Capitalism hate him

Les Schaffer schaffer at optonline.net
Mon Apr 23 14:26:48 MDT 2001


[ from Nestor ]

En relación a Capitalism hate him, el 23 Apr 01, a las 14:43, Charles
Brown dijo:

> Chavez' dictatorial tendencies and anti-business rhetoric are likely
> to frighten away those who are most economically productive.

Is there some kind of a massive outflow of workers from Venezuela?

[...]

> Right now Venezuela is riding high on a wave of high oil
> prices. With approximately 70% of the country's net exports coming
> from state-owned oil production, and oil near ten-year highs, the
> government's revenue has substantially increased. GDP growth and
> economic indicators are positive.  Venezuela's external debt
> represents only about 30% of GDP, lowest among the major Latin
> American economies. Furthermore, Venezuela's economy is experiencing
> the only current account surplus among the major Latin American
> economies. All of these factors are considered positive, yet I will
> argue that a major decline in Venezuela's economy is becoming
> increasingly likely.  In the longer term, it is ideas, and the
> social, political, and economic environment that ideas produce that
> determine a country's economic results.

As anyone can witness in the flamboyant evolution of both the USA and
Eastern Europe recently. Yes, I agree fully with these guys!

> Right now, the greatest threat to Venezuela's economic future lies
> within its ideological direction, specifically the anticapitalist
> and statist philosophy espoused by its popular president, Hugo
> Chavez.

Ah, a pity. I thought we were talking with serious people. It just
looks we are facing yet another sorcerer.

> Chavez took power in December 1998, promising to reform a corrupt
> government.  Since then, he has instead led a "political revolution"
> designed to elevate his personal power within the government, and of
> the government over its citizens.  Chavez has removed the checks
> against his power held by Congress and the Supreme Court. And
> Chavez' ultimate goal appears to be ruling Venezuela by personal
> decree - i.e. dictatorship.

Strange for a dictator that he runs over his opponents in crystal
clear elections after a Constitutional Reform where everyone had a
right to vote and speak. But well, with these guys we know,
"dictator=anyone who won't let me steal". Yes, a dictator, then. But I
don't see the relation, since dictators have offered some of the best
business opportunities in the past (Videla, Costa e Silva,
Pinochet...) Maybe Castro is a dictator? Ah, in that case I don't
understand a word at all, because European capitalists are doing
extraordinary business with him. Oh, mysterious economics!

>  Chavez gravitates towards the dictatorial left, and has explicitly
> struck out against America's dominant status in the world and the
> "savage capitalism" it promotes. He has gone out of his way to visit
> and praise Fidel Castro, Jiang Zemin, and Saddam Hussein, and has
> cited the government of Libya's Col. Muammar Qaddafi as a model of
> democracy. Regarding Cuba and Venezuela, Chavez stated that both
> countries were "swimming together towards the same sea of
> happiness."

Again: what does this have to do with business? As noted above, there
are extraordinary opportunities for business in all these
countries. Ask the owners of plants in China, and were it not for USA
what agreements could not be reached with Saddam or Gaddafi?

> There are ominous parallels between Castro and his admirer
> Chavez. Like Castro, Chavez was a failed baseball player, and like
> Castro, came to power as a "reformer."

Wow, depths of psychological analysis! A failed baseball player. Never
allow such a criminal get to power in the United States, for
example. It would be terrible for business.

> Both were originally hailed as "reformers" and "pragmatists." Now,
> like Castro and numerous past revolutionaries, Chavez erects massive
> posters of himself, and lectures the country for hours on the
> wickedness of capitalists, the necessity of class warfare, land
> redistribution, and the delights of delivering a "knockout punch to
> the counterrevolution."

The question is: are capitalists counterrevolution? If they are, then
there is no way for business, on this we agree. But, again: are they?
Or not?

> Those productive and wealthy Venezuelans on the receiving end of
> Chavez' abuse aren't waiting around for his "knockout punch."

So that Venezuelan bourgeois are productive. What did they produce, in
forty years, but a market for American whisky?

> They appear to be voting with their feet and checkbooks. Capital
> flight is substantial, estimated to be about US$1 billion per month.

