During a trade mission to China in October, British Chancellor of the Exchequer George Osborne noted in a BBC interview that China’s leaders were “a lot more market orientated than the British Labour Party.” This was an obvious dig at the left-leaning party, with members of the Conservative Party joining Mr Osborne in accusing Labour’s leader Ed Miliband of want-ing to move the UK back to seventies-style socialism with his plan to cap energy bills for two years if his party wins the next general election. British politicking aside, the statement also reflects the striking irony of the Chinese Communist Party (CCP) managing an essentially capitalist economic system whilst Labour and others still dream of a socialist utopia.
Take Venezuela, for example. Last Friday, we commented on that country’s downward economic spiral, directly attributable to continuing attempts to implement the late President Hugo Chávez’s populist “21st century socialism” and the state’s mismanagement of the economy, which have achieved nothing more than gross inefficiencies, low productivity, foreign currency shortages, high inflation, negligible growth and chronic scarcities of basic items. We even adverted to the irony of power cuts in an energy-rich country. As if to underline our point, in the latest, graphic example of Venezuela’s economic woes, a massive power cut plunged Caracas into darkness and chaos on Monday evening, with people having to be evacuated from the underground, shops and offices.
The opposition has, unsurprisingly, criticised the government for failing to maintain and upgrade the power grid, both under President Chávez and his successor Nicolás Maduro, who, typically, has blamed the incident on “sabotage”.
Mr Maduro, the self-proclaimed “son of Chávez”, by seeking to continue his mentor’s admirable mission to lift millions out of poverty and bring social equity to Venezuela, has persevered with heavy-handed interventionist policies, which are, unfortunately and ironically, simply serving to increase the hardships faced by poorer people, generate greater personal insecurity and widen the gap between the haves (including the new power élite) and the have-nots. And if Mr Maduro continues with his policy of price controls, seizure of retail outlets and state control and nationalisation of the productive sector, all in the context of an increasingly bureaucratised system, the end result of chavista socialism will only be greater hardship and impoverishment.
Meanwhile, in China, the CCP has recently announced moves to expand the free market in order to ensure a better distribution of resources and permit the participation of private enterprises, both Chinese and foreign, in state industries. Ever since the reforms of Deng Xiaoping between 1979 and 1992, which led to the creation of a ‘socialist market economy’, successive Chinese leaders, whilst steadfastly maintaining the supreme political power of the state, have progressively managed and opened up the economy through market mechanisms.
Thus, as Venezuelans suffer increasing shortages and a rising cost of living, China continues to practise an essentially pragmatic brand of state capitalism, eschewing the collectivism and economic interventionism of the past, which proved to be the ruin of Communist economies and is widely discredited, except in North Korea. Vietnam, for instance, is pursuing a successful policy of economic transition along Chinese lines and even Cuba is implementing, albeit gradually, a process of structural change aimed at economic recovery.
Mr Maduro and his economic advisers, however, seem oblivious to this reality. It is true that there are many socio-economic wrongs that need to be righted in Venezuela, but demagoguery and populist economics are not the answer.
In this context, it will be interesting to see whether Sunday’s municipal elections, generally being regarded as an unofficial referendum on Mr Maduro’s presidency and, by extension, the future of the ‘Bolivarian Revolution’, especially in the context of Mr Maduro’s razor-thin victory in the still-disputed presidential elections of last April, will prove to be a reality check for chavismo.