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What “Made in Socialism” Means to Venezuelans

By: Andrea Rondón García - Jul 27, 2015, 1:31 pm
La escasez y la miseria son la consecuencia de las políticas socialistas. (Ríete del Gobierno)
Shortages and misery are always the consequences of socialist policies. (Ríete del Gobierno)

EspañolSocialism is any system that restricts or infringes upon the free exercise of human action or entrepreneurial role, and that is justified in the popular, political, and scientific discourse as a system capable of improving society and accomplishing a set goals and objectives that are considered to be good— Jesús Huerta de Soto

Socialism is not what it claims to be. It is not the pioneer of a better and more beautiful world, but rather the destroyer of what thousands of years of civilization have painfully created. It builds nothing and  demolishes everything. If it were to triumph, it should be named destructionism, because it is, in essence, destruction.  —Ludwig von Mises

Este logo identifica los productos de las empresas públicas y expoliadas en Venezuela. (Taringa)
“Made in Socialism” is the label identifying products made by state and seized private firms in Venezuela. (Taringa)

“Made in Socialism” is a Chavista slogan stamped on Venezuelan products that points to a dysfunctional system: while the company that manufactured the good nominally has a private owner, he has no control over it.

In Venezuela, a company can no longer freely dispose of its own assets when, pursuant to the Organic Labor Law, the government decides to occupy it “temporarily.” Instead, a new Board of Directors composed of government officials runs the firm.

As a result of direct intervention, consumer goods become scarcer, even though they continue to be produced by the same company.

Shortages in Venezuela amplified after last year’s seizures. Even then, many now-occupied companies already suffered from the government’s exchange and price controls. By definition, controls create distortions in the economy, such as scarcity.

Behind the “Made in Socialism” label lies a long list of companies that have fallen under this regime and whose products have become harder and harder to find.

The hostile economic conditions turned them into victims, forcing them to either halt production or reduce them to a pace from over a decade ago.

The socialist regime’s desire to plan and control everything is clear in the countless measures enacted over the years, such as price and foreign-currency controls, increased taxes, restrictions on foreign investment, and labor laws.

As Rey Juan Carlos University professor Jesús Huerta de Soto is fond of stressing, this is a fool’s errand. The day-to-day operation of a company cannot be learned overnight. The entrepreneurial knowledge needed for such a task is practical in nature and dispersed among economic agents. It’s not a form of information that can simply be gathered and transferred to a government entity.

In a free market, entrepreneurial knowledge as well as innovation are constantly evolving. Therefore, it is impossible to seize it, sum it up, and hand it over to some government officials.

As a Venezuelan, I can tell you one does not need a full grasp of leading anarcho-capitalist theories to understand the current state of affairs.

What all Venezuelans witness every day serves to show socialism does not work: long lines outside stores; the shortage of basic consumer goods; spiraling inflation; not being able to shop when one needs to but rather when the government allows you; resorting to barter (for instance, trading shampoo for coffee); having to buy from bachaqueros (middlemen) on the black market, and so on.

The situation is worse if we consider that all products traded in Venezuela implicitly bear the “Made in Socialism” stamp. A firm in Venezuela does not need to have its facilities seized to be affected by the government’s economic policies.

Because the local industry is in shambles, Venezuelan firms make their products with imported materials, which they pay for with US dollars granted by the government. Then they must comply with arbitrary fixed prices and somehow sort endless hoops before they can get their products to the market.

Writing these words is tough because I live it — I suffer it. Analyzing our day-to-day lives leaves us gasping for breath. The one doing the choking is the state, which intends to intervene in every single aspect of our lives.

But then, Aldous Huxley reminds us in Brave New World that “when the individual feels, the community reels.” In other words, when an individual becomes conscious, he or she can spread change and motivate it in others. That is the first step to revert this mess called “Made in Socialism.”

Products in Venezuela may be “Made in Socialism,” but we Venezuelans who must keep the government in check, are not.

Translated by Franco Bastida.

Andrea Rondón García Andrea Rondón García

Andrea Rondón García has a PhD in Law from the the Central University of Venezuela, and teaches at the Andrés Bello Catholic University. She is the director of CEDICE’s Property Rights Committee, and academic director of the Ludwig Von Mises Institute in Venezuela. Follow @arondon75.