, 1980, actually. I didn’t know where El Salvador was. I didn’t know where Nicaragua was. For all I knew, they were in Africa. But I read the poems of Ernesto Cardenal, the poet-priest and Minister of Culture in Sandinista Nicaragua. And I read his poetry in 1980 and just really wanted to go down and find out what was going on there, because I read the newspapers and there was some… it was very clear to me that the reports were not accurate, just from what I knew and what I was beginning to find out.
So I wanted to go down and find out for myself what was happening in Nicaragua. So I got a one-way ticket. I was going to go join the… at that point, really, my apocalyptic Christianity easily translated right into an apocalyptic revolutionary socialist communist utopian millenarianism. And I went off to Nicaragua with my dictionary and about the present tense of Spanish and about a vocabulary of about 20 words and thought I was going to be a revolutionary and fight imperialism.
I soon was dissuaded of that notion. I realized I didn’t have it in me to really do those things. I didn’t have any of the skills. I didn’t even have Spanish. So I eventually came back home, sick and broke, and started doing work here, solidarity work in Berkeley with the Sandinista revolution, and moved away from Christianity and became much more interested in Marxist theory and revolutionary ideas that I was picking up from Latin America.
I started translating. I translated my first book of poetry written by campesinos in Nicaragua, and the farmers and policemen and soldiers. Ernesto Cardenal was organizing poetry workshops at that point and teaching people how to write poetry. Teaching military people, militia people, secret police, farmers, students, etc., etc. Everybody was writing poetry and everybody was reading poetry. And it was a really beautiful thing, actually. Very inspiring to me. And the Christians were so involved in the revolution. And so I think that really made the Sandinista revolution a really unique and quite interesting phenomenon in the late 20th-century revolutionary movements. It was unique. It was just quite fascinating. And I followed that all the way to the end. I was a militant Sandinista solidarity activist. And then that came to an abrupt halt in 1990 when the Sandinistas were voted out of power after a long Contra war. I didn’t know all the backstory of that until much, much later, that there was a whole dark side to that. In fact, my book—you didn’t mention, but I wrote all this stuff that I’m talking about in a memoir, a political memoir for an anarchist publisher, AK Press, called Home from the Dark Side of Utopia. And I have a whole chapter called Chapter 10, entitled “Revolution in the Rearview Mirror,” because as I looked back at the Sandinista revolution in the light of what I later learned and what I experienced much later in Venezuela. So that was the beginnings of all my interest in Latin America, the Sandinista revolution and going through that. And I lived there in Nicaragua in 1987. I was working for a Guatemalan news service as a translator. It was actually the political wing of a guerrilla organization in Guatemala. So, yeah, that’s kind of my background.
Liberation from What and to What? [05:47]
Bob Zadek: Cliff, a couple of questions in your narrative, which I thank you a great deal. You mentioned liberation movements. And the question that comes to mind is: liberation from what and to what? And I have a follow-up question. There’s a reason I’m asking the “to what” part of it. But was the thought process deep enough for there to have been a liberation from something and a liberation to something?
Clifton Ross: Yeah, I mean, I think that there was a real problem in Latin America in the 20th century. I mean, the Cold War, even prior to the Cold War, the… I think as a species, we have kind of a natural inclination for empire building. And in the 20th century, as the United States came to become a very powerful nation, ex-colony of the United Kingdom, which had its own empire, it started looking south with the idea in mind of building its own empire in the Western Hemisphere. The Monroe Doctrine in the 19th century essentially set that up.
And the Spanish-Cuban War in the late 19th century, which ended in, I believe it was 1898, where the US came in just at the very end of that war and essentially occupied the country, “liberated,” quote-unquote, the country. And in some ways, it really did. It helped the defeat of the last little pockets of Spanish soldiers, but they essentially occupied the country thereafter.
Through the 20th century, especially as the Cold War progressed, and especially say in 1954 with the Arbenz government, when the US overthrew a kind of a moderately left government because the US was seeing communist guerrilla movements everywhere. It was both seeing them and they actually existed. And especially starting in 1960, the Soviet Union really did take on an approach of funneling arms through Cuba to guerrilla insurgencies all over the continent.
