Venezuela's Socialist Disaster Doesn't Nullify America's Social Democracy

Jun 9, 2016

COMMENTARY

Here we go again, only in reverse.

If you remember the Great Recession, then you remember every liberal coming out of the woodwork in those days to denounce capitalism.

Not just the capitalist excesses that caused the U.S. financial collapse. Free-market mutants like subprime mortgages and the deranged securities they were bundled into. But capitalism itself.

Marxists from Hanoi to Havana declared capitalism not only diabolical but dead. In 2009, arguably the worst year for America since the Great Depression, then Venezuelan President Hugo Chávez said, “The destructive model of capitalism is eradicating life.”

RELATED: Trump-Chávez Comparisons Are Fashionable. They're Also Flawed.

But now Chávez is dead – and the socialist revolution he founded is the destructive model as it works overtime to eradicate life in the Western Hemisphere’s most oil-rich nation. Desperate food shortages. Hospital squalor. Daily blackouts. Rampant homicide. Monstrous corruption.

In fact, a decade after its stunning comeback in Latin America, socialism is once again a discredited system.

And for the time being, every conservative will come out of the woodwork to denounce it.

Not that I disagree with them. Socialism in its traditional sense – a state-run economy – is a relentless failure, as predictably tragic as a Miami Dolphins season.

Liberals use catastrophes like the Great Recession to rant about capitalism. Conservatives use catastrophes like Venezuela to rant about anything that contains the word social.

The problem is that conservatives use catastrophes like Venezuela as an excuse to rant about everything and anything that contains the word social. Social welfare. Social responsibility. Social studies. Social life.

Their favorite target at the moment is Democratic presidential candidate and self-described socialist Bernie Sanders. The Internet is oozing with headlines like:

“Hey, Bernie, I Left Venezuela’s Socialism Behind.” “Venezuelan People Feel the ‘Bern’ As Real Socialism Destroys Their Country.” “Bernie Sanders Should Explain Why He Won’t Create Another Venezuela.”

But for all his egomaniacal leftism – and despite wackadoo Venezuelan President Nicolás Maduro calling him his "revolutionary friend" – Sanders doesn’t represent genuine socialism any more than the Dolphins represent quality football.

Sanders in reality is a social democrat: He doesn’t advocate socialism so much as greater social equality. Which is what his supporters want. In fact, polls show most millennials don’t even know what actual socialism is, even though gobs of them gush that they back Bernie’s “socialism.”

And yet conservatives are having a ball conflating Venezuelan socialism with American social democracy – despite the fact that America has always been a mix of capitalism and what the Bernie Bros call socialism.

U.S.A. works best when the capitalist and social-democratic sides of its brain get ample oxygen. When freedom and fairness complement each other – when we consider net profits and safety nets equally important.

When that equilibrium breaks down – when we throw all our chips on the Welfare State or the One Percent – we usually melt down. The inflation rate in 1979 and the unemployment rate in 2009 prove my point.

GETTING IT

But so does Latin America’s experience.

Chile is one of the places that gets it. For the past quarter century it has worked on merging capitalism and social democracy the way its vineyards blend Cabernet and Carménère.

Then there’s Brazil, which seemed to be getting it in the 2000s. Then President Luiz Inácio Lula da Silva called himself a socialist – but he understood that capitalism afforded the wherewithal to make him a successful socialist.

“It’s called doing things right,” Lula told me in a 2008 interview. “Allowing the rich to earn money with their investments and the poor to participate in economic growth.”

"Socialist" presidential candidate Bernie Sanders.
Credit John Locher / AP via Miami Herald

If Brazil is a mess today, it’s in no small part because toward the end of his presidency Lula started doing things wrong. He – and especially his more leftist successor, Dilma Rousseff, who’s now facing impeachment – let socialist policy sap capitalist productivity, and Brazil is currently mired in its own worst recession since the 1930s.

As for Venezuela, conservatives need to remember that Chávez’s Frankenstein socialism was a backlash against Venezuela’s Frankenstein capitalism. Against decades of cronyism and corruption that favored a small clique of cogollo (chieftain) families and pushed half the population below the poverty line.

So before they point to Venezuela as a rationale for trashing social democracy in the U.S. – for, say, dismantling bank reforms enacted during the Great Recession, as Republicans are now poised to do – they should revisit 2009. When our capitalism showed it can turn just as whack-job as Hugo Chávez’s socialism.