Hugo Chavez: What's the Point?

The real problem with oil is not that it is despoiling the earth through global warming. It
is that it ruins nations. Like Venezuela. The great problem nations of the world are often
oil-rich.

In an oil-rich nation, the people become a cost. But in a resource-poor nation, the
people are a resource.

That certainly goes for Venezuela. The oil revenues of Venezuela are a piggy-bank to
pay for the ambitions of the leader of Venezuela. Right now, the leader is
Hugo Chavez, a Castro-type
lefty whose ambition is to bestride Latin America like a colossus. His foreign policy
is to
oppose whatever the US proposes.

Right now, the US proposes a Free Trade Area of the Americas, a continent-wide
market in which all can participate. But
Chavez
went to the recent pan-American summit determined

to "bury" the trade plan, arguing that it would "enslave" Latin
American workers. He called the plan for a Free Trade Area of the Americas an
"annexation plan" that would destroy local industries and give
the US political and economic domination over the region.

OK, pal. Go ahead. From the US point of view, the free-trade plan is really
little more than charity. Our major trading partners are Canada, Mexico, Europe and East Asia.
If South America doesn’t want free trade, it really doesn’t make much difference to the
US.

Of course, according to generally accepted economics, a free-trade pact will
make a big difference to the workers and the emerging economies of Latin America, bringing
the benefit of “global best practice” into their economies. But if they don’t want
it, or Chavez can persuade them that they don’t want it, why bother?

The lesson of history seems to be that nations that don’t allow a free competive
economy just stagnate and wither. As Venezuela will stagnate once the current oil-price
bubble pops.