So the liberation was national liberation from colonial governments that were allied with the US in a Cold War context, the same way that the Soviet Union had its colonies in the Eastern Bloc. The US had its colonies in this hemisphere. And the national liberation movements were essentially attempts to decolonize their countries. The problem really was that these were most of them were almost all backed by the Soviet Union. And the idea of what they wanted to liberate into, quote-unquote, liberate, was a socialist revolution. And that was the model for liberation in those years.
The Cold War and National Liberation [07:06]
Bob Zadek: So your narrative seems to suggest that the United States in its perceived imperialism, the reaction to that, the countermeasure, if you will, in Latin and South America to US appearance of or behavior as an imperialist country, was simply the countermeasure was Russia. And since Russia brought with it socialism or communism, that the US imperialism, if I’m understanding it right, seems to be a major contributing factor in forcing Latin America away from a market economy, away from free markets and property rights. Am I being too simplistic?
Clifton Ross: No, that’s pretty accurate. A lot of people get left behind in markets. I mean, there’s competition and there’s what Schumpeter calls creative destruction. Well, that also has an impact on people. When people lose work, when a factory closes because another factory’s got all the manufacturing orders, then those people thrown out of work don’t necessarily have a positive view of the market. They haven’t benefited from it.
So if you have Latin America essentially being a resource area rather than even a manufacturing area—the natural resources of the region—the United States frequently would bring or help into power governments that would give them favorable trade terms on the extraction of natural resources. That was not uncommon. Honduras was viewed by Dole Banana, for instance, as a banana plantation. I mean, so was Guatemala. And that’s why Arbenz was coming in. Arbenz’s crime was that he nationalized Dole Banana’s plantations and did some land redistribution.
So these are complex issues, of course. I mean, now I understand that. But when I was a young socialist activist, I just thought, “Well, yeah, of course you go in and you nationalize Dole Banana’s land because the people need the land.” And that was my thinking in those days. And we could talk about that later. But yeah, that was the… and the solidarity movement in this country and around the world was largely inspired by Leninist ideas and Leninism, whether it knew it or not. The communists were really brilliant in their strategy for undermining the West the same way that the US was at attempting to undermine the Soviet Union and the communist insurgencies. Not always so intelligently, but…
So the solidarity movement really, we looked to these national liberation movements as movements that would ultimately liberate the people and we looked for the vanguard to support. So in Cuba, it was obviously Fidel Castro. In Nicaragua, it was the Sandinistas, and so on. So that was the world we lived in during the Cold War, maybe a lot of your listeners…
Socialism as a Secular Apocalypse [11:05]
Bob Zadek: And the word that I’ll focus on is, because I was thinking as you were speaking, you used the word “ultimately.” And what I was thinking to myself, Cliff, as you were explaining this economic and political history, what I was thinking to myself was that the promise of socialism was that the ultimate goal was pretty glorious. The promise was glorious. There was no analysis, obviously, as to whether or not the vehicle to get to that glorious goal would actually do the trick, whether the medicine was going to cure the illness. It was just the goal was so glorious it blurred out any analysis, economic analysis, political analysis, as to what you lose in the process—freedom—and whether it would actually work. It was just the promise drew all the attention. That’s what it seems like to me. I know it’s simplistic, but is that a reasonably rational observation?
Clifton Ross: Yeah, I actually think it is. I think that’s my perspective now. Because socialism really is an apocalyptic ideology. It believes that it’s really a secularized version of the same Christianity that I held to when I became a fundamentalist Christian back in the ’70s. That was why for me it was a seamless transition from apocalyptic fundamentalist evangelical Christianity to socialism. Because they have the same exact narrative. I mean, the idea that you’re oppressed, you’re living in sin, you’re oppressed and you need to be liberated from the sin. And only a messianic force can liberate you from that thing. You can’t do it yourself. You’re incapable of it. But the vanguard, the people, the glorious vanguard can liberate you from your oppression. And when you are liberated, you will enter into a realm where the workers control the means of production and everything is peaceful and everyone lives in harmony. It’s essentially just a rewriting of the Christian narrative using different symbols and different language, but it’s essentially the same narrative.
