Cato Institute Says the Venezuela Deal is Socialist

There is a piece in the Cato Institute's blog criticizing the Venezuela deal, in part for reasons I've laid but also because it's socialist.

It expands state corporatism by giving the US government a large, and possibly majority, stake in a major joint oil venture in Venezuela, an entity the Wall Street Journal reports “would be the world’s second-largest corporate holder of proven reserves after Saudi Aramco.” State-owned enterprises are a bad idea anywhere, but as Scott Lincicome observes, this comes after the US government under Trump has already taken equity in 31 private companies. As Scott says, “This isn’t even ‘creeping’ socialism anymore.”

In the meantime, the House of Representatives voted to condemn socialists and Scott Bessent calls socialists "underachievers." The President of the United States, however, wholeheartedly embraces core socialist ideals.

Of course, this version of socialism only entails state ownership, not state redistribution, so it's the worst possible version. At least the Soviets pretended to give back. Given the lack of details and the connection to a clearly corrupt go-between, it adds to the overall vibe of kleptocracy.

There is a lot to be revealed still, but it feels like an alternate version of the "Boliburguesía," the well-connected Venezuelans who got rich off the fruits of state ownership while claiming it was a revolution for the people. I feel confident that a bunch of people are either going to get very wealthy (or get much wealthier because they're already rich) by being tied into this deal.

And remember, imperialism and socialism can go together perfectly well. The Soviets are a perfect example. Imperialism doesn't have to mean capitalism. It just means controlling and plundering for your own benefit. What you do with the spoils afterward isn't part of the definition.

The big question is how much this deal helps Venezuelans. It doesn't seem promising.