Under conditions of dictatorship. It seems that dictatorship is not
_that_ tremendous. If I were Chávez (in fact, if Dubya were Chávez)
these guys would not be able to leave the country with their
monies. The monies would be left behind them.

> Despite his anti-capitalist rhetoric, Chavez is hoping to raise
> money from foreign and private investors by partially privatizing
> the telecommunications and energy industries. So far investors have
> been distrustful of Chavez' contradictory policies, and incoming
> investment has slowed, with foreign investors reluctant to invest
> even in oil ventures, let alone non-export industries.

So that they are _pushing_ Chávez to socialism and isolation. Even
though he hates them, he offers them possibilities to do
business. They require that the other side _loves_ them before they do
business (maybe so it does not look like rape?). Well, that is a bit
too much. If he decides to take the step they are forcing on him,
don't blame him for it, OK?

> With state oil revenues generating a windfall of government funds,
> Chavez is expanding government spending at an even faster
> pace. Chavez recently announced plans to spend additional billions
> this year to inaugurate a new stage of "economic revolution." Though
> details are lacking, given Chavez' background, his economic
> revolution is likely to entail confiscation and redistribution of
> wealth, and an increase in government interference in the economy.

"Confiscation and redistribution"? Excuse me, wasn't this wealth owned
by the State, since it came from exports of oil by the state monopoly?
And what's wrong with redistribution, doesn't it create a market?
Doesn't it open up new outlets for production? Doesn't it provide new
economic opportunities?

> Even with $30 oil, Chavez is spending beyond the government's means,
> given that government expenditures are expected to reach 20% of
> GDP. This has led Chavez to raid $2 billion from the central bank,
> crushing its façade of independence. To further compound the
> problem, the central bank's currency policy is the same as was once
> pursued by Indonesia and Thailand: a "controlled" devaluation, with
> a weaker currency each month, devaluing 9.9% in 1999, and over 6% so
> far in 2000.  The combination of government spending and devaluation
> has resulted in inflation of over 15%.

Inflation is also, as a toddler knows, a way to redistribute wealth,
if properly managed. Again, an opportunity for business. Aren't
Venezuelans more attractive even for monsters like Nike when they wear
tennis shoes, instead of going barefoot? So, what's the problem here?
Maybe Nike WANTS Venezuelans to go barefoot?

> Venezuela's situation is unlikely to lead to immediate collapse, but
> the situation looks quite negative for coming years. Chavez'
> dictatorial tendencies and anti-business rhetoric are likely to
> frighten away those who are most economically productive,

That is, you, my dear wealthy reader. You. Pat, pat, pat.

> gradually leading the economy to become increasingly dependent upon
> government, and the government increasingly dependent on oil
> revenues.

This is simply ridiculous! A diversification of the domestic market is
exactly the only way out of extreme dependency on oil revenues for any
country producing raw materials. ABC.

> Given oil's volatility, an expected medium-term downturn in the
> price of oil could leave Venezuela with an expensive bureaucracy, an
> absence of productive entrepreneurs, an unproductive economy, and a
> scarcity of revenues.

"Productive entrepreneurs" are the clue. But what I see from my
everyday experience is that "entrepreneurs" are scared like hell of
risk, and that if they are American and wealthy, their blunders are
soaked in Government's help (remember Long Term...) So that the only
productive entrepreneur in Venezuela seems to be the Venezuelan
state. A pity for "entrepreneurs", but they are not "entrepreneurial"
enough...

> That's a recipe for collapse - someday.

Certainly. That is when the NYSE collapses.

> Andrew West is a Contributing Economics Editor for Capitalism
> Magazine. He is Senior Portfolio Manager and Senior Vice President
> at Global Assets Advisors Inc., a subsidiary of International Assets
> Holding Corp. He is currently working at the firm's New York City
> branch. Mr. West has worked in the field of global investing over
> eight years as both equity analyst and portfolio manager. Mr.  West
> graduated Summa Cum Laude with a Bachelor's degree in Finance from
> the University of Central Florida. In 1997 he received the Chartered
> Financial Analyst designation from the Association for Investment
> Management and Research.

And Mr. West is an agent for the worst scoundrel on Earth: imperialist
bourgeoisie. I would rather have some Mr. East for a better night
sleep.

Néstor Miguel Gorojovsky
gorojovsky at arnet.com.ar





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