There is a lot we can learn politically from the South American country of Venezuela. It has the highest inflation in the world and its citizens are pouring out over its borders because of food shortages. Its president clings to office with the support of the army and most of the rest of the world is now prepared to recogniser its opposition leader as the legitimate president. It is hard to see this situation being resolved short of a civil war.
Venezuela became a Spanish colony when Cortez invaded South America in 1522. They imposed the Spanish language and the Roman Catholic faith and when they were deposed a cabal of wealthy landowners ruled the country. Late in the twentieth century it suffered a "Bolivian " revolution when Hugo Chavez seized power and installed a populist social welfare state. The future looked promising because oil had been discovered in Venezuela and this oil field rivalled Saudi Arabia in size.
Venezuela was able to fund socialist states like Cuba while the oil price remained high, but Chavez died of cancer and the presidential mantle passed to Nicholas Manduro, a former bus driver. When the oil price slumped Venezuela had difficulty paying its bills and in 2017 it defaulted. Maduro has since clung to power by rigging elections and using force to suppress his citizens. There is a very real danger of mass starvation.
Like most of South America, Venezuela was a country of great inequality. Rich landowners lived a life of luxury in comparison to the peasants who scratched a bare living from the land. This inequality made it almost certain that eventually a populist leader would arise to install a regime that offered change. As we are seeing in Venezuela that quickly changed to a dictatorship as an incompetent president brought financial ruin and military rule as his means of clinging to power.
The western world is suffering an unnerving wealth division between the average wage earner and the captains of industry. We are fast reaching the stage where the top 0.1% of the population owns more wealth than the other 90% combined. This is reflected in the variance between a typical top CEO's pay and that of the average worker. In the 1970's that held a ratio of 30 to one. Today it is nearer to 312 to one.
It is starting to manifest itself in a rejection of the old two party political system. We are seeing the emergence of small political parties with limited manifestos and populist independents are being successful in gaining office. In such a situation a strong leader eventually emerges and may gather popular support to demolish the democratic rules that apply to office. We are seeing sheer desperation bring unusual leaders to power in other countries and some may cite Donald Trump's elevation to the presidency in America as a sharp illustration of that trend.
Whenever the pay balance between the top and bottom of the pay pyramid becomes too wide the pressure for political change becomes inevitable. It is up to the political system in place to ensure that does not happen, and there are warning signs evident now in many economies.
It does raise the question of whether any person deserves a multi million dollar pay packet. As we have seen in recent Royal Commissions and similar enquiries, these highly paid people are quite capable of making disastrous mistakes in their stewardship of major companies - and in many cases this is deliberate and to their personal benefit.
Maybe the mayhem in Venezuela is a portend of what lays ahead if we do not average earning ratios and return to a practical political system.
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