Category Archives: economics

by Joel | 18 November 2025 · 5:09 am

Polish Heweliusz Series on Netflix

My latest weekly update from Culture.pl includes a profile of a new and interesting Polish film series: Heweliusz: Netflix Revisits Poland’s Most Tragic Ferry Disaster. During our recent pilgrimage to Gdansk, we stayed in a nice hotel on Heweliusz Street not far from Gdansk Main train station. Here are some excerpts from the story on Culture.pl.

Jan Holoubek’s blockbuster is more than just a solid piece of good entertainment. In this Netflix series the story of the greatest maritime disaster in post-war Poland becomes a tale of the victims of the transformation and the brutal verdicts of history.

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It was 5:12 a.m. on January 14, 1993, when the rail-truck ferry Jan Heweliusz, operating between Świnoujście [= Ger. Swinemünde] and Ystad, capsized in the stormy winds. A few minutes earlier, Captain Andrzej Ułasiewicz had broadcast a ‘Mayday! Mayday!’ message, calling for help from all nearby vessels. He had 36 passengers and 29 crew members on board, all of whom found themselves in the water at a temperature of 2 degrees Celsius during a raging storm, force 12 on the Beaufort scale. Ułasiewicz didn’t even try to save himself – he remained on the bridge until the end, trying to relay information to rescue units – German, Danish, and Polish. When the waters receded, he was named as the main culprit in the Heweliusz tragedy, whose story is now told in Jan Holoubek’s series.

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From its inception, the MF Jan Heweliusz was considered an exceptionally unlucky vessel. Launched in 1977 at the Norwegian Trosvik shipyard, it sailed under the Polish flag for the next 16 years, experiencing around 30 different breakdowns during that time. Its history of adventures was so rich that Swedish sailors dubbed it ‘Jan Haverelius,’ or ‘Accident John.’

The Polish ferry capsized twice while in port (hence why one of the series’ characters explicitly calls it ‘a f…cking roly-poly toy’), its engines failed, and its ballast system malfunctioned. The Heweliusz also collided with a fishing boat.

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However two other failures proved crucial to the tragic events of January 14, 1993. The first was damage to the ferry a few days before the sinking. While docking at the Swedish port, the vessel struck the quay, bending the gate securing the ferry’s entrance, allowing water to enter. The shipowners, Euroafrica company, a subsidiary of Polish Ocean Lines, were aware of the defect but decided not to suspend operation until it was fully repaired. The reason was simple – a vessel sitting in port wouldn’t earn any money, and the company’s management wouldn’t allow it. The crew members themselves were supposed to carry out makeshift repairs, but without the proper equipment and time, they could only partially repair the damage.

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The second of the ferry’s structural defects proved even more significant and far-reaching. It involved a multi-ton concrete cover on one of the decks. In 1986, during a voyage, a refrigerated truck caught fire on the ferry, spreading to other vehicles and engulfing the vessel’s superstructure on one of the upper decks. The ferry was then renovated at the Hamburg shipyard, and the damaged deck was poured with a layer of concrete. Immediately after the Heweliusz tragedy, attempts were made to argue that the poured concrete weighed ‘only’ 30 tons (a small amount compared to the vessel’s total weight), and that the reconstruction concerned one of the lower decks. However, in reality, the ferry was loaded with more than twice that weight, and the renovation only affected one of the upper decks, significantly affecting the vessel’s stability. Stability, which had already been far from ideal, chiefly due to the wide captain’s cabin on the bridge, which, in hurricane-force winds, turned into a veritable sail. All of this meant the ferry was unable to cope with the severe storm that struck the ship that January night, claiming the lives of 20 sailors and all of the ferry’s passengers.

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The questions that researchers of the Heweliusz tragedy have been asking themselves for years resonate powerfully, yet at the same time, seemingly incidentally, in Jan Holoubek’s series. Not as a theme in itself, but as a footnote to the story of the people grappling with the consequences of the disaster. Kasper Bajon’s story skillfully transports us across several timelines and between characters examining Heweliusz’s case from different perspectives. Guides through this world include a crew member (Konrad Eleryk) who survived the disaster, plagued by remorse; Captain Ułasiewicz’s widow (Magdalena Różczka), who must defend his memory and care for her teenage daughter; and the truck driver’s wife (Justyna Wasilewska), who lives in the same neighborhood and is left destitute after his death. Finally, there is Captain Piotr Binter (Michał Żurawski), a sailor and friend of Ułasiewicz. As a juror deciding the causes of the disaster, he must choose between loyalty to his deceased friend and his career, which is threatened by the pressures of a political and business alliance.

