2007 February 18 Sunday
Hugo Chavez Threatens Supermarket Takeover In Venezuela

The President of Venezuela is threatening to take over supermarkets that sell meat for market prices.

Venezuelan President Hugo Chavez threatened to nationalize supermarkets that sell meat above the government-set price as his administration struggles to stem a surge in the cost of basic foodstuffs.

Chavez told a gathering of pensioners Wednesday in Caracas, Venezuela, he's waiting for the "first excuse" to take over butcher shops and supermarket chains that manipulate stockpiles of beef and other foods to artificially boost prices. The government blamed manipulators for a 4 percent surge in the cost of food in January that pushed inflation to the fastest in two years.

"If they continue to violate the interests of the people, I'm going to take the meat markets and supermarkets," Chavez said. "I'll nationalize them." Chavez, who won re-election for a third term in December, is raising the prospect of seizures to push companies to support his social programs and transform the oil-rich nation into a socialist state. Chavez is completing state control of companies in the energy and telecommunications industries, which he deems a strategic part of his socialist plan.

You might be thinking: Wait, everyone knows that price controls produce shortages. Everyone knows that below market prices end up below production costs and then the producers stop producing and shortages get worse. You might be thinking that the old USSR was characterized by long lines and empty shops. Surely, the Venezuelans have learned the glaringly obvious lessons of economic history?

Venezuela (and Russia and Iraq and quite a few other places) illustrates why progress is not inevitable and why democracy does not always work. Stupidity and ignorance hold back most of the world. If people are too unwise and intellectually incapable then they'll do damage with their power to vote and as bureaucrats and elected officials.

The government is combining price controls with subsidies to produce food.

The Venezuelan Farmers' Federation (Fedeagro) welcomed Monday the government decision to remove the value added tax (VAT) from meat and implement subsidies to agricultural products, said Fedeagro head Gustavo Moreno.

However, the senior representative added, this action must go along with additional policies, including a review once in a while of price controls.

The National Association of Supermarkets and Services (Ansa) backed also the government offer to remove 8 percent of VAT from beef. "This will be translated into a direct benefit for consumers," said the agency in a communiqué.

Venezuela makes enough money from oil sales to subsidize lower prices for food. This might work for a while. But eventually declining oil field production will make all the costs of price control unavoidable.

Venezuelan President Hugo Chavez rules by decree and he was given dictatorial power by the democratic process.

To illustrate just how democratic the country is, the 167 members of the National Assembly — all of whom support the president because the opposition boycotted the last parliamentary election — convened outdoors in Caracas last month, to be better seen by the throngs of red-shirted Chavistas gathered in the square, and unanimously voted themselves into irrelevance.

The vote gave Chavez the power to make laws by decree for 18 months, with no need to even use his Assembly's rubber stamp. Seeing as how Chavez already had total control over the judicial branch, how he is taking steps to quell opposition media and how he could have rammed any law he chose through the Assembly with barely a semblance of debate or a whisper of protest, his new powers seem gratuitous. But even symbolic oversight can be messy, bureaucratic and slow. Kind of like democracy.

The Assembly effectively voted to say that they are not competent to create legislation.

Dictatorial powers over government actions, firm control of the judiciary, and nationalization of major industries aren't the only ways that Chavez has extended his powers in Venezuela. Chavez is also undercutting the independence of so-called Non-Government Organizations (NGOs). Chavez is also working to cut back on TV broadcast stations that are critical of his government.

As Chavez accelerates his country's shift toward "21st-century socialism," a decision not to renew RCTV's broadcast license is among the government's more dramatic steps, and one that has caused serious concern among free-press advocates. While Venezuelan officials have accused the 54-year-old station of having collaborated with organizers of a 2002 coup against Chavez, the Committee to Protect Journalists in New York, the Organization of American States and the Catholic Church have warned that press freedoms in Venezuela are in danger.

The case has attracted widespread attention from officials in Washington and Latin America, for whom the non-renewal of a license has echoes of right-wing dictatorships of the past, when newspapers and broadcasters were closed if they veered from the party line. Though self-censorship and slayings of journalists remain common, particularly in Colombia and Mexico, the closing of a media outlet for political reasons has not occurred in years.

