Monday, April 3, 2017

Venezuela, the Socialist Petri Dish

When Socialism saves the populace from eating, producing, and cash value, the graph looks like this (the dashed red line is at the bottom):

10 comments:

Taylor Hall said...

Aren't they all socialists countries on that chart? This seems to be about countries with a currency pegged to the US dollar.

Xellos said...

Don't you know, Stan? Venezuela is actually a capitalist social democracy! Also there is literally nothing socialist about it.

Stan said...

I don't know how socialist each country is. For example Brazil seems to have castes with huge populations of extreme poverty. At the same time it has a positive GDP growth.

A number of these countries have gone through the same dictatorship-bust that Venezuela is suffering now.

Taylor Hall said...

You don't know how socialist each country is, but you wrote a post called "Venezuela, the Socialist Petri Dish" and wrote that "When Socialism saves the populace from eating, producing, and cash value, the graph looks like this (the dashed red line is at the bottom):"

Again, this graph is about about monetary policy, not fiscal policies. So what was your point then?

Taylor Hall said...

Xellos, Venezuela certainly is a socialist country, and so are many, if not all, of the other countries on that graph, so what was your "funny" sarcastic point supposed to be about? I did not research so I don't know which ones are more socialist than others, but that's not what the graph is about anyway.

Stan said...

Actually, the graph plots delta GDP vs. time, and has both dollarized and undollarized economies graphed to those parameters. It is normalized to real GDP measured in USD and equilibrated to 100% at 2001. What it shows is the deteriorization of Venezuela's GDP by nearly 100% between 2001 and 2013. Both dollarized and undollarized economies did better than Venezuela by significant degrees.

The ever-increasing Chavez-style takeover of the economy and the results of that socialist dictatorship is what the graph was intended to show, as the red dots on the red dotted line indicate. Dollarizing tends to stabilize economies through turbulence, but it doesn't show rescue capacity for necrotic economies, regardless of ideology. If you challenge the conclusion, then provide some actual contrary data showing why Venezuela is prospering in your opinion.

If you are a socialist, then why not provide your information which indicates the superiority of centralized control. You might start with Mao's successes and then with Stalin's successes, since those are the largest socialist experiments in the past century.

Taylor Hall said...

I am no partisan of Socialism a la Venezuela, but I can see savage, unchecked Capitalism's flaws also.

Again, I repeat, this graph is about about monetary policy, not fiscal policies. So what was your point then?

Stan said...

The point has been adequately made; you don't like it: tough. If you choose to refute the conclusion being made, then make your case. Repeating the same thing over and over is not an argument, it is trolling.

Taylor Hall said...

What I see is a conclusion that does not follow from the information given here. It’s not that I don’t like it; it’s just not valid.

I didn’t want to put words in your month but you refuse to even try to defend your point so I will try to express it as I see it:
- Venezuela is a socialist country
- Venezuela’s GDP went down drastically from 2001 to 2016, as shown on the above graph
- Therefore socialism is bad, really really bad ("Socialism saves the populace from eating, producing, and cash value")

Problems:
1) Correlation does not imply causation; there could be other reasons other than Socialism causing Venezuela’s problems
2) It is not clear from the graph whether the other countries are more socialists or less. My understanding is actually that all Latin American countries are socialists to a certain extent.
3) The graph specifically says that the data is used to show the advantages of pegging a country’s currency to the US dollar. This has nothing to do with Socialism (fiscal policy) and all to do with managing the money supply (monetary policy) in order to prevent inflation or foreign attacks on the currency, to give just 2 examples.

Therefore, your argument is bogus. It only shows an unjustified disdain for Socialist policies and a misunderstanding of macroeconomics principles.

Finally, I do believe that Socialism in Latin America failed miserably, but this is not a reason to blame Socialism as a set of principles and certainly not a reason to make bad arguments like the one you made in this post.

Blake said...

See that dude wrote something too complex for your lazy ass to answer, right? Right???