As the unravelling of Venezuela’s socialist experiment continues, anti-government protests are picking up momentum. Street protests have long been a feature of Venezuelan politics, but according to Project Syndicate, the opposition movement is not just growing in size, but also becoming more broad-based and socio-economically diverse.
Is this the beginning of the end of yet another failed socialist experiment? Venezuela is fast descending into authoritarianism, but it is still technically a democracy. If an early presidential election forced Nicolas Maduro out of office, the descent could still be halted.
Political ideas lead a life of their own, and whether they are fashionable or not has little to do with whether they are successful or not.
It normally takes ages for a country to recover from socialism. East Germany, for example, is still heavily dependent on fiscal transfers from West Germany. But Venezuela still has a rudimentary market economy, waiting to be reactivated. If a post-socialist government ended the disastrous regime of price controls and exchange rate controls, the runaway money printing, and the arbitrary confiscations, the country could bounce back relatively quickly. Rebuilding investors’ trust and getting the public finances back in order, however, would take years.
But it might positively affect the debate in many Western countries, where socialist ideas have become extremely fashionable again, especially among the young. Political ideas lead a life of their own, and whether they are fashionable or not has little to do with whether they are successful or not. But it should cause socialists at least some embarrassment if a real-world model which they have been praising to the skies for years collapses so spectacularly. And until about three years ago, Owen Jones, Jeremy Corbyn, Seumas Milne, Diane Abbott and many other leading figures of the British Left had been doing precisely that in the case of Venezuela.
Remember the “Schulz-Hype”, the brief surge of Germany’s Social Democrats (SPD) in the polls after nominating Martin Schulz as their top candidate? It now turns out that it was just a short-term fluke. The SPD was hammered at the federal election on September 24th, securing just 25.7 percent of the vote.
Why shouldn’t the UK just join the North American Free Trade Area (NAFTA), turning it into a transatlantic free trade area?
If you are interested in a smooth and successful Brexit, this is good news. It is not exactly a secret that there are people in Brussels who want to “punish” the UK, in order to set a warning example to potential future defectors. Hans-Olaf Henkel, a German MEP, has recently accused the EU’s chief Brexit negotiator and the European Parliament’s Brexit co-ordinator of deliberate, politically motivated obstructionism. A Chancellor Schulz would have reinforced that tendency. A conservative-liberal coalition with a strong FDP, in contrast, can be expected to take a much more constructive line on Brexit, focused on minimising disruption and preserving trade links.
Speaking of post-Brexit trading relationships: a US/UK working group, tasked with preparing a free trade deal between the two countries, has been formally established. The UK is still a member of the European Customs Union, and therefore not allowed to engage in trade talks on its own. But such “talks about talks” could already do a lot of the heavy lifting, so that the conclusion of a trade deal after Brexit need not take ages (provided we don’t ruin it by panicking over chlorinated chickens or some such non-issue).
The US is the UK’s second-most important trading partner after Germany. This means that the gains from a free trade deal will not be massive overall, since the level of economic integration is already fairly high. But there could still be substantial gains in a number of sectors. If trade talks take longer than expected, maybe the UK government should consider building on what is already there, rather than trying to reinvent the wheel. Why shouldn’t the UK just join the North American Free Trade Area (NAFTA), turning it into a transatlantic free trade area?
Meanwhile in France Emmanuel Macron has not been off to a bad start. Plans to limit redundancy payments, and make it easier for companies to lay off staff for economic reasons, are being drafted. So are changes to the pension formula, which would end the expensive privileges enjoyed by some groups, and strengthen the link between entitlements and contributions. If enacted, Macron’s plans would facilitate job creation, and make the cost of the pension system a bit more manageable.
So far, so good. But we need to bear in mind that similar reforms have been tried before, namely by Alain Juppé in the 1990s, and Nicolas Sarkozy in the 2000s. They quickly U-turned in the face of strikes and resistance.
It is not exactly a secret that there are people in Brussels who want to “punish” the UK, in order to set a warning example to potential future defectors. Hans-Olaf Henkel, a German MEP, has recently accused the EU’s chief Brexit negotiator and the European Parliament’s Brexit co-ordinator of deliberate, politically motivated obstructionism.
Most free-marketeers would naturally be a bit suspicious about an institution that has the words “National Council” in its name. But it is worth making an exception for Nigeria’s “National Council for Privatisation”. That council, set up by the previous government and continued by the current one, has recently privatised a large petrochemical company, and the government has expressed a commitment to further privatisations.
By African standards, Nigeria has been a magnet for foreign direct investment for years. There has recently been a slowdown in investment flows, and what better way to revive it than a privatisation initiative?
India, in contrast, tends to be a much more reluctant privatiser, but the recently announced plan to privatise Air India is an encouraging sign. Privatisation helped British Airways, Air France and Lufthansa successfully to defend their positions despite fierce competition from low-cost airlines. It is about time the ailing Air India company joined that club.