RE: HEY NON-VENEZUELANS, HERE'S A LITTLE HYPERINFLATION TEST FOR YOU:
Correct me if I'm wrong, but Venezuela still has private supermarkets, retailers, car manufacturers, etc, right? If it does, then at least a part of the economy is not socialist, while other parts, like the healthcare system, is socialist.
Yes, we still have them, kind of. There's a rigorous price control, lots of enterprises of different kinds have been expropriated by the government for "strategic purposes", including big supermarkets, actually. So private companies have to play by the government rules, not even the constitution.
I believe you think that social democracies and socialism are the same, and that's the point where we probably disagree. Nordic countries (and most of Europe) are social democracies (Welfare state + free market). Venezuela is socialist (State controlled economy). Cuba is communist (State owns everything).
The problem with social democracies are pretty much the same as Free Market capitalist countries. What I believe is that there is not an specific formula to be a fully developed country. What is successful in the Nordic countries, and part of Europe, may not be successful in the US, or the rest of the Americas. It depends mostly on the people.
If most US-citizens are law-abiding, agree to pay low taxes but choose to pay for healthcare the way they do: Medicare for the elderly, free market competition for the rest, it's OK. It depends on the individual to choose what they want to do. Just think about it: Tell a US-citizen who pays about 30% of taxes (Income + sales), that in order to get UBI, and to pay for free education infrastructure, they have to pay 50% of taxes. They won't do it, even if it works. Some even will say: "Tax the rich!", and it just doesn't work like that. Even in the nordic countries, entreprises only pay 20% of income tax, even less than the US. It depends on the culture of their citizens.
It's like a new capitalist government trying to tell Venezuelans that every state owned company (including the oil industry), has to be sold to private entities to create revenue and help the nation: They won't buy it. Even in the situation we have right now. It depends on the people's will to change their culture, and to be truly citizens.
Ok, that does sound very different from the social democracy I know
I suppose there's a problem with the words here, because when people in for example the US say they want "socialism", they mean "more socialism" to arrive at the level of social programmes that Sweden has. Every country on earth has some socialism, as every country has a military (except for like 2 tiny islands thats still have universal healthcare). I agree we should have a different term for Venezuela than we have for Sweden or Cuba, I think maybe "controlled economy" would be better, or something like that.
I looked ot up now, and in Sweden you don't pay anything for the first 2'000$/year, 32% for the next 50'000$/year, 52% until 70'000$/year and 57% for everything above that. So they still have progressive taxes, the reason why the middle class pays such a large part of the taxes is because there is so little inequality
If you could choose between copying everything the US does in Venezuela, or copying everything a European country of your choosing does, which would you take?
Well, here we are about 30 million people, pretty much the same as Canada. And we have free college tuition (I graduated from a public university). We have UBI but it has never worked well. I believe that it's because the government directly runs the main source of income: The oil industry. And because of that, we are fully dependable of that.
I would stick with having the welfare model that we actually have. BUT ONLY if all oil industry activities are controlled by prívate entities paying proper taxes and royalties. We are a medium sized country in terms of population, so I think it would work if all people (even low income people) pays a reasonable income tax (maybe 10-15%). Because there's The other thing: Governments tend to be populist and not tax lower income people, but they also participate from all the government programs. So, it's pretty much unfair to pay for some people who work also and don't pay anything at all.
What I'm saying is this model can be applied here if a lot of things change, from the government to people's mentality. People just don't like to pay taxes. They see it as a burden because everything that they're intended for is not working.
And just check this, this is a theory of mine (i could be wrong): The larger the country, the larger the inequality. I don't think it's just because of bad policies.
Yes, "the larger the country the larger the inequality" probably holds up. But I doubt it's because having a large country means its programs increase inequality more, if such a large country was divided into many countries, then the inequality within that same region would only grow, certainly geographically (Europe vs US, the US has a way lower geographic inequality than Europe because Europe doesn't have common social programs to counter geographic inequality which also contributes to inequality at large).
I agree that most of Venezuela's social programs, mostly those that European countries also have, would probably work just fine if its source of funding wasn't so insecure, like the oil market is. But do you also think Venezuela's apparently incredibly tight price controls are a good economic tool to use, for the benefit of the working class? If you're not for those controls, wouldn't that basically just mean you're in support of a European-style social democracy with a bit more social programs (like UBI)?
Sidepoint: If you want to convince an American of supporting UBI, you can try calling it "Social Security For All", that is more self-explaining and sounds less like "scary socialism", because it is kind of literally just taking a program for seniors and giving it to everyone, like Medicare For All which is hugely popular by now
Definitely not. It never worked here. Everytime there is price control, there's scarcity. Everytime. And a black market of everytring controlled grows. Most of the basic food items I buy i only find them thru black market.Or else I have to wait in line for a couple hours outside of the supermarket to buy it with no guarantee to get it before they run out of it.
I'm not in support of it. What i'm saying is that I believe that a new government can't take away benefits from people who already has them as settled law. So, the only way to make things better is improving the economy in a way to get more revenue and at the same time change people's culture. I'm saying that, comparing Venezuela's population to some developed countries that have UBI, it can be viable to have an European-style social democracy. And we actually did in the '70s. But only dependance in oil revenues makes this economy really volatile. And that affects pretty much the same way either we live in a capitalist country or in a social democracy.
I think the Venezuelan conflict with the US and the resulting embargo is probably a large reason why the Venezueland economy is doing so poorly now. What exactly do you think are the deeper reasons for that? The US clearly doesn't have anything against Venezuela's economic system, they trade happily with China and are allies with the EU, so what else is it?
There is not an embargo on Venezuela. The government still sells oil to the US thru CITGO. There's still (but a lot less than before, mostly of geopolitical reasons) trade with the US. What is happening is that the US government thru the Department of Treasury imposed economic sanctions to several VE government officials accused of money laundering public funds to buy properties and having funds saved in bank accounts up there. And also, there's a restriction for US entities or individuals to buy debt from here. And a court decision to disallow CITGO to be sold until the VE government pays debt.
So it's not an embargo. We still have trade with the US.
The main crisis started at the end of 2015. Oil prices fell sharply, and all subsized services started to crash (colleges, government hospitals, government supermarkets, oil industry, etc), prices of everything started to raise faster. Government imposed heavier price controls and started to put sellers on jail, and cause of that scarcity worsened. Then national food supply was changed with imported food from México (bad quality food, it's recent news), Brasil and Guyana. And it was also price controlled. Well, hyperinflation came. The sanctions were imposed just a year ago after all the killings due to protests against the government.
I'm not naive to not know that all of this is a geopolitical issue. There is a trade war ongoing between China and the US. And to pressure Venezuela for a change affects China interests in this region. They have a high influence in some oil production, with joint ventures with the VE government and also in the mining industry.
I agree that it's not a good idea to base your entire government on oil revenues, but wouldn't the problem stay very similar if you base the government on the tax revenue of oil production? If then the oil price drops, that will lower tax revenue just as much if not more, because only profits are taxed not revenue
I think diversifying earlier would have been good, using the revenue from oil to boost other areas of the economy maybe even with outside investments, not to immediately give out UBI with the oil revenue, and such