Vladimir Putin's government has done the same thing with opposition press in Russia and to an even greater extent. Putin's been in office longer and so he's had more time to reduce the size and influence of a free press.

The underlying political conflict driving events in Venezuela, and in much of the rest of Latin America, is between a lower IQ Amerind lower class and a smaller higher IQ ethnically Spanish upper class. The Amerinds have less. The want governments that'll take from the more affluent Spanish and give to them. Hugo Chavez rules a country which is perfectly suited to satisfy their desires because Venezuela is a big oil exporter. The oil revenue finances the wealth redistribution.

Share |      By Randall Parker at 2007 February 18 12:28 PM  Democracy Failure

Daniel said at February 18, 2007 9:59 PM:

What is happening in Venezuela is actually quite comical, isn't it. Life imitates art: Woody Allen's Banaanas!!! We couldn't pay Hollywood enough for such authentic comic relief. The stupidest thing, however, for the American government to do - watch it though, Bush is in power, and that is a very low bar and anything is possible - would be to get involved or even express concern in any way. Just let it ride, that's what I say. Logically, Chavism should discredit both socialism and that peculiar latin political construct: the caudillo. Let's hope so.

When all is said and done, Chavez will leave with either a bullet in the head or on a flight to Havana.

But, I dont' feel pity for the Venezuelan upper and upper middle class. They didn't spawn Chavez, that's right, but they did preside over an utterly corrupt regime for far too long. A regime that set the stage for Chavez. I don't think that there is any question about that. Venezuela demonstrates that even at their best, Latins are a superficial and trivial people. It is to our dismay that our current president seems to have developed a profound sympathy towards them. Lord help us.

Randall Parker said at February 18, 2007 10:58 PM:


Good comments. But, no, the Latins won't learn from this Caudillo. They've had plenty of other caudillos. Didn't learn from them.

Yes, no sympathy. But we should learn the lesson our liberals do not want to learn: Their values are not universal. Not all have the attributes needed to create our kind of society.

mike said at February 19, 2007 4:52 AM:

I don't think that there is any question about that. Venezuela demonstrates that even at their best, Latins are a superficial and trivial people.

I'm often surprised by how much open-borders libertarians seem to resemble Latin America's upper classes in their outlook. They seem to be an equally superficial and trivial lot. Not to mention self-centered and unpatriotic.

Ned said at February 19, 2007 6:20 AM:

Latin America has a long, sad history of dictatorships of the left and right, and Chavez is just another bad example. His continuing attempts to socialize the country will cause foreign investment to dry up, wreck the currency and result in a severe decline in the standard of living. Venezuela may hold out a while longer because of the oil revenue, but that won't last forever and the ultimate outcome will not be in doubt. Eventually he will be overthrown by some sort of coup and either be killed or, if he's lucky, sent into exile. He will probably be replaced by some type of right wing dictatorship that will brutally root out all of Chavez's supporters (think of Chile under the Allende-Pinochet regimes). The same thing may happen in Cuba when the Castro boys finally kick the bucket. It's all so depressingly familiar. Better get ready for the next tidal wave of Venezuelan refugees.

Ted said at February 19, 2007 7:43 AM:

Is the left freaking out over this? If so, I have missed it. Ned, you are right. Guess who gets to clean up the mess, we do. We will pay for the whole thing too and we will still be called gringo assholes by the rest of those fucks down there. They make the mess, and we clean it up. And uh, oh yeah, here are some refugees too. Can they be settled in your country? Thanks. If the US does nothing then we are gringo assholes. If we step in, we are gringo assholes. I would rather be a gringo asshole and save our time and money. We need to stop giving a damn about these countries. No more aid, and no more refugees to our shores. If the Venezuelans want to fuck up their nation, that is their problem. God knows we have enough idiots here fucking up ours.

Larry said at February 19, 2007 8:33 AM:


Open-border libertarians superficial and trivial??? What about open-border democrats and republicans who want voters and cheap labor?

