Rear View

A Load of Koch

If you wish to have some understanding of what is happening and how the 99 percent are suffering in Venezuela, who better to call than Daniel Mitchell? He has a PhD in economics and is a senior fellow at the Cato Institute, originally known as the Charles Koch Foundation. With such a background, Mitchell’s musings should come as no surprise: ‘I feel sorry for the Venezuelan people, but I’m perversely glad that the country is collapsing. That’s because it’s nice to have proof that Margaret Thatcher was right when she famously warned that the problem with socialism is that you eventually run out of other people’s money. To be sure, we already had proof from Greece, France, the Soviet Union, Brazil, and many other places. But it’s still nice to have another piece of evidence that big government eventually produces very dire results. I also confess that I’m enjoying Venezuela’s economic decay because I get a warm feeling of Schadenfreude when watching leftists try to explain what’s happening in that formerly rich nation ‘(, 2 June).

Mitchell takes pleasure in the suffering of our class but conveniently forgets to mention that a small minority continue to enjoy the comforts available in what blogger Agustin Otxotorena describes as the ‘upscale sectors of Caracas’. Shopping shelves there are not empty as elsewhere. ‘If you have money’ there is champagne, vodka, Belgian chocolates, lobster, brand-name clothes, etc. Exclusive restaurants, nightclubs, beaches, yachts, golf clubs, private schools and universities form ‘a whole country within a country where there are no poor’ – other than those working there. Such ostentatious privilege exists regardless of the government’s orientation – left, right or centre.

Thatcher was right, at least when she stated: ‘There is only one economic system in the world, and that is capitalism. The difference lies in whether the capital is in the hands of the State or whether the greater part of it is in the hands of people outside of State control’ (House of Commons speech, 24 November, 1976). Venezuela is not and never has been socialist. Neither are or were Brazil, Greece, France or the Soviet Union. Lenin wrote of Russia in 1918: ‘reality says that State capitalism would be a step forward for us; if we were able to bring about State capitalism in a short time it would be a victory for us’ (The Chief Task of Our Time). That same year, the old lie about Russia being socialist or communist (Marx and Engels used the terms interchangeably) was exposed in the August 1918 edition of this very journal. The idea of socialism in one country is rather like being a little bit pregnant.

Parasites beget parasites

The 1 percent exist worldwide, in Russia and Venezuela, Norway and Italy. ‘The world’s youngest billionaire is worth an eye-popping $1.2billion, around £862 million. Alexandra Andresen comes in as one of the richest people on the planet, after inheriting millions from her businessman father Johan Andresen. The Andresen family own Ferd, a long-running private investment company’ (, 2 June). We are also informed later of one major reason for Alexandra’s wealth. ‘her great-great-great grandfather bought J.L. Tiedemanns tobacco factory in 1849, which later became the country’s market-leading cigarette maker.’

Elsewhere (, 4 June), we learn that ‘the tobacco industry has annual revenues of nearly $500bn. The number of cigarettes manufactured and sold has risen to six trillion every year worldwide – nearly double what it was four decades ago. Tobacco stocks outperformed the market in 2015 and have in fact done so for the past decade. The … electronic cigarette market is now worth $7.5bn.’ Our labour, that of adults and children as young as five years old, is the source of this wealth. The tobacco products are then sold back to us at a profit and kill an estimated six million of us annually.

Wealth is product of human labour, acting upon nature-given materials, that is capable of satisfying needs. We work, they take and pass on. Some of today’s capitalists have many centuries of legalised theft behind them. The richest families in Florence have been at it for the past 600 years. This fact was confirmed recently by two economists doing useful work for a change. Guglielmo Barone and Sauro Mocetti studied the records of Florentine taxpayers in 1427 with those in 2011 and after comparing the family wealth to those with the same surname today, concluded the richest families in Florence six centuries ago remain the same now.

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