Monthly Archives: September 2025

by Joel | 13 September 2025 · 7:20 am

Afonso de Albuquerque vs. Ormuz

From Conquerors: How Portugal Forged the First Global Empire, by Roger Crowley (Random House, 2015), Kindle p. 173:

That Albuquerque possessed an intemperate streak was becoming increasingly apparent, not just to the hapless Omanis but also to his own captains. It was usual for the captain-major to consult with his ship commanders and, often, to be subject to a vote of the whole group. Albuquerque, intelligent, impatient, and possessed of an unshakable belief in his own abilities, had no such tact or cooperative spirit. The captains had been nominally informed at the start of the Omani expedition, but as the weeks wore on the relationship became strained. By mid-September they were inside the mouth of the Persian Gulf, increasingly distant from the key task to which they had been assigned: blocking the mouth of the Red Sea. The drive up the Arabian coast had one clear destination in Albuquerque’s mind: the island city of Ormuz, a small nugget of parched rock anchored offshore that was the axis of all Gulf traffic between Persia and the Indian Ocean. It was an immensely wealthy trading place—the great Arab traveler Ibn Battuta had found it “a fine large city with magnificent bazaars” and tall handsome houses. When the Chinese star fleet had called, they’d declared “the people of the country…very rich….There are no poor families.” It controlled the famed pearl fisheries of the Persian Gulf and dispatched large numbers of Arabian horses to meet an insatiable demand among the warring empires of continental India. “If the world were a ring, then Ormuz would be the jewel in it,” ran the Persian proverb. Albuquerque was well aware of the city’s reputation and strategic worth.

Aggressive action against Ormuz seems to have formed no part of his instructions from King Manuel to “establish treaties.” The harbor was thronged with merchant ships when Albuquerque arrived, but he proceeded in customary style. He refused all gifts from the king’s messengers; his reply was simple: become vassals of the Portuguese crown or see your city destroyed. The chief vizier, Hwaga Ata, concluded that Albuquerque, with just six ships, was a seriously deluded man, but on the morning of September 27, 1507, in a hubbub of noise, Portuguese bronze cannons again outgunned a far larger Muslim fleet. The vizier quickly sued for peace, accepted Manuel as his lord, and agreed to payment of a hefty annual tribute.

Albuquerque saw the hand of the Christian God at work in the victory.

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Filed under Arabia, economics, Iran, migration, military, nationalism, Portugal, religion, war

by Joel | 12 September 2025 · 5:07 pm

Venezuela’s Malaria Battle

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 241-243:

Chávez, Chavismo, and its intellectual supporters in Venezuela and abroad, had argued since 2004 that the old liberal state could not produce people who cared for the well-being of the majority. The “representative” governments from the 20th century had not been able to deliver for all. But if there is an area where the liberal state was able to create long-lasting institutions with veritable results, it was health care.

The first nationwide, publicly funded efforts to eradicate malaria started during Rómulo Betancourt’s first government in 1945. The program had begun under the old generals in the mid-1930s. Dutch, British, and American oil companies had been active in the eradication of the disease in their areas of influence. But Betancourt’s social priorities and taxes on oil companies provided a new impetus. The efforts led by Dr. Arnoldo Gabaldón started with a massive campaign to eradicate mosquitoes in malaria zones. Within three to five years malaria had disappeared from the areas where the infecting mosquito predominated, although the WHO would not certify the disease had been eradicated from the country. Betancourt and his party would be thrown out by a coup in 1948, only to return to power by February of 1959. One of his first acts the second-time around was to name Dr. Arnoldo Gabaldón as Health Minister. The renewed emphasis and funding would officially free the country of malaria by 1961. Gabaldón’s work did not stop as efforts to build a robust central health authority continued for a decade. Critically, his lifework had been dedicated to getting the academic and practical experience necessary to build such an organization.

Gabaldón had started work as an assistant at the Ministry of Health in 1928, when generals still ruled the country. This gave him an early acquaintance with the ins and outs of the health bureaucracy across the country. He then studied at the German Institute of Naval and Tropical Diseases and the Italian Experimental Station for the Antimalarial Battle, before returning to Venezuela in 1932. He received a health science doctorate from Johns Hopkins University in 1935 through the Rockefeller Foundation and interned at Rockefeller University in New York City.