Ned said at February 19, 2007 8:39 AM:

Ted -

You put it well, if a bit delicately. Who appointed the US policeman to the world? How does all this neo-Wilsonian interventionism in any way benefit this country? Haven't we learned our lesson? We squander the lives of our troops and our money in unimaginable hellholes like Iraq, Somalia and Bosnia, only end up making things worse, and now everyone hates us to boot. What a deal! Time to develop a program of energy independence, put the brakes on the refugees/immigrants and tell these third world idiots to bugger off. They all hate us anyway, so what would we lose? This pattern of pointless inteventionism runs seamlessly through succeeding Democratic and Republican administrations for the last several decades. How has it benefited the US? If the jerks-in-residence in Venezuela, Iraq, the Balkans, Africa or anywhere else wish to turn their countries into dungheaps, let them. They're the ones that will have to live there, not us. It's not our business any longer.

Ted said at February 19, 2007 8:46 AM:

I've said it before. The Republicans and Democrats are having a contest to see who can fuck over white Americans first while simultaneously turning the US into Brazil. Democrats want the votes and they get supported by leftists/liberals and latinos. Republicans want the money from corporations that want cheap, docile labor that won't organize for their rights. The Democrats are actively looking to destroy white America by embracing these low IQs form the 3rd world, the Republicans talk the talk of economics, and the bullshit lie that these 3rd worlders somehow, magically become Americans. The result is the same, we will get the shaft. But remember, these are jobs Americans won't do. We need Affirmative Action, quotas, PC, multiculturalism, shit public schools, etc... It is for our own good because we are just a bunch of racists and rednecks. Never mind the Clintons and Bushs live in the nice parts of town and send their kids to private school. Nothing to see here, please disperse. They don't have to run the gamut of this filth that has washed up on our shores, and celebrated as something good. Any serious nation would run them out or shoot them dead (see Japan Mexico on how to deal with unwanted visitors). Sorry about the rant, but our political class and American elites are really doing a swell job of turning this nation into a cesspool. I can't wait for the racial strife to start. Wait, it already has, and guess who is getting blamed?

Irish Savant said at February 19, 2007 12:42 PM:

Daniel is absolutley right. Whatever about Latin amercia learning (Randall's point) the key issue is for the US to butt out. Involvement will only strengthen Chavez, who, as Daniel says, will be ousted one way or the other in due course.

Mensarefugee said at February 19, 2007 2:02 PM:

I never get rid of that nagging sensation of frustration when I see people deliberately f*cking up something that works, for something that gets the feel-good hormones pumping in their brains.

Randall Parker said at February 19, 2007 9:30 PM:


I feel that frustration too. But I feel it less because I figure the human race can't function much better than it does now. I just want to keep the less functioning parts of it away from me. Hence my emphasis on immigration restriction.

Armin Van Buren said at February 20, 2007 3:18 PM:

Fair analysis. It seems as if Latin American states with market dominant minorities will always have political instability. I wonder if Chavez himself understands the IQ disparities and whatnot and is just along for the ride to gorge himself on political power.

Now, when China comes in and starts to dominate Latin America, they can't complain about the evil US, because they'll realize that we weren't so bad.


SamC said at February 20, 2007 3:31 PM:

The underlying political conflict driving events in Venezuela, and in much of the rest of Latin America, is between a lower IQ Amerind lower class and a smaller higher IQ ethnically Spanish upper class.

I think this conflict can be generalized to the whole world. The technological developments of the last 40 years has lead to the devaluation of "manpower" and the increased value of "brainpower". Social solidarity between people with 3-digit IQs and people with 2-digit IQs will decrease (US elites flooding the US labor market with low IQ hispanics, and therefore screwing homegrown low IQ types, can be viewed as an example of this). We may even be moving towards an IQ based neo-feudalism; "globalizaton" may be the first manifestation of this trend. Interesting times ahead.

Robert Sperry said at February 20, 2007 11:33 PM:

The tragedy that is going on in Venezuela has happened outside of Latin America. At the risk of bring up the internets bigest cliché, Hitler was an elected official. The National Socialist were elected by what was the most educated, and one of the most intellegent people on the planet. IQ did not help them avoid tragedy. IQ matters, but in Germany and in Venezuela its bad ideas that did and will do them in.

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