Between 3 – 8 July 2017, the Institute of Economic Affairs and the Adam Smith Institute jointly held Freedom Week, a series of seminars aimed at students with an interest in classical liberalism, at St Catharine’s College, Cambridge. The IEA’s Dr Kristian Niemietz gave a talk on the ongoing appeal of socialism. The article below is based on his presentation.


Continued from Part 2


The socialism of the Soviet Union was REAL socialism, until it retroactively became un-real in the 1950s. The socialism of Mao’s China was REAL socialism, until it retroactively became un-real in the mid-1970s. For a more bespoke circle of fans, the socialism of the GDR was REAL socialism, until it retroactively became un-real once the Berlin Wall came tumbling down.

And that was it, for a while. Throughout the 1990s and early 2000s, socialists stuck to the REAL-socialism-has-never-existed mantra. They had too. Their erstwhile utopias had all collapsed, and the few that limped on were thoroughly discredited. But in the mid-2000s, they discovered a new socialist utopia: Venezuela. Praising Chavismo – or ‘Socialism of the 21st Century’, as those in the know would call it – became extremely fashionable in Western countries.

Here’s a few examples. About five years ago, Owen Jones went on a pilgrimage to Venezuela, and came back saying that

“Venezuela is an inspiration to the world, it really does show that there is an alternative.”

And a bit later:

“Chávez […] is the first Venezuelan president to care about the poor. […] Under Chávez, the poor have become a political power that cannot be ignored […] [H]e has proved it is possible to […] [break] with neo-liberal dogma.”

Jones was particularly keen to emphasise that Chavismo was not just a huge success story in its own right, but a model that we should all learn from:

“It’s so important to me that we don’t look at Latin America as something that’s just happening elsewhere, but as something which gives us all hope”.

This was echoed by his then colleague Seumas Milne, who also went on a pilgrimage to Caracas:

 “Venezuela’s […] success in bringing resources under public control offer lessons to anyone interested in social justice and new forms of socialist politics in the rest of the world. […] Venezuela and its Latin American allies have demonstrated that it’s no longer necessary to accept a failed economic model, as many social democrats in Europe still do”.

After Chávez’s re-election in 2012, the General Secretary of Unite the Union, Len McCluskey, said:

“We welcome this […] clear endorsement of Hugo Chávez’s progressive social policies. Venezuela shows that governments that put the needs of ordinary working people first can expect strong support at the ballot box. […] Europe might want to learn the obvious lessons from Venezuela”

After Hugo Chávez’s death in 2013, the General Secretary of the Communication Workers Union (CWU), Bill Hayes, said:

“Hugo Chávez helped to inspire a new socialism for the 21st century and provided the spark that lit up the whole South American continent”.

The General Secretary of UNISON, David Prentis, believed that:

“Hugo Chávez will be remembered for his continuous struggle to raise up the poor, his commitment to social justice and his dedication to fairness and equality”.

The General Secretary of the Trade Union Congress (TUC), Frances O’Grady, added:

“Hugo Chávez saw the implementation of an impressive and highly progressive programme, lifting millions out of poverty”.

Chavez’s biggest fan, of course, was Jeremy Corbyn. Around the same time, Corbyn said at a pro-Chavez rally in London:

“Chavez […] showed us that there is a different, and a better way of doing things. It’s called socialism […] [I]n his death, we will march on, to that better, just, peaceful and hopeful world”

This was the peak of Venezuelamania. Hugo Chávez had, in one important sense, been extremely lucky. Literally from the moment he took office, oil prices were rising steadily, eventually reaching the highest levels ever recorded in history. Venezuela, a petrodollar economy, was awash with oil money, and Chávez couldn’t believe his luck. He spent every penny that came his way, and then some.

What can’t last, won’t last. When oil prices finally fell back to a level more in line with the historic norm, Venezuela’s economy imploded. The socialist miracle had been built on sand.

At that point, most left-wingers just stopped mentioning Venezuela altogether. The country just dropped off the map. One of the exceptions was Corbyn. Two years ago, Corbyn still said:

“When we celebrate – and it is a cause for celebration – the achievements of Venezuela, in jobs, in housing, in health, in education, but above all, its role in the whole world as a completely different place, then we do that because we recognise what they have achieved, and how they’re trying to achieve it”.

