March 13, 2019 - The Decivilization of Venezuela

The Decivilization of Venezuela

Of late, Venezuela has had a wretched time of things.
 
As a rule I attempt to be judgement-free when it comes to evaluating governing systems. For the most part, governments—like economies and cultures—are products of geography. Germany’s proximity to so many competitors makes it focus on organization and quality. America’s territorial insulation and richness enables it to get by with a much smaller, more laissez faire system. China’s regional splits force it to gyrate between central clampdowns and peripheral spin-outs. I try not to criticize or play favorites, and keep my personal preferences to myself.
 
But then there’s Venezuela.
 
Venezuela is a country of geopolitical advantages in a region where those are hard to come by. It has oil and agricultural wealth, an educated populace, a commanding position on world trade routes, and easy access to the world’s largest consumer market. It is far from the most advantaged country, but Venezuela had what it needed to thrive…until a reckless, selfish cult took that wealth for itself.
 
The Venezuelan system isn’t socialist at all. It hasn’t been for a long time. When a socialist government takes over a productive asset, it runs that asset with an eye towards furthering some government goal. Perhaps not competently, but keeping seized assets operational so they can provide this or that input is sort of the point. For at least the past decade when the Venezuelan government has taken over something—say a farm—they instead loot it like a flock of locusts and simply leave it to lie fallow.
 
This isn’t socialism, or even mismanagement—this is kleptocracy. (Yes yes yes there’s an argument to be made that most socialism-flavored governments concentrate so much decision-making into government hands that such cronyism is a constant danger, but that’s a debate for another time.) Suffice to say, since roughly the middle of the Chavez era in the late 2000s, the only thing socialist about the Venezuelan system has been the propaganda.
 
Under the misgovernment of President Nicolas Maduro, Venezuela has suffered one of the worst economic depressions in human history—so far we’re at an estimated 50% contraction in GDP and seven-digit annualized inflation growth.
 
The crisis can be seen, and felt, most acutely in terms of food prices. A Venezuelan earning the official minimum wage would need five months of savings to purchase a single can of olive oil. Private grocery stores struggle with supply issues thanks in large part to corruption in government-controlled supply chains. “Non-essential” items like condoms, diapers, and medicines are all but inaccessible. Venezuelan fuel is now sold just across the border in Colombia to Venezuelans by corrupt government officials who keep the cash.
 
Venezuela used to have a modern healthcare system, but now basic supplies are so scarce that intensive care units have shut down. Doctors have emigrated. Over 70% of the hospitals that are still open don’t have running water and frequently lose power. An estimated 3.4 million, or 10% of the population, have fled the country, mostly to Colombia and Peru.
 
Those who stay have begun the process of dying from malnutrition and preventable diseases. The average Venezuelan lost 24 pounds in calendar year 2017. The pace of decline is accelerating. At the time of this writing, the bulk of the capital of Caracas has not had power for a week. No power means no running water means no refineries means no gasoline means no food distribution.
 
 

Summed up, Venezuela in 2019 is teetering on the edge of a complete decivilizational event.
 
Decivilizational. It’s a big word with bigger implications. But first we need to unpack what we’re going to unpack: civilization itself.
 
Everything we know about human civilization is based on the simple idea of organization. Once a government lays down some basic ground rules like “don’t kill your neighbor” people start doing what people do: raising families, growing food, hammering out widgets. People start trading, so that the farmer doesn’t also have to make flour. This specialization makes us more productive in our chosen fields—be it farming or milling or blacksmithing. This society gets richer and expands. More land, more people, more specialization, more interaction, more internal trade, greater economies of scale.
 
Eventually we become so specialized and our technology has advanced so much that we become totally incompetent at tasks which used to be essential. Try producing your own electricity or enough food to live on while keeping up your full-time job. What makes it all possible is the idea of continuity: the idea that the safety and security we enjoy today will still be here tomorrow and we can put our lives in the hands of these systems. After all, if you were pretty sure the government was going to collapse tomorrow, you’d probably worry less about whatever work-related minutiae your manager insists is so important and instead focus your time on learning how to grow and can vegetables.
 
What the Americans have done in the post-World War II era is to vastly expand continuity via the global Order. Instead of specialization and interaction being limited to the internal affairs of individual nations, the Americans imposed security on the global system. Think of Europe, a place where dozens of ethnicity have fought wars with one another for millennia. Yet with the exception of some hiccups in the Western Balkans there hasn’t been a shot fired in anger between armies since May 1945. That’s flat-out unprecedented. Labor hyper-specialization is now the norm, and trade has become so complex entire economic sub-sectors (independent logistics providers, trade negotiators, contract mediation, and warehouse planning consultancies), now exist to facilitate it. The civilization process is reaching for its ultimate, optimal peak.

But “optimal” is not the same thing as “natural.” The Americans deliberately forced the Order into existence to fight the Cold War. The Americans have a deep continuity and large economies of scale without the Order, but the global system is wholly artificial. Making matters worse, the Order does not and cannot maintain itself. Someone must pay the bill to keep it going, and the American right, the American left, and the American center have lost interest and are all arguing for a more constrained American role in the wider world. No one else has the spare economic heft or the large market or the globe-spanning naval capacity to force an Order. Break the global continuity and everything that makes our world work quickly cracks apart.
 
There are a number of ways down, but they all share something in common: reduced interaction means reduced access means reduced income means fewer economies of scale means less labor specialization means reduced interaction. Shortages force people to look after their own needs directly. The value-added advantages of continuity and labor specialization whither. Everyone becomes less efficient. Less productive. And that means less of everything: not just electronics but electricity, not just automobiles but gasoline, not just fertilizer but food. And it compounds. Electricity shortages gut manufacturing. Food shortages gut the population. Fewer people means less chance of keeping anything that requires specialized labor working. Say, things like the electrical grid or food production.
 
Whether the country in question is high-tech export-led manufacturer (Germany, South Korea, China), a mid-tech supply chain link (Thailand, Poland, Turkey), a resource exporter (Kuwait, Russia, Morocco), or a major agricultural supplier (Brazil, South Africa, Kazakhstan) the differences are one of scale rather than kind. Lack of continuity means disruption of what we think of as civilization to exist.
 
Just how vulnerable is everyone? Think of it this way:
 
While “only” about one-fifth of global foodstuffs are traded internationally, the vast majority of global foodstuffs are produced with industrialized inputs like fertilizers and pesticides. Those inputs on average more than triple yields. Those inputs are largely petroleum-derived and four-fifths of the world’s oil is traded internationally. Unless you live in a country lucky enough to produce enough oil for its own needs and have the ability to process it into agricultural inputs and have the climate and land necessary to grow your own food, all it takes is one small tweak to the physical security of trade routes in the general vicinity of places like the Former Soviet Union or the Persian Gulf to shift you from living in a world of plenty to a world of want.
 
What would you do—what wouldn’t you do—to get a full belly? To feed your children?
 
That is what decivilizational means: a cascade of reinforcing breakdowns that do not simply damage, but destroy, the bedrock of what makes the modern world work. And that’s just one example in one sector.
 
What is going on in Venezuela is horrible by any measure, and in a world of Order Venezuela is the very definition of outlier. But a world of Order is not the natural state of things. Pay attention: Some shade of what the Venezuelans are going through is what many of us will need to deal with. Soon, the only thing that will truly make Venezuela stand apart is that its pain is self-inflicted.