I can't stand this ideological sports-team type of commentary, so just to add some real information and context (after my downvote):

Venezuela produces ~70k barrels per person per day. Norway produces a little more than half as much total oil, but with one-sixth the population it works out to ~330k barrels per person per day. An order of magnitude per-capita difference.

First, a nitpick - your numbers should be per million people, not per person:

https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...

Second - the output itself depends on management, so I'm not sure it would be fair to compare current production numbers to show the potential help to the population. In fact - Venezuela has more proven reserves per-capita than Norway, by an incredible margin:

https://en.wikipedia.org/wiki/List_of_countries_by_proven_oi...

That's not an order of a magnitude.

Even then, so, Venezuela produces 1/5th per capita the oil of Norway. Why doesn't there exist a fund with $37k/person in Venezuela?

Norway had a per-capita GDP 10x that of Venezuela when they launched their fund. The option was a luxury that they were granted by already being a fairly wealthy country.

Also, consider if 25% of Norway's oil revenue is sufficient to provide a basic functioning government. Now you have Norway saving 75% of their oil revenue every year, and Venezuela still sucking 5% out of other funds, resulting in a long-term extremely wealthy Norway and a destitute Venezuela.

Venezuela was the 4th highest GDP as recently as the 50s. It saw sharp declines in economic health after Chavez and Maduro.

You could ask a similar question of the UK.

This is a question I ask.

The UK policy was, effectively, 'paaarty!'

Sad but true. One shining light in this dismal situation however is that Shetland managed to do something similar to Norway: https://www.google.com/amp/s/www.scotsman.com/news-2-15012/g...

Well - capitalise trade in The City of London; without the oil it's pretty clear London wouldn't have developed the way it did.

Rather than the story of financial degregulation?

Sceptical.

The UK has the same amount of oil spread across 12x as many people. Yes, the Tories wasted it but it could never have had the same impact on the whole UK that it had on Norway. Perhaps if Scotland had been independent (most of the UK's oil is in its waters) it would have been similar.

Nonetheless it would have ha some positive impact, And, while I'm as anti Tory as anyone there does not appear to have been a lot of objection to the way the oil income was handled from other parties.

And North Dakota. The resource curse can happen anywhere.

Venezuelan oil costs more per barrel to extract than Norwegian oil...

While your point about per-capita production is well-taken, I don't think the original comment was intending to score ideological points. It simply said the Venezuelan crisis was avoidable and happened due to mis-management, not that Chavismo is an inherently evil ideology...

Yes, thank you. I deliberately avoided attributing anything to ideology. At the end of the day, both countries are chiefly comparable in having nationalized their oil resources for the public benefit, at least de iure. Also Venezuela was actually doing quite well I believe in 2013 when prices were high. It was a singular failure of their stewards not to diversify the profits.

If Venezuela had a fund of 20k per citizen they would definitely not be in the same state as today...

You sure?

Venezuala's problem was just overleveraging

They basically got margin called on their long oil position, and then their political ideology became apparent

Except every other oil dominated country - e.g. Iraq, Libya, half of Africa is more like Venezuela (worse even), than Norway.

The oil curse is very real and, for Venezuela, largely unavoidable.

Norway is about 20% of it's GDP from Oil/Gas, Iraq is above 90%. I think that is also an explaination

That’s hardly surprising for anyone having been there.

its GDP

I'm reminded of a YouTube video, The Rules for Rulers, that touched on this. It makes the point that in a country with oil-based wealth, the keys to power are held by a few small elite, in contrast to a country with a 'service economy', in which case the masses are vital to the country's wealth.

[0] https://youtu.be/rStL7niR7gs?t=733 (Relevant segment is about 60 seconds)

Correct me if I'm mistaken, but most of those other countries have not nationalized their oil (or at least the profits) like Venezuela and Norway have.

But I'm sure they're taxing natural resources exploration at a pretty high rate.

That doesnt explain why all those other countries make so much from oil, even though some of them are at war.

That’s not true, the Saudis do very well for themselves. The entire citizen population is given massive handouts, and it seems to be working out okay. Corruption isn’t very bad, at least compared to other oil states.

