Monday, April 07, 2008


I couldn’t help but juxtapose the two following news items:

--Cuba is privatizing to ease shortages

--Venezuela is nationalizing (or at least announcing nationalization) to ease shortages

This also highlights the changes in the Cuba-Venezuela relationship after Fidel’s departure. Hugo Chávez and Raúl Castro have a regular diplomatic, rather than a personal, relationship. With Raúl, Chávez does not have the same type of ideological soulmate.


Anonymous,  4:22 PM  

Small scale private farming should be very positive for the Cuban economy. It will provide wealth for small scale producers should alleviate some consumer demand issues. The key is that this is small scale privatization...

I don't necessarily see these two items as contradictory. In the case of Venezuela, you have macro-sized industry owned by foreign investors, contributing not only to capital flight, but apparently also not even satisfying the domestic market it that it takes the resources and labor from.

In both cases, the Cuba and Venezuela are attempting to solve the shortage issue domestically. By producing for needs internally rather than turning to imports and foreign investment.

Anonymous,  5:51 PM  

Thats not you say you aren't about Raul and Chavez, but I don't think these issues indicate your point.

I fail to see how small scale privatization is an endorsement of the larger international capitalism as illustrated by the Venezuelan cement industry.

If anything these moves are pushing the Cuban and Venezuelan economies closer into alignment. Cuba is opening up internal markets (very limitedly) while Venezuela is trying to gain control over foreign industry.

So again, Raul and Chavez might not be ideological soulmates, but these issues dont have anything to do with that.

Justin Delacour 5:59 PM  

This is a completely silly piece of analysis on Greg's part. Is there any doubt that Venezuela has --in absolute terms-- far more free enterprise than Cuba? No. So how exactly does it follow that, if Cuba moves slightly in the direction of freer enterprise and Venezuela moves slightly in the direction of more state intervention, this is a sign of a rift between Chavez and Raul? The argument is straight-up retarded, but that's to be expected here. It would be much more logical to suggest that the two separate moves represent gradual convergence toward a mixed-economy model.

Greg Weeks 6:02 PM  

I never wrote anything about causation, rifts, or contradictions, but you are free to speculate about them if you like.

Justin Delacour 6:15 PM  

Stop lying, Greg. You quite explicitly put forth a completely baseless argument that the two separate moves somehow represent an ideological rift. The problem is that you haven't a clue as to what you're talking about.

Anonymous,  8:45 PM  

Can't wait till Justin gets his PhD and has to start looking for a job.

Paul 9:48 PM  

"Can't wait till Justin gets his PhD and has to start looking for a job."

Don't hold your breath.

Anonymous,  12:04 AM  

kelby, in your comments you seem to suggest that Venezuelan companies and those owned by foreign companies are conspiring against domestic production. I think you fail to see it is the govt. policy that is limiting domestic production. Even if there was a conspiracy new domestic producers would step in to fill the void, but this isn't happening, why.

Perhaps you should brush up on your Venezuelan history because we have lived though this before, it's a failure.

Anon. I'm sure the CEPR in Washington DC. is hiring, with all those Venezuelan dollars they could use an extra "analyst" among the ranks.

Justin Delacour 2:26 AM  

Can't wait till Justin gets his PhD and has to start looking for a job.

Uh, how exactly does this have anything to do with Greg's inane arguments? I'm oh-so-curious.

Anonymous,  10:07 AM  

It has to do with your tone and how people will see the trail of mierda you leave in blog comments.

Anonymous,  4:12 PM  

KA, i am not saying that there is some grand conspiracy to sabotage the domestic market. as long as those cement companies see a greater profit in exporting overseas, they are going to send the lions share that way and the domestic market is going to be neglected. no conspiracy, its just the way it works unless you correct the institutional structures around it.

and please dont confuse my analysis as support for nationalization. i have no idea if it will ultimately be beneficial or not.

i am simply pointing out that an industry that uses Venezuelan resources and Venezuelan labor but doesnt satisfy the Venezuelan cement market is something that should probably be corrected.

in your view, what are the government policies that are limiting domestic production?

Anonymous,  8:34 PM  

kelbi, Justin,
illustrate us.
mention one nationalized industry that is more efficient than it was before nationalization in Venezuela.
Also mention one product that hasn't increased its price due to Chavez's economic policy.

