The “R” Word

UK39xsVOur calendar says it’s 2014, but Venezuela seems to be stuck in the XXth Century: we are dealing with the return of malaria, and shortages. Yes… the country with the largest proven oil reserves in the world is -ironically- filled with empty supermarket and pharmacy shelves. Needless to say, Venezuela is in a recession. Again. And now, a gizmo-laden new biometric rationing system.

The Fair Prices Superintendent, Andrés Eloy Méndez, claimed that the biometric system would “allow families to purchase a sufficient amount every week”. So… if “sufficient” means a “fixed amount” or at least a maximum amount, then he’s clearly talking about rationing… Right?

In a classic case of using words to mean the opposite of what they mean, Maduro lamely tried to reassure us that “the system will not ration anything”. BS. The biometric system limits how much of a given thing you can buy in a given period of time: that’s more or less the dictionary definition of rationing. “To ration” is to “allow each person to have only a fixed amount of (a commodity)”. What Bolivarian Socialism has wrought is just a 21st century version rationing card, much like the one used in Cuba since 1963 only, y’know, electronic.

It’s not the first we hear of this. Back on March 8th, 2014, Maduro announced the “Tarjeta de Abastecimiento Seguro”, which would complement a biometric system to control sales and –according to Maduro- prevent smuggling and speculation.

Though the biometric system was originally supposed be implemented on government-owned and subsidized supermarkets like Pdval, Mercal and Abastos Bicentenario, the Central Government recently announced that the biometric system would be expanded to private supermarkets.

Not only is this system unconstitutional (just like our friend @ignandez clearly explains in Spanish in Prodavinci), it’s also falsely presented as the solution for the shortages that we Venezuelans face on a daily basis.

Rationing is a clear sign of the decay of the so-called “Socialismo del Siglo XXI”, just like it was of the Classic Socialist System of the XX Century. But, has one would often hear, those who don’t know history are doomed to repeat it.

According to János Kornai (the Hungarian economist, reknown for his studies on Socialism), the economic characteristics of the Classic Socialist System of the XXth Century are:

If in block 1 we change “Marxist-Leninist” for “Psuv”, the graph also represents the economic basics of the “Socialismo del Siglo XXI”. No surprise there.

What’s really shocking is that the Venezuelan Government would expect different results… they expect block 5 to simply vanish or something.

By 1977, 32% of the world population lived under a Classic Socialist System. But after its epic fail, by spring 1991 only 0.006% of the world population still lived under this system. (Kornai, 1992)

Why would anyone would want to live under an economic system that would clearly bring them a life of complications and misery? There are 3 basic theories: some say is all about power. Others say is all about “los guisos”. But there are also crazy ones that believe in the system and are simply in denial.

Just like we didn’t come up with the Socialist System, Venezuela is not the first country to “suffer” rationing. Kornai (1992) shows us this rather depressing set of examples:

Also… those LONG lines to buy products are nothing new when it comes to countries that lived under the Classic Socialist System.

Siberians line up outside a shop in Novokuznetsk, Russia, in the final years of communist rule

For some years, Venezuelans have had to buy products with restrictions. With the biometric system the rationing is simply being formalized.

But rationing is not going to solve the shortages.

To reduce the shortage (and inflation), is essential to foster domestic production and to –in the short and medium run- increase the efficiency of imports. The Central Government should not focus on how to track sales, but how to encourage the increase of the supply and quality of goods and services.

Since the first step towards recovery is admitting you have a problem, this might take a while… in the meantime, nos vemos en la cola.

13 thoughts on “The “R” Word

  1. The populist leftists of Latin America still rely on the old, tired formula- hate the rich, hate the gringos, hate the Spaniards, hate the mestizos, hate anyone who has more than you- it’s all their fault. And the comic lunacy of what passes for economic planning for Marxists keeps recycling the old failures of the past.


  2. It could be said I think that shortages in Venezuela and yes, rationing, are for somewhat different reasons than in the former Soviet Union. For example, it seems to me that Venezuela has outperformed other socialist countries in the area of totally failing to meet the needs of its people in that it has not, like other socialist countries, implemented total across the board direct state control of argriculture and manufacturing, which history has shown does not work. What makes chavismo such a world class failure is that (1) it had extraordinary resources to mitigate its own stupidity; and (2) it never got to actually be a real socialist system before it failed; these ideologues never actually stood for anything.

    And so to add absurdity and tragedy to failure, you can fill up your car for almost free in socialist Venezuela, but 20-30 plus percent of kids outside of Caracas are malnourished and will suffer developmental problems because they don’t have enough milk in their diet. That is called a Revolution.


    • And the most sad part of it is that those oil revenues still allow the goverment to keep their heads just above the water and potentially sustain indefinite mediocrity, lunacy, ineptitude and corruption. All while the education system gets totally destroyed, obliterating the hope of getting out of this disaster in the foreseenable future. Pero mientras tanto nos vemos en la cola….


