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What Danny Glover and I have in common
In a kind of a weird back-door way, I also support Hugo Chavez. Or put another way, and going a little Hegelian, as Tyler likes to say, I think Chavez is an historical necessity, and a richly deserved one at that.
Venezuela has relatively high levels of income inequality (a gini coefficient in 2000 of around .44 compared to .36 for the US according to the UN) from a relatively low base and was run by a corrupt elite class who swallowed up oil wealth while the economic standing of the country plummeted. In 1957, Venezuela's GDP per capita was 51% of the US, in 2003 it stood at 18.5% of the US. Existing institutions had no credibility with a very large portion of the population and simply could not continue to exist as they had.
Don't get me wrong here, I'm NOT endorsing Hugo. Do I think that Chavez and his policies are going to serve the long term economic interests of Venezuela? NO. Do I think Chavez is a charming guy? NO. Would I be sad if Chavez lost power? NO. If George Bush and Chavez were in a burning building and I could only save one would it be Chavez? NO.
I am just saying that Venezuela was run into the ground by its ruling class and Chavez is the (I hope only temporary) result of their short sighted, poor governance.
A similar analysis applies to Evo Morales. Bolivia has even higher income inequality (year 2000 gini of .60) from an even lower base, and has fallen even more precipitously in economic standing relative to the US, From 25% of US per-capita GDP in 1951 to 8.7% in 2003. That is just a disaster. The ruling elite of Bolivia had Evo Morales coming and I hope he gives it to them but good.
I am not sure whether this type of path is inevitable in Latin America. Lula was a populist firebrand but has governed quite moderately. Brazil though, did not suffer nearly the same fall in its relative living standards. Their peak of per-capita income relative to the US occurred in 1980 at 31% and it "only" declined to 21% by 2003. Income inequality though is very high (2003 gini of .58). Will Brazil avoid a Chavez, or is that yet to come for them?
Note that the GDP figures used here are from the Penn World Tables 6.2 and are adusted for deviations from purchasing power parity (the variable I use is "CGDP relative to the United States" and it is available from 1950 - 2003).
Posted by Kevin Grier on May 24, 2007 at 09:51 AM in Economics, Philosophy, Political Science | Permalink
Comments
What if you had a choice between saving Chavez and saving BOTH Bush and Cheney?
Posted by: Mike J. at May 24, 2007 10:00:24 AM
If George Bush and Chavez were in a burning building and I could only save one would it be Chavez?
I'd sit back and toast some marshmallows.
Posted by: Peter at May 24, 2007 10:12:20 AM
This is an interesting political application of the annealing concept that the complexity folks talk about. A system caught in a sub-optimal equilibrium can be temporarily made worse and due to being freed from the old steady state can now achieve a better outcome.
This seems to be a property of many systems from metallurgy to political economy.
Posted by: GoodnessOfFit at May 24, 2007 10:20:31 AM
Is Chavez good for Venezuela? No, but the country wasn't going to get wealthier anyway, and will now likely end up with Chavez until he dies, and will suffer like Cuba has for the last 47 years.
Will the same happen to Brazil? Yes, but the timing is uncertain. I suspect all of Latin America, with the possible exception of Mexico will travel down the path of populist dictator-for-life governments in the next 50 years, even Chile.
Posted by: Yancey Ward at May 24, 2007 10:41:46 AM
If George Bush and Chavez were in a burning building and I could only save one would it be Chavez?
Hugo Chavez, by his buffoonery, is pushing someone else's country into decline. George Bush, by his buffoonery, is pushing my own nation into decline. This is a no-brainer.
Posted by: Mr. Noah at May 24, 2007 10:59:24 AM
George Bush will stop pushing our nation into decline very soon (though residual effects will continue, clearly).
Hugo Chavez may be pushing a foreign nation into decline for quite some time to come.
Posted by: Dave McDougall at May 24, 2007 11:23:08 AM
GoodnessOfFit: it's great to hear someone considering ideas from complexity to be relevant to social systems.
Grier: My sentiments exactly! Chavez is necessary to break the stranglehold of the elite. This sort of turmoil is always necessary in any society that was characterized in the past by large inequality with an elite class, quite simply to change the beliefs of people to those that support a different state of society.
Posted by: The Tsunami at May 24, 2007 12:23:14 PM
Out of curiousity, would you same about Mugabe? Castro? Pinochet?
Posted by: Dave at May 24, 2007 12:45:09 PM
Unfortunately, everything is pointing to Chavez being a dictator for life and not just redistributing the income like you mentioned but running his country into the ground. He's giving himself more and more power and has seized control of the industries that will guarantee he can retain that power.
Posted by: taoist at May 24, 2007 1:13:36 PM
Hi Dave: Mugabe has been president since independence, so I can't put him as a reaction to previous corruption and bad governance. I think Castro and Cuba
may be a similar case, with the important difference that Castro wasn't elected into office like Chavez and Morales. I don't know enough about the facts
on the cuban economy and income inequality in the first half of the 20th century to say much more. Pinochet also was not elected and I think pursued
significantly different policies than Chavez and Morales when in power.
Posted by: Kevin Grier at May 24, 2007 2:07:52 PM
Tsunami,
There are a handful of researchers out there applying complexity to social systems. If you are interested in more about the application of complexity science to social systems see "Complex Adaptive Systems" by Miller and Page (both are affiliated with The Santa Fe Institute).
