The only time I have been to Venezuela was in 1981 with Friedrick Hayek to speak at some conference. At that time it had the highest per capita income in south America ($4,951 in 2024 dollars). Today (i.e. 2024) it has dropped to 11th place with a per capita income of $4,218, while Uruguay has risen to $23,089. How and why did this happen?
Venezuela become an independent country in 1830 and a democracy since 1958. But with the election of the socialist Hugo Chávez in 1998 Venezuela’s economy turned South. He oversaw the adoption of a new constitution and the “socialization” of the economy. Chávez was reelected three more times before dying in office of cancer. He was succeeded by Nicolás Maduro. Their governments were characterized by hyperinflation, famine, disease, and crime, which lead to massive emigration from the country (roughly 8 million).
Maduro’s reelection May 20, 2018 was disputed by his opposition. After being sworn in for a second term on January 10, 2010, the Organization of American States approved a resolution in which Maduro was declared illegitimate as President of Venezuela, urging that new elections be held. On January 19, 2019, the president of the National Assembly, Juan Gerardo Antonio Guaidó, was declared the interim president by that body. Guaidó was immediately recognized as the legitimate president by several nations, including the United States. President Trump threatened to remove Maduro.
President Trump falsely claimed that Maduro was responsible for large illegal drug shipments to the US (very little of which came from Venezuela) and prepared to remove him, offering him safety outside Venezuela. However, the Trump administration’s bombing of speed boats it claims were carrying drugs to the U.S. and its attack on Caracas and kidnapping of its President were illegal in the U.S. and internationally and bad for America. “war” “The military operation, undertaken without UN Security Council authorization, without congressional authorization, without a claim of self-defense, and without even a plausible legal rationale, represents the most harmful attack yet on the rules-based order.” Foreign Affairs: The World Without Rules”
In a recent interview about the U.S. operation to seize Nicolás Maduro and “run” Venezuela, Trump was asked if there were any limits on his power; he replied: “Yeah, there is one thing. My own morality. My own mind. It’s the only thing that can stop me.” In the same exchange, he added that he does not “need international law,” signaling that he does not view international legal rules as binding limits on his use of military or coercive power abroad. If you love America, this much concern you.
The adherence to acceptable norms of behavior– the rule of law at home and abroad– is an incredibly important contributor to our well-being. Weakening or destroying it is bad for the U.S. and the world. Trump’s threats to expand the US invasions to Cuba, Panama, Mexico, Iran, and Greenland further damaged America’s image and cooperation of previously friendly countries. “A world in which the powerful no longer feel the need to justify themselves is not merely unjust. It is barbaric: operations to kill, steal, and destroy are severed from any claim of right. That world does not have a legal order at all. It has only force, guided by one man’s whims.” Ibid. German President Frank-Walter Steinmeier warned us that we are in the midst of a “breakdown of values” that is turning the world “into a den of robbers, where the most unscrupulous take whatever they want”
While Maduro’s kidnaping was impressively well planned and executed, it’s unclear what is planned for the day after. U.S. experiences with the follow ups to our attacks on Libya, Afghanistan and Iraq were not good.
In Iraq, a hard to understand invasion based on lies, the ruling Coalition Provisional Authority, led by the U.S., removed not just Iraq’s leadership but a very large part of its bureaucracy including disbanding the Army (who were then going to do what??) with disastrous results. I describe my experiences there in: “Iraq-An American Tragedy-My Travels to Baghdad”
In Venezuela the Trump Administration has left the Maduro government in place allowing Vice President Delcy Rodriguez to assume the Presidency, the opposite of our earlier approaches after our invasions of Afghanistan, Iraq and Libya. This decision seems to have been based on consideration of the options: an evaluation that Ms. Rodriguez, while an important member of the Maduro government, is widely respected and pragmatic, and that the U.S. via its oil sanctions has considerable leverage without the need for boots on the ground. “Rajan Menon: here’s what Trump really wants”
At the White House press conference following the very well planned and execute attack on Caracos, Secretary of State Marco Rubio described America’s strategy for the period ahead: “Step one is the stabilization of the country. We don’t want it descending into chaos. Part of that stabilization, and the reason why we understand and believe that we have the strongest leverage possible is our quarantine. We are going to take between 30 and 50 million barrels of oil. That money will then be handled in such a way that benefits the Venezuelan people, not corruption, not the regime.