Also Kuwait is doing good as well, and they have a retarded amount of oil.

But, in general, I agree that it often hurts instead of helps. But select countries like the US, Norway, Kuwait, and Saudi Arabia have become very prosperous from natural resources and nothing terrible has happened because of it.

>the Saudis do very well for themselves. The entire citizen population is given massive handouts,

Have you ever been to Riyadh and seen the poor state of housing, the laughable state of repair of motor vehicles, the constant complaints about the state of the education and health systems?

Perhaps they are given massive handouts but it doesn't seem to be translating into functioning infrastructure.

I think the difference is potentially that the Gulf countries - Saudi, Kuwait, Qatar etc - benefitted from being able to develop their economies and infrastructure and establish large social welfare systems in the 70s and 80s while their populations were small and oil prices and income were very high.

Here's a chart that shows Saudi per capita income from the 70s: https://d3fy651gv2fhd3.cloudfront.net/embed/?s=saunygdppcapk...

You can see that their per capita collapsed in the 80s along with oil prices. The royal families in those countries are incredibly corrupt by modern standards, but they have established a system that keeps everyone outside that circle in line with subsidies, religion and threats of imprisonment.

Or you could read up on the astonishing crimes and incompetence of the Chavez regime.

But what to say about Americans, who squandered natural resources to help the rich, and now the funding to their own social security is en route to insolvency?

It would be easy to make social security solvent far into the future. There's no shortage of resources to do it, just lack of political will.

One step would be to move it away from an insurance model and raise the cap on contributions. Another would be to modestly increase the contribution rates.

> One step would be to move it away from an insurance model and raise the cap on contributions. Another would be to modestly increase the contribution rates.

This is essentially what happened in the mid-90s with the Canada Pension Plan (https://en.wikipedia.org/wiki/Canada_Pension_Plan#1996_refor...): an increase of contribution rates to move beyond PAYGO solvency to a partial advance-funding model. As a result, the CPP now has a few hundred billion dollars in assets (invested largely in equities) providing income to support long-term solvency.

The downside of that is the Canadian pension doesn't provide a livable amount. One ex tech worker in Calgary who's collecting pension now told me it pays his electric bill.

If they do raise the cap on contributions people should have the option of either paying more in to social security or paying more into an uncapped IRA or 401(k).

Almost the entire point of raising the cap would be the resulting wealth transfer. Doing it with an opt out wouldn't fix the problem.

Maybe a social security tax on capital gains.

A fundamental difference is that for Americans, natural resources are owned by the individual property owner rather than the state. If you find oil on your land in the US, it is yours and you decide what to do with it. In most other countries if there is oil on your land, the government has the exclusive right to oil (or other sub-surface minerals).

Lol. No.

Usually where there are significant amounts of minerals, there are separate mineral rights. Mineral rights trump surface ownership, and usually the rights were sold off decades or centuries ago. If you find something under your property, it probably doesn't belong to you.

Also, state laws vary in weird ways. Should you find gold in New York, it's the property of the state.

Outside developed oil or coal plays, severed mineral estates in the US are the exception, not the rule. Also, to the point above, those severed mineral interests are almost always privately held.

Unless they happen to be on "sovereign" indian reservation land.

>But what to say about Americans, who squandered natural resources

Yeah, they squandered their natural resources on the way to becoming the richest, most powerful nation in the history of the planet...

How can people say things like this with a straight face? The fact that there are some tough political issues that have or may span a couple decades doesn't erase centuries of history, or millennia of future prospects.

Exactly right. Many Americans are so ashamed of the US, when in many ways it's a shining example of how to do things right -- certainly relative to many other countries. The US is a spectacularly prosperous country, and all it seems anyone talks about is how to fundamentally change the systems that made it that way. There are always in which a society can improve, but man -- let's not forget what's worked well.

> The US is a spectacularly prosperous country, and all it seems anyone talks about is how to fundamentally change the systems that made it that way.

