Inflation is on the rise in the United States. With it, there are politicians now arguing that "greedy businessmen" are to blame for it. This is not only a misleading notion but also a dangerous one, as it could end up leading to policies as destructive as the ones implemented in countries like Venezuela.
When people quickly compare the Norwegian and Venezuelan economies, they tend to see the one trait they have in common: a big public sector. However, when we study these countries in depth, it becomes evident that the two follow opposite economic principles. While Norway’s economy is among the freest in the world, Venezuela has become a prime example of what a socialist economy looks like.
As much as I would like to believe that the COVID-19 crisis will produce a future where evidence-based policies triumph over other forms of governance, the sad reality is that the COVID-19 crisis will leave us in a much more authoritarian Venezuela.
Venezuelans are desperate to circumvent the ill-conceived regulations that are harming their nation’s wellbeing. They eagerly await a real economic turnaround—one that will protect the economic freedoms of all Venezuelans. And they know that Venezuela cannot recover without democracy.
In order to flourish economically, property rights must be secure and the rule of law must exist.
As a Venezuelan and an economist, I believe we economists sometimes need to go beyond economic indicators. We need to speak from our hearts about our experiences. Only by doing this can we truly communicate the social implications of an economic collapse of this magnitude. No economic indicator could ever do justice to the depth of the human suffering taking place in Venezuela today. Venezuelans are suffering in ways most people in developed nations could not even imagine.