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Chávez’s Daughter Is Filthy Rich, and That Shouldn’t Be a Surprise

By: Guest Contributor - Aug 26, 2015, 12:01 pm
The accumulated wealth of Hugo Chávez's daughter is not the result of covert capitalism.
The alleged wealth of Hugo Chávez’s daughter is not the result of covert capitalism. (Albaciudad)

By Ezequiel Spector

EspañolThe alleged fortune of María Gabriela Chávez, daughter of the late Hugo Chávez, has recently stirred up controversy in Venezuela. Media reports suggest that Chávez’s daughter has US$4.2 billion stored in bank accounts in the United States and Andorra, which might make her the wealthiest person in Venezuela.

Critics have pointed to a supposed inconsistency: how can one support the so-called Bolivarian Revolution while enjoying such enormous riches? However, the premise of this critique is flawed, because it assumes that Chavismo emerged to uphold rights and equality.

In countries like Venezuela, the inequality between crony politicians and common citizens is evident. The first group enjoys considerable privileges, while the latter struggles to avoid drowning in a sea of inflation, shortages, and unemployment. The ruling class’s friends can travel and have access to foreign goods. Common Venezuelans must make do with “shopping” at mostly empty supermarkets.

But make no mistake, Venezuelan leaders are not covert capitalists. Their wealth does not come from outperforming their competitors in the provision of superior, affordable goods and services. It is not the result of taking risks and investing their own capital.

They are rich because the government has awarded them privileges and subsidies, at the expense of the average citizen. That’s 21st-century socialism’s social mobility. They don’t want capitalism, since their socialist system has already made them quite comfortable.

When defenders of the republic call for separation of powers, an independent judiciary, a nonpartisan central bank, and respect for civil liberties, they don’t do it out of a whim or to advance some abstract theory.

They do it because, among other things, they know that is the path to economic progress. They are aware that when those values are upheld, poverty and unemployment rates decrease, upward social mobility picks up, and individual potential is unleashed. They also realize that high concentration of power occur when those values are undermined.

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Australians, Canadians, and Swedes are not inherently better than Latin Americans. The wealth of nations has nothing to do with national character. It comes down to institutional frameworks: some choose to promote trade, rule of law, and republican values, and others give their leaders absolute power.

The defense of republican values and individual liberties is not some foreign concept, divorced from citizenship. It is the defense of citizens themselves, and the economic elite in Venezuela know it. That’s why they choose to keep their fortunes in republican countries, where they know there is no authoritarian ruler that will arbitrarily take it all away.

However, they don’t apply that knowledge to the Latin American countries where they grew up. If they did, an open economy would not allow them to live so comfortably; they would have to compete in a free market.

The reject capitalism not because they think it is inherently unjust, but because they are well aware that it is the only system that would put their talents to the test. And that is something which they greatly fear.

María Gabriela Chávez’s alleged wealth, and other inequalities present in Venezuela, are not anomalies, or symptoms of a “poorly implemented” socialist system. They are, in fact, the inevitable consequences of socialism.

That is a lesson Latin America has yet to learn.

Ezequiel Spector is a lawyer, PhD candidate, and professor at the University Torcuato Di Tella. He was also a visiting scholar at the University of Arizona and the Charles III University of Madrid. Follow @ezspector.

Translated by Vanessa Arita and Adam Dubove.