5.3 Does Bad Management Make Socialist Countries Poor?

The idea of socialism is property should not be privately owned but instead should be owned by all the people.  Who says it represents all the people?  The government and in socialist countries the government takes private property away from their owners.   Government leaders in so called socialist or communist countries often become very rich.  Private owners don't willingly give up their property so the government uses violence to seize it and often locks them in jail.  People in socialist countries don't work hard to buy property since even if that was permitted they'd lose it.  They don't make more money than the next guy who doesn't work and don't get ahead by working hard so there is less incentive to work hard and create wealth.

One of the words used in the video by Hugo Chavez "expropriar" means expropriate.  He expropriated private businesses and private property.  Another word used is sanctions which means a punishment, often involving stopping buying or selling goods to a country.  Some people blame U.S. sanctions on Venezuela for making it poor.  The U.S. sanctioned Venezuela in 2006 by stopping all U.S. arms sales to the country.  That could only help the Venezuelan economy by stopping the Venezuelan government from spending precious money on arms.  In March 2015 Obama imposed sanctions against those individuals in the government responsible for repression of the Venezuelan people.  The U.S. imposed sanctions on drug dealers from Venezuela.  None of these sanctions explain what happened to the Venezuelan economy.  The economic downturn in Venezuela was already occuring in 2010, before any sanctions by the U.S. against Venezuela

In the video the economist talks about adjusting to market realities.  Those realities can include the changing supply of and the demand for different products and services.  During the pandemic the demand for eating inside restaurants went down because people were afraid of getting infected by other people but the demand to eat outside where the risk was lower went up.  Stores adjusted by putting tables outdoors.  During the pandemic people were afraid to enter stores but felt a lot safer having their food delivered so stores and others started food delivery services.  There are millions of adjustments that are made by private companies, a government that owned all the stores is unlikely to know what adjustments to make or to be able to make them fast enough. 



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