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Filed under cinema, economics, Germany, industry, labor, Poland, Scandinavia, travel

by Joel | 29 September 2025 · 7:12 pm

Relieving Lwów in 1919

From Kosciuszko, We Are Here!: American Pilots of the Kosciuszko Squadron in Defense of Poland, 1919-1921, by Janusz Cisek (McFarland, 2025), Kindle Loc. 361ff.

Despite his harrowing experiences and incomplete recovery, [Merian] Cooper had no intention of returning to the U.S., nor of indulging in a more than well-earned rest. He quickly discovered another passion, service in the American Food Administration, which had started its activities also in Poland. Its chairman Herbert Hoover, had already visited Polish territory in 1913 and in November 1915 sent Vernon Kellogg there. He was to evaluate the situation of those in Poland who had been affected by the war. The situation was tragic. Right until the end of the war, the country had been pillaged by the German, Russian, and Austro-Hungarian armies. According to Hoover’s findings, the front rolled across some parts of territories populated by Poles seven times, causing death and enormous destruction to the infrastructure. Agriculture was particularly badly hit and due to this fact the food situation deteriorated. Many areas had not been sown for several years, others had fallen into neglect because of the death of the owner, lack of machinery or an epidemic. The worst disasters affected the poorest layers of society and children. When Poland again roused herself to an independent existence she not only faced military threats from East and West, but was forced into battle against hunger and epidemics, which attacked her together with the Bolshevik armies advancing westward.

The prices of basic articles increased repeatedly several-fold. Even firewood was rationed due to lack of coal. The tragic food situation was reflected in the reports of the U.S. Military Attache to Warsaw. Herbert Hoover had already drawn attention to the suffering in Poland in his speech entitled “An Appeal to World Conscience,” enumerating it along with the suffering in Belgium, northern France, Serbia, Romania, Montenegro, Armenia, and Russia.

At Hoover’s initiative on January 24, 1919, Congress passed an appropriation bill of $100,000,000 to finance appropriate aid. In a later period, the financial aid was significantly increased. Prior to this resolution, Hoover, in December 1918, before the official recognition of the Polish government by the U.S., sent Kellogg to Warsaw to ascertain Poland’s needs and to examine the possibilities of providing effective help. Kellogg together with Colonel William R. Grove and others arrived in Warsaw on January 3, 1919, almost at the same time as Paderewski. After a tour of most of the centers, Hoover’s envoys estimated that from a general population of 27 million who were under the control of the Warsaw government, at least four million were famine stricken, and another million were in need of additional nourishment. Shortly after, food distribution stations run by Americans appeared in many Polish towns. In May 1920, at the height of the operation, 1,315,490 Polish children were being fed on a daily basis. There was particular hardship in Lwów and the surrounding area. Much of central and western Poland had escaped military threat and the presence of foreign armies, but Lwów was the arena of an extremely complicated conflict. During the partitions, the town was one of the most shining centers of Polish culture and also home to Pilsudski’s strongest military centers. Lwów itself had a strong Polish majority; however, the villages of eastern Galicia remained Ukrainian. The only Polish element in the countryside was the intelligentsia and landowners. On November 1, 1918, when the Austro-Hungarian monarchy was in a complete state of impotence, the population of Lwów was surprised by a proclamation of the establishment of the Western Ukrainian People’s Republic and by a Ukrainian military action which aimed to occupy the city. For the next three weeks there waged a severe and bloody battle. Not until November 21, 1918, did volunteer and regular Polish units come to the relief of the occupied city.

The defense of Lwów passed into history as an example of heroism, patriotism and the determination to unite this territory with Poland. Unfortunately, it was not a conclusive victory. Lwów and the immediate city outskirts continued to come under fire from Ukrainian artillery. The only railway line linking Lwów with Poland was sabotaged, and trains derailed several times. Practically every transport going to the city had to fight its way by force. There was no electricity, water or food supplies in the city. It is not surprising that the U.S. Food Administration considered food-aid for Lwów as one of its tasks. Merian Cooper was placed in charge of the mission there.

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Filed under economics, food, nationalism, Poland, Russia, U.S., Ukraine, war

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 | 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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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.

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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 | 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.

