Though Thanksgiving has passed, that does not mean that we cannot pause for a moment to be thankful for the fact that we live in America. Specifically, we should be thankful for that fact because we do not live in a full-blow socialist state – yet. For a reminder of how important it is that we defend freedom and free markets in the United States, consider the chaos that is enveloping Venezuela at the present. Yahoo! News reports that a significant portion of the country was plunged into darkness yesterday as a result of a massive system wide power failure. The article also provided a vehicle for one Venezuelan to voice his frustrations:
"I feel so frustrated, angry and impotent," said sales adviser Aneudys Acosta, 29, trudging through the rain along a street in the capital after having to leave the disrupted underground transport system.
"I live far away and here I am stuck under the rain. Something's going wrong that they're not sorting out. The government needs a Plan B. This is just not normal."
Monday's outage appeared similar to a massive September 5 blackout that was one of the worst in the South American OPEC member's history.
Unfortunately for Mr. Acosta, this was not the first massive blackout, and they likely will become more common. President Maduro’s socialist regime blames almost anything that goes wrong on the fascists and right-wing opponents of his reign. The reality is much simpler: since the power sector was nationalized in 2007 by Hugo Chavez there has been systematic corruption, a lack of investment in infrastructure, and incompetence that have swiftly destroyed the effectiveness of the power grid in a stupendously resource-rich country.
Free markets would not tolerate incompetence, corruption, and a crumbling infrastructure for long but with no competition and a government with limitless power backing it, Venezuelans have no choice but to suffer. In fact, President Maduro even had the gall to chastise Venezuelans for consuming too much electricity, despite the country being blessed with tremendous crude oil reserves and massive rivers perfect for hydroelectric power production.
Like any socialist governing without limits, Mr. Maduro has doubled down on economic controls, even though the economy continues to slip through his fingers the tighter he clenches his fists. Annual inflation is now estimated at 54%, and there is a scarcity of many resources from paper to automobiles. President Maduro’s impulsive response was to implement price caps on automobiles, a move which will surely backfire. The price caps will only increase scarcity of cars since dealers will sell fewer (rather than lose money), in turn causing the black market price for cars to soar even higher. Further it will make it harder for people to protect their wealth against inflation by investing in a durable good (unlike in America, cars sold there actually gain value when they leave the dealer’s lot). As is usually the case, the government’s heavy hand in the economy will cause a host of undesirable and unintended consequences.
President Maduro recently seized five electronics stores and forced the owners of what can best be analogized as Venezuela’s Best Buy to sell products at “fair prices.” The move was done just in time for December elections, allowing a few hundred Venezuelans to leave the store with good deals on TVs and appliances. It will do nothing to help the Venezuelans in the long run however when the government finishes looting the store and it inevitably goes out of business, making it more difficult for Venezuelans to purchase important goods.
In short, we should be thankful that we live in a country that has yet to descend so far down the rabbit hole that the lights fail to turn on, we should be thankful that we are not yet as frustrated and impotent as Mr. Acosta, and we should work to make sure this type of economic insanity does not become commonplace in America.
*Thomas Warns is a J.D. Candidate, class of 2015, at NYU School of law, Staff Editor on the NYU Journal of Law & Liberty , and author of the weekly column "Consider This a Warning."