You call that a protest? This is a protest!

By skepticlawyer

In light of some rather anodyne efforts at the G20 summit in Melbourne, I’ve spent some time searching for some genuinely impressive protests. They also had to be recent protests – I think everyone in my age-group is over pictures of theanti-chavez.jpg Vietnam Moratorium marches. I found what I wanted here.

Venezuelan blogger Daniel does a superb job photoblogging Saturday’s huge anti-Chavez protest, with lots of links in both English and Spanish to other reports and photographs of the protest. Apparently one of the highlights was a speech by opposition leader Manuel Rosales. One of Daniel’s photos shows the speaker’s plantform dwarfed by the crowd; I wonder how anyone other than the closest few thousand managed to hear him talk, regardless of the quality of any broadcasting equipment.

There is an election on December 3; Daniel is concerned that, should Chavez win, his country will slide further into authoritarianism. I am less concerned on that score: the presence of such a major anti-government voice is probably a sign of democratic good health.

My concern is economic: Chavez has funded most of his government’s expansionist social justice policies out of Venezuela’s oil revenues. Oil is a commodity like any other. As the price per barrel drops, and as alternatives to oil are developed elsewhere, he may find himself – and his country – in serious trouble. Apart from that, he is a fairly standard big-government statist, with all the micromanagement, regulation and intervention that entails. And he loves Castro.

We shall have to see come December 3.


  1. Posted November 27, 2006 at 11:31 pm | Permalink

    Oh dear, another South American post – and me with only (fairly rusty) Castilian Spanish.

  2. Boris
    Posted November 27, 2006 at 11:32 pm | Permalink

    There was also a huge pro-Chaves rally next day. It was failry anti-washington, so you can call it a protest too. I wonder which one was bigger.

    Oil will not be cheap any time soon. A bigger danger for a single-commodity economy is that it will eventually run out. It will happen long after Chaves is gone however. But it may happen much sooner in Russia.

  3. Boris
    Posted November 27, 2006 at 11:35 pm | Permalink

    “I am less concerned on that score: the presence of such a major anti-government voice is probably a sign of democratic good health.”

    I often thought Miloshevic wasn’t a dictator, in conventional terms, if he was removed by elections, followed by rallies. True dictators usually don’t hold multi-party elections, led alone lose them. Neither they allow opposion, let alone opposition rallies. Ever heard of an opposition rally against Hitler? Stalin? Brezhnev? Saddam? Pol Pot?

  4. rog
    Posted November 27, 2006 at 11:42 pm | Permalink

    The Chavez rally was not quite so big and had the help of the authorities;

    It must have rattled Chavez

  5. Posted November 27, 2006 at 11:49 pm | Permalink

    Daniel makes the point that Chavez’ rally depended on bussing people in from all over the country, and still wasn’t as big. The Rosales protest was entirely voluntary, and probably drew much of its support from within Caracas.

    I do get the impression that there’s a considerable rural-urban divide. I’m reading Adam Tooze’s Wages of Destruction at the moment, and he points out that many of these retrograde movements – of both left and right – have their roots in shoring up the agricultural sector.

    Over time it becomes uneconomic to have so many people on the land, but in a poor country the (still heavily populated) countryside can swing a lot of votes. This means agitating for everything from subsidies to tariff protection to debt relief to milking the cities to pay for the countryside. It seems to be a world-wide phenomenon, until agriculture is mechanized and the numbers drain out of it.

    Tooze’s analysis of how the nastiest of Hitler’s policies sprang from the large rural voting bloc makes chilling reading.

  6. Jason Soon
    Posted November 27, 2006 at 11:55 pm | Permalink

    meanwhile another country in South America elects another doofus

    Really, is there any hope for this continent? When they’re the scrap heap in 50 years time while China and India, Eastern Europe, etc are booming, just don’t come to us with your begging bowl, people. You dig your own graves.

  7. Posted November 28, 2006 at 12:02 am | Permalink

    It seems that Ecuador has already ditched all the debt it needs to, and this guy wants to flush their bonds as well? Where did all that other money go? Some tax haven somewhere, I’ll bet.

  8. JC.
    Posted November 28, 2006 at 12:06 am | Permalink

    Bllomberg says:

    An ally of Venezuelan President Hugo Chavez, Correa said last night he’s not concerned if the election results spark a decline in bond prices and push up Ecuador’s borrowing costs.”

    It would be hilarious if it wasn’t so tragic. It’s almost like they do a nationwide search for the biggest ignormus and vote him in.

    They have this sloppy, almost romantic love for socialism that’s almost endearing. Endearing in the sense that you sometimes give up and smile at rank stupidity.

    I say it’s a good thing in a selfish way. We can alsways use someone as an example not to follow.

    Every 15 years on the dot these guys go begging to wall street for cash, they get it, do well while they’re spending it, then the monthly interest bill comes in and they can’t pay it. They then default and the whole thing starts up again.

  9. Boris
    Posted November 28, 2006 at 2:21 am | Permalink

    I do not think you guys here are looking at all this in the right way. These countries had leaders of all colours, including those promoting free markets with no much improvement in living standards. This wave of left-wingers reflects an understandable desire for change.

