It’s easy to look at the chaos in Venezuela and think that it couldn’t happen here. But there was a time Venezuelans believed just as strongly that a dictatorship was impossible there. In fact, their story is a cautionary one for us in the U.S. If you look closely at the headlines, you’ll see a path we could find ourselves on if we’re not careful.
Those old enough to remember the 1980s and early ’90s may remember when Venezuela was one of the richest and most successful democracies in Latin America. So what happened? The answer you hear repeated often, including by President Donald Trump, has to do with the country’s embrace of socialism. It’s an ideologically driven explanation that oversimplifies the situation.
The true origins of Venezuela’s crisis go back to 1992, when a military officer named Hugo Chavez led an unsuccessful coup against the government. The last time the military had gotten involved in Venezuela’s domestic affairs was the late 1950s, when it stepped in to support the establishment of the country’s long-running democracy. This history raises an important point: Democracies flourish as long as the military serves the civilian government, whoever is in charge. Once the military starts taking sides, trouble starts.
Despite the fact that his 1992 coup failed, six years later Venezuela elected Chavez as its president. How? He tapped into average citizens’ anger over income inequality and rampant corruption.
To address entrenched inequality, Chavez initiated an aggressive domestic spending program financed by the country’s oil revenues. This might seem like a positive thing, but there is an economic problem called “Dutch disease.” The phrase was coined after the Dutch economy was hurt, not helped, by the discovery of natural gas off its shore. After the discovery, the Netherlands’ ability to export this natural resource drove up the value of its currency, making its manufactured goods noncompetitive overseas. Ultimately, this caused several domestic industries to shut down. The Dutch economy has never fully recovered.
Similarly, reliance on oil exports increased the value of Venezuela’s currency to the point that its other products could not compete. As a result, domestic industries went out of business. The redistributionist policies of Chavez’s government exacerbated these economic issues. Why work when you can live quite well on your share of the oil revenues?
Still, Chavez’s economic policy seemed to be working out well for Venezuela — until two pivotal things happened in the early 2000s. First, oil prices began to drop, meaning Chavez could no longer prop up his economy with oil revenues. Venezuela’s once-impressive agricultural and manufacturing sectors no longer existed, leading to shortages when the government no longer had the funds to buy necessities from abroad.
We are willing to trade many of our freedoms for a sense that a strongman in charge will solve our problems.
Around the same time, a military coup supported by the U.S. attempted to unseat Chavez. After initial successes, officers loyal to Chavez put down the rebellion. As a result, Chavez purged the government of anyone he perceived to be disloyal and systematically destroyed other Venezuelan institutions that supported democracy. To keep the military happy, Chavez allowed it to engage in profitable criminal activity and corruption.
Upon Chavez’s death in 2013, Vice President Nicolas Maduro took over, continuing Chavez’s policies and actually increasing corruption. Last year, Maduro was allegedly elected to the presidency in what many deride as a “show election.” His inauguration last month gave rise to protests, which led to the current crisis.
After the protests started, opposition legislator Juan Guaido declared himself president. The U.S. and several of our allies have recognized Guaido as Venezuela’s legitimate president, though no election has chosen him for that position.
The big question now is what the military will do. If it remains loyal to Maduro, Guaido will likely end up in jail. A number of top military leaders have stated that this is their intent. It appears, however, that lower-level officers are dissatisfied with Maduro. This is noteworthy, as Chavez was only a lieutenant colonel when he led his coup.