Chavez at it again
Chavez remains committed to taking what is not his or Venezuela’s as you can see from this article from the AP news service.  While Venezuela may “compensate” the oil companies for their shares, the oil companies’ losses of majority interest will not be compensated.Â
Moving entitlement protection from property and contract law where exchanges are voluntary to tort law, where exchanges are not voluntary, as is the case with nationalizations, when it is only a matter of “might makes right,” should be viewed with a great deal of skepticism (see my earlier post on the Banning of Butts in the Bayou State). Of couse, the real effect, that Chavez does not recognize, is that foreign investment in Venezuela and other Latin American countries where Chavez’s populism is likely to encourage nationalization, is likely to come to a screecthing halt. And many of these countries are unlikely to be able to support the same level of investment through their own generated funds through savings, as the poor have a difficult time saving and investing.
Expect a disaster.
MC
February 27th, 2007 at 11:46 pm
I agree that the other Latin American countries where Chavez’s populism encourages nationalization is eventually going to come to a screecthing halt. Chavez just wants the american companies out because he doesn’t agree with our government right now. Chavez knows that despite that fact we obtain oil from the middle east, we also obtain a lot of oil from Venezuela. Chavez is going to have to invest money in all of these oil companies but who is to say they are going to stay now that he wants to control 60% in the oil projects. I am just wondering where Chavez is going to come up with all this money.