Once again today, the Venezuelan government held a press conference in which major economic announcements were expected, specifically, related to the foreign exchange system. Unsurprisingly to anyone paying close attention to Venezuela since Hugo Chávez died in early 2013, the big announcements amounted to little more than a renaming of the existing system of extensive and complicated capital controls. This included some minor tweaks and a small devaluation and a new “free” rate where people are allowed to sell as many dollars as they want, but limited to buying $300 at a time.
Many people are interpreting this as proof that either Nicolás Maduro and those advising him have no idea what they’re doing or that they’re being overruled by factions within chavismo that benefit from the distortions caused by the current forex system. Outside of the hardcore chavista intelligentsia–who have spent much of the last year attacking Maduro from the left–, there is little consideration to the possibility that Maduro and his advisors are genuinely committed ideologically to these policies and believe that the orthodox reforms most people expect them to implement sooner or later will be counterproductive. This is not to discount the fact that there are definitely powerful members of the government who benefit personally from the current system and are fighting to keep it for reason of personal gain. Nor is it to argue that the current course has any real chance of creating a sustainable, productive Venezuelan economy. It is simply to argue that it’s worth considering it as a possible motivation for Maduro’s decision-making since it could inform how his government behaves in the future.
In his book A Failed Emprie: The Soviet Union in the Cold War from Stalin to Gorbachev, Vladislav M. Zubok notes that one of the most striking things in the declassified minutes from Politburo meetings all throughout the Cold War is the degree to which the leadership in the Soviet Union genuinely believed in Soviet ideology and how reluctant they were to abandon or even modify it. This includes even Gorbachev who was genuinely committed to reforming the Soviet to better fulfill its founding principles and ideologies, not to introduce proto-capitalism.
Similarly Fidel Castro is arguably much more ideological–and consequently, less cynical–than many give him credit for. For example, once the economy had stabilized following the collapse of the Soviet Union, he began rolling back many of the limited market reforms that had been implemented during the Special Period. Moreover, during the 1970s, Cuba maintained its support of lefitst insurgencies in Latin America and Africa, even though it alienated him from the Soviet Union, upon whose protection his government depended.
Of course, Nicolás Maduro and his advisors being ideologically committed does not preclude them from also being incompetent. Nor does any amount of ideological commitment change the simple reality that people respond to incentives and that the Venezuelan political economy creates countless incentives to exploit arbitrage opportunities and few incentives to produce goods and services. Nonetheless, why Maduro is making the decisions he makes matters, both for the opposition and others, because it informs how he might react to new stages of Venezuela’s economic crisis. A Maduro who is ideologically committed might react differently than one who is beholden to the interests of the enchufados or one who is simply too stupid to think of any new course of action.