Upon returning to Venezuela, he joined the Ministry once again. At that time, fighting malaria was the country’s number one priority. By 1945 no pathogen, including the influenza virus that caused the 1918 pandemic, caused more deaths than malaria in Venezuela. The population had declined between 1891 and 1920 because of the disease. The historical devastation caused by malaria no doubt contributed to the zeal with which a generation of reformers fought a tireless battle against it.

First in his front-line role eradicating malaria, and then as the builder of a first-class health ministry and epidemiology network, Gabaldón delivered the most enduring results in the history of Venezuelan health care. Over three decades he dedicated himself to reforming, modernizing, and growing an existing, prior organization. The deep differences between Betancourt’s perspective and that of the military governments he had overturned had no real impact on Gabaldón’s work. His formula of achieving scale through incremental reforms, long-term training of middle cadres, deploying compliance systems, and creating strong legal frameworks, continued until the 1970s. Gabaldón was able to defeat every health challenge he met, to international acclaim. The epidemiology systems he created prevented the return of any serious epidemic for more than forty years, until everything he had built was dismantled.

Gabaldón’s legacy was overturned in the name of the people’s originary wisdom and the virtues of intuitive decision-making in health matters. Yet, no one suffered more than those in whose name the health sector was destroyed. By 2017, over a decade into the Chavista dismantling of the liberal state, more than 400,000 Venezuelans had been infected by malaria. This increase amounted to 84% of the rise in malaria cases between 2010 and 2017 around the world.

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Filed under democracy, disease, education, malaria, nationalism, Venezuela

by Joel | 11 September 2025 · 6:15 pm

Venezuela’s Oil Industry Makeover

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 230-233:

Nationalizing and running government-owned enterprises had been perfected by socialist governments for one hundred years. From the examples in France and Germany, to the more recent profitable state ventures in China and Vietnam, there were many successful formulas to choose from. In Venezuela, participatory identity politics drove an entirely different agenda.

This story has been chronicled in the book Comandante, a first-person account by the Guardian’s Caracas correspondent Rory Carroll. Published in 2013, the book provides a unique view of events unfolding between 2004 and 2012, the years before Chávez died.

In one chapter Carroll describes a visit to Ciudad Guayana, the place where every Venezuelan government since the late 1960s had invested in the promise of a non-oil economy based on hydroelectric power, ore, bauxite, gold, and diamond mining. Ciudad Guayana would become tragically violent by the 2010s, and already bore the hallmarks of squalor and massive de-industrialization. At the city’s aluminum plants, in the hands of new worker-managers, everything had collapsed well before Chávez’s death.

“Political managers from Caracas with no background in industry. Ideological schools set up in factories. Investment abandoned, maintenance skimped, machinery cannibalized. A catalog of grievances detailing blunders, looting, and broken promises. Venalum, they said, had at a time stopped exporting to the United States to vainly seek ‘ideologically friendlier’ markets in Africa and South America. After months of stockpiling, aluminum managers returned to US buyers, but then the market had crashed, losing the company millions. To curry favors with Miraflores [the presidential palace in Caracas A.N.], another company imported trucks from Belarus, Chávez’s European ally, but the cabins were too high for the region’s twisting paths, terrifying drivers. The trucks were abandoned. Managers at another factory halted production and sold the company’s entire stock before disappearing with the cash. On and on went the denunciations, one anecdote bleaker than the last. Worst of all, said the union men, was that for the previous years bosses had refused to renew collective agreements, meaning workers lost their rights and half their wages to inflation.”

Carroll’s descriptions show the new priorities in the running of these enterprises. The formal world of management seems to have been trumped by the personal feelings and experiences of the new leaders. Most importantly, by the intuitive sense of their ethnic legacy. In this view a government company’s assets did not represent an opportunity for the country’s future profit. Rather, it was booty stolen from the blood and sweat of centuries. It was treasure. And the fair and right thing to do with treasure was to distribute it.

