My latest animated “bar chart race” visualization above displays Per Capita GDP (in current US dollars) in all 12 South American countries annually from 1980 to 2020, with a focus on the rise and precipitous fall of Venezuela’s economy. The data are from the International Monetary Fund that include actual figures through 2018 and estimates for the years 2019 and 2020. A video version of the visualization appears below that allows pausing and stopping. Note the following:

1. During the 1980s, Venezuela was consistently among the wealthiest South American countries measured by GDP per capita, and it ranked No. 1 or No. 2 in each year from 1981 to 1988 except for 1987.

2. During the 1990s, Venezuela consistently ranked among the top five wealthiest countries in South America. When Hugo Chavez took office in 1999, Venezuela was ranked No. 4 among South American countries for GDP per capita and in the years following from 2005 to 2008 Venezuela rose to the No. 2 spot. According to Wikipedia’s entry on Hugo Chavez, “the high oil profits coinciding with the start of Chavez’s presidency resulted in temporary improvements in areas such as poverty, literacy, income equality and quality of life between primarily 2003 and 2007, with a reversal beginning after around 2012.” Reflecting that temporary period of economic prosperity, Venezuela ranked No. 2 for GDP per capita in South America in each of the four years between 2005 and 2008. By the time Chazez died in office in 2013, Venezuela’s deteriorating economic conditions brought the country’s ranking down to No. 7 for GDP per capita.

After a temporary rebound in per capita GDP in 2016 to the No. 4 position, by 2017 Venezuela fell to the No. 10 position before falling to the bottom No. 12 position in 2018, 2019 (estimate) and 2020 (estimate). This year, Venezuela’s per capita GDP of only $2,548 is more two-thirds below the average in South America of $7,866. Next year, Venezuela is expected to be more than 71% below South America’s average GDP per capita at only $2,427. As recently as 2008 Venezuela’s GDP per capita was ahead of Uruguay’s, but this year Uruguay’s GDP per capita at $17,029 (No. 1 in South America) is nearly 7 times greater than Venezuela’s. In 2008, Venezuela’s GDP per capita was roughly the same as Chile’s, but this year Chile’s GDP per capita is more than 6 times greater than Venezuela’s ($15,400 vs. $2,548).

According to the IMF, Venezuela ranked No. 121 in the world last year for GDP per capita out of 186 countries. Its further economic decline this year will likely lower Venezuela’s world ranking below another 15 countries to somewhere around No. 136 in the world, and comparable to the GDP per capita of African countries like the Congo and Ghana.

MP: The initial, temporary success of democratic socialism in Venezuela that was predictably followed by the precipitous economic decline illustrated in the visualization above provides a cautionary tale for those today in America who are attracted to the socialism being repackaged as “democratic socialism” and peddled by Bernie Sanders and AOC (“Karla Marx”). As I wrote in “Why Socialism Failed“:

There were some initial signs of economic prosperity under Hugo Chavez’s democratic socialist regime in Venezuela in the early part of this century, but that “success” was brief and unsustainable. Chavez was able to distribute to his people some of the bounty from stolen property when his government seized the country’s oil production in 2006 and 2007 by forcibly taking over oil companies such as Exxon Mobil, France’s Total, and Italy’s Eni. Relatively high oil prices also artificially helped the socialist regimes of both Chavez and his successor Nicolas Maduro in the short run.

But the corrosive, demoralizing, and devastating effects of socialism have now been exposed, as the country has gone into an economic death spiral of poverty, chaos, starvation, and death.

…..

The temptress of democratic socialism advanced today by Sanders and Ocasio-Cortez, is constantly luring young Americans with the enticing offer: “give up a little of your freedom and I will give you a little more economic security.” And free college tuition, free healthcare, and guaranteed housing. As the experience of Venezuela has clearly demonstrated, the bargain is tempting but never pays off in the long run. The unfortunate citizens of Venezuela have ended up losing both their freedom and their economic security.

Programs like socialized medicine, free college, guaranteed jobs, free housing, and living wage laws will continue to entice us because on the surface they appear to be expedient and beneficial. But those programs, like all socialist programs, will fail in the long run regardless of initial appearances. These programs are part of the dangerous Big Lie of socialism because they ignore the important role of incentives.

Socialism is being repackaged and recycled by today’s left-leaning politicians including Sanders and Ocasio-Cortez and is being taken seriously by a new young and gullible generation, many who weren’t even alive when the historic events of the 1980s and 1990s occurred including the fall of the Berlin Wall and the collapse of the Soviet Union. But the lessons from history about the defects, deficiencies, and failures of socialism are very clear. As we’ve learned from countless examples throughout history, including now Venezuela, the main difference between capitalism and socialism is this: Capitalism works.

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