The dire situation in Venezuela holds valuable lessons for the American people.
The first lesson involves Venezuela’s economic system, which is based on socialism and interventionism. It has produced nothing but chaos, crisis, misery, conflict, discord, and poverty. That’s what socialism does. As an economic system, it is a total failure.
Why is that a valuable lesson for Americans? Because the welfare state economic system that Americans adopted in the 1930s is a variation of socialism. That’s what such programs as Social Security, Medicare, Medicaid, subsidies, public schooling, the postal service, Amtrak, immigration controls, the Federal Reserve, and progressive income taxation are all about. They are based either on the socialist concept of taking money from those who own it and give to people who don’t own it or the socialist concept of central planning. That’s precisely why all these programs have produced chaos, crisis, misery, conflict, discord, and poverty. The only reason that things are not as bad here as they are in Venezuela is because Venezuelan public officials have embraced socialist principles to a greater degree than U.S. officials have.
Second, the ongoing economic chaos and crises in Venezuela have led to greater and greater government control over people’s economic activities, to such a point that the nation is now living under a democratically elected authoritarian police state. That’s because, as Ludwig von Mises pointed out, each economic intervention inevitably leads to more interventions to fix the crises caused by previous interventions. As the interventions add up, the result tends toward a complete government takeover of economic activity, which inevitably is enforced with brutal police-state measures.
We especially see this phenomenon here in the United States in three areas — healthcare, drug laws, and immigration controls.
