Monday, June 13, 2016

Venezuela: What Happens When Economies Collapse

The economy of Venezuela has been in trouble since at least 2013 when, as a result, its currency was devalued. In 2016 its troubles led to economic collapse.
We rightly pause to reflect on the challenges confronting ordinary Venezuelans. We live in societies dominated by the Global Technological System (GTS). Because the GTS is a system, trouble in one part of it, like Venezuela, has harmful effects on other parts. Such trouble also increases the chances that the whole global economy will collapse.

Let us learn what we may from their painful experience. The following is a summary of an article by Michael Snyder entitled “8 Lessons We Can Learn from the Economic Meltdown in Venezuela” (June 5, 2016). Consequences of economic collapse include:
1. Shortages of necessary products. Families face shortages in food, toiletries (toilet paper, toothpaste, shampoo), and medicines. For many families, this leads to malnutrition. Others resort to eating cats and dogs.
2. Reductions in services. Households, offices, schools, and businesses suffer unpredictable losses of electricity (due to rolling blackouts). Hospitals run out of supplies and can provide fewer services such as surgeries. The government cuts back on bureaucrats, police, and teachers. Fewer governmental services are available for fewer hours each week. Governmental payments to pensioners are reduced or stopped.
3. Decline in production. Factories run out of the materials they need to make their products.
4. Hours in long lines. When basic products and services run short, people stand in long lines to get what they can. Sometimes the line is too long and supplies are exhausted before people at the back of the line can get what they need.
5. Increasing crime: robberies, looting, assault, and murder.
6. Worthless currency. People resort to using gold and silver coins, bartering, or doing without.
7. Decreasing freedom. When times get tough, people ordinarily want the government to do something. In response, it always increases its control even if that control does nothing to solve problems.

Copyright © 2016 by Steven Farsaci.
All rights reserved. Fair use encouraged.