Friday, July 29, 2016

George Kennan in Venezuela

Thanks to Joshua Goodman via Twitter for mentioning the diaries of George Kennan, which in 1950 have this mention of Venezuela and its addiction to oil as he traveled to Caracas.

Here was a tropical country in the subsoil of which reposed great quantities of a liquid essential to the present stage of industrialization in the U.S. Americans were extracting this liquid and hauling it away. The local population had not moved a finger to create this wealth, would have been incapable of developing it, and did not require for its own needs the thousandth part of what was apparently there. However, for the privilege of being able to enter and extract this liquid, our firms were paying hundreds of millions of dollars annually into the coffers of the Venezuelan Government, a sort of ransom to the theory of state sovereignty and the principle of non-intervention which we had consented to adopt. The traffic could bear it. Prices of oil permitted it. The companies could pay this tribute and still make money... 
There was plenty of oil under the ground. Perhaps this could go on for a long time. There were signs that the competitive position of high priced Venezuelan oil was falling off, but important iron deposits had been found, and new capital was already pouring in for their development. Still, one could not avoid the conviction that some day, some how, there would inevitably be a terrible awakening: a day when the morphine of oil company or steel company royalties and taxes would no longer enter the system of Venezuelan economy, when the country would be thrown back on its own resources, and when someone would have the unpleasant task of dealing with a terribly disoriented and intellectually debilitated population. It would behoove us to think about that day, and to anticipate it... 
Incidentally, all of nature in Venezuela was a bilious yellow-brown.

This was, as Lars Schoultz notes*, a trip Kennan took after resigning his position as State Department Counselor and then getting invited to give a talk to U.S. ambassadors in Rio. He took the opportunity to travel around Latin America and pretty much hated everything.

Then Kennan wrote a long memo for the Secretary of State just a few weeks after he returned. Here is one key insight:

It seems to me unlikely that there could be any other region of the earth in which nature and human behavior could have combined to produce a more unhappy and hopeless background for the conduct of human life than in Latin America.

Not much need to go further than that. Communism is a big problem and Latin Americans are worthless.

Now, back to Venezuela. There is a "terrible awakening" in Venezuela now, but it's not really what Kennan was getting at. Venezuelans are perfectly capable of producing their own oil. The problem is not lack of intellectual capital, but rather the PDVSA corruption that spread so thickly over the years of Chavismo.

See his Beneath the United States, pp. 330-331.


Alejandro Velasco,  10:09 AM  

soon enough we'll return to a time when corruption was unknown in Venezuela. #makevenezuelagreatagain

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