Things Are Never So Bad That They Can’t Get Worse: Inside the Collapse of Venezuela, by William Neuman, St. Martin’s Press, 352 pages, $22.08
The Bolivarian Cable Train was an elevated railroad planned for a poor neighborhood in Caracas, Venezuela. It ended up running for only three-fifths of a mile and connecting to nothing.
By 2012, four years into the project, the government had spent about $440 million on it and the project was only partly finished. But the country’s socialist leader, Hugo Chávez, decided that he wanted to take a ride on live television. The contractors told his handlers the train wasn’t ready yet; the cable, motors, and machinery had not even been installed.
“No European engineer is going to tell the people of Venezuela what can or cannot be done,” Chávez’s lackey replied. So the government paid an extra million dollars for a temporary setup that might fool the TV audience. An ebullient Chávez (seemingly oblivious that the fragile, makeshift operation nearly sent him hurtling down the track during the broadcast) boasted that “this is the work of a socialist government so that the people will live better every day.”
Today the train runs intermittently, the Brazilian company overseeing its construction has pleaded guilty to corruption in 12 countries, Chávez has died from cancer, and Venezuela, after more than two decades under the control of Chávez and his successor, Nicolás Maduro, has been transformed from a constitutional democracy into a brutal dictatorship. The whole cable train saga is vividly recounted in Things Are Never So Bad That They Can’t Get Worsea new book by former New York Times Reporter William Neuman.
The book gives voice to a woman named Hilda Solórzano, providing a snapshot of what life is like for the Venezuelan poor. Her son’s teeth turned black and fell out from lack of calcium. Her uncle and brother were murdered. Her 10-year-old daughter was kidnapped, tortured, killed, and tossed in a garbage dump. After Solórzano started a successful baking business, a relative stole the money she needed for ingredients. She lives in the same Caracas slum where the government spent around half a billion dollars on the Bolivarian Cable Train.
Neuman also introduces us to bookstore manager José Chacón, the “Last Chavista,” who can’t afford the mayonnaise, beef, and tomatoes he once loved. He skips meals and drops 15 pounds. But Chacon is unswayed. He reveres Chávez and is grateful that the socialist state taught him “to eat healthier.” Someday, after everyone has fled the country, Neuman writes, “You’ll see Chacón, sitting atop the great pile of rubble and ash, holding firm, chewing on the last lentil.”
These are powerful depictions of human beings coping with daily existence in a disintegrating society. But when it comes to explaining why This oil-rich nation experienced one of the largest economic contractions in modern world history, the book is a muddle.
Neuman won’t accept Chávez’s word that he was a socialist. Although the Venezuelan leader used that word relentlessly to describe his policies after 2005, Neuman insists it was just a marketing ploy. “Chávez was neither a Marxist nor in any real sense, despite the rhetoric, a socialist,” he writes. It was “showcialismo.”
Was it? One classic definition of socialism is government control of the means of production. Chávez nationalized banks, oil companies, telecommunications, millions of acres of farmland, supermarkets, stores, the cement industry, a glass container maker, a gold-mining outfit, the steel industry, a fertilizer company, a shipping company, the electricity industry, vacation homes, and more. He imposed capital controls that put the government in charge of all foreign trade, turning Venezuela into a command-and-control economy—aside from its burgeoning black market, another typical feature of socialist societies.
In industry after industry, nationalization led to deterioration, abandonment, and collapse. In 2008, Chávez boasted that he would transform the steel giant Sidor into a “socialist company owned by the socialist state and the socialist workers.” By 2019, at the Sidor plant in Guayana City, “everything was stained with rust,” Neuman writes. “In all that great expanse, nothing moved.” The book is filled with similar accounts.
So it was dumbfounding to read on page 82 that “Chávez made no serious effort to dismantle the market economy.” The book claims he was merely continuing longstanding Venezuelan policies but painting them “a different color.” Neuman is a journalist who tells powerful stories and then misinterprets his own material.
