Socialist Venezuela, which has the world's largest proven oil reserves, is out of gasoline

By Dan Calabrese —— Bio and Archives December 29, 2017

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I want to say that, sure, there has to come a point when ever those most determined to believe in socialism will see enough stories like this and be forced to reckon with the truth. But we all know better than that, don't we? When you're a true believer in something, there's always another explanation apart from the one that would shake the foundations of your belief system. Pretty tough to do in the case of the world's most oil-rich nation running out of gas, but give them a few hours of watching MSNBC or reading the New York Times, and they'll come up with a way to explain this away too:

See? It's all Donald Trump's fault! That didn't take long. But of course, this is the inevitable result of socialism's basic economic incentive system - or disincentive as the case may be. In a free economy, producers and refiners would be able to compete on price and market access to sell gasoline to consumers. They'd have to balance the interest in profits with the reality that you can only charge what people can and will pay. And the more competition there is, the better it is for consumers because consumer choice is what empowers the individual buyer to demand a reasonable price for goods. In socialist Venezuela, the state controls the petroleum resources and commandeers them for the benefit of the political class, while severely limiting the freedom of producers, refiners and distributors to profit off the sale of oil-related products. It also uses oil resources to prop up its otherwise worthless currency, and in some cases to manage the debt that the country lacks the cash to properly retire. There is little incentive within the private economy to engage in oil production because there's little to no potential to profit from it. And with the state taking priority over the demands of the market, the public's needs for gas takes a back seat to the agenda of the political class. So with such little incentive to produce, refine or distribute oil-related products - and such little freedom to do so profitably even if you wanted to - a nation that is theoretically rich with oil resources has literally run out of gas. If you've followed the travails of Venezuela under the Chavez/Maduro regime at all, you know this story isn't limited to gasoline. The country faces a shortage of everything from food and milk to toilet paper, and the entire situation is self-inflicted by a government that seizes private businesses and restricts their ability to operate profitably. This is the inevitable result of socialism, and the dreamy Millennials who are demanding it here really should look across the globe to learn about what's happened in countries that got the very thing they want. But then, it would hardly matter to people to won't learn what they don't want to know.