Posted by: GoodnessOfFit at May 24, 2007 2:19:26 PM
rather a tragedy than a necessity. The only thing that we deserved was a better goverment, but our country believed too much on Hugo Chavez. On the years to come, we will find that he betrayed his own people like no one before. Venezuela will be a poorer country as he and his followers not only ransacked the country, but destroyed our industry and our cultural institutions. And yes, we have had a ot of resources but we have been unable to put forward our country.
Posted by: Antonio at May 24, 2007 3:33:37 PM
Tsunami: "Chavez is necessary to break the stranglehold of the elite."
And replace it with a chokehold from a different elite.
Meet the new boss. Same as the old boss.
Posted by: Jeff Hallman at May 24, 2007 3:50:26 PM
And our ruling caste wants to import this culture?
Posted by: ricpic at May 24, 2007 4:28:58 PM
Even better, it'll all be America's fault.
And just wait until he lets the Iranians base missiles there.
Posted by: Sandy P at May 24, 2007 6:12:52 PM
Kevin, Babalu Blog, The Real Cuba and other Cuban blogs might be of interest - and don't forget the recipies! Of course, we need to kick up a notch the "Spain Exploiting Cuba for 500 Years" movement.
There's also an article written after 9/11 about how although it was "bad" under Batista, they were better off econ-wise. And Medved had a Cuban on yesterday talking about his Che book and boy, the lefties were spitting.
Posted by: Sandy P at May 24, 2007 6:19:16 PM
Thanks, the GDP comparison statistics are very helpful to me in understanding the situation.
Posted by: Steve Sailer at May 24, 2007 6:25:45 PM
it is available from 1950 - 2003
A real weakness, as most Latin American countries had higher GDP relative to the United States in the pre- and post-WWI era. And they got variations on socialism, populism, and caudilloism which didn't help.
I think that your post shows a bit too much ignorance of Latin American history. Latin America has seen leaders of Chavez's ilk before; it led to no fundamental reforms, but only retardation of GDP relative to the US.
Posted by: John Thacker at May 24, 2007 7:17:37 PM
In other words, it definitely is too Hegalian to claim that Chavez is an "historical necessity" if you're going to ignore that similar kinds have arisen in the past. He may easily not be part of progress at all, but merely part of a sadly recurring cycle.
Posted by: John Thacker at May 24, 2007 7:19:36 PM
It's mostly about race, of course. Chavez's followers are more the descendants of the losers of the Conquest -- Indians and African slaves -- and his opponents are more the descendents of the winners.
Property rights come out of the barrel of a gun (or blunderbuss, in the 16th Century).
Posted by: Steve Sailer at May 24, 2007 9:38:33 PM
John Thacker is correct that Chavezes are nothing new. Generally speaking, what happens is that ambitious young dark men marry fair women of the upper classes, and their successful sons repeat the process until the dark upstarts' descendents are almost indistinguishable from the rest of the white ruling class. That's how white people have stayed on top for 500 years in Latin America.
Posted by: Steve Sailer at May 24, 2007 9:41:18 PM
Growing up in Brazil, not a day would go by without our 'intellectuals' blaming the 'elites' for the plight of our country. And that included me and my family, since being able to write your own name is pretty much enough to make you 'elite' in a country like Brazil. And all we ever did was study and work hard and pay our taxes and comply with the laws and vote for candidates who would never get elected. Eventually I got tired of bringing so much misery to the country and left to the US. Too bad that wasn't enough to escape from that kind of Marxist nonsense, and even worse to have to see it endorsed on MR.
Posted by: Phoebe at May 24, 2007 10:13:05 PM
Historically, Latin America has not benefited from the brilliance of Western culture to the extent that North America did. We are seeing the consequences of that now (as well as evidence of the superiority of Western civilization).
Lacking the Western European cultural background, much of Latin America has been impoverished and uneducated. When someone finally comes around who promises the people the moon, the populace lacks the education to understand exactly what will happen; they only know who makes the nicer-sounding promises. So that's the guy they get behind.
Without the education to see past the promises of the Chavezes and the Allendes and understand what will really happen, the people of Latin America are forced to learn the hard way. But hopefully, after a generation or so the lesson will stick.
Posted by: Kurt M. Weber at May 24, 2007 10:46:06 PM
I do agree with Kevin Grier. The opportunity cost of having a Evo or a Chavez is not as high as it seems at first, because good government is rarely a feasible alternative.
On Brazil, I am quite optimistic. Inequality has been falling; between 2001 and 2004 the incomes of the 10% poor rose 7% a year. The causes of this redistribution are related mainly to structural demographic and labour market changes, while cash transfer programs play a minor role. (Source:
http://www.ipea.gov.br/sites/000/2/publicacoes/NT_%20ingles_des_pobreza.pdf).
If the world economy keep on growing for a decade or so, the menace of having a populist president will weaken.
Posted by: L Monasterio at May 25, 2007 3:55:13 AM
Heaven help Guatemala then (gini coeff = 0.56). They have a Nobel Prize winner waiting to take over the country.
Unfortunately the prize was not for economics.
Posted by: Pigfoot at May 25, 2007 7:39:40 AM
