02 | September | 2025 | Far Outliers

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 82-85:

It was dawn in the tiny fishing village of Cabimas when the earth started to shake on December 14, 1922. A roaring explosion followed the tremor, and a furious rainstorm of thick oil fell over the straw-roof shacks and dirt roads. The black rain went on for days.

The Barroso II oil field’s spectacular blowout spewed one million barrels of oil in a little over a week. It was then the world’s biggest known oil field, tapped just in time to feed a global economy fast converting from coal to fuel oil. The black rainstorm signaled a new era for one of South America’s poorest countries. Exploration and production would spread throughout the sparsely populated country as American roughnecks turned “béisbol” into a national pastime and pound cake into a local delight, “ponqué.” Everything from the most trivial to the most consequential would be transformed, starting with the economy.

Ever since Barroso II, three numbers have dominated many conversations seeking to explain the country’s destiny: barrels produced per day, their price in the global market, divided by the country’s population.

During the heyday of 1974, oil production reached 3.4 million barrels per day, the global price of crude oil stood at US$48 in 2019 dollars, and the country had thirteen million people. By 2019, the price of crude stood at US$50, production had bottomed out at 877,000 barrels per day, and the population had reached 28 million. By this somewhat arbitrary measure, the per capita production value in 1974 was US$4,582 for every Venezuelan. By 2019, it was US$572.

For many, this simple math tells their country’s story, a kabbala of its miseries and triumphs. The Chavista leadership of the late 2010s prayed the accelerating emigration would tilt the simple formula, or at least its trendline, in their favor. If enough people left the country, there would be fewer mouths to feed and able bodies to revolt, even on declining oil revenue. No one imagined, much less understood, the extent to which millions and millions of Venezuelans walking away from their country would answer the wildest wishes of those in power.

And yet, the long history of social and geographical conflict means that even a positive balance between oil production, international prices, and population cannot always guarantee peace.

The revolt leading to the coup d’état against General Pérez Jiménez in 1958, and Commander Chávez’s attempted coup in 1992, both took place when the global price of oil, and production capabilities, had not suffered significant downward pressures. Chavez’s coup came weeks after the end of 1991 when the economy had clocked the world’s fastest growth at 9.73%.

The dynamics behind the 1958 coup are illuminating. Three decades after Barroso II, the country was experiencing massive urban migration of the rural poor to the cities and unprecedented European and South American immigration. A new professional middle class and rising prosperity in many regional capitals had contributed much complexity to the country’s politics. General Pérez Jiménez never understood that the way he was brokering the oil wealth was out of step with a fast-changing Venezuela. The emerging actors demanded a new accommodation. By January 1958, a broad coalition overthrew the last general to rule the country in the 20th century.

Eleven months later, Acción Democrática’s Rómulo Betancourt set out to build a novel liberal state designed to broaden the oil treasure’s distribution. The new democracy would ensure the old rural poor, in the countryside or the big cities, received a much higher share of the bounty. The far from perfect but more independent unions, courtrooms, congressional chambers, political parties, and professional and trade associations allowed for a deeper and broader distribution of resources across constituencies throughout the country. Betancourt was determined to erase old ethnic and racial fractures but also paid attention to the growing expectations of more assertive regions, a nascent immigrant commercial class, and new industrial and financial interests. A more sophisticated accommodation to manage the oil bounty made sense for a country that had become too complex for the iron hand of a highland general and the machinations and prejudices of his conservative cronies.

While the construction of Betancourt’s gigantic new state would be very visible, a key component underpinning the country’s society since the 1930s would remain unmentioned: the currency’s value.

The bolivar’s high value relative to the dollar had been a political and cultural demand of economic elites and the nascent middle class as far back as the late 1920s. As oil revenues increased in the aftermath of President Franklin Roosevelt’s 1934 dollar devaluation, the bolivar emerged as one of the strongest currencies in the world. The country’s unique history and the realities of an oil economy developed on the back of a poor and virtually empty geography had turned the overvalued currency into a true religion. The generals and their conservative allies, and later Betancourt along with his socialist and liberal supporters, both built societies on the foundation of a strong bolivar. Their very different answers to the social, ethnic, and racial fractures that had torn the country apart for four hundred years had a shared, if silent, premise in the long-running currency consensus.

However, as often happens to societies whose good (and bad) fortunes depend on a single commodity, oil and its ability to prop up the currency became a fixed reference in the nation’s identity and a conveniently forgotten factor in its destiny. The connections tying modern universities, great theater, sophisticated newspapers, vibrant public debate, and transformational strides in nutrition, health, and education to the price of oil and the overvalued bolivar were always fuzzy.

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 71-73:

The broader cultural context of Chávez’s offensive was a new emphasis on the notion of being a “real” Venezuelan. Building on 19th-century tropes, Chávez kept talking about a connection to the land, the music, food, and customs that were thought to be “pure.” These were the opposite of the culture espoused by the “cosmopolitan” classes with roots elsewhere. One of Chávez’s favorite words came to be “endogenous,” or that which comes from the inside, to refer to everything he and his movement stood for: endogenous development, endogenous economy, endogenous culture and film, and by direct implication, endogenous power. Those who had come from somewhere else, and descended from them, or looked to those countries for their inspiration or education, were in this sense not true Venezuelans. Their blood was not tied to the land.

As in prior purges based on ethnicity and religion throughout history, the most important thing was to have a list: a piece of paper with the names of those who were not “real” Venezuelans.

The opportunity to create such a comprehensive classification came about when 1.5 million signatures were collected to force a recall vote against the president in early 2004. While people signed the petition in the hope of bringing about political change by removing the president, the electoral authority leaked the data file containing the names, national ID numbers, and addresses of every single person opposed to Chávez who had signed. A ruling party congressman then uploaded every record to a public website. That is when the ethnic purge went fully digital. Many on the list did not descend from Creoles, or 19th-century German families, or 20th-century immigrants. No existing database can empirically determine the precise ancestry of those signing the petition, but it seems clear that a vast majority had parents and grandparents who came from somewhere else.

The infamous “Tascón List,” with its millions of names, was a classic example of political persecution. It became a virtual and universally accessible blacklist. Entire government agencies and ministries were purged, as were employees of government-owned banks, insurance companies, and other enterprises. Government contractors, scientists, college professors, people in highly technical positions, beneficiaries of government services, and anyone who had a connection to the state, was summarily dismissed, cut off, and otherwise vanished from access to government funds. The systematic persecution and disfranchisement of those who wanted Chávez out simply added to the growing number of those who, not wanted in their own country, would choose to migrate.

The 1.5 million signatures triggered a full recall referendum, which Chávez would win with 58% of the vote. The election’s fairness was questioned by some, but the elections were deemed impartial by former US President Carter, who personally oversaw the process.

Between strong political and electoral victories, the wholesale firings from the oil company, systematic purges from all state functions, and the beginning of an exodus of Chávez’s most educated opponents, the Chavista ethnic identity project was beginning to change the political landscape, and perhaps the electoral one as well.