On a grand scale this was the fate of PDVSA, the state oil company. Because the value of treasure was perceived to be intrinsic to itself, and had no relationship to exploration, extraction, refining, and its sale in global markets, the new Chavista leadership’s priority was its distribution among the people. After 20,000 highly skilled managers and middle managers were fired in the PDVSA purges of 2003, more than 100,000 bona-fide Chavista party members were hired to work at the company. One of the best-run energy companies in the world had become a patronage machine tasked with running myriad welfare programs. The government would distribute the treasure while crude production capabilities degraded, refining capacity dwindled, and entire operational capabilities were destroyed. Actual production sank to about a million barrels a day in 2019, down from the 3.5 million that had been produced the year before Chávez assumed power. It was the lowest level in almost seventy-five years. The trendlines for production into the 2020s looked bleak.

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Filed under democracy, economics, education, energy, industry, Venezuela

by Joel | 7 September 2025 · 1:02 am

From Most Prisoners In Hawaiʻi’s WWII Internment Camp Were Korean, by Kirsten Downey (Honolulu: Civil Beat, 5 September 2025). While hundreds of Japanese-Americans were the first held at Honouliuli, many more Koreans followed:

The Honouliuli internment camp in central O’ahu is best known in Hawaiʻi as the place some 400 Japanese Americans were detained during World War II.

But new research is bringing to light the fact that Koreans were the largest single population group there.

In fact, there were seven times as many Koreans held there as Japanese Americans. Of the 4,000 people held, about 2,700 were Korean, captured elsewhere and brought to Hawaiʻi, and about 400 were Japanese Americans who had been living and working in Hawaiʻi when the war broke out.

The Koreans were prisoners of war who fell into American hands as U.S. forces made their way across Oceania fighting Japanese imperial forces, who had seized lands all across the Pacific, including in China, the Philippines, the Dutch East Indies (now Indonesia) and French Indochina (now Vietnam, Cambodia and Laos), Guam, Hong Kong and Singapore.

Most of the Koreans were in fact doubly prisoners: The Japanese, who had invaded and conquered Korea in the early 1900s, had conscripted many of them against their will. Dragooned by the Japanese, they then ended up American prisoners when the Japanese garrisons fell.

The little-known fact that Koreans made up the lion’s share of residents at the internment camp is becoming the focus of new academic scrutiny and discussion.

Korean Prisoners Identified

Last year, researchers at the University of Hawaiʻi’s Center for Oral History began a new collaboration with the National Park Service to collect accounts from the Korean or Korean American descendants of people who were detained at the camp or who worked there to incorporate this new information into current understanding and historical interpretation.

This work builds on the scholarship of Duk Hee Lee Murabayashi, president of the Korean Immigration Research Institute in Hawaiʻi, and Professor Yong-ho Ch’oe, who taught Korean history at the University of Hawaiʻi and was the author of a book about Korean immigration to Hawaiʻi called “From the Land of Hibiscus: Koreans in Hawai‘i, 1903–1950.” Ch’oe died last year.

Murabayashi has identified the 2,700 Koreans held at Honouliuli, providing their names and home locations, which is helping people identify their deceased relatives.

…

‘A Complete Shock’

The fact that so many Koreans were present in the camp during World War II has come as a surprise even to the Korean community.

“Until a few months ago, I certainly did not know about Koreans who, during World War II, ended up as prisoners of war right here in Hawaiʻi at Honouliuli Internment Camp,” said David Suh, president of the United Korean Association of Hawaiʻi, at a recent talk hosted by the park.

“It came to me as a complete shock,” said Edward Shultz, former director of the Center for Korean Studies at the University of Hawaiʻi and the immediate past president of the Korean American Foundation.

…

As the war progressed and American forces began advancing on Japanese-controlled strongholds, they took a number of Koreans into custody as prisoners of war, bringing them to the internment camp at Honouliuli. According to the National Park Service, hundreds arrived after each battle in the Pacific, including from Guam, Peleliu, Tinian and Palau, sometimes intermingled with Japanese prisoners.

Following the 1944 battle in Saipan, the NPS reported, about 350 Koreans arrived, all noncombatants, many with bullet and slash wounds. The bullet wounds came from the American troops, but the Koreans also appeared to have been victims of sword attacks by Japanese, suggesting they suffered systematic abuse.

Relations between the Koreans and the Japanese Americans at the camp became at times so strained that they had to be kept separate from each other, said Professor Alan Rosenfeld, the associate vice president of academic programs and policy at the University of Hawaiʻi, who has spent years studying Honouliuli.