Chávez was not the first Venezuelan president to nationalize companies, fix the exchange rate, or impose price controls. But he pursued these policies on a much larger scale than his predecessors. Chávez also gutted property rights, destroyed the currency, dismantled the judiciary, corrupted the military, and generald the separation of powers. One lesson of his reign is that when it comes to building sustainable prosperity, institutions matter more than possessing the world’s largest oil reserves.
Neuman’s analysis gets ridiculous in the post-2013 era, after oil profits (which plummeted because of a collapse in production and the end of the price boom) could no longer paper over the hollowed-out economy. That, Neuman writes, meant the state was “reduced to the absolute minimum.” Services disappeared and crime ran rampant, which in his view shows us what happens when “private initiative can flourish, unncumbered.” But the “private initiative” depends on the rule of law. In 2019, the Fraser Institute’s Human Freedom Index ranked Venezuela 163 out of 165 countries in the category of “Legal System and Property Rights.”
Neuman sees nothing necessarily wrong with nationalizing industries; he just thinks Chávez did a bad job of it. “You can make an argument that certain industries or certain types of companies might be better under public control,” he writes. But “you ought to make an effort to run them well—to invest in them and to hire competent administrators.”
This argument reminds me of comedian John Oliver’s 2018 claim that Venezuela’s collapse is best understood as a case of “epic mismanagement,” not socialism. It is certainly true that Chávez and his cronies mismanaged the businesses they seized. The country operated as a “mafia state,” a concept developed by the Venezuelan journalist Moisés Naím. Writing recently in The Wall Street Journal, Naím observed that the country’s socialism often served “as little more than a narrative that the powerful used to cover up their plunder of public assets.” But that is true of many socialist regimes. Indeed, it is what we should expect of them.
In his 1944 book The Road to Serfdom, FA Hayek argued that the worst transition to government ownership of the means of production will invariably be spearheaded by the types of people. Only a “skillful demagogue,” Hayek wrote, can bring the “gullible” together around “hatred of an enemy”—the United States, in Venezuela’s case—and then show the “ruthlessness required” to centralize an entire economy. For the apparatchiks, “the readiness to do bad things becomes a path to promotion and power.”
Neuman’s claim that nationalization might make companies “better” also fails to recognize that when governments steal from citizens, they scare off capital. “Investment in Venezuela has disappeared,” said Marcel Granier, the CEO of Radio Caracas Televisión (RCTV), in 2007. “Nobody is going to invest in a country where they’re threatened with expropriation.” Granier made those remarks during RCTV’s final broadcast before Chávez forced the station off the airwaves.
Speaking of RCTV: At one point in the book, Neuman travels to a café in Berlin for an interview with former RCTV producer Andrés Izarra. Izarra, who used to serve as Chávez’s minister of communications, is depicted as a pained ex-official “trying to make sense” of everything he went through.
Neuman does not inform his readers that Izarra is one of Chavismo’s great villains—an ideologue who spent more than a decade excusing government crimes. He was central to the propaganda campaign defending the shutdown of RCTV on the grounds that the network had supported a coup attempt in 2002. In 2008, he defended Chávez’s decision to expel Human Rights Watch from the country, accusing the organization of being a cover for planned US interference. In 2010, he broke into superarious and dismissive laughter during a CNN discussion of Venezuela’s exploding murder rate. That same year, he tweeted: “Franklin Brito smells like formaldehyde.” Brito was a martyred farmer who had died in a hunger strike after the Venezuelan government expropriated his land.
Izarra eventually fled Venezuela and now lives comfortably with his family in Germany. Hilda Solórzano remains stuck in a violent slum, worried about her next meal.
Socialism in Venezuela caused millions of personal tragedies, and I’m glad that Neuman brings many of them to life so vividly. But paying tribute to the victims should also mean being clear-eyed about the cause of their suffering. Otherwise, such catastrophes are apt to be repeated.