Venezuela is one of the most unequal nations on earth: as USD 1 trillion passed through the hands of the state since 1999, top political leaders wound up with far more wealth than many millions of families on the bottom, who are still relatively poor
Venezuela was spinning in this tornado of self-defeatism for a long time before Chavez perfected the spin and called it a revolution. The policy victims are the bottom half of the economic pyramid, people who are confused by getting bigger handouts for consumption each year but which make them poorer through inflation.
The question facing Venezuela is whether to continue down the path of failure or to strike a new path toward prosperity. The choice sounds simple but is not because the power elites profit enormously from top-down waste, corruption and inequality. Venezuela is one of the most unequal nations on earth: as USD 1 trillion passed through the hands of the state since 1999, top political leaders wound up with far more wealth than many millions of families on the bottom, who are still relatively poor.
In 2006, I showed in "Getting Over Chavez and Poverty" that the bottom Venezuelan families could work themselves into the middle classes through a capital investment of USD 48 billion in money-making equipment, small businesses, housing mortgages, and education. The key to bottom-up wealth is having private families own the credit, equipment, business, housing and education –not the state. Families need the independent work of making investments pay off for their children. As a result, they become self-reliant, middle-class, independent actors that the state cannot push around at will. This is what happened in Alaska, Norway and now Brazil, which sowed their oil in the bottom of the society in order to set them free. Why this commonplace and common sense solution has never been tried in Venezuela remains a mystery.
A group of some 60 Venezuelan economists from across the country and from different generations and backgrounds, has met regularly in the past couple of years and now has brought forth a document explaining the reasons of the current emergency and outlining specific proposals on how to address the serious economic crisis the country has plunged into over the last three years.