“There are archival incidents of Koreans and Japanese fighting,” said Mary Kunmi Yu Danico, director of the University of Hawaiʻi’s Center for Oral History, who is leading the project to gather oral histories of the descendants of people who lived or worked at the camp.

…

Word began to seep out in Hawaiʻi that Koreans were there, probably because the American military hired some local Korean Americans to serve as translators and guards at the camp.

The first published report that Koreans were living at Honouliuli came in the pages of the Methodist Church bulletin in 1944, according to Murayabushi [Murabayashi!]. Church leaders had apparently been told that many Korean men in their 20s and 30s were being held there, and that they were bored and lonely. The first notice about their existence came when the church asked if anyone had spare musical instruments they would be willing to donate so the men could entertain themselves.

Later, church leaders began organizing an outreach to them, delivering Christmas gifts and arranging to loan them books.

That means there may be people living in Hawaiʻi today who recall those years and those interactions. Murayabushi [Murabayashi!], Danico and Ogura are asking people to come forward to share those memories.

For an earlier blogpost about Korean POWs in WW2, see Koreans, Taiwanese, and Okinawans Among Japanese POWs. See also Origins of Korean POWs in Hawaii, excerpted from an article by the late Yong-ho Ch’oe, mentioned above. Prof. Ch’oe was a fine scholar and a kind gentleman.

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Filed under Hawai'i, Japan, Korea, labor, language, migration, military, nationalism, U.S., war

by Joel | 6 September 2025 · 1:31 am

Bolívar Recalibrates National Identity

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 203-205:

By 1819 Bolívar delivered the justly famous Angostura speech to the second Venezuelan Congress. What he said then laid out a plan based on Boves’ insight into colonial society. For years, the Angostura text has been read as an example of a centralizing Bolívar advocating for a strong state that accommodates patrician institutions like a hereditary House of Lords. The most radical aspect of the speech is seldom mentioned.

Going well beyond what he had written in the Cartagena Manifesto, Bolívar seeks to explain the fragmentation and hatred within the colonial territories. Many decades before Vallenilla Lanz and Uslar Pietri had articulated the fracture at the country’s heart, he already speaks of a society on the verge of falling apart: “The diversity of origin requires an infinitely firm grip, an infinitely delicate tact to manage this heterogenous society whose complicated artifice can be dislocated, divided, and dissolved with the slightest altercation.”

The key phrase is “diversity of origin,” which acknowledged at the very beginning of the 1800s that Venezuela was, at its core, a multi-ethnic and multi-racial society. The explanation goes into considerable detail,

“We must be aware that our people are not Europeans, or North Americans: they’re a composite of Africa and the Americas rather than a product of Europe; even Spain itself is no longer European due to its African blood, its institutions and its character. It is impossible to properly decide to which human family we belong. The largest part of the indigenous population has been annihilated, the European has mixed with those of the Americas and those of Africa, and they have mixed with Indians and with Europeans …”

No one had ever described the facts and uncertainties of ethnic and racial differences in this way. Boves’ de facto solution had been to promote the extermination of all whites. Creole society’s program sought to reenact the colonial caste system. Many ignored the issue and pretended it was not relevant. As the years went by and a battery of constitutions dismantled the caste system’s nominal rules, and later, slavery, most of the country’s intellectual establishment chose to ignore the subject.

The speech’s enduring passage defines the conundrum faced by countries in the Caribbean basin: “our parents, different in origin and blood, are foreigners, and all have visibly different skin: the dissimilarity brings a challenge of the highest order.” In the context of his time, and that of many decades after him, Bolívar proposes a radical solution: “The blood of our fellow citizens is different. Let’s mix it in order to unify it …”

The speech promotes a mixed-race country with a historical dimension and a spiritual path. Boves’ men had lived their day-to-day in a new kind of army: multi-ethnic, horizontal, and devoid of rankings based on skin color or national origin. This had been a revolutionary social experiment. Bolívar wanted a society based on that model and included his ethnic group in the mix.

While the concept of nation proposed at Angostura had nothing to do with the Creole ideals of the older Cartagena Manifesto, Bolívar continued to advocate for a powerful ruler and a centralizing seat of power.

