Lessons and Hope in Venezuela

Of all the nations in the world that have fallen to dictatorship, Venezuela is the closest analog to the United States. If we fail to turn around our trend of democratic decline, the hope of a Venezuelan resurgence is America’s hope of a future resurgence.

Americans have likely only heard much of Venezuela since the recent waves of refugees and Trump’s fearmongering of the Tren de Aragua criminal organization. So, it may be surprising that Venezuela would have much relevance to us. 

Venezuela is not just another fucked up Latin American country. It is a country with a long history as a rich, democratic nation. This club is small, and Venezuela is the only example of falling from this exalted club into hell.

See below a view of the world in 1960 through the dual lenses of electoral democracy and economic prosperity. If you can’t find it on the map, it’s the nation at the north-most part of South America’s coastline.

The Path from Liberty and Fortune to Hell

If we were to transpose Venezuelan history onto America’s current trajectory of democratic decline, we would place ourselves into Venezuela in the early 90s.

A prior decade of economic tumult from the sharp decline of oil prices in the 80s hit Venezuela hard, as a country with a major energy sector.

While market forces provided the impetus for growing civil discontent and a growth in the popularity of populist politics in Venezuela, in America our political dysfunction and media environment have created the seeds of democratic decline, now amplified by post-COVID lingering discontent.

In Venezuela, this civic discontent and the rising populist energies arrived at a critical point when a coup attempt was launched by Hugo Chavez in February, 1992.

(https://www.theguardian.com/world/2016/feb/05/hugo-chavez-venezuela-failed-coup-1992). 

Unsuccessful coups are an interesting theme of the last few decades of Venezuelan history, tempting comparisons to other failed Central and South American states. Certainly, due to proximity, the idea of military coups was politically prominent enough to inspire various Venezuelan political actors. However, what is notable is that they have all utterly failed, whether against liberal governments or against Chavista regimes. The Venezuelan military has not functioned as a fourth branch of government but instead as a servant of the state, similar to the military’s place in the United States.

The futile and unsuccessful coup attempt in 1992 by Hugo Chavez bears a chilling resemblance to the insurrection attempt of January 6th, 2021 by Donald Trump. Instead of ending in punishment and disgrace, a mythology was formed celebrating the criminal act (https://youtu.be/HR_FAdVPPuw?si=vsz6uD_FlnKX9oau), eventually named the “Day of Dignity.””. In the years following, the government granted pardons to the participants in the coup attempts, including Chavez in 1994 (https://digitalrepository.unm.edu/cgi/viewcontent.cgi?article=12459&context=notisur). This troublingly resembles the history, so far, of the aftermath of the January 6th insurrection. While initially condemned, the right has come to revere the motivations of January 6th, Donald Trump was reelected, and pardons were issued for the participants.

We can pray that January 6th is never set as a national “Stop the Steal Day”.

The Populist Era of Hugo Chavez

Thankfully in our current and growing democratic decline, the United States has not yet elected a political figure like Hugo Chavez. Donald Trump is a symptom of our societal rot, but we have yet to find a populist figure that appears like a solution to it.

In the 1998 election, Hugo Chavez won the election by 16 points with both major moderate parties unifying against him (https://en.wikipedia.org/wiki/1998_Venezuelan_presidential_election).

In a moment of fortune that surely felt like the world bent itself to serve Hugo Chavez, upon taking political leadership in Venezuela, the long troublesome energy sector of the Venezuela economy began to rebound off of higher global energy prices until his death 14 years later.

Because of this stretch of good fortune, it may have been difficult for democratic Venezuela to separate the god-send from global markets and the populist economic policies of the Chavez administration. The rising tide of oil sales was able to paper over any defect in economic policy, and Chavez was politically dominant until his death in 2013. 

Hugo Chavez wielded the bully pulpit of a state apparatus that spread propaganda wide attributing the recovery in the 2000s to Chavista reforms. As center left and right parties were blamed for not adequately turning around the hang-over of the crash in oil prices in the 80s, Chavez was getting political rewards for their upward march.

However, on the back of the political power Hugo Chavez was granted, he had time to transform the Venezuelan government into one that could fall to dictatorship, although it is unclear whether Hugo Chavez had that possibility in mind. Despite being weakened by populism, when Hugo Chavez died, Venezuela was still a democracy, neither poor nor authoritarian. 

It is easy to see the fall of Venezuela as preordained knowing what we know now. Place yourself in the mind of a Venezuelan citizen, however. You had lived in a prosperous democratic nation your entire life, unlike any neighboring country. The past three decades had been tumultuous, but even the elderly were too young to remember a time when Venezuela was not a place of productivity, of liberty, with a government that, however imperfectly, served the Venezuelan people. No tyranny or dictatorship has taken hold over any other people who could say that, and how it happened may say a lot about how it may eventually happen to us.

