First of all, what people refer when they talk about “failed socialism” is really failed Communism.
There is no socialism in Venezuela. Venezuela is a capitalist country. The means of production other than oil are in the hands of the private sector. The private sector capitalists run the whole domestic economy. Shortages are basically not even possible in a free market absent an embargo, limited production or other artificial means. If there is a bad toilet paper shortage, Bob Lindsay’s Toilet Paper factory opens up. It’s real simple. All shortages are immediately covered by other competing businesses.
Everything that is in shortage in Venezuela is either manufactured or imported and then sold by the private sector. The government does not make or sell even one of those products in shortage. All of those shortages are because the capitalists manufactured an economic crisis to get rid of the Chavistas. They did this exact same thing in Chile. This is right out of the Allende playbook.
The shortages of these goods is occurring because the private sector is refusing to make/import them or make/import enough of them.
Also there is incredible hoarding of manufactured goods going on. Every week they seize another huge warehouse full of hoarded products. A warehouse containing 21 million needle syringes was seized the other day. This while the US press is screaming about medial shortages and shouting that a military coup is the only way to fix this and other problems.
35% of imported products go right out of the country, smuggled to Colombia for a higher price. A lot of production is immediately diverted to the black market where you can get higher prices.
The government gives the capitalists dollars to import those goods in shortage, and they take the dollars, refuse to use them for their state purpose – to import goods in shortage – and instead turn around and use these dollars to play the currency market in the Venezuelan black market. Black market dollars are worth far more than government dollars, so capitalists get cheap government dollars and sell them for very high prices on the black market.
The truth is that the private sector is hardly making anything anymore. They are using most all of their money in speculation in the money markets on the black market, or they are smuggling stuff out of the country to Colombia where it gets a higher price.
Bottom line: the private sector is refusing to import or manufacture a lot of products, resulting in horrific shortages. Someone want to tell me how this is the fault of “failed socialism?”