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The Classic Path to the Inevitable Result: Venezuela Succumbs to Dictatorship

The Classic Path to the Inevitable Result: Venezuela Succumbs to Dictatorship

7 Mins
April 10, 2017

This week, the opposition forces in Venezuela are still in the streets, struggling with government forces, to protest last week’s lurch of Socialist President Nicolas Maduro’s government toward dictatorship. Thousands of people blocked the main Caracas highway on April 6,  chanting "No more dictatorship!" It appeared that the demonstrators might march on the office of state “ombudsman,” the government's so-called “human rights advocate.”

An opposition leader, Henrique Capriles, put it succinctly: "The human rights advocate has to stop being the Socialist Party advocate!" But government forces blocked the march, clashing with young protesters in a scene repeated over and over again in the past 15 years. Protesters threw stones and Molotov cocktails and government forces fired tear gas. It appears that the opposition may continue its protests for now, but socialism in Venezuela is far advanced.

Venezuela has triple-digit inflation, shortages of even basic foods and medicines, and one of the world's highest murder rates. For the record, the Maduro's government has said that a U.S.-backed business elite is responsible for the economic downturn, trying to foment a coup to impose right-wing rule.

Just a week ago, it seemed official: The Socialist revolution begun in Venezuela less than two decades ago by the avowed Marxist, Hugo Chávez, has ended in dictatorship. The 34-member Organization of American States (OAS), to which Venezuela belongs, held an emergency meeting in Washington, DC, in response to a decision by Venezuela’s Supreme Court to take over all powers of the National Assembly. OAS head Luis Almagro declared that the court had delivered “the final blows to democracy”; Venezuela had become a “dictatorship.”

The National Assembly had been the last political base of opposition to Venezuela’s socialist President Nicolas Maduro, who was elected in 2013, in a very close race, to succeed Hugo Chávez, who had died of lung cancer. The president of the National Assembly, Julio Borges, representing Democratic Unity, declared “Nicolas Maduro has carried out a 'coup d'etat' ... this is a dictatorship…" He tore up a copy of the Supreme Court ruling at a news conference in the gardens of the legislature, saying "This is trash from people who have kidnapped the constitution, rights and freedom of Venezuelans ...”

Then the Maduro government abruptly withdrew the specific decree that has been the last straw.

In that sense, the official declaration had value, calling attention to the most recent nation—one that had been Latin America’s first to achieve independence from Spanish colonial rule and once was one of Latin America’s wealthiest nations—to travel the socialist road to loss of freedom and economic catastrophe. Several Latin American nations also had taken strong diplomatic and economic stands in opposition to the Maduro government decree.

In another sense, the declarations by the OAS, the U.S. State Department, and others seem formalities to those who understand the inescapable logic of Marxist revolutionary socialism that for a century, in nation after nation, has begun in delusional celebration of “socialism” and ended in dictatorship and economic disaster.

And, apparently they did not reassure the hard-pressed opposition in Venezuela, which has seen the government controls metastasize for more than a decade and a half, the economy succumb step by step to the logic that government interventions cause economic distortions that justify new interventions, and protests go unheeded.


For those who speak of “democratic socialism,” it is notable that elections have continued in Venezuela (two years ago, Democratic Unity won a majority in the legislature). All the pivotal steps toward this week’s seizure of power have been against “economic” rights. Early in his rule, Chávez nationalized the Venezuelan oil industry, with the world’s largest oil reserves; over the next decade, oil production declined, but oil prices soared. Chávez used the money to create a welfare state, including a system of “Bolivarian Missions” to provide services, directly redistribute wealth, conduct land reform, “democratize the workplace,” and set up worker-owned cooperatives. He simply gave away much of his country’s oil to other countries to wield political influence in Latin America.

When international oil prices later fell, he kept on spending by borrowing and printing money. He was spending more than all foreign profits of Venezuela’s oil companies, but oil production kept declining and foreign investment in the country’s oil industry, by 2013, when he died, was half that of 1999, when he took power.

With spending, borrowing, and currency controls (to keep capital from fleeing the country), Venezuela’s inflation rate became the highest in the world. Chávez then nationalized one major industry after another to gain revenues. In response to inflation, he instituted price controls, including on 400 “basic” foods. The inevitable severe shortages of goods, including especially food, began to bring hunger to the land, which has increased year by year. It is reported that today some 15 percent of Venezuelan’s rely on garbage thrown out by markets and restaurants to survive. Chávez responded to the severe shortages by requiring producers to produce and sell at the controlled prices; inflation increased more; he sent soldiers to confiscate the goods producers would not sell.

The decline of a major economy into poverty, collapsing production, virtual bankruptcy, and starvation is a complex process. But the pattern has been crystal clear: new economic interventions such as nationalizations and accelerating social spending, resulting economic distortions such as declining production and rising prices, additional economic interventions such as price controls, production controls, and seizures of goods. The pattern has occurred throughout the Venezuelan economy: industry, agriculture, banking, medical care, retailing, trade, and investment. All major steps have been economic, curtailments of “economic rights.” Elections have continued: democratic socialism.

Other “economic” steps have been purchased by government of opposition newspapers and other media, until, today, only one television station opposing government remains and is under heavy pressure from the regime. The recent de facto nullification of the national assembly also was an “economic” step. The assembly had refused to approve certain joint-ventures for oil production that President Maduro sought. The high court, whose nine judges all had been replaced by Chávez allies in 2010, declared the legislature in “contempt” and assumed all its functions.

