“The fundamental objection advanced against the practicability of socialism refers to the impossibility of economic calculation. It has been demonstrated in an irrefutable way that a socialist commonwealth would not be in a position to apply economic calculation. Where there are no market prices for the factors of production because they are neither bought nor sold, it is impossible to resort to calculation in planning future action and in determining the result of past action. A socialist management of production would simply not know whether or not what it plans and executes is the most appropriate means to attain the ends sought. It will operate in the dark, as it were. It will squander the scarce factors of production both material and human (labour). Chaos and poverty for all will unavoidably result.” -Ludwig von Mises
Venezuela was once touted as a socialist paradise, a completely planned economy that relied on its oil revenue (50% of total GDP, and 95% of total exports!) to fund “socialist” programs for its citizens. Unfortunately, with oil prices plunging, Venezuela has had problems planning its economy; inflation is up 65% and murder rates are the second highest in the world. The above video is one of many that show the recent spate of looting in stores as people desperately fight for toilet paper, among other basic necessities, because their savings have been inflated into worthlessness. It highlights the problem with a society where money is becoming worth less than the paper it was printed on.
This problem is not merely endemic to openly “socialistic” economies like Venezuela; all economies that have the “socialistic” inclination of controlling the economy, pretending that THEY know better than the PEOPLE, by printing record quantities of paper and debt to “stimulate” via the “wealth effect” (making the rich richer via funding stock-purchases and buy-backs that drive up share prices) will soon find themselves in a similar boat. At least the people of Venezuela got something when the getting was good… In other countries, wealth inequality has sky-rocketed before hyperinflation has even had a chance to sink in.
Venezuela is tanking because of lower oil prices. Oil prices are low because demand from China is low due to reduced manufacturing and its tanking economy. China is tanking, and manufacturing less because the people of its biggest client, the USA, are NOT feeling a recovery of any kind — disregard the pep-talk about a “recovery” that the talking heads tried so hard to sell us over the last two years.
So far we have seen two links in that chain fall, but both falls come as a consequence of the prior fall of the third chain… the US’ and much of the developed worlds’ middle classes are hurting.
Zero Hedge wrote a telling piece:
“Venezuela’s hyperinflation is reaching its final stages. It is probably already far too late for the government to stop the complete collapse of its currency. The bolivar is in the process of transforming from a medium of exchange to tinder for wood-stoves. Venezuelans who had the presence of mind to convert their savings into gold or foreign currency in good time are likely to survive the conflagration intact.
Those who bought stocks on the Caracas stock exchange seem to have successfully side-stepped the effects of the devaluation as well, but they need a plan for the post-inflation adjustment crisis, which will bankrupt a great many companies very quickly. Also, the government can simply close the market down at any time if it doesn’t like what is happening there, so there is the ever-present danger of even more government interference as well.
It is quite fascinating to see that in spite of numerous examples throughout history, governments never seem to learn. They all believe they can somehow overrule economic laws by diktat. This is not only true of Venezuela’s government, but of practically every government in today’s world. Central planning of money has been adopted everywhere. Venezuela merely shows us what the end game for every fiat money system looks like.
At some point the State is overwhelmed by the promises it has made to its citizens. When it can no longer pay by means of confiscating private wealth, the printing press is always the last resort. Recently one actually gets the impression that it is often the first, rather than the last resort.
In developed countries, people believe that the planners have everything in hand, and that their “price stabilization” rules will protect them from such outcomes. However, it should be clear that these rules will simply be abandoned in extremes. The independence of central banks exists only on paper – it will mean nothing in a perceived “emergency.““
People have come to understand just how corrupt their systems are, particularly in the US where everyone seems to understand the open-bribery that seems to occur between their politicians and the corporations via “election campaign funds” and “speaking arrangements.” It is a little strange then to see that people yet trust these sociopaths in power to have their best interests at heart when it comes to their quality of life, and the value of their money…
Who am I kidding? Clinton, Bush or Trump are probably going to get voted in over the relatively honest politicians anyway. Then when looting occurs at Walmart they can blame worsening race-relations or something…
This Article (The First Domino Falls: Looting In Venezuelan Stores As Hyperinflation Takes Hold) is free and open source. You have permission to republish this article under a Creative Commons license with attribution to the author and AnonHQ.com.
Unfortunately for those who demonize socialism, there are both good and bad examples of socialist governments, just as there are good and bad examples of capitalistic governments. There is no perfect ideology or utopia, and even if it were possible to establish one, the inevitable change would occur and destroy it . . . . locking in on ideology alone only perpetuates the status quo.
The following countries are some of the most socialistic nations in the world today:
Denmark, Finland, Netherlands, Canada, Sweden, Norway, Ireland . . . .
Famous Socialists: Albert Einstein, Isaac Asimov, Howard Zinn, Mark Twain, Francis Bellamy, Author Of The Pledge Of Allegiance, George Orwell, Richard Feynman, Nelson Mandella, Martin Luther King Jr., François Holland, H. G. Wells, Noam Chomsky, Clarence Darrow, Stephen Jay Gould, George Bernard Shaw, Marie Curie, Robert Oppenheimer, John Lennon, Sinclair Lewis, Charlie Chaplin, Carl Sandburg . . .
The rich denigrate socialism because it really does scare the hell out of them . . . . it threatens their way of life.
Not to forget Danes are the happiest people in the world, and the people who are the best non-native English speakers. Must have a rough time with all that free healthcare and education!
There has never been a capitalist economy, the free market has never once been tried in recorded history. America is a fascist economy where the taxpayers are forced to suffer the losses of industry but the profits are private. There are no good examples of socialism, it is the direct cause of the economic pains of the people when the government (which is never we the people so don’t kid yourself) gets to determination how the wealth of the nation is spent
Shawn, you are absolutely right. Neither is it really intelligent to underestimate the potential of participative economy possible in socialism. The sad thing to me is that non socialist country did manage it for real because there are always some militant monkeys like Chavez, Castro, stupid Maduro not understanding fundamental laws nor government administration. And even less about international finance. Well, to be honest, Uruguay does pretty well….crossing fingers….and China is not a sample at all because China is to big that any kind of ideology will last long
This has nothing to do with socialism!!!! It has everything to do with the financial elite bringing the economy to its knees through their manipulation. More details here: http://blog.kareldonk.com/venezuelan-protests-another-coup-detat-attempt-by-the-financial-elite/
And before Hitler came to power during the Weimar days in Germany, they had the same issue of being milked by the financial elite through high inflation. After Hitler came to power he kicked out the bankers and their system of usury and debt slavery, and things improved rapidly: http://blog.kareldonk.com/adolf-hitler-the-greatest-story-never-told/
It’s the Zionist central bankers.
That is socialism….. Or do you refer to the fantasy of a government run by the people.
Power is only attractive to the corrupt, because those who seek dominion over their fellow man are by nature corrupted
What is this bullshit.
In onemonth working 6 hour per day you only make 17$ in not kidding…
Everything depends on BANKS.
Move to Bitcoin.