In Which We Are Reminded Anew That Hugo Chavez Knows Nothing About Economics
By Pejman Yousefzadeh Posted in Foreign Affairs | Hugo Chavez | Re-Warmed And Failed Socialist Policies — Comments (9) / Email this page » / Leave a comment »
One of the features of the Chavez economic "program" (the use of irony quotes are most definitely called for in this case) is the use of cooperatives as a means of implementing Chavez's socialist program. The Chavez regime's crafting and introduction of cooperatives in Venezuelan society is indeed an excellent way to showcase the nature of socialism to the Venezuelan people--along with the fact that cooperatives, like socialism, do not work:
Amid rows of softly humming sewing machines, with women calmly chatting among themselves as they go about their work, Margarita Morales picks up one of the bright red T-shirts from the production line.
"We're making these for people to wear at pro-government rallies," she says cheerfully, revealing a room stacked with T-shirts emblazoned with slogans such as "With Chávez, the people rule" and with images of Marxist revolutionary Che Guevara, as well as piles of military uniforms.
This small Venezuela Advances factory in Catia, a poor district in the west of Caracas, is one of Venezuela's showcase co-operatives, at the frontline of President Hugo Chávez's "Bolivarian revolution". Measures to promote such outposts of a `socialist economy' are one of the central planks of the changes Mr Chávez hopes to introduce to the constitution, expected to be approved in a referendum on December 2.
But not everyone is so optimistic about the prospects for the co-operatives. "So far there isn't a single example of a successful co-operative that I'm aware of," says José Luis Betancourt, the president of Fedecámaras, Venezuela's leading business association.
Despite the government having spent well over $1bn on grants and loans over the past few years, and billions more on social programmes designed to train workers in how to set up and run co-operatives, the results have so far been disappointing.
Although according to official statistics there were over 180,000 co-operatives at the end of 2006 - more than any other country - Gonzalo Gualdrón, the president of the government commission on co-operatives, says that in fact there are fewer than 80,000. Some census figures suggest there are fewer still.
While many co-operatives never got off the ground, due to misuse of government funds, others simply pocketed the money and ran, a situation that even Mr Gualdrón acknowledges.
Of course, as one might expect, apologists for the cooperatives movement have a ready-made excuse for the failure of cooperatives in Venezuela:
Supporters of the scheme say the biggest challenge is a deeply embedded culture of "capitalist individualism".
Translation: "If only the Venezuelan people would stop being so gosh-darned capitalist, then we could have some socialism around here!"
This is the point where readers may feel free to insert their own jokes concerning this . . . er . . . most curious of theories.
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In Which We Are Reminded Anew That Hugo Chavez Knows Nothing About Economics 9 Comments (0 topical, 9 editorial, 0 hidden) Post a comment »
that shotgun you use to slam co-ops in general nails Republicans in the USA. Agricultural and electrical co-ps abound in the heartland. Credit unions can also be considered co-ops. Would you prefer to disband these entities against the wishes of their members?
Chavez may be a human punching bag, but don't blame co-ops.
And the link you provided from the Financial Times was titled
"Chávez co-operatives yield mixed results"
At the bottom of the article one can read:
“The feeling I get is that a large number of the co-operatives have failed,” says Steve Ellner, a political scientist at the Oriente University in Venezuela who has studied the co-operatives. “The ones that are functioning are not resounding successes ... But they have transformed the lives of those belonging to them.”
We must assume that "transformed the lives" is a good thing.
Co-ops can work and are not a Bolshevist plot.
Those forced on people by Chavez and Voluntary associations.
Even using your quote. You get a majority have failed and the ones that haven't are barely alive economically. The only thing he can say is that the economic venture has mystical rewards.
Brilliant.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
I think you fail to realize that co-ops in the United States are organizations that the members choose to be part of and government has minimal involvement.
Chavez's co-ops create nothing people want, but propaganda to prop up his crooked and evil regime.
You must see the difference. Right?
I was surprised to learn that REI is a cooperative. To purchase goods, you become a member. At the end of the year you get (hopefully) a voucher for about 10% of what you spent.
USAA also follows this model, and as a member I got a nice little nest egg set aside with them.
I'm a stinking capitalist pig and I can't find a problem with this. I wonder if the REI model isn't the wave of the future. I suppose, however, the downside is that you don't have a large shareholder who pushes the company to make more money, but in the end, the corporation serves the customers, and as long as that's happening, what more do you really need? REI's obligation to shareholders keeps its cash tied up so it can't do anything financially stupid. (The same reason why old-timers like dividend stocks!)
Aren't corporations simply expressions of public ownership of companies? Aren't corporations like co-operatives in that you get to profit from the company's good fortune? This is the wonderfully democratic thing about corporations that gets lost in the stories of wild excess, that anyone can own a part of the most evil corporation in the world and get a nice dividend check.
"I can say - not as a patriotic bromide...that the United States of America is the greatest, the noblest and...the only moral country in the history of the world. - Ayn Rand
Yes... and there are many private sector "mutual" companies like USAA and other insurance companies for that matter... the largest coming to mind.
I think the poster who claimed we hate co-ops is either just a Chavez sympathizer, or doesn't realize that we have a beef with socialism and central planning, whether that central planning be done via a faux "co-op" (because in reality the end beneficiary of the co-op will be Chavez) or a "corporation" that is owned by the state.
Chavez would have been gone a long time ago if Venezuela had no oil. All the more reason to drill domestically.
I think the poster who claimed we hate co-ops is either just a Chavez sympathizer, or doesn't realize...
or more likely he was responding to this
-along with the fact that cooperatives, like socialism, do not work:
One can after disagree with Chavez policies and see that co-ops can work and work well.
Coops don't work? Chavez's Venezuela is one thing, but worldwide appears to tell a different story; check out this article:
"A Cooperative Solution"
by Riccardo Lotti, Peter Mensing, and Davide Valenti
http://www.strategy-business.com/resilience/rr00034?pg=all
"It must be frustrating, never being able to get away from us pestiferous Yankees."
--Kenneth Lafarge to Gwendolyn Ingolfsson
Chapter 17, "Drakon" by S.M. Stirling
As I mentioned in another comment on this site, at least in the sense that about three-quarters of the Venz population are functionally under- or unemployed and eager for handouts and freebies from the government.
In the nineties, I visited Caracas many times and been to Maracaibo once and although there were pockets of productivity and industriousness that pass muster as capitalist and individualist, the general impression I got from talking with academics, media, and political Venezuelans back then was that their country suffered from "the curse of oil," which has eroded much of the citizenry's motivation, gumption, get-up-and-go, and the populace's general level of ambition.
In addition to the hemorrhaging of self-motivation, one senior governmment official told me that the percentage of "illegal immigrants" in Venezuela was over twenty percent---almost all of them slipping into the country to get the freebies and handouts an oil economy furnished the underemployed. One has the sense that this border-crossing will only increase among those in neighboring countries who suffer from an aversion to hard work or even some sort of employment.
Finally, Venezuela is becoming the new center for money-laundering as all those petrodollars make neighbors like Nestor and his pilfering spouse, the new Evita, use Caracas as their offshore banking center to turn Argentine currency to actual real money. Ditto for Bolivia, Ecuador, and Colombia.
Panama and Mexico have been left in the lurch as kleptocracy apex predators.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777