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by Joel | 30 August 2025 · 1:37 am

Betancourt’s Vision of Venezuela

From Venezuela’s Collapse: The Long Story of How Things Fell Apart, by Carlos Lizarralde (Codex Novellus, 2024), Kindle pp. 43-44:

Rómulo Betancourt was the architect of a Venezuela in which race and ethnicity were eradicated from the public discourse. An early 20th-century pro-democracy leader, he laid down the basis for the country’s race-neutral ideology as Venezuela’s president first in 1945, and then again in 1959. Adecos, as Betancourt’s followers were called, would go on to become the political reference point in the life of the country, until Chávez and the new demographic wave destroyed their social project. Their vision’s successes and failures are virtual keys to understanding contemporary Venezuela.

By 1940 the thirty-three-year-old Betancourt was already a promising political leader, but one in the very middle of a unique moment in history. Behind him lay a poor, provincial country with a vast countryside still recovering from the deep social fractures Laureano Vallenilla had described in 1919. Ahead of him was a nation with a once-in-a-lifetime chance to start over again. He imagined that properly distributed, oil money would create a brand-new country to be filled, like a vast empty canvas, with great ideas and institutions. The young Betancourt knew he could shape an entirely new political imaginary. He was convinced he could solve the underlying issues of the country’s ethnic fracture.

His political program for change was clear: the state would charge a 50% tax on all profits obtained by American and British oil companies to underwrite a welfare state that would wipe out poverty, and level all Venezuelans. An enormous investment in education would transform people into informed citizens, and an influx of migrants would bring their legacies to form a new society made up of equals.

His political party, Acción Democrática, would organize workers, peasants, students, professionals, and industrialists around the unifying idea of a new Venezuela that left behind castes, ethnicities, and places of birth. The party’s manifesto called the organization “multi-class” and was purposely silent on matters of race, ethnicity, castes, or regional origin. Oil would fuel the country’s development and well-being, and act as a social glue linking everything together.

…

Betancourt had to embody that majority to sell this project. He emphasized his mother’s African descent. His hometown was on the western edge of the Afro-Caribbean Barlovento coast. His accent lacked the upper-class singsong of Creoles, and he would occasionally refer to himself as a “mulatto from Guatire.” His Spanish was laced with provincial colloquialisms.

But most importantly, Betancourt’s public persona embraced the mannerisms, language, and humor of ethnic Pardos. Ethnicity is an ambiguous combination of perceptions, far from the clearer lines that can define race. By embracing and claiming to be a Pardo, Betancourt became the perfect spokesperson for a project that someone with a Creole accent, a more formal manner, or wearing starched shirts with cufflinks could never sell.

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by Joel | 25 August 2025 · 3:00 pm

Portugal’s Means & Ends in 1505

From Conquerors: How Portugal Forged the First Global Empire, by Roger Crowley (Random House, 2015), Kindle pp. 137-140:

Dom Francisco de Almeida, was only the king’s second choice. Tristão da Cunha had been his initial nomination, but the experienced seaman had suddenly been struck down by blindness, probably the result of a vitamin deficiency. Though he later recovered, the incident was taken as a sign from God. Almeida was to be the first member of the high nobility to lead an India expedition. He was about fifty-five years old, with wide military, diplomatic, and nautical experience, but he also possessed the personal qualities that Manuel hoped for in a man to whom he might entrust high affairs of state. Almeida was incorruptible, unmoved by the lure of riches, benevolent, a widower without home ties, pious, and mature in his judgments. For many, the attraction of India was the prospect of personal gain; Almeida was untarnished by the appetites of the Sodrés. He valued titles above bales of spices, and he knew how to fight.

Almeida was not just to be the captain-major. He was also granted the elevated title of viceroy, nominally with executive power to act in the king’s place. What this meant in practice was spelled out a week later in the regimento, the instructions given to him by the king. They ran to 101 closely written pages, containing 143 different items divided into chapters and subchapters that revealed both the microscopic level of detail at which the king wished to direct his appointee and the breathtaking scale of his ambition.

After sailing around the Cape, Almeida was ordered to get control of the Swahili coast. His targets were to be the ports of Sofala, key to the gold trade, and Kilwa. The recommended method was to arrive in the guise of friendship, then attack the towns by surprise, imprison all the Muslim merchants, and seize their riches. Forts were to be constructed and control then exercised over the sources of gold, necessary for trading on the Malabar Coast in exchange for spices. It was to be a mission of war, disguised as peace. Then, wasting no time, he was to proceed directly across the Indian Ocean and build four more forts: at the stopover island, Anjediva, as a support and provisioning hub, and in the friendly cities of Cannanore, Quilon, and Cochin.