Bob Zadek: And what’s fascinating to me is—it’s kind of off-message, but as we go to break and when we come back, we’ll discuss, we’ll apply what you have explained to us to the case history, the facts on the ground today in Venezuela. But my observation before we go to break is, it’s the promise of an elixir. That socialism and communism promised an easy way out, an elixir, a fountain of youth, a secret pill. Just sign here and no more hard work. We will fix—“we,” whoever “we” is—will fix everything for you. We’ll take care of it. Now, that was the promise in Latin America. And as we go to break, that’s the promise today. “We will give you free stuff. You don’t have to earn it. You don’t have to do anything. We will just provide it. Just give us the power and we’ll take care of everything.” That’s the lesson which is a constant lesson today. Now, I’m not saying that to throw down a gauntlet, just an observation which occurred to me, Cliff, as you were speaking.
We’re going to go to break now for 30 seconds. When we come back, Cliff, since you are such an expert and such an astute observer on what has happened and what is happening and what will happen in your opinion in Venezuela, I’m going to ask you to apply these lessons that you learned and have observed to Venezuela and tell us what’s going on there and what’s going to happen in your opinion. This is Bob Zadek. We’re spending a wonderful hour talking with Clifton Ross. Clifton is a writer, director, producer, author, poet, and has spent extensive time and extensive thought dealing with Latin America. We’ll be back to discuss Venezuela in detail in 30 incredibly short seconds.
[Commercial Break]
The History of the Venezuelan Petro-State [16:51]
Bob Zadek: Welcome back to the Bob Zadek Show, the longest-running live libertarian talk radio show in all of radio. This show constantly of ideas, never, ever the show of attitude. Thanks so much for listening this Sunday morning to my conversation with Clifton Ross. Cliff has spent an enormous amount of time and thought and has written extensively on the political and economic history of Latin America in general and specifically Venezuela. And in light of all that’s going on in Venezuela these days—it is in the news every single day—I thought this is the perfect time to bring an expert such as Cliff on our show to help us understand what is really going on there. How does a country with the largest oil reserves on earth starve its people so that by one statistic—sounds right to me—the average Venezuelan has lost about over 20 pounds in body weight simply through starvation? Shocking. What’s going on in Venezuela? Cliff, tell us the recent, perhaps not so recent, economic and political history of Venezuela. But as you do, explain to us what’s going wrong with a country that has so much by way of natural resources. How could its people be starving to death?
Clifton Ross: So, this is a really big question. I think we need to start with the election of Chavez. And so, Venezuela, just quickly, a very quick recent history: they had dictatorships through most of the 20th century. A lot of caudillo strongmen ruled the country through the 19th century. In 1958, they had a democratic revolution, overthrew a dictator, and set up a democratic political system in which essentially the main party that was behind that was the Social Democratic Party, Acción Democrática (Democratic Action). And then there was a Christian Democratic Party that competed with them, and there were another couple of little smaller parties.
But they had a democratic revolution, January 23, 1958, and they began to use the oil money. Rómulo Betancourt, the first president, began investing the “sowing the oil money,” what he called sowing it, like sowing seeds. Using the oil money to develop the country. So he began developing the national industries. Venezuela’s not only the largest has the largest amount of oil in the world of any country in the world, they also have coltan, they have gold, iron, bauxite, all kinds of minerals in the region known as Guayana, which is right next to the country of Guyana. And so they began bringing electricity to the country, to the rural areas. They began using the oil money to get people educated, get people educated. And the country really began…
Defining the Economic Systems [19:25]
Bob Zadek: Cliff, I want to interrupt if I may with one question. At that moment in history that you are describing, what was the economic system? You said they were using the oil money to spread the wealth, bring up the standard of living. Was it a socialist country then, communist country then, a mixed economy? Help us understand what was going on economically so we can follow your story.