The speech summarizes the late Bolívar’s prescription for the country: fuse all nations and races and ethnicities into a new brown Venezuelan identity and superimpose a powerful central state to combat factionalism and special interests.

Although this was never clearly stated, one hundred years later Rómulo Betancourt founded his political project upon those ideas. Acción Democrática would create a vast and centralized welfare state unimaginable to Bolívar in its scope, reach, and sheer power. And the party and its leaders would work tirelessly to create one nation around the idea of Juan Bimba, a racially mixed John Doe that stood for the average (and ideal) Venezuelan.

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Filed under Africa, democracy, migration, military, nationalism, Spain, Venezuela, war

by Joel | 5 September 2025 · 12:25 am

Spanish American Caste System

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 178-181:

The caste system in Spanish America was the most important, and likely the least understood, organizing principle of colonial society. Contemporary historians, particularly at American universities, have debated for decades how the caste system worked, to what extent its rules were enforced, and how relevant it was to everyday society across Spanish colonies.

No one disputes the extent to which the Venezuelan society of the late 1700s, more than that of any other Spanish American colony, was gripped by a furious battle between Creoles and those of mixed-race over the future of their society. The legacy of violence from battles between Indians and Spanish, and the enforcement of African enslavement, had shaped the Wars of Independence. But underneath the conflicts there was a revolt against the caste system.

The lives of distinct social groups marked by religious and ethnic descent had been tightly regulated for hundreds of years in the Muslim and Christian strongholds of Spain. Muslims born of Arab and Syrian ancestry in the Emirate of Granada had different privileges than Mozarabs (Muslims of Spanish ancestry [no, rather Christians under Muslim rule]), those of Jewish ancestry, or the Slavic or Berber warriors in the employ of Sultan Boabdil. Those rights, regulations, and privileges would change for different social groups in Christian-controlled cities like Avila or Valladolid but were just as rigidly enforced, if not more so. Everywhere in the Iberian Peninsula there were rules determining where different ethnic and religious groups could live, who they could marry, and what kind of work they could do. The Spanish exploration and subsequent invasion of today’s Dominican Republic and Cuba came only a few years after the conquest and occupation of the Emirate of Granada. The fall of the Emirate in 1492 had been followed by the reorganization of the social hierarchies, with Muslims dispossessed of their lands and castles, some enslaved, those Mozarabs that opposed the Spanish punished, and those that had collaborated, and professed Catholicism rewarded. Many of the men arriving in the Caribbean had been the same Extremeño and Castilian soldiers fighting in Granada.

Historians of Spanish America tend to see the caste system in its uniquely European and Catholic sense. In the classic Race Mixture in the History of Latin America, Magnus Mörner argues that castes were “created by transferring to the New World the hierarchic, estate-based, corporative society of late medieval Castile and imposing that society upon a multiracial, colonial situation.” But he forgets how multi-ethnic Spain had been since the Muslim invasion of 711. Something else he fails to mention is the extent to which the Mexicas and the Incas in Peru had perfected their own rigid caste systems.

Tenochtitlan and Cusco were organized on even more fixed social lines than Granada or Avila. Hierarchies of lineage, genealogy, ethnicity, and work ruled much of the lives of every inhabitant. The canal that used to separate today’s Zocalo in Mexico City from the market in Tlatelolco, for example, signaled a completely different set of rights and regulations for the ethnically specific inhabitants of each area. In the Mexica city there were slaves and traders from different nations, a priestly class, a warrior class, an aristocracy, and carefully designated guilds for different types of labor. It was in Mexico City and Cusco, cities built on civilizations based on caste-like groupings, that the Colonial Spanish American imaginary was created, and exported to lesser colonies such as Venezuela.

Equally relevant to this discussion is the speed of change in the ethnic composition of colonies like Venezuela from the 1550s through the early 1800s. In 1503 Queen Isabella I issued a royal proclamation encouraging the Spanish and those of indigenous descent to intermarry. By 1514 intermarriage was fully codified in a Royal Edict. Promoting ethnic diversity was an intuitive choice for a Spanish monarch of the time. It would dilute the power of the former rulers and legitimize the new ones. Previous rulers in different parts of the Iberian Peninsula had taken similar actions for the same reasons over the previous 1,000 years.

