August 4, 2007

Revolutionary Surplus Value

Quico says: So the Cuban government denies that it's getting Venezuelan oil for free, noting that La Isla pays for most of its oil bill through the services of Cuban doctors, sports trainers and other professionals in Venezuela.

Lets pick this one apart.

In the comments' section, Omar proposes the provocative concept of the Cuban-professional-to-oil-barrels terms of trade. The question is, what is the implicit cost to the Venezuelan treasury of a Cuban professional?

The short answer is, I don't know - and neither do you - because the terms of the deal are secret, and nobody knows precisely how many Cubans are working in the country. The original oil-for-Cubans treaty was never submitted to the National Assembly for approval, as the constitution mandates.

But lets guesstimate, generously, that there are 80,000 cubans working in Venezuela. We know that, last year, Cuba got $3.4 billion worth of oil shipments from Venezuela. Dividing $3.4 billion by 80,000 gives us an implied-cost-per-Cuban-per-year of $42,500.

Now, ask yourself this: how much of that does a Cuban professional actually get?

Turns out they get paid $2,400 per year, plus they get subsidised housing and food. Just to put a number to it, their all-in compensation package (wages + subsidies) might generously be estimated at $6,000 per year.

Fidel, on the other hand, gets seven times that much in Venezuelan oil.

To put it in terms chavistas can understand, the Cuban government made off with $36,500 in surplus value for each Cuban working in Venezuela last year. Or, in savage neoliberal terminology, their work in Venezuela was taxed at a rate of a foreign government!

Granted, you can quibble with the numbers: they are admittedly (though necessarily) plucked from thin air. Cuba says it pays for about half its oil bill in cash: if true, then the cost-per-cuban-professional is less. Then again, 80,000 is a very high estimate of the number of Cuban professionals in the country: if there are fewer, then each one costs more.

That we even have to engage in this kind of speculation is a testament to the opacity of the whole deal. But whichever way you want to jig the numbers, the basic point stands: Fidel appropriates the lion's share of the remuneration for these people's work.

Because the basic issue here is one of ethics, not economics: Where the fuck does Fidel get off using his citizens' labor as payment for anything? If Chávez wants to buy professional services, how come it's Fidel that he pays, rather than the professionals? Are they Fidel's property?

In important ways, that's how they're treated. After all, when you want to rent a lawn-mower, you don't "pay" the lawn-mower, you pay its owner. And when Chávez wants to "rent" some Cubans, he doesn't pay the Cubans, he pays Fidel. Chávez and Fidel treat them as a rental good, as things whose use they're entitled to buy, sell or barter.

The actual Cubans are bystanders to the transaction: little more than chattel. Realistically, they can't refuse to go, because they have no negotiating power vis-à-vis the government: no independent unions, no right to strike, no possibility of working for someone else. Cuban professionals face a complete labor monopsony: it's the commie way or the highway. So it's not surprising that, at the end of the day, the amount of money that reaches their pockets is a tiny fraction of the amount their "owner" gets.

Now, can you imagine what the Penns and Glovers, the Tuckers and Chavezes of the world would say if the US government tried to exploit people quite this crudely? Can you picture the howls of outrage?

And would you feel if, tomorrow, your government decided that it was going to start "paying" for imports of, I dunno, French cheese with your labor? How would you react if your government told you it had a secret agreement with France and it was going to ship you off to Marseille, where you would be paid one-seventh of the value of the cheese your government would get in return for your work?

Any takers?

...didn't think so...

Added later: the title turn-of-phrase, "Revolutionary Surplus Value", (plusvalía revolucionaria) is one of the many rhetorical jewels in J.M. Briceño Guerrero's The Savage Discourse, which also includes this chilling, prophetic passage:
I've also seen - and I wish I hadn't - that the revolution, when it's carried out seriously and succeeds, brings forms of injustice and oppression even more abominable than the current ones. I've seen those new forms of injustice and oppression in the eyes and the words of the most sincere, hardest working, most loyal revolutionary leaders. They feel themselves messianic saviors, avatars of history; they think they know my interests, my wishes, my needs, better than I do; they don't consult me or listen to me; they've struck off on their own as my representatives, as vanguards in my struggle; they are paternalist tutors; they pre-configure today that future olympus where they will make all decisions for my well-being and my progress; they'll make the decisions and they'll impose them on me in my name, through fire and blood in my name.

August 3, 2007

To think CAP got impeached for misappropriating 250 million...bolivars!

Quico says: Here's a galling number for you. In 2006, Venezuela sent Cuba oil shipments worth $3.4 billion. Cuba doesn't seem to be actually paying for it, as far as anyone can tell - which isn't very far, because the details of the deal and the payment mechanisms (if there are any) are secret.

3,400,000,000 dollars. Picture it. You can't? Of course you can''re only human.

As scientists know,
humans aren't very good at grasping the meaning of very large numbers. 3.4 billion is an abstraction too far for our weak little brains. I could tell you that the giveaway is worth nearly 2% of Venezuela's economy, almost three times the UN's guideline for developed countries' total foreign aid to poor countries. I could tell you it accounts for a staggering 15-20% of Cuba's GDP (depending on who's doing the counting). But those numbers are just as abstract: they fail to cause much of an emotional ripple.

So I'll fall back on my favorite heuristic device, the Mexican Drug Cash Pile (MDCP). Earlier this year, this stash worth $206 million, mostly in $100 bills, was confiscated from a Mexican drug cartel:

Venezuela's oil giveaway to Fidel last year was worth over 16 MDCPs. About this much:

Basically, we pay for their totalitarianism.

August 1, 2007

Eat our dust, Paraguay!