Clifton Ross: Yeah, you know, the problem in our country, in the United States today, language has become so has deteriorated so much that we you have to define terms. Socialism would be the state ownership of the means of production and distribution and capital. Capitalism would be that would be privately owned and it would be done all activity would be a market activity would be done in in a in a market rather than by a state.
Social democracy, which is what they had in Venezuela in 1958, would be where you have a private ownership of the means of production, you have some state industries, you have some state monopolies like on energy and oil production was a state monopoly. In other words, the state owned all the resources in the country, the oil mineral resources. And that money came through a into a fund similar to what happens in Norway. So it was sort of like social democracy, kind of like Norway, where you have a market economy but and you have free enterprise market capitalist system, but a very strong intervention on the part of the government and national ownership of the mineral resources so that those resources were reinvested in the country.
So it was social democratic. And even the right-wing, so-called right-wing parties, Christian Democratic parties, would come in and and do the implement the same social democratic they would just continue the social democratic parties. It’s unique because as a country, it’s a petro-state. 98% of its income comes from oil of its foreign exchange. So that comes into the state. It doesn’t go to the as like in the United States, you may own mineral rights of your on your land and if the oil companies come in and drill, they give you the money rather than the state. In Venezuela, the state owns the mineral resources.
So basically what that what the what the governments of Venezuela traditionally did was invest all that oil money back into the country. And they called Venezuela “Venezuela Saudita” (Saudi Venezuela) because it was and it had the living standards of any European country throughout the ’70s and into the ’80s. Or just the beginning of the ’80s. But then you have then you have… well, actually in the early ’70s, up until around ‘74, we have the oil crisis, we have the we have the price of oil zooming up and it Venezuela prospered through that time.
But it got over its head in obligations to the people and to its social programs. It started borrowing money to maintain the social programs. And by 1979, when there was a debt crisis hit Latin America and through and all these governments suddenly were unable to pay their debts because the interest rates went up at that point when Carter was in office. And then when Reagan came in, you have this from the time during the Reagan years, you have the “lost decade” in Latin America where the governments are all in dire straits. They’re doing austerity everywhere.
And the same thing happened in in Venezuela. They had their first big catastrophe and it was the first disaster that called into question democracy because people suddenly started suffering because really they had not totally developed their industries. They had they had relied entire too to a great degree on importing food rather than producing it themselves. And they have an extraordinarily rich country. I mean, very good soil, incredible conditions for growing things, but they they found it so much easier just to import food than than to grow it themselves because they got all this oil money coming in.
So the government would import food and people would import things and so so that was the that was a problem that really raised big questions about the system. You had a this explosion, social explosion in 1989 called the Caracazo. A lot of people were killed, protests against the government. You have crisis going on through the 1990s. The government also had gotten very centralized, so it began decentralizing so that people would have a lot more local power. They allowed the people to elect their own mayors and governors, for instance, and they would no longer be chosen by the central government. So you had these steps toward decentralization. But but that but the country was still in crisis.
The Rise of Hugo Chavez [23:09]
Bob Zadek: And an observation: when what happens is—and maybe I’m hearing everything through my own libertarian filter—but when oil prices were high, the government was honoring and making more promises to the people. “We will give you stuff: education, improved standard of living,” whatever the promises were. They became what we call in the States today “entitlements.” Once the government is giving these entitlements, if you will, to the people, then whenever it’s taken away—whether it’s taken away because of externalities like the lowering price of oil—it’s still being taken away and that causes unrest.
And it sounds like there’s an exportable lesson to any country, i.e., the US, that offers entitlements and which are inflexible, and then when circumstances change and you can’t afford the entitlements, you can’t withdraw them and therefore debt and other political unrest results. So I’m taking the lesson of Venezuela and explaining how it has applicability to the US. Also, what we have, Cliff—and I know you’re aware of this, but just so the audience can follow your narrative—what we have is the decisions were made not by the market—that is, how much to spend and what’s going to happen and cushions for the future—but rather were made by very few individuals who were making these decisions to remain in political power and not making a decision based upon sound economic policy, I will infer.