Moving north, another fort was to be built at or near the mouth of the Red Sea and close to the kingdom of Prester John, to choke off the sultan’s spice trade and ensure that “all India should be stripped of the illusion of being able to trade with anyone but ourselves.” Two ships were to be on permanent patrol along the African coast as far as the Horn of Africa. The regimento then turned its attention to the intractable Calicut problem. One way or another, the new samudri, as hostile as his predecessor, was to be dealt with. Almeida was to establish peace if the samudri agreed to expel all the Muslims; if not, “wage war and total destruction on him, by all the means you best can by land and sea so that everything possible is destroyed.”

No strategic point was to be overlooked. After locking up the Red Sea, a fleet was to be sent to other Islamic city-states and kingdoms: Chaul and Cambay, and Ormuz, at the mouth of the Persian Gulf. Almeida was to demand annual tribute to the king of Portugal; to order these states to break off all commercial relations with the Arab merchants of Cairo and the Red Sea; to capture all Muslim shipping along the way. To pay for all this, he was to ensure the full loading and prompt sailing of the annual spice fleets.

…

Manuel’s ambition did not end there. After seeing to the spice ships, the viceroy was ordered to open up new frontiers by “discovering” Ceylon, China, Malacca, and “whatever other parts have still not been known.” Pillars were to be planted on this new soil as markers of possession. It was an exhaustive list.

Though the instructions also claimed to allow Almeida a certain freedom of action in the case of unseen eventualities, in practice they imposed a rigid agenda. Manuel never had seen and never would see the world whose conquest he was demanding, but the regimento revealed an astonishing grasp of the choke points of the Indian Ocean and an authoritative geostrategic vision for controlling them and constructing his own empire. This knowledge had been acquired at breathtaking speed. Within seven years of bursting into the new world, the Portuguese understood, with a fair degree of accuracy, how the twenty-eight million square miles of the Indian Ocean worked, its major ports, its winds, the rhythm of its monsoons, its navigational possibilities and communication corridors—and they were already eyeing farther horizons. The methodology of knowledge acquisition had been developed over the years of slogging round the coast of Africa, during which the Portuguese had become expert observers and collectors of geographical and cultural information. They garnered this with great efficiency, scooping up local informants and pilots, employing interpreters, learning languages, observing with dispassionate scientific interest, drawing the best maps they could. Astronomers were sent on voyages; the collection of latitudes became a state enterprise. Men such as Duarte Pacheco Pereira, substituting firsthand observation for the received wisdom of the ancients, operated within the parameters of Renaissance inquiry. Information about the new world was fed back into a central hub, the India House in Lisbon, where everything was stored under the crown’s direct control to inform the next cycle of voyages. This system of feedback and adaptation was rapid and effective.

Manuel had drawn on a small coterie of advisers to construct the regimento for Almeida. Influential among them was Gaspar, the Polish Jew posing as a Venetian whom Vasco da Gama had kidnapped on his first voyage. He is woven into the first decade of Portuguese exploration, invaluable as an expert and an interpreter, an elusive figure, changing his identity and name to suit the patron of the moment and the needs of the situation. First Gaspar da Gama, to Manuel probably Gaspar da India, on the forthcoming voyage he would call himself Gaspar de Almeida “out of love for the viceroy.” He had a propensity to tell his new employers what they wanted to hear, but he was well informed. He seems to have had a good knowledge of the Indian Ocean and to have traveled widely. It was he who suggested the first overture to Cochin, and he had probably made voyages to Ceylon, Malacca, and Sumatra. He also understood the strategic importance of the Red Sea. It was this information that seeped into Manuel’s grand plan of 1505.

Gaspar had advocated that the Portuguese should go straight for the Muslim jugular—attack Aden, close the Red Sea, and suffocate Mamluk trade first; then the samudri would be compelled to become a Portuguese client—rather than laboriously constructing forts on the Malabar Coast that would cost money and lives. The wisdom of the forts strategy would become a hotly debated issue in the years ahead. Manuel had absorbed the plan but not the sequence: he preferred first to establish secure bases on Indian soil as a platform for snuffing out Muslim trade.