In fact, it happened in just four years.

Rushing into Hell Without Restraint

What is shocking about Venezuela’s decline to hell in a matter of years of the death of Hugo Chavez under Nicolas Maduro is that it was allowed to happen at all. Ironically, a more unstable society would have rejected the disastrous economic and political moves of the Maduro regime. The double edged sword of a society with no institutions prepared to challenge the law is that if the government and law becomes the enemy, then you are more helpless than a Banana Republic.

Already dealing with a recession after the global financial crisis of 2008, Maduro was dealt a devastating blow shortly after his narrow election win as Hugo Chavez’ chosen replacement as head of the Chavista party (https://en.wikipedia.org/wiki/2013_Venezuelan_presidential_election). The oil market fell. Adding to that, the major customer of Venezuela, the United States, had its fracking revolution becoming a major producer of domestic energy.

As an inexperienced leader with a narrow political mandate, Maduro was immediately thrust into an economic and political crisis in 2014 into 2015 (https://backend-live.cfr.org/sites/default/files/pdf/2015/03/CPM_Update_Venezuela.pdf). There was a genuine economic crisis in Venezuela, and the government steps to maintain civil order are not dissimilar to past events under liberal regimes after the 1980s oil price declines (https://www.deseret.com/1989/3/5/18797401/venezuelan-riots-show-gravity-of-latin-america-s-debt-troubles/). 

However, Maduro’s policy response to the economic crisis and his later authoritarian moves threw Venezuela from a disaster into a cataclysm.

Economic Suicide

Economically, Maduro doubled down on Chavista economics through legislating higher wages, implementing price controls, and effectively crushing any business model for domestic Venezuelan business, pushing Venezuelan inflation from a crisis to a hyperinflation nightmare. 

The more of a depression Venezuela sunk into with a reduction of business activity, the harder Maduro squeezed the business community to hold off a deterioration in the quality of life of Venezuelans. This supply side inflation was also enabled by the ending of the central bank’s independence in 2007 (https://archive.ph/l7Efd). 

The market forces of rising inflation and shortage should have been the mechanism for new business opportunity and a revival of prosperity in Venezuela, but instead it was used as a policy justification to send Venezuela into hell. Specific inflation numbers become challenging to assess when business activity becomes unviable and remaining economic activity functions on a model of rationing versus a functioning market.

Dicatorship

The Chavista party fell out of favor due to the absence of the leadership of Hugo Chavez and the increasingly dire economic situation in Venezuela beginning to emerge. In the 2015 parliamentary elections, the first since the death of Hugo Chavez, the anti-Chavista party won the election by a similar margin (https://en.wikipedia.org/wiki/2015_Venezuelan_parliamentary_election) that Hugo Chavez did when he rode into power in 1998.

At this critical moment for the future of Venezuelan democracy, the Venezuelan parliament had a strong Chavista majority, elected 5 years prior when Hugo Chavez was politically dominant and currently Nicolas Maduro was president. The day after the election, they began using their power to vacate the existing judges on the Supreme Tribunal of Venezuela and appoint new Chavista party members to the court (https://english.elpais.com/elpais/2015/12/22/inenglish/1450795287_909403.html?outputType=amp). By doing this, against the popular will, the Chavista party was able to maintain partisan control of 2 branches of government.

Not unlike some moves we have seen in some U.S. states, the Maduro regime used its existing partisan control of most of the branches of government to strip the power of constitutional authorities of their opposition. The Maduro regime reached for emergency power and the partisan court blessed it. The opposition Congress passed laws, and the court ruled them illegal.

For the following decade to the present, the politics of Venezuela have devolved ever downward, with domestic international pressure both serving as a source of instability to the Chavista government and also as a source of provocation used as justification for further political entrenchment.

Saving Venezuela

The lesson for America in our democratic decline is somewhat dispiriting because Venezuela’s past is so easily imaginable as our future. What we must hope to avoid is the emergence of a populist figure of the kind of popularity we last saw with FDR, but with little regard for America’s democratic, liberal tradition. If we do, hopefully that leader will not be blessed with good fortune that will allow for the weakening of the institutions that would resist the political movement when a peaceful transition of power is eventually called for.

For Venezuela today, the past decade has been a nightmare, but has been short enough that it is a nightmare they can wake from. The civil servants are still alive, the capable productive civilization is still there, and the expectation and demand for democracy, liberty and law is present.

A pathway to a free Venezuela is a potential precedent to a pathway of freedom to ourselves in countries with long rich democratic histories.