Justin Delacour 10:42 PM  

and please dont confuse my analysis as support for nationalization. i have no idea if it will ultimately be beneficial or not.

Indeed, that's completely beside the point. The point has never been about whether it is good or bad to nationalize. The point is that Greg's argument doesn't make sense. The two separate moves on Venezuela and Cuba's part give us no indication whatsoever of an ideological rift.

Anonymous,  11:13 PM  

"The point is that Greg's argument doesn't make sense."
Man, You really take this personal. Easy Justin. Get a life.

Anonymous,  11:21 PM  

kelby, no offense but I think you are making illogical assumptions and have a misunderstanding of how an economy works.
In any case I asked around and quickly looked up some numbers and cement exports have been declining over the years with production going up. Cemex of Venezuela actually had this to say in the quarter ending 2006

"En Venezuela, el volumen de cemento
doméstico aumentó en 17% y el volumen de concreto se incrementó 10% con
respecto al año 2006, los principales impulsores fueron los sectores de
infraestructura, autoconstrucción y residencial. La inversión pública continúa
siendo el principal motor de la actividad de la construcción. Los volúmenes de
exportación de Venezuela disminuyeron 51% contra el 2006 por atender como
primera prioridad el mercado nacional."

So why nationalize? because Chavez wants to, this I would argue is one of the major factors limiting production.

Anonymous,  10:41 AM  

oops one mistake

"Cemex of Venezuela actually had this to say in the quarter ending 2006"

Should be quarter ending 2007

Boli-Nica 11:40 AM  

Dont know what Delacour is talking about, this is so on point.

Welcome to 1988!!...Cuba discovers Perestroika 20 yrs after the fact.
What did not work then, is what was doomed to failure when started in the 60's, and what failed everywhere in the world.
Facts are facts and 50 yrs of Fidel reduced one of the regions most prosperous economies to a basket case. Ordinary peoples standards of living are barely at pre-1959 levels. In that same period other countries in the region with "less enlightened" leadership managed to produce more food, and actually feed their people better. In 1958 the likes of Nicaragua and Bolivia produced a fraction of the rice Cuba did, now they are almost even. Colombia and Mexico with much larger populations have overtaken Cuba in calories per capita.

While some reality is creeping into Cuba, Chavez is going into the world of the unworkable and foolish. Colombia just got 1 billion in foreign investment, Chavez is going to pay about 1 billion to buy out foreign investors so he can get a cement company to mismanage.
Wasting billions on an obviously failed direction is insane, but that is Chavez for you. Just don't say it is a model for anything except for what doesnt work, same as Cuba

Justin Delacour 12:13 PM  

The problem with people like Boli-Nica, Greg and Boz is that they constantly confuse their wishful thinking --based upon their own ideological predispositions-- with actual analysis. Greg, Boli-Nica and Boz would like to see the isolation of Venezuela (even by Cuba), so it must then be true that there is an ideological rift between Chavez and Raul. Never mind that there is nothing in the way of evidence to demonstrate such an ideological rift. Facts don't matter to these people. Ideology does.

It's rather embarrassing for any social scientist to "analyze" any region of the world in such a crassly ideological fashion.

I would suggest that Greg, Boz and Boli-Nica consider reading the first chapter of Edward Hallett Carr's "Twenty Years' Crisis, 1919-1939: An Introduction to the Study of International Relations." For people in dire need of developing basic analytical skills, this book is a must.

boz 1:52 PM  

Justin wrote:
Boli-Nica, Greg and Boz...
Greg, Boli-Nica and Boz...
Greg, Boz and Boli-Nica

I like when I get mentioned when I'm not even commenting on threads. It helps validate the importance of my point of view :)

Justin Delacour 2:02 PM  

I like when I get mentioned when I'm not even commenting on threads. It helps validate the importance of my point of view :)

Well, it just so happens that the critique applies even more to you than it does to Greg. Greg is at least occasionally capable of some form of independent thought.

Anonymous,  6:49 PM  

"Greg is at least occasionally capable of some form of independent thought."
Man, you are beyond arrogant.

Anonymous,  9:57 PM  

haha, I warned you all a long time ago about Justin

Paul 12:35 PM  

"Facts don't matter to these people. Ideology does."

Believe it or not, Justin Delacour actually said this!

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