The oil-rich and once expanding Venezuelan economy is in shambles. The country is running out of basics, from food to toilet paper. While retaining preferred exchange rates for select food and medicine at 6.3 bolivars per dollar, the official value of the Venezuelan currency has plummeted from about 50 to 170 in the last several days, an admission that the central government’s attempt to control the currency has failed miserably. Meanwhile, the government is seeking to overturn a World Bank ruling that it owes Exxon Mobil $1.6 billion due to under-compensation when the Chavez regime nationalized some of its oil projects. I’m sure Exxon Mobil wants to be paid in U.S. dollars, not bolivars.
But as Venezuela continues its downward economic spiral, the police state is intensifying its clamp on society. Mass protests are common. Police shot and killed a teenager in San Cristobal during a protest against the Maduro regime. The city’s pro-democracy mayor has been arrested for allegedly plotting the overthrow of the national government. As usual, Maduro sympathizers continue to claim that the U.S. is behind the protests and is actively seeking regime change. I ordinarily wouldn’t discount this charge completely, but President Obama seems to be somewhat of a sympathizer himself.
The take-home point here is the connection between economic and political tyranny. Economic freedom is fundamental to any prospering society and includes rights to make both production decisions—what is produced and how it will be priced—and personal decisions—where to work and what to buy. When a government restricts economic rights by nationalizing industries, controlling prices, and manipulating the value of its own currency, it is stifling individual liberty. Government has a monopoly on ultimate force, which must be garnered to institute such restrictions. In the end, the socialism-fascism mix employed by Chavez and Maduro not only destroys the economy, but also ends in arrests and violence.
The U.S. is not Venezuela, but the same principles apply. A confiscatory and irrational tax code is enforced by an IRS with an endless staff of taxpayer-financed attorneys and a legal ability to confiscate assets, sometimes without stated charges. Obamacare requires that individuals purchase government-specified health coverage or pay a fine. And if some on the left eventually get their way, businesses will be required to pay all workers $15 or more per hour regardless of what they actually contribute to the organization. Refuse to do so and you’ll be fined. Refuse to pay the fine and your assets will be seized. You could even end up in jail.
It’s important that we learn from what’s happening in Venezuela. Government isn’t always a bad thing, but most of its regulations restrict both economic and individual liberty. In the end, all laws must be ignored, selectively applied, or administered with force. None of these options are good, which is why