The article was written by Jonathan Watts and published by The Guardian in 2016, back when the Venezuelan crisis was not at the stage it is at right now, but the writing was already on the wall. The writing presents itself as a journey through various parts of Venezuela, mixing interviews and observations with economic commentary. The central argument of the article is that Venezuela, despite having a strong oil industry and the capacity to become one of the most prosperous countries in the region, its economy crashed and burned because of high inflation, inadequate socialist policies, as well as internal corruption and the external oil price crash.
The case presents, across several stories, the development of the Venezuelan crisis (Watts, 2016):
- What happened: Gradual economic collapse and inflation;
- To whom: Venezuela;
- Progress:
- Chavez policies nationalized oil and agricultural industries;
- Poor management and socialist policies led to underproduction;
- World oil crisis undercut the main source of money flow;
- Crisis, high crime rates, corruption, lack of/poor quality of production.
The case demonstrates the concepts of socialist theory at work. Socialism is an economic theory/ideology that supports a command economy, sustains that the means of production are to be used by the people, and that the government should provide individuals with everything they need. It is demonstrated by the attempts of the Venezuelan government to provide cheap oil, cheap food, and medicine on a distribution basis, rather than allow market forces to be shaped by supply and demand.
Reference
Watts, J. (2016). Venezuela on the brink: A journey through a country in crisis. The Guardian. Web.