Entrepreneurs and the lesson of dictatorship

By Luis Manuel Aguana

After the economic measures announced, the Maduro regime returned to their own way of trying to tie down food prices. After removing 5 zeros from the amounts of all the economically active population's bank accounts, instead of taking measures that directly affected the causes of the blistering hyperinflation that plagues us, the regime went to control prices. In other words, back to the beginning of the cycle. They want the private sector to pay an unpayable minimum wage after 90 days, which the regime says it will pay in the beginning, but which companies cannot pay because they do not have a money-making machine.

It reminded me of the famous joke about the reaction of a capitalist, a fascist and a communist to the infidelity of their wives. The first one beats her, the second one kills her, but the third one protests in front of the United States Embassy. And that is what the communists who run the economy of Nicolas Maduro are doing, they continue to blame the "economic war" of the empire. They want to make the population believe that putting supermarket managers in prison or forcing production entrepreneurs to put up a forced price will control inflation.

Meanwhile, for 90 days, Venezuelans will have the illusion of having "increased" their minimum wage from a single blow to $30, courtesy of the clowns of the economic magic circus of the Maduro regime. They have already begun badly by saying that they will pay pensions in three parts starting in September and that companies will have to register their payrolls so that the difference between the current minimum wage and the new one (180 million Bolívares fuertes or 1800 million Bolívares soberanos) could be paid by the regime through the Homeland Card during the first 90 days. It is clear that in that time the employers will be doing the math to get rid of the employees or close their businesses. If nothing else is done, it won't be long before those zeros grow back.

"In the majority of the work groups established between the national government and businessmen, for the discussion of prices of 25 products of the basic basket, no agreements were reached, according to the president of Fedecámaras, Carlos Larrazábal. (see Panorama in Spanish, El Presidente de Fedecámaras aseguró que la mayoría de precios de productos no fueron acordados, en https://www.panorama.com.ve/politicayeconomia/Presidente-Fedecamaras-aseguro-que-la-mayoria-de-precios-de-productos-no-fueron-acordados-20180823-0026.html).

But the prices not yet agreed upon were published in Resolution No. VSE-001-2018 of the Extraordinary Official Gazette No. 6,397 dated Tuesday, August 21 (see in Spanish Contrapunto, Se acabo la espera: los 25 productos con precios acordados en bolívares soberanos, en

According to this note, very important companies such as Arroz Cristal, La Lucha, Industrias Diana, Coposa, Central Azucarero El Palmar, Pastas Capri, Pastas Sindoni, Corporación Venezolana de Café, Cargill de Venezuela and Alimentos Polar agreed with the regime, even against the cost structure, as the President of Fedecámaras suggested. Are these important businessmen accepting the imposition of the regime by assuming in their cost structure a difference that would destroy their companies, or are they playing into Maduro's hands by accepting an inflationary subsidy for food production? In either case the situation is perverse and very dangerous.

This puts us here in a complex and at the same time very delicate discussion: To what extent are the businessmen supporting the regime and what is the limit that can be reached to give continuity to a situation that is impossible to sustain? There is no one like entrepreneurs to know that in a communist regime there is no chance of the company surviving. Private property has no place in this form of visualizing economic relations between people. So why give the regime oxygen to keep prolonging people's suffering? They have expropriated, humiliated and ruined the private sector, and destroyed more than half of this country's GDP in 5 years. To continue producing with what is left so that these people can continue to fortify themselves with the food of the population, because they are the ones who have brutally increased the price of the food distribution chain through their mafias, is nothing less than suicidal.

Some of them may argue that there are threats such as expropriations or jail for businessmen or that it is necessary to continue producing because there is a great need in Venezuela. All this is true, but all these reasons could have been valid at the beginning of this tragedy, which has now reached unsustainable levels. Today we are already in a life dilemma in which we must decide if it is them or us. In this there is an extraordinary ethical and moral component that every entrepreneur must weigh up well within his or her own situation. If you don't lose it today, you will surely lose it very soon tomorrow.

Franklin Brito went on an indeclinable hunger strike that cost him his life because his farm was expropriated and he did not give in to the bribes offered by the regime (see in Spanish El Estímulo, Franklin Brito, la inmortalidad cumple 7 años
http://elestimulo.com/climax/franklin-brito-la-inmortalidad-cumple-siete-anos/). In the same way, in a little-known facet of entrepreneurship, former Ambassador Diego Arria's production hacienda "Las Carolinas" was also expropriated because of his open opposition to the regime. This place produced "2,500 liters of milk daily, has about 250 head of cattle, has about 80 hectares of crops and generates 30 direct jobs" (see in Spanish, Confiscan hacienda a crítico de Chávez, en https://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article2004973.html). And so, the more than 200,000 companies that have vanished in the last 20 years are too scandalous a cemetery for entrepreneurs to look the other way. We have all arrived at the arrival point, and the remaining entrepreneurs, who sooner or later will be forced to face the situation, cannot escape from this.

It is not the first time that entrepreneurs have believed that they can survive through a dictatorship. In an excellent work that relates the business situation in Spain during the Franco era, it is highlighted: "Those who thought that the dictatorship would bring the desired order to business, found themselves with an authoritarian, protective, one-party, interventionist state, willing to sacrifice the development and welfare of the population for the sake of its consolidation. The economic policy was designed by a military government, which reserved a capacity for intervention superior to that of previous stages, transforming the traditional link between the business world and the political world..." (see in Spanish, Empresarios y política en la dictadura de Franco
https://www.jstor.org/stable/41325087, Dictadura y Empresarios, pág. 149). Nothing different is happening in Venezuela with this dictatorship, even worse, because in a communist system the days of the private sector are counted.

But it will not be until business people "learn the lesson of dictatorship" that things begin to change, as they did in 1958. This was stated by former President Don Rómulo Betancourt in a historic interview by Carlos Rangel and Sofía Imber in their extraordinary morning program, " Buenos Días ", in 1978. Don Rómulo said:"...And also something very important: in addition to the workers' forces that had always been within his union militantly fighting for democracy, in 1958 there was an awareness of the business sector. Then the business sector, which had already learned the hard lessons of the 10 years of dictatorship, cooperated in the formation of this great democratic front. The Armed Forces had also learned the lesson of the dictatorship. A dictatorship that spoke on behalf of the Armed Forces but from which the dictator benefited, a small gang of unconditional people in uniform and a vast influx of civilians, contractors, lawyers, engineers, and the government of the Armed Forces was a government of the dictator and a gang of opportunists..." (see in Spanish, Sofia Imber y Carlos Rangel entrevistan a Rómulo Betancourt, en https://youtu.be/_ZlZm5Uxg00 min 10:30).

When the real businessmen, those who put their principles before their pockets, learn that lesson from the dictatorship', by separating the wheat from the chaff, and by differentiating themselves completely from the vast influx of civilians, contractors' and the clique of profiteers' of the regime that Betancourt mentioned, they will be able to take a step forward in the definitive recovery of freedom in Venezuela. Without their help, the regime will never be able to survive....

Caracas, August 23, 2018

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