The things that made America so wealthy were changed pre-2000. It takes time for those changes to really impact society, and for people to realize it. And no one really talking about "fundamental" change. They're talking about raising taxes back to what they used to be like in the 60s and 70s. Not just in terms of the rate, but the percentage of the tax burden that falls on each segment of society.

While there are many other proposals, that kind of tax policy change would, in itself, definitely be a big change. I encourage people to use this calculator to determine your effective tax rate at various times in the past. If your family is like mine, reverting to the tax policy of the 60s and 70s would be a very large hit to us every year.

https://qz.com/74271/income-tax-rates-since-1913/

I think the reasons for that are twofold:

1) There is a tendency to focus on the negative

2) The general trend of wealth inequality has been going in the wrong direction for many, many years and it is only getting worse

https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...

> when in many ways it's a shining example of how to do things right

US prosperity is largely a function of imperialism and military might, not some magical economic formula.

For instance, in South America:

https://en.wikipedia.org/wiki/United_States_involvement_in_r...

The US government overthrew a democratically elected government for the prosperity of a _fruit company_.

> all it seems anyone talks about is how to fundamentally change the systems that made it that way.

Many of the people are fighting the systems that have heavily exploited poor countries around the world for the last ~100 years because they see it as fundamentally immoral. The US doesn't _deserve_ the standard of living it has achieved, and it's built on the blood of dead South Americans and Middle Eastern people.

It's honestly pathetic that poor Americans aren't provided for given the absolute spoils of war the elite have enjoyed.

Oh please. If imperialism and military might were the source of a country's wealth, then Mongolia would be on top, and Russia, and the sun would have never set on Great Britain. No, strong property and contract rights combined with the rule of law and relatively low corruption is what made the US wealthy. And, yes, natural resource extraction and up until recently relatively prudent management of its fiscal resources.

Mongolia's dominance was far before the industrial revolution. That argument is so devoid of context it's not worth addressing. They did achieve huge gains in wealth through imperialism anyway...

The USSR was imperialist, and did achieve massive increases to the standard of living of the elite through imperialism. It's much easier to feed Russia when you can starve Ukraine.

Colonial Britain and the Dutch East India company both achieved massive gains in wealth through imperialism.

The only argument you've made is that strong property and contract rights with rule of law and low corruption can prevent squandering the spoils of imperialism. I'm not sure if I agree with that, we're too early into the US's age of dominance to tell, but it's adjacent to my point.

None of those countries stopped those practices. That is, they realized the end of their prominence due to policy positions and factors other than imperialism (or maybe even because of imperialism). That is, imperialism doesn’t necessarily make a country wealthy, and it certainly doesn’t keep it that way. Distant wars are expensive. See Rome. The US’s escapades in the Middle East May break it yet. No, I maintain that those imperialistic tendencies are not at all what’s made the US so prosperous, and they may in fact lead to its demise.

PS: You mean en route—sounds the same, but that's how to correctly spell the phrase.

America should seriously consider nationalizing its resources and using that money to either fund programs to reverse the trend of its declining life expectancy or at the very least reduce the deficit (and perhaps, one day, bootstrap a sovereign wealth fund of its own)

One of my clients at my old finance firm was Alaska’s oil fund. They do pretty well for themselves and dole out 2k/year in cash to everyone living there. It’s unsurprisingly a very popular program, though I’m kind of morally opposed to a government function like that.

> though I’m kind of morally opposed to a government function like that.

Yes, it's much better for the government to allow a single person to appropriate all that wealth for themselves. /s

The Norwegian fund is principally for our descendants. The state has a self-imposed limit on how much of the revenue of the fund can be spent each year, the capital is untouched as far as I know. Also what money is spent is spent by the state rather than by individuals; no guarantee that it will be spent wisely of course but a greater degree of likelihood that it will be spent on something of lasting value perhaps.

The Alaska Permanent Fund is unsurprisingly popular. To the extent that the state recently voted to cut essential services rather than to cut handouts from the fund:

https://www.nytimes.com/2019/07/07/us/alaska-university-budg...

The amount varies from year to year. It's mostly been less than 2k.

https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Annual_i...