Later in the 1500s, kidnapped Africans would be transported in substantial numbers to work as slaves in the Spanish Caribbean, where plantation economies were beginning to thrive. The conquerors’ early ideology of slavery was based on the ancient practice in North Africa—a place that the south of Spain was still culturally tied to. It was not racialist in the way the word is understood today: anyone captured in the Mediterranean Sea by pirates would be routinely sold into slavery well into the 1700s. Miguel de Cervantes, before writing Don Quixote, had been captured on the high seas and sold in a Tunisian market as a slave. Five years later he was able to purchase his freedom and write his famous novel.

That is partly why in Spanish America, as opposed to the British colonies and later the southern United States, it was easier and more culturally accepted for the enslaved of African descent to buy or be granted freedom. Once free, they would establish themselves as free artisans near their former plantations or in the cities.

Ethnic diversity in cities was not only a long legacy of both the Iberian Peninsula and the great pre-Hispanic empires. It was a fact created by the bringing together of people of different races and backgrounds in one place. The new colonial social order even made it possible for people from formerly enemy indigenous nations, and their descendants, to now live in peace near each other.

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Filed under Africa, democracy, economics, Mexico, migration, nationalism, Peru, religion, slavery, Spain, Venezuela

by Joel | 4 September 2025 · 12:02 am

Venezuela’s “Dutch Disease”

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 118-119, 126-128:

The early theorists of Dutch disease studied how real economies, including those with robust consumer markets, reacted to a commodity boom. These writers did not consider what might happen to a small, barely functioning country, which did not even have a modern state in place when the first oil gusher blew out. The existing capital in Venezuela was negligible, which means that other, less measurable, factors came into play.

Arturo Uslar Pietri was the first person to pick up on the cultural strands of Dutch disease well before American academics started modeling the phenomenon. He was a descendant of landowners and had seen first-hand the death of the cocoa and coffee industry upon oil’s arrival. More importantly, he could see what oil was doing to the country as far back as the 1930s and 1940s. In a feat of uncanny prediction, he also foresaw the tragedy of the 2010s.

His brief analysis of the new economy was offered in a now-famous op-ed piece, “Sowing Oil,” published in 1936. For him, conditions were such that the newfound riches “could make Venezuela into an unproductive and lazy country, a giant oil parasite, swimming in a temporary and corrupting abundance, and driven toward an inevitable and imminent catastrophe.”

The main issue, he feared, was that either oil would run out, or that something synthetic would replace it, as had happened to other commodities familiar to South Americans, such as rubber or indigo. His thesis mirrors what the early theorists of Dutch disease would later acknowledge. What the academics ignored but Uslar could sense all around him were the broader, less tangible ways in which oil would permeate and dull Venezuelan society.

Uslar wrote his op-ed to counter the increasingly influential views of Rómulo Betancourt, who thought that oil was, and should be, everything. Alluding to Betancourt, he writes in “Sowing Oil” that having the state focus exclusively on the rent from oil was the “suicidal dream of naive men.” He believed the oil money should be used to develop a vigorous national industry, including modern agriculture.

…

While a lot has been written about how governments wasted oil revenues for decades, Dutch disease was very much a part of the private sector as well. Mid-sized and large companies that, in retrospect, had a real chance of global success, were never able to do anything about those prospects.

The shoe industry born in the Catia neighborhood of Caracas is a perfect example. The know-how of Sicilian and Neapolitan families that had emigrated from the old country to continue their shoe trade in Venezuela could never become globally competitive with a strong bolivar. Their companies were very prosperous for decades because the Ministries of Education and Defense would buy millions of shoes and boots. But the future was bleak without a consumer market big enough for the factories to reach substantial scale. The overvalued bolivar never let them export successfully, and cheap Chinese manufacturing eventually hit them hard. Later, they would be crushed by globally integrated and truly competitive retailers such as Zara.