So there’s again a lesson for any country on earth as to what happened in Venezuela. Now, bring us—so I don’t want to run out of time before you get to share the lesson of Venezuela. So we have now there is unrest and the people are getting disappointed with the broken promises of government. But still, there still is plenty of oil and oil prices go back up. So what has happened in Venezuela? Now oil prices were down and now they fluctuate, of course, but they have so much oil. How could the people be actually starving to death? What is the core issue today in Venezuela that causes starvation when you have so much natural resource?
Petro-Socialism and the Debt Trap [24:42]
Clifton Ross: That’s so this is a along with your point. In 2003, after the US invaded Iraq, we’ll all recall the price of oil just skyrocketed. And this was coming just at about the time this happened right around mid-2004, just about the time that that they were having a a recall referendum on Chavez because the opposition was really very upset with him increasingly more and more people were not happy with him. He had gotten cozy with Fidel Castro and Fidel said, “Well, you know, why don’t you begin giving more programs for the people and you can bring this whole referendum to an end.”
And so the money from the oil flooded in and the president is in control of that stuff. And he managed to get control of all the oil money and he began what he called the “missions” and giveaway programs to the people. And he was parading them out. He began parading them out and won the referendum as a result. And so he this was a lesson for him. You know, you get the oil money, you you buy you pay off your constituents and they will vote for you again. And he ran many elections. He ran about 13 elections that while he was president in over the next number of years.
And but but the problem is that there was never enough money to pay for everything. And so he began borrowing money. And so he began borrowing money in by even by 2007 when oil was $130 a barrel, he was borrowing money from China and from mainly from China and to fund his social programs. And he would bring out all the social programs before his elections. He was doing what he called “petro-socialism,” taking the oil money and just giving it away to the people. Well, to his constituency primarily, but you know, they were called “the people.”
And so what we have here is really a populist socialism. It’s a socialist or a socialist populism, if you will. It’s whatever you want to call it. It’s basically classic populism. And people can kind of look at that. I’m not going to define that or go too much into that, but basically the idea of dividing society up into the good people and the bad people. And the good people are the people, of course, who support you. And as the leader, you become the movement itself. The leader becomes the movement.
And so what happened in Venezuela was he began taking the country massively into debt. And in by 2007, and I go into a lot of this stuff in my book, he started first of all funding the cooperatives, which was his way of funding his constituency. The cooperatives didn’t really work very well in terms of creating the socialism of the 21st century, as he called it. And then he began organizing these communal councils where his his constituents would organize themselves as a community council in a community in a city and he would fund them directly. So he had different ways of funding his constituency and his supporters.
And this and but there was a massive amount of money. I mean, the that he was putting out there. And so he kept borrowing money. And so he was driving the country deeper in debt even at a time when oil was at $130 a barrel. And then and then he died. I mean, he and he was increasingly becoming more and more authoritarian and expropriating industries and expropriating land and also giving land to his constituents. And so this was all going on. He was increasingly going toward a socialist model under the influence of Fidel Castro. And so gradually the country and destroying the national industries, expropriating industries.
And he also had currency controls, which was his way was the way that a lot of the corruption began happening because it’s one of the few countries today that has has currency controls. So they overvalued their money and began printing up massive amounts of money to fund their their programs. And this, of course, caused inflation. But they had currency controls, so a huge black market evolved. They also had price controls. So they would they would buy rice, say, for a dollar a pound and sell it for 25 cents. And because everything was imported, they were they were subsidizing all these imports. They didn’t grow anything in the country. Chavez said that he was going to develop the country. He didn’t do that at all. He ended up…
An Indictment of Socialism and Kleptocracy [28:20]
Bob Zadek: And of course, when you talk about Chavez, you’re saying the proper noun “Chavez” often, which means a totally autocratic government. It is one guy running the place. And of course, the fatal conceit of socialism is that there are is one or a group of people smart enough to run an economy. And of course, that is never the case as we as we now know, as we have always known.