As Ayn Rand demonstrated, and illustrated many times, without property rights there can be no other rights. All translation of our ideas, plans, and goals into reality requires property; mind and body, plan and action, idea and production are inseparable. If we cannot acquire, create, use, and enjoy property by right, then all that we do in life is by permission of government to “use” public property.

Immediately after seizing the assembly’s power, the court stripped its members of their traditional immunity from arrest during their tenure—a crucial protection of the balance of power between the executive and the legislature. In the long struggle between socialist presidents and the assembly in Venezuela, the next step is becoming clear: arrest the opposition.


Who was Hugo Chávez, the socialist revolutionary, hero of the people, and friend of the downtrodden—the man who snuffed out freedom in Venezuela? I have called Venezuela’s experience a “classic” in the tragically repetitive history of Marxism. So, too, in many ways, was Chávez.

Much of his biography comes in multiple versions. He was born in southwestern Venezuela in 1952, one of six surviving sons of two schoolteachers. One version emphasizes his proletarian poverty, another his middle-class upbringing. The Encyclopedia Britannica reports that as a teenager his views were shaped by a local historian who introduced him to the ideas of Karl Marx and Latin American colonial liberator, Simon Bolivar. Other reports are that he encountered the writings of Marx, Lenin, Bolivar, and others later in life. There is no disagreement that revolutionary Marxism shaped his views of the future of Venezuela and Latin America.

At the same time, he was attentive to the communist guerrilla insurgency, FALN, underway in Venezuela during the 1960’s, inspired by the new Cuban Communist dictator, Fidel Castro. Castro would become Chávez’s inspiration and ally.

At 17, Chávez entered the Venezuelan Military Academy. He did not like to study, his passion was to play baseball, and the Academy had a good team. Chávez played, but could not make the grade. The Britannica reports that he was incompetent in his studies and graduated last in his class. Wikipedia reports that he graduated first in his class.

First or last, he emerged with the standard military commission of second lieutenant. Chávez served for two decades, much of it fighting (or later monitoring) communist guerrillas. Not surprisingly, he became disillusioned: weren’t these peasants fighting for their economic rights? He did not resign his commission, however; he became a traitor, collaborating with the guerrillas. In 1982, he and fellow officers created the clandestine “Bolivarian Movement 200” to spread the philosophy of revolutionary Marxism throughout the military.

In 1982, Chávez led officers in a military coup to overthrow the government of Venezuela. Since 1958, when democrats had united to seize power from a long line of authoritarian governments, the Democratic Unity movement had governed in Venezuela. It was this relatively new democratic regime that Chávez and his insurgents attacked. Although every other team in the insurgency achieved its goals, Chávez’s team failed and the coup collapsed. This may have Hugo Chávez profited. At the head of his guerrilla team, he was surrounded by government troops. He capitulated and offered to call upon the other insurgent teams to do the same. Given just two minutes on television, urging his co-conspirators to give up “for now,” Chávez discovered the power of his rhetoric and personality. The brief speech stirred the hopes of many Venezuelans and began Chávez’s rise to power.

The government would have been justified in executing Chávez. He had betrayed the army by collaborating with the enemy. He had conspired to undermine armed forces discipline. And he had led an armed coup against the government and personally led a team to take the president of Venezuela prisoner. The liberal government put him in jail; two years later, as his political popularity grew, he was released. Lenin, Hitler, Ho Chi Minh, Castro, and other future triumphant dictators all were in prison at one time or another and released. Let us hope that Venezuela does not pay as high a price for this folly as did Russia, Germany, Vietnam, and Cuba.

He founded the political party, “The Fifth Republic Movement,” attracting sundry socialist activists, Castro-admirers, and military officers. He was the classic “outsider,” imprisoned for his convictions, righteous in his call for the morality of socialism, sweeping in his promises to the masses, and, perhaps most appealing, a stark contrast to a string of “centrist” governments with their compromises, cronyism, and “normal” corruption. Such governments all over the world have fallen to the fiery idealists of revolutionary socialism. Chávez was open about his Marxism and openly scornful of the “neo-liberalism” of the market economies rising around the world. Above all, he attacked American “capitalism.”

In the election of December 1998, he won the presidency with 55 percent of the vote. It has taken Venezuela slightly less than two decades to become a socialist dictatorship.

[Next: a look at how spending, social programs, nationalization or de facto control of industries, regulations, debt, inflation, price and currency controls, and other “economic measures” interacted to cause Venezuela to be ranked 174 out of 177 on the 2013 Index of Economic Freedom.]


Atlas Shrugs in Venezuela by Robert Bidinotto.

Venezuela Black Out by Robert Bidinotto.

Is John Galt Venezuelan by Thor Halvorssen.

Walter Donway


Walter Donway

Walter Donway was a trustee of the Atlas Society from its founding until 2010. He launched the organization's first publication, "The IOS Journal," and contributed articles and poems to all later publications. He is the author of poetry collections, novels, and works of nonfiction, including his book, "Not Half Free: The Myth that America is Capitalist," with a foreword by David Kelley. He analyzed the philosophical meaning of the 2016 presidential election, and the import of Donald Trump's election, in his book "Donald Trump and His Enemies.: How the Media Put Trump in Office." He is an editor and regular contributor to an online magazine, "Savvy Street," that presents current events in the context of Objectivism. He lives in East Hampton, New York, with his wife, Robin Shepard.

Walter Donway
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Walter Donway

"Walter's latest book is How Philosophers Change Civilizations: The Age of Enlightenment."

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