Quico says: Sure, we didn't do so well in the PanAm Games, but in the league tables that really count, Venezuela is still on top of the game. The World Bank has just published its latest study on governance matters (covering 1996-2006), and Venezuela has edged out Paraguay for the coveted Western Hemisphere silver medal in freestyle corruption!

That's right, boys and girls, we're now officially more corrupt than the country where a President of the Republic got busted riding around in a stolen BMW.

That's no excuse for complacency, though. We still have a ways to go before we catch up with the undisputed hemispheric masters of the craft: the Haitians. But Hugo Chávez was never one to go down without a fight. (OK, except for Feb. 4th and April 11th.)

As new corruption allegations rain down on PDVSA, he is keeping the focus squarely where it belongs: on corruption in the oil industry before he came to power. Showcasing his determination to go for gold, he then confirmed his backing for PDVSA boss Rafael Ramírez, the man directly responsible for it all.

See, the Haitians might have the natural talent, but with leadership like that, we have what it takes to make it to the top.

July 31, 2007

Getting kidnapped: more trouble than it's worth

Quico says: Sometimes, amid all the high-fallutin' talk about the rise of authoritarianism and the creeping onslaught on basic liberties, we lose sight of chavismo's basic inability to make sensible policy. The latest VenEconomy Monthly deals with one of the more alarming recent examples: the Anti-Kidnapping Bill now making its way down the fetid intestinal track that is the chavista legislative bowel.

The proposed law sets out to combat kidnapping by making life as hard as possible for kidnap victims' families. It would make it a crime to fail to report a kidnapping or to pay ransom. Family members would face up to three years in prison for keeping a kidnapping quiet. "The law says that they are accomplices," is the way the AN's Interior Policy Committee Chair, Juan José Molina, puts it.

But if they do report a kidnapping, the law goes proactive on their asses: freezing the family's assets to prevent them from raising the cash to pay ransom. Presuming their guilt, the bill would effectively punish people for having a relative get kidnapped.

This government never saw a social problem fly it didn't want to swing a policy sledgehammer at. Much of the problem seems to come down to an ideological aversion to thinking through the incentive structures policies put in place for normal people. There's a whiff of capitalist decadence, I guess, about the whole notion of thinking through the incentives policies create: they just won't do it.

Lets do it for them.

Lets say (y que Dios no lo queira) your kid gets kidnapped. The law says you must put yourself in the hands of Venezuela's notoriously incompetent, overstretched, brutal and often criminal law enforcement authorities. If you don't, you're an accomplice and face years in jail. But if you do, your chances of ever seeing your relative alive again surely become vanishingly small: the cops will almost certainly fail to free him, and if you change your mind and decide you want to pay ransom, you won't be able to.

What are the pros and cons you'll weigh as you try to decide whether or not to report the crime? Surely, you'll be aware of the chance that, if you do report, the cop you report to is the cop who kidnapped your kid. And not just in theory. As VenEc reports,
In the last five-year period, 2002-2007, charges have been brought against 14 military personnel, seven members of the CICPC force, and 16 Metropolitan police officers for crimes related to kidnapping.
But lets say you do go to the cops. At that point, you leave the kidnappers only two options: release him without ransom or kill him. Which option do you think is more appealing, safer from the kidnappers' point of view? Hmmmm...

Now - and sorry to get so grim, but - lets say they do kill him, but the body doesn't turn up. The kidnapping can't be declared "over" without a death certificate, but you can't get a death certificate without a body. So your assets remain frozen indefinitely. Now that's going to make people want to report.

To follow this dismal dynamic one stomach-turning twist farther, don't you think kidnappers will catch on to this and turn it to their advantage? How long before ransom notes start including ghastly threats to not just kill your loved one but to destroy the body as well? How would you react to a note like that, knowing that reporting would mean an indefinite freeze on your assets on top of the death of your child?

And, at the risk of straying into unadulterated Macchiavelianism, if you were a completely unscrupulous businessman looking to thin out your competition, could you think of a more cunning way to get rid of a rival than to kidnap his kid, make sure the cops hear about it, and then disappear the body?

It doesn't take a rocket scientist to figure out what this law will do: criminalizing kidnap victims' families is only going to drive them underground, making them ever less willing to report to the authorities.

When crime statistics come out, this will show up as a sharp fall in reported kidnappings...and guess what will happen then? Pedro Carreño will come on VTV, a glowing smile on his face, to trumpet the governments progress in the fight against kidnapping.

July 29, 2007

"I'll take the gunbao chicken, some springrolls, and 32,000 b/d, please..."

Simón Boccanegra says: Some of the stuff that's been going down recently borders on Caribbean surrealism. The story about the Chinese drilling rigs is pure farce. Readers may remember that, some weeks ago, one of those Chinese rigs PDVSA has been importing blew up. Turns out that when the two rigs arrived, PDVSA's people realized the manuals were in Chinese. But instead of going to the Chinese oil company and asking their technicians for help, what did they do? The went to a Chinese restaurant in Anaco and asked the staff for a translation! Turns out the chinese guys working there were cantonese, and the manual was in mandarin, so they couldn't help the ingenious engineers from the red, very red PDVSA. Undaunted, they went back and tried to run the rig anyway. The result is already fodder for yesterday's newspaper: the thing blew up. It reads like a Three Stooges script, but it isn't.

Sea of Felicity

BBC says: Cuban athletes have made a hurried departure from the Pan-American games in Brazil, apparently amid fears of possible mass defections.

The delegation was rushed at short notice to Rio de Janeiro's airport, leaving the men's volleyball team no time to collect their bronze medals.

The athletes were said to have been ordered to leave the games before the finishing ceremony on Sunday.

It follows the defection of four Cuban athletes earlier in the tournament.

Such was the speed of the departure that some athletes were said to have had difficulty finding their luggage.