Now, Cliff, a question about Venezuela so our friends out there, our listeners can put it in context. Is what happened in Venezuela simply further proof of the intellectual failure of socialism? Or is it just a standalone lesson that when you put a kleptocrat in control in an autocratic government and you have simply a dictator, he’s going to steal and it’s simply an aberration and not an indictment of socialism? And I’m asking you that because you have studied socialism, you have self-identified as a socialist. Is what happened in Venezuela a lesson about socialism or a lesson about the venality and the selfishness and dishonesty of one or a small group of people? And I’m asking you that, Cliff, because we have a few seconds, we’re running out of time, and I want the audience to get the big picture takeaway, the lesson of Venezuela.
Clifton Ross: It’s it’s both. It the lesson is both. The problem is exactly the what you were referring to, the what Hayek calls the “synoptic delusion” that a small group of people can know everything there is to know about an economy and and just centralize all power and and and make a an alternative to an a market economy. That it’s that. But it’s also when that small group of people gets all the power or that person, then they the the temptation to corruption is just impossible to control. It’s just impossible to not fall into it.
And so it really is both. And Chavez fell into that temptation and huge amount of about half of the money estimated who came in from oil in the in during the boom was was stolen, was was embezzled and is now in bank accounts in the Bahamas, in Panama, and so forth. The country has become just incredibly insecure. Crime is people are able to operate with impunity. There’s virtually no accountability whatsoever. The institutions of government are broken. It’s it’s Caracas is more dangerous than the West Bank. It’s the most dangerous the the economy it’s lost they’ve lost half of their economy. It’s decreased by 50% just in the past few years. So it’s it’s a complete wreck and it’s a result of both of those things: incredible corruption and and a an economy that has been destroyed because people went to work on it and to try to centralize everything and under their power and create a socialist economy and destroyed it and destroyed the market.
The Prognosis for Venezuela [31:20]
Bob Zadek: In about 30 seconds or 45 seconds at the most, what’s the prognosis for Venezuela? What do you see as the most likely three-year outcome from now in Venezuela?
Clifton Ross: We don’t really know what’s going to happen. It all depends on the military at this point. Whether they’re going to go—the military has been given huge chunks of the economy, including drug trafficking. About 80% of the drugs that are produced in Colombia come through Venezuela and are trafficked out by the military. So the military has benefited a lot from the so-called revolution. And Maduro’s given them bigger chunks of the economy to keep them on his side.
Now, whether or not they’re going to go with the new interim president who’s been—didn’t auto-proclaim himself but was chosen by the National Assembly, the legitimate National Assembly that was voted in massively in December 15, December of 2015. And the new interim president of Juan Guaidó, whether the military’s going to go with him or whether they’re going to stick with Maduro is the the big question now. So it can go either way at this point. We don’t know. If it continues with Maduro, it’s just going to continue down this trajectory of of destruction and misery and probably we’ll be looking at a Somalia in South America, something just a disaster. If if Juan Guaidó is managed to get control of the power, we can see some slow rebuilding of the country, probably along social…
Bob Zadek: Cliff, we have about 30 seconds, regretfully. How can our friends out there follow your writing, please?
Clifton Ross: cliftonross.com. My movies are there, my two movies on Venezuela are there, and then links to and my blog. I’ve been doing updates and I’m going to be doing a lot more of them there. So…
Bob Zadek: And your memoir, which I commend to our entire audience. The title of your memoir, please?
Clifton Ross: Home from the Dark Side of Utopia: A Journey through American Revolutions.
Bob Zadek: It is a must-read for all my friends out there. Cliff, sorry we ran out of time. It always happens. Thanks so much for giving us an hour of your time. It was a wonderful show. Thanks for sharing your wisdom with us.
Clifton Ross: Thank you so much for having me.
Bob Zadek: Thanks a lot, Cliff. Have a good day.