A few weeks later, Corbyn wrote, in an article for his own website:

“[H]istory is being played out to its fullest extent in Venezuela, where the Bolivarian revolution is in full swing and is providing inspiration across a whole continent. […] Venezuela is seriously conquering poverty by emphatically rejecting […] Neo Liberal policies […]

Success for radical policies in Venezuela is being achieved by providing for the poorest, liberating resources, but above all by popular education and involvement. As with Cuba the threat to the USA by Venezuela is not military […] It is far more insidious, a threat by example of what social justice can achieve.”

A ‘threat by example’ it has indeed become, albeit not quite in the way Corbyn had meant it.

In the meantime, the situation has become so bad that even Corbyn no longer mentions Venezuela. The article I just mentioned has been deleted; I had to track it via the Wayback Machine, which is a digital archive that stores deleted internet content.

I told you about experiments in REAL socialism becoming retroactively un-real when they become an embarrassment for socialists. Think of a science fiction movie with multiple, parallel timelines, and people moving between them, like Terminator Genisys. That’s how socialism works. Whenever a country goes socialist, two parallel timelines are being created. On Timeline 1, it is REAL socialism. On Timeline 2, it is not REAL socialism. It looks like socialism, but it is really just state capitalism, or whatever. As long as the experiment seems to work, we are on Timeline 1. As soon as it fails, we all move collectively to Timeline 2, where the experiment in question was never socialist.

This is happening now, because of Venezuela’s collapse. We are currently in the process of moving from Timeline 1 to Timeline 2. We’re not there yet. We’re in a confusing interim stage between the timelines. Venezuela is no longer REAL socialism, but we are not yet at the stage where it was never socialist in the first place. But we’re getting there.

Take Noam Chomsky, the archetype of the Western intellectual (and in my view, a summary of everything that’s wrong with Western intellectuals). Eight years ago, Chomsky said:

“[W]hat’s so exciting about at last visiting Venezuela is that I can see how a better world is being created […] The transformations that Venezuela is making toward the creation of another socio-economic model could have a global impact”.

Chomsky now says:

“I never described Chavez’s state capitalist government as ‘socialist’ or even hinted at such an absurdity. It was quite remote from socialism. Private capitalism remained […] Capitalists were free to undermine the economy in all sorts of ways, like massive export of capital.”

That’s exactly what I’m talking about. This is REAL socialism, becoming retroactively un-real. This is the movement from Timeline 1 to Timeline 2. This is the withdrawal of the certificate of authenticity, but with retroactive effect. It’s not that a revolution has been ‘betrayed’. It’s not that a country is socialist in the beginning, and then moves away from REAL socialism. No: once we’ve arrived on Timeline 2, the country was never socialist in the first place. On Timeline 2, calling it ‘socialist’ is a straw man, a stick which neoliberals like me use to beat the noble ideal of socialism.

Thus, the two Chosmky quotes are not in conflict. It’s just that the first quote is from Timeline 1, and the second one from Timeline 2. Likewise, there’s nothing dodgy about Corbyn et al deleting their old pro-Venezuela articles. Rather, these articles belong to Timeline 1, which we’re leaving behind. We’re moving to a timeline where Venezuela was never socialist, so they cannot have written those articles. This is the equivalent of the Arnold-vs-Arnold fight scene in Terminator Genisys, in which Arnold Schwarzenegger fights against his younger self, the Schwarzenegger of the 1980s. Young Arnold has just moved between timelines, and landed on the timeline of Old Arnold – and they can’t both be there.

That’s the deeper meaning behind the old adage that REAL socialism has never been tried. Of course it hasn’t. And it never will. Because every socialist experiment eventually collapses, and every socialist experiments becomes retroactively un-real as soon as it does.


Head of Health and Welfare

Dr Kristian Niemietz joined the IEA in 2008 as Poverty Research Fellow, becoming its Senior Research Fellow in 2013 and Head of Health and Welfare in 2015. Kristian is also a Fellow of the Age Endeavour Fellowship. He studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). In 2013, he completed a PhD in Political Economy at King’s College London. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and at King's College London, where he taught Economics throughout his postgraduate studies. He is a regular contributor to various journals in the UK, Germany and Switzerland.

2 thoughts on ““But that wasn’t REAL socialism!” (Part 3: Venezuela)”

  1. Posted 06/08/2017 at 03:08 | Permalink

    Brilliant analysis. I remember working with a guy in the late 60’s who was a Trotskyist and he kept telling me that USSR was not socialist but state capitalist. Your analysis helps me clear my thoughts on this and I cannot agree more with what you say.

  2. Posted 07/08/2017 at 07:55 | Permalink

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