Monopoly In Venezuela

[Charles Mueller <cmueller@xxxxxxxxxxxxx>]

	An issue that strikes me as especially important is one posed by the
recent election results in Venezuela--the victory of Hugo Chavez, described
in the press as a charismatic leader of the left who had previously led a
violent coup attempt and has ideological and other connections with Cuba's
dictator, Castro.

	We have here a situation that deserves, in my view, a great deal of study
and thought by those who're concerned with the welfare of the world's 6
billion citizens.  Venezuela is a very rich nation--thanks to having the
largest oil reserves of any country outside the Middle East.  Yet some 78%
of its 22 million citizens live in poverty.  How to square this figure with
the country's relatively high per-capita GDP of some $8,000--more than 10
times that of the poorest of the planet's nations, e.g., $300 or so in
Ethiopia and Haiti?  Remember that story in statistics class about all
those drownings in a river whose 'average' depth was 3 inches?  All that
oil wealth flows into the bank accounts of Venezuela's political and
economic elite--in economic terms, its monopolists--and the citizenry at
large teeters on the thin edge of starvation.

	Monopoly is, as I've pointed out no small number of times, systematic
theft.  And repeated, endemic theft--once publicly identified--tends to
generate a potent political response unless suppressed by a police state.
A nation like Venezuela--one looted decade after decade by a group of
corruptly-maintained monopolies--will routinely give birth to a
'revolutionary' personality of one sort or another, a leader who promises
to change the monopolisitc 'system.'

	Global poverty in 1998 is tied to the reigning definition of
'revolutionary.'  The world's 200 countries tend to oscillate between 2
political/economic extremes.  Corrupt private monopolies--as in
Venezuela--routinely generate a 'revolution,' which unfortunately tends to
be of the Marxist variety, a la Fidel Castro in Cuba.  These Marxist
monopolies, alas, tend to further impoverish the already poor citizenry--as
the tragic historic of the Marxist experiment worldwide from 1917 to date
so poignantly illustres.  So the 'revolution' fails--the poor are poorer
still--and a Fascist 'strongman' then arises to fix it, his solution being
a return to 'private' (corrupt) monopolies.

	 Deja vu all over again.  Private monopoly, public disgust.  Public
monopoly, public disgust.  Back and forth, the swinging goes on, endlessly,
spanning decades and centuries in, for example, virtually the whole of
Latin America.  No recognition, though, that the common element in the
individual nation's problem--under both the Marxist and the private
monopoly/corruption--is economic monopoly.

	Hugo Chavez of Venezuela now has 3 key policy choices:  (1)  Go with
Fidel's public-monopoly model (Marxist ownership of everything worth owning
in the country) ; (2) give his blessing to the Friedmanite model of private
(corrupt) monopoly that currently impoverishs his people; or (3) take on
the tough job of leading his country into a genuinely competitive
free-enterprise economy, one with NEITHER public nor private
monopolies--thus enriching all of his citizens and vastly reducing the
present inequalities that so profoundly disturb his society.

	Suppose Hugo Chavez should ask us for our economic advice:  How to make
his country, Venezuela, prosperous for all its citizens?  What would we
tell him?  Me?  My advice would be, Kill your monopolies.

	Charles



	

	
Charles Mueller, Editor
ANTITRUST LAW & ECONOMICS REVIEW
http://webpages.metrolink.net/~cmueller

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