The Socialist Utopia of Oil-Rich Venezuela is Rationing Gasoline

Posted by PITHOCRATES - July 22nd, 2012

Week in Review

Venezuela is a lot like Iran in a way.  They have lots of crude oil.  But little refining capacity.  Which is a problem because nothing really runs on raw crude oil.  It’s what we refine from it that we use in our cars, trucks, buses and power plants.  Causing a bit of a problem in Venezuela.  Because in their socialist utopia they virtually give their gas away.  Which was one thing when they refined it.  But another when they have to buy it (see Chavez’s gasoline rationing plan causes uproar by FABIOLA SANCHEZ, Associated Press, posted 7/20/2012 on Yahoo! News).

As home to the world’s cheapest gasoline, Venezuela has long had to contend with the hemorrhaging of supplies as smugglers haul gas across the border to cash in where the fuel costs far more.

In neighboring Colombia, drivers pay 40 times as much as Venezuelans to tank up — $1.25 a liter ($4.73 a gallon), compared to 3 U.S. cents a liter (11 cents a gallon).

So much gasoline is being taken out of Venezuela illegally that President Hugo Chavez’s socialist government imposed rationing on motorists in one state bordering Colombia last year, and now it’s touched off a furor in a second border state by announcing it will ration gasoline there, too…

Venezuela is a major oil exporter but its refining capacity is limited, so the government buys gasoline from the United States, losing money by then selling it at home for almost nothing. Those imports have been steadily rising since 2009…

Ramon Espinasa, a Georgetown University economist, blames “operational problems” at some Venezuelan refineries as well as rising demand from power plants built in the past two years that burn gasoline and diesel fuel.

“They’re not producing specialized (petroleum) products and must import finished products,” Espinasa said…

“It’s not rationing,” [Hugo Chavez] said. “It’s a means of control, to give everyone gasoline, because the gasoline here is practically free, so the idea is to give everyone what they need.”

One of the problems of socialism is that there is no incentive to risk capital.  Because if you invest and build a refinery the state will just take it away.  So that leaves the state to build their refineries.  And based on their refinery capacity shortfall that’s something the state just doesn’t know how to do.  Or else they would have done it.  And not have gasoline rationing.

Another problem with socialism is the whole ‘from those according to ability to those according to need’ nonsense.  Something that requires some people to work hard so others can have more.  Never a great inducement to get people to work hard.  So they don’t.  In socialism those who show the most need get the most.  And if they show no ability they don’t have to work hard to learn and acquire skills that will advance the economy.  So what can happen is that a chemical engineer with a college degree but no children may earn the wages of a janitor while a janitor with no college degree but with lots of kids can get the wages of a chemical engineer.  From those according to ability.  To those according to need.  You know what this gets you in the long run?  Gasoline rationing.

So socialism requires everyone to sacrifice for the greater good.  And based on the very large black market for gasoline that isn’t happening.  Which is why socialism fails as an economic system.  For people always look after their own interests.  Not the greater good.  Even in the socialist utopia of Venezuela.

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Chavez suffers Relapse of Cancer and escapes his Socialist Paradise for Treatment in Cuba

Posted by PITHOCRATES - March 4th, 2012

Week in Review

Hugo Chavez is remaking Venezuela into to a socialist paradise.  Where everyone is equal.  And one of the tenants of a socialist paradise is national health care.  Where they put people before profits.  And give everyone access to the same quality health care.  Unless you’re the president and have suffered a relapse of cancer (see Venezuela’s Chavez confirms cancer recurrence by Andrew Cawthorne and Eyanir Chinea posted 3/4/2012 on Reuters).

“I will live! I will overcome!” the 57-year-old socialist leader said in a televised meeting with some cabinet colleagues from Cuba, where he underwent an operation six days ago for a recurrence of the cancer that first struck him last year.

Chavez also lambasted Venezuela’s opposition as “bourgeoisie” intent on dismantling his welfare policies for the poor, spoke of an increasingly fervent Catholic faith and – as always – broke into verse at several points…

Chavez, a close friend of former Cuban president Fidel Castro, prefers treatment in Havana because he is guaranteed discreet treatment and a lower possibility of media leaks.

Yeah, right.  Discreet treatment.  If the choice was between quality care and discreet treatment what would you pick?  Quality care.  Because you’d want to live, right?  So the quality of Cuban health care must be better than the quality of Venezuelan health care.  Or Chavez simply chose discreet treatment over higher odds of survival.  Which I doubt.  No.  He went to Cuba because he wanted to live.  And the health care in his socialist paradise, that’s good enough for his people, simply wasn’t good enough for him.  Which is socialism in a nutshell.  Where all of the people are equal.  Only some of the people are more equal than others.

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