Comment by lend000
3 years ago
While you're correct that high social spending that relied on high oil revenue was probably the primary cause of Venezuela's economic collapse, they had price controls on food starting back in 2003 and they began nationalizing major industries in addition to oil by 2008. From 2008, it was a full on centrally planned disaster.
Ownership and allocation mechanism are mostly independent axes. Consider for instance Norway (extensive state ownership but highly market-oriented; in certain respects more liberal than the US) contemporary China (state control of most major firms but mostly market-oriented), Gaullist France (nationalized infrastructure plus minority state shares in other sectors, markets supplemented with indicative planning and state-directed investment) or the US during WWII (almost entirely private, full-blown central planning).
Venezuela's level of interventionism is unremarkable by the historical standards of the developed world. The problem is their poor choice of interventions.
> in certain respects more liberal than the US
why would this be surprising? Don't believe for a second that the USA has a generally more liberal financial market than Scandinavia. Employment laws, trade, regulations, etc. are often wayyy less strict in Scandinavia.
It shouldn't be surprising, but American political discourse has unfortunately latched onto an extremely simplistic univariate model of economic policy. There's a common background assumption that redistribution, public ownership, fiscal policy, and all varieties of regulation rise or fall together.
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Employment laws “wayyy less strict” in Scandinavia than in the USA?
Where in Scandinavia would that be?!?