    I am not sure the same standards as in developed countries apply in Latin America. As for free-market politicians, they must lift their game, and not just promote their cronies. But they are too much dependent on corrupt big business.

  10. rog
    Posted November 28, 2006 at 7:40 am | Permalink

    Both Mises and Hayek argue that any central planning committees entrusted to run the economy would become corrupt, whether they be ‘left’ or ‘right’. Most of Latin America has govt controlled/influenced economies, with % rates in the 20’s with the exception of Chile.

    Chile is ranked as having the most economic freedom in S America whilst Venezuela lies down the bottom near N Korea;

  11. Posted November 28, 2006 at 8:51 am | Permalink

    Corruption and cronyism is at the heart of the problem in South America, with the exception of Chile – we’ve had this discussion over at one of the (several, now) Allende threads. I’ll reprise some of my comments here:

    Until the Chicago Boys instituted neoliberal economic policies in Chile, no South American country was particularly capitalist. I think you’ll find a mess of dictatorships – both left and right – and a preference for autarky rather than free trade. Many of Cuba’s woes are as a result of Castro’s autarky as opposed to the US blockade. I suspect you’ll also find plantation economies where protection suits local business elites who are almost inevitably hostile to free trade.

    Many wealthy people in the third world want a government that is pro-business, and frequently, governments of the right deliver this thinking they are helping the economy. A pro-business government (particularly one in a country with a plantation economy) will be more efficient than a socialist one, but will still be much less efficient than a genuinely liberal economy.

    What people on this site advocate is pro-market economic policies, not pro-business policies. Pro-market policies are about competition. Many business leaders in the third world like protection (aka hiding behind a wall of tariffs), and are quite happy to trade personal freedom in exchange for fleecing consumers generally and the poor specifically to maintain their position.

    This is borne out in Pinochet’s case. Only Friedman personally was able to persuade him to allow the Chicago Boys to have a relaively free hand. They were not able to do so. He was quite happy to piss in the pockets of local business elites in exchange for them saying ‘how high?’ everytime he said ‘jump’.

  12. FDB
    Posted November 28, 2006 at 9:57 am | Permalink

    Boris is dead right.

    Nobody has EVER governed very well in South America, regardless of political tradition. Until the endemic corruption and human rights abuses of BOTH sides of politics are sorted out, it makes very little sense to bitch about ‘lefties’ or ‘righties’.

    And SL – I agree with you broadly, but your bias is showing. Who do you think digs up the oil that make Caracas’ citizens rich? The voters who keep Chavez in power, that’s who. The oil fields aren’t in Caracas, so they needed to travel there. They’re not just backward third-world farmers, waiting to be herded onto busses for a rally, their labour is driving the economy. To call the anti-Chavez rally ‘voluntary’ is to imply the opposite about the pro. What is your basis for this, other than ideology?

  13. derrida derider
    Posted November 28, 2006 at 10:54 am | Permalink

    South American history serves as a great example to people who think distribution doesn’t matter. The root of the problem is massive inequalities in property and in human capital investment – a legacy the Spanish left them.

    When a few dozen families own the country, cronyism is impossible to avoid. When the bulk of people own nothing and face crony-run governments and institutions, who are determined to keep it that way, then populism starts to sound attractive.

    The root cause fo the exceptionally poor quality of South American governance, on both right and left, is the massive inequality resource endowment people are born into.

  14. Posted November 28, 2006 at 11:10 am | Permalink

    “The root cause for the exceptionally poor quality of South American governance, on both right and left, is the massive inequality resource endowment people are born into.”

    Exacerbated by:

    1. Insecure property rights and recurrent nationalisation threats.

    2. Little chance of upward mobility, partly caused by 1. above.

    3. Stifling creativity due to oppression and a lack of a capital market.

    Stability, civil rights and real property titles would do a lot in Sth. America.

  15. Boris
    Posted November 28, 2006 at 9:09 pm | Permalink

    “Who do you think digs up the oil that make Caracas’ citizens rich? ”

    FDB you must be joking. Read this:

    In December 2002 many of PDVSA’s managers and employees (including the CTV trade union federation) led a lockout/strike to persuade Venezuelan president Hugo Chávez to call early elections, and virtually stopped oil production for 2 months. The government fired 19,000 employees and reestablished production with employees loyal to the Chávez government. The International Labour Organization (ILO) called on the Venezuelan government to launch “an independent investigation into allegations of detention and torture”, surrounding this strike.[1] The strike caused substantial macroeconomic damage, pushing unemployment up by 5% to a peak of over 20% in March 2003.[2]

    Rising oil price saved Chavez but PDVSA could be in a much better shape without him.

  16. Posted November 28, 2006 at 9:20 pm | Permalink

    Love how the lefties try to spin PDVSA as a ‘good’ oil company, despite the fact that it engages in both monopolistic and monopsonic behaviour, especially since Chavez has stacked it with his stooges and broken the back of the union that took him on. With torture and detention, too, if the ILO is to be believed, not exposure to world markets or abolishing the minimum wage.

    Funny, that.

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