Washington, DC, July 18, 2017 --  

Venezuela has been destroyed by unchecked inequality. Americans must learn from its tragedy.

Gun-wielding, motorcycle-mounted thugs raced into a crowd at a a Caracas polling station on Sunday in a fight to save the revolution.  The target was a line of voters waiting to cast ballots in an opposition-organized poll challenging the regime. A 61-year-old woman was shot dead and three others wounded.¹

After nearly 20 years in power, the populist regime in Venezuela is increasingly desperate. It is under intense pressure by a collapsed economy, sagging opinion polls, and an intense protest movement led by the opposition-controlled Congress that organized Sunday's non-binding vote. The ballot asked three questions challenging a regime plan to rewrite the constitution.

For a country where opportunities to get ahead are almost non-existent, stakes are high in the struggle for control of the country.  Those in power fear being turned out by fresh elections.  If the regime were to fall, its millions of supporters would lose patronage positions and become unemployed.  The opposition, long associated with the rich, would seize power and take the spoils.

Young people are leaving the country in droves, aware that there is no future for them. Those that remain, like the thugs on the motorcycles, fight a zero sum game over shares of an ever shrinking pie.  By one estimate, nearly two million Venezuelans have left the country since the regime took power, and the government is no longer able to provide passports to keep up with demand.²  The rich and middle class go to Miami or Spain, while the less affluent head over the border to Colombia or other nearby countries.

For Americans watching from the north side of the Caribbean, it is all to easy to dismiss Venezuela as a hopeless basket case.  But the country offers an important lesson in the dystopian consequences of unchecked rises in inequality and lack of economic opportunity for the masses. It was dispossessed Venezuelans' anger over inequality that swept Hugo Chavez to power in the 1998, and his redistributionist solutions merely provided a temporary shift of petroleum income from one group of people to another.

Venezuela is hardly unique. Bleak conditions are common in countries around the world with high levels of inequality.  In South Africa, wealthy homes are almost always ringed by razor wire to keep out violent intruders.  In Brazilian cities, hillsides covered in slums require tunnels and bridges for wealthier motorists to bypass areas where they would risk carjackings and robbery.

Could America become this way? Unlike Venezuela, South Africa and Brazil, the United States has for over a century been blessed with the world's most dynamic large economy. Rather than fighting for a share of a stagnant or shrinking pie, Americans at least have a growing pie. But the relative share going to the masses has been shrinking, and by some measures, the absolute size of their share has stagnated or declined. This leads to resentment. And if sustained over long periods, it can create exactly the kind of polarized, dysfunctional society that exists places like Venezuela, South Africa and Brazil.

Free market conservatives expecting down-on-their-luck workers to improve their own circumstances may be right about the particulars. But what's the point in being right if you future involves driving in protected tunnels between razor-wire compounds so as to avoid the angry masses? If life comes to this, even if you live in one of these compounds, you have lost. Americans who do not want to live this way must work to reverse current trends.

The election of Donald Trump's populist adminstration was widely recognized as a backlash against lost economic opportunity by white males in America.  While his protectionist and anti-immigrant prescriptions are no solution for the problems that face these people, the fact that the dispossessed enthusiastically chose such a leader should be a wake up call that something serious must be done to combat the problem in America as well.

It took less than 20 years from the ascension of Hugo Chavez for Venezuela to devolve into chaos and ruin. Fortunately for America, it has far stronger democratic traditions and liberal institutions that will help see it through. America won't be turning into Venezuela any time soon. But for those who care about the future, its lessons should not be ignored.

Related Web Columns:

Pitiful Subjects, November 29, 2016

The Rise of the Loony Left, January 3, 2006

Notes:

1. Toronto Star, One Dead, Four Wounded in Shooting at Venezuelan Opposition Polling Site, July 16, 2017

2. Bloomberg News, Venezuelans Are Trapped by a Chronic Passport Shortage, March 8, 2017