The degree to which the out of context desarrollista policies failed the country is made evident by comparing two key Venezuelan companies and their Mexican counterparts. As early as 1979, well before NAFTA, Mexico’s Grupo Modelo managed to reinvent their weak and cheap working-class beer Corona into a “cool and light” alternative for American “Yuppie” consumers. The venture’s success turned Modelo into one of Latin America’s most valuable companies while Venezuela’s brewery Polar, awash in 1970s overvalued bolivars, did not take export markets seriously. Decade after decade Polar’s businesses expanded domestically, remaining tied to the price of oil and the swings of Venezuelan politics. Another Mexican company, Cemex, exploded out of humble beginnings to become the biggest cement company in the world. While its take-off did not happen until the 1980s, everything started with a financial consolidation, a series of acquisitions, and a listing in the local stock exchange in 1976. Right around that time, Cementos de Venezuela was happy to feed the building boom driven by the strong bolivar, a prelude to its eventual bankruptcy.

Rather than getting ready to expand through exports, the simplistic theory of import substitution allowed the Venezuelan private sector to use overvalued bolivar revenues to obtain dollar-denominated loans. Foreign banks at the end of the 1970s and the beginning of the 1980s were ready to lend dollars against future bolivars. On top of every other challenge, the borrowing proved catastrophic.

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Filed under economics, education, energy, industry, Mexico, military, philosophy, Venezuela

by Joel | 2 September 2025 · 11:32 pm

Venezuela’s Oil Blessing and Curse

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.

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by Joel | 2 September 2025 · 12:20 am

Purging Venezuela’s Opposition, 2004

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.

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by Joel | 1 September 2025 · 12:58 am

Early Rise of Hugo Chávez

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 53-55:

The slow collapse of the Adeco project started in the early 1980s, as oil prices fell and did not rise again, except for the Gulf War hiccup in 1990, until 2004. In 1998, when Chávez won his first election with 56% of the votes, the price of oil had just dropped in real dollars to its lowest levels since 1972. Venezuela’s population was then twelve million people, as opposed to the twenty-three million inhabitants of 1998.

If the country’s oil prospects had helped Betancourt dream of erasing, and then burying, any sense of racial and ethnic identity from the country at the beginning of the 20th century, 1998 presented a different landscape. The return of ethnic difference in the nation’s consciousness was already in the air.

As explained, Chávez broadened his base toward the end of the electoral campaign and eventually won the 1998 election with support from lighter-skinned middle-class voters. He campaigned hard for those votes by tapping into the desire for a powerful military figure at a time of uncertainty. He said the country and the state were broke only because someone, an “evil group,” had stolen all the wealth. By then his speeches lacked any mention of redistribution, and merely mentioned theft. If he stopped “them” from stealing, there would be plenty of money for all. But this was campaign rhetoric. It was clear to anyone who looked at the numbers that Chávez would not be able to do anything once in power.

Oil prices had hit rock bottom, and there was only so much revenue to go around. There were not even enough resources to satisfy Chávez’s core base in the favelas, much less reconstruct the state that had glued the country together for so many decades. Chávez’s short-term economic options were almost non-existent, but it is also clear he did not even have a plan.

What Chávez had was a prescient understanding of power: he realized the color-blind society built over the prior fifty years was broken and ready to die. Despite his one-nation pitch in the final months of the campaign, Chávez was aware that his powerbase could only be nourished by deepening, not bridging, the ethnic gap. He intuitively understood 19th-century Venezuelan politics, specifically the 100-plus years during which rulers had to grab and retain power in a country with vast swaths of extreme poverty, a weak state at best, and very little money.

The young Chávez vividly understood everything the young Uslar Pietri had described in his novel Las Lanzas Coloradas, which most of the country had forgotten. His encyclopedic knowledge of the songs, legends, heroes, and language of bygone times became a political currency of incalculable value. His humble origins in the rural Plains and his self-proclaimed Zambo identity (the original caste designating those of mixed African and Amerindian descent) made him a different kind of politician. The memory of his great-great-grandfather Maisanta, a renegade warlord whose guerrilla actions had killed former President Crespo in 1898, helped him understand the new politics that were to come.

He saw the power vacuum in front of him, as had been the case for ambitious would-be-rulers throughout the 1800s. Back in that century, a sudden drop in coffee prices, a shift in population, or a palace revolt in faraway Caracas, were always seen as golden opportunities for men of war to march with a few peons and take over the trophy capital while advocating the grievances of Pardo peasants.