The Chávez Way

The debate over Hugo Chávez’s political legacy is a posthumous re-enactment of the ideological battles that were fought while he was alive. The battle for his economic legacy is more straightforward: it comes down to how he managed Venezuela’s oil wealth.

LONDON – I remember the exact date of my visit to Venezuela. I was sunbathing by the pool on the roof of the Caracas Hilton. A waiter came up to me and mumbled something about a bomb attack in New York. I rushed to my room and saw the news footage, endlessly replayed, of two airplanes crashing into the World Trade Center.

I was in Venezuela on September 11, 2001, to attend a conference on the “Third Way.” Hugo Chávez was very interested in the Third Way – a modus vivendi between American-style capitalism and state socialism – as had been Tony Blair a few years earlier. Chávez himself, dressed in fatigues, briefly graced the meeting with his presence, receiving a heavy volume of Marxist texts from an elderly professor.

A day earlier, I had had lunch at the Venezuelan central bank, sitting next to the deputy governor, Gastón Parra Luzardo. He told me that all Venezuelans believed that they had been born with a “loaf under their arm” – that is, a right to a share in the country’s oil revenues. As a result, no one worked hard. An economist, Orlando Ochoa, explained that rent-seeking dominated the Venezuelan economy. Oligarchs fight to keep control over the oil revenues, populists promise to redistribute them, and both groups steal as much as they can for themselves. No one is interested in creating wealth.

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