  3. We can’t appreciate what the Bolivarians are doing for us because we are stuck in a bourgeois immediatist concept of time… This is not Coca-Cola increasing production today to please a consumer society tomorrow, but communists in Venezuela trying to understand how a consumer society works. And doing that reading all the wrong books. So yes, it will take time. Just look at Cuba. By 2050, if we get extremely lucky, they may start understanding that fixed prices MIGHT generate scarcity. If one wants to like more Chavismo, he must get rid of his immediatist bourgeois desires, kill all his dreams and hopes, and understand that the Chavistas are acting thinking in the very long-term. In the same way that Christians’ base their deeds not on this world but in Heaven, Chavismo is also not thinking about “our time”. They have all the time in the world, they have the infinite ahead of them. Actually, they are the infinite.

    The people in the middle of the (revolutionary) process are just background escuálido noise.


  4. “to foster domestic production and to –in the short and medium run- increase the efficiency of imports”
    The solution is extremely simple: eliminate all price, distribution and currency exchange controls. Almost overnight the production engine will start revving up and the shelves will be filled. There is no other solution, when people understand this then change will be possible.


        • In an ideal society people would clobber away any politician that offered to control prices of anything (even minimum wages).

          But in the mean time back on earth, if people understood that the scarcity is the direct consequence of the price controls, that would make it politically viable to eliminate those controls. Imagine that, people picketing carrying signs asking for a lift of the price controls. Sorry, back to earth again.


  5. Evidently the regime is establishing the captahuellas food rationing system as a way to dramatically lift its flagging popularity among all classes which will welcome with bulliant enthusiasm the new system as liberating and as a marvelous improvement on the old system where everybody arbitrarily bought what they wanted when they could get it . We can expect a huge upsurge in the regimes now somewhat battered popularity . This is not what hardline Chavistas were expecting (nor was it something that the dear departed leader evern promised) but in their heart of hearts they knew this wonderful moment would someday come .!! now the regime in its benevolent wisdom will tell us what to buy and how much to buy !! we should be grateful !!

    This way they can once again show ordinary people how efficient and competent the regime is at running things , the idea is brilliant and the execution is bound to be impecable .!!


  6. I find this, and many others articles that go on the same tonic, sadly amusing. Yeah, the solution is to encourage production and investment, and not rationing. Thing is, this government doesn’t want to solve shit (and pardon my crude language). What the they want is to finally f*ck up us all and force the Cuban model onto us, so they can forever and ever keep the control and have it easy while repressing us.

    Oh, BTW, while the biometric thing is for “ration” how much we buy, it’s also done for keep track of who’s trying to buy what things in which place(s) he/she’s not allowed to and for whom he/she’s voted. Maybe I’m stating the obvious, but it still amazes me that no one’s talked yet (maybe, dunno) about the REAL implications and possible consequences (biometric, SAFIS, SAIME, CNE, do the math). Cheers!


  7. The problem is that Marxism is a religion: irrational and self righteous. Impervious to reality always selling utopia and blaming the non believers for their failures.


  8. Amazing that lines to buy regulated products are mentioned but no one recignizes the lines at the private clinics and in the airport to fly to Miami, for example. I suppose that in the mind of the autor that lines of middle class people do not count as lines. Lines are only for the chusma, right?

    Before SUNDEE clamped down on suprmarkets, both state and private, for not opening all the cash register points and deliberately causing lines, lines in supermarkets sucha s Excélsior Gama and Plazas were unbearable.

    People have money to spend on food so any talk of a “crisis” in this sense is completely misplaced.

    Antone who says that supermarket shelves are empty or that there are no pharmceuticals does not live in Venezuela and is just spewing propaganda.

    Sure, youc annot always find the brands you want but no one goes hungry and this was clearly evidenced by the special award given to Venezuela last year by the FAO for “doing more tan any other country in the 21st century to defeat hunger”.

    The biometric fingerprinting will put a stop to internal contraband and if anyone thinks that 3 kilos of harina pan per person, per week is rationing, then they must be as overwight and obese as 31% of the population.

    For a healthy society we need to eat less and allowing whole families to buy, say 10 kilos of harin apan each and then resell it has nothing to do with rationing, but is living off the state taht subsidizes these products.

    I guess that most bloggers on CC want free prices as in the EU where wages have been reduced but prices stay the same or rise. In Greece they earn the same as in Serbia and Croatia but pay Paris prices for food. This is a great system for the corporations much loved ny you capitalists.

    No one appears to be able to see that since 2008 capitalism is dying on its feet and impoverishing populations bioth in the EU and US.

    One final observation – since JC took over CC it’s standards have become more and more like Tal Cual – a newspaper (or rather propaganda rag) much loved by apátridas such as Alec Boyd who is just another parasite off the British state.


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