I agree and here is a different perspective from history,. Venezuela had 4th highest GDP per capita in 1950. It's incredible how bad they managed since then. Source http://money.visualcapitalist.com/richer-poorer-venezuela-ec...

One piece of history that I think marks the start of Venezuela's free fall, it's the pardon that the then-president Caldera granted to the leader of a military coup, Chávez. That allowed populism and corruption to reign in the country (he won the next elections).

The corruption was there before the military coup. I think the only coup that did not involve prior corruption was the one against Mosaddegh (and still, the country was still corrupted from his predecessor). Also this was probably the coup that finished any hope of peace and democracy in the middle east.

Not many people here probably know who Mosaddegh was. So for context, he speaks of the 1953 CIA backed coup against the iranian elected president Mosaddegh, who nationalized the oil from foreign companys. Which the foreign companys and their governments did not like. But, I am not sure if all would have been peace and harmony without that coup. Sudden oil richness in a very, very poor society, is just very hard to do right.

It’s possible, but since we made it a priority to mess them around for decades, we will never know what would have happened.

Is anybody claiming otherwise? It seems pretty obvious that someone there messed up majorly for a long time.

There are people who for ideological reasons blame all of Venezuela's woes on external factors. Then again, there are some for ideological reasons who claim external factors haven't made things worse than the terrible leadership has made it. Not sure of the ratio of blame that should go to internal leadership versus external factors but it does seem like poor leadership has made it easier for external forces to worsen the situation.

There is also the fact that, with the American playbook for regime change being what it is, there is quite a lot of skepticism about the sudden surge to prominence in the news cycle about the governance woes of a very oil-rich nation, irrespective of how legitimate reports of the mismanagement actually are.

The people who barricaded the Venezuelan embassy when there was an attempted coup against Maduro for one.

There is a big ideological drive to show that communism works, and as such all the problems Venezuela faces are just imperialism at work (In their argument).

There's a bigger ideological drive to show that taking US oil assets in the country and diverting the funds toward social programs was a dire mistake.

And on the other side there are lots of people trying to show how it all does not work, while ignoring that the super power number one does all they can, except open military actions, to make it not work.

In other words, to me the situation in Venezuela does not prove anything, in terms of political ideology.

Venezuela has less public ownership of resources than even the US. To say that they are 'communist' is an ideological farce.

People are opposed to regime change because the US government has a long history of destabilizing foreign governments in deference to US capital interests. It's unlikely their motivations are just, especially as the people involved were responsible for some of the worst atrocities in Southern American governments in the 50's-90's.

Furthermore, applying economic sanctions hurts the material conditions of poor Venezuelans without significantly affecting the corrupt government. This is evidence the US does not have a strong interest in helping poor Venezuelans, but primarily forcing regime change to a government more amenable to the interests of US oil companies.

If the US was truly a force for good, wouldn't we see the same pressure on the Bolsonaro regime in Brazil? The story is similar, a corrupt rise to power achieve through unjustly jailing political opponents. If you doubt this, read Glenn Greenwald's reporting in The Intercept.

Norway is an exception. A mix of corruption and foreign intervention that supports corruption is the root cause for countries like Venezuela.

It’s not so much the amount that will prove them successful, but the length. Over time will it revert to the mean?

Not the single biggest, but the only and quite unique piece of evidence.

Not Leadership but corruption

Of course it was avoidable. Just should have kept capitalism.

How does capitalism decide who gets extraction rights for natural resources?

The discoverer? And then whoever wants to buy the extraction rights from her at the market price? What’s even the problem?

So whoever discovers something automatically owns it? What if I discover an oil field that continues under someone else's land - is it mine because I discovered it? Do I get to take all the oil as long as the extraction equipment is only on my land? If my extraction activities lower the value of their land, do I owe them damages?

My point is not to actually get into these details but to point out that capitalism does not give the answers. Capitalism can only start after you have nailed down the rules about how public and private property work.

I agree. Land rights are more complicated than that, indeed.

Because buying extraction rights from corrupt politicians who happen to be in the declared backyard of the empire number one, famous for covert operations .. might have not much to do with "fair capitalism" and investment..