“The second phase will be a phase that we call recovery, and that is ensuring that American, Western, and other companies have access to the Venezuela market in a way that’s fair. Also, at the same time, we begin to create the process of reconciliation nationally within Venezuela so that the opposition forces can be amnestied and released from prisons or brought back to the country and begin to rebuild civil society. And then the third phase, of course, will be one of transition.”
Friday Trump summonsed the main US oil producers’ leaders to seek their agreement to move back into Venezuela’s oil fields. When ExxonMobil’s chief executive Darren Woods said that Venezuela was currently uninvertible, Trump, in typical bully style, stated on Airforce One that: “I didn’t like Exxon’s response. I’ll probably be inclined to keep Exxon out. I didn’t like their response.” “Trump threatens to block ExxonMobil in Venezuela” He declared that he would make all the decisions. Putin couldn’t have said it better.
Rather than accepting Vice President Rodriguez becoming President and seeming to toss aside the legitimately elected President Juan Gerardo Antonio Guaidó, why didn’t we convene discussions with all of the relevant parties in Venezuela (Guaidó, Rodriguez, key generals, members of Parliament, etc.), and include in the dialog the relevant members of the US Congress and key allies—especially Brazil, Mexico, Colombia, EU and agree on a path back to democracy and prosperity. Unfortunately, the DOGE chainsaw has eliminated many of the US DOS officials with knowledge and expertise on Venezuela as well as US experts capable of helping to implement the resulting plan (e.g., “USAID”).
The attack on Venezuela can’t be undone. Unfortunately, we already sold out the Venezuelan opposition, fired all our Venezuela experts and staff capable of negotiating and executing the day after, irretrievably alienated all the allies whose support we need (and even threatened them with attack as well!). The prospects for restoring a successful and peaceful democracy to Venezuela are challenging to say the least. The U.S. is in a much weaker position that we were a year ago. “Fukuyama: The problem with America’s Venezuela policy”
Warren's space 
Dear Warren,
This is a complex topic—particularly for anyone who has not lived in Venezuela or Colombia or studied Latin American history in depth. That said, before offering a few factual and contextual corrections, I want to acknowledge that I believe the intent of your blog was constructive and well-meaning, but wrong.
Venezuela’s independence was achieved largely by an army composed of Colombian peasants and women who rallied behind a Venezuelan-born, Spanish-descended general: Simón Bolívar. Bolívar was a wealthy criollo, educated in Europe, who became the symbolic and strategic leader of a transnational liberation movement. Once he was brought into Colombia, the campaign against the Spanish Crown accelerated.
Independence was first achieved in parts of Colombia beginning in 1810, although Spain continued to send troops for nearly a decade, finally relenting after the Trujillo Armistice in 1820. Venezuela declared independence in 1811, Peru in 1821 and Ecuador followed in 1822. One factor that slowed the liberation effort was geography: the Andes trifurcate dramatically in Colombia, creating three fragmented mountain systems and complex river basins that severely constrained mobility and logistics. Bolívar himself suffered greatly from exposure to extreme Andean conditions and ultimately died in 1830 in Santa Marta, Colombia.
In hindsight, one of the greatest failures of this monumental liberation effort was political rather than military. Power quickly transferred from Spanish authorities to criollos—people of Spanish descent born in the Americas—who assumed control of the new republics while neglecting the original promise of independence: education for the disadvantaged and the formation of a broad middle class. For much of the 19th century, and well into the 20th, the working population remained marginalized, again exploited—this time by local elites, military leaders, and newly formed governments.
Colombia and Venezuela then diverged structurally.
Colombia, endowed with more modest natural resources (notably far less oil), had little choice but to invest in education, entrepreneurship, private health systems and institutional development. Private sector has always been the blood in Colombian’s veins. Venezuela, by contrast, benefited early from vast reserves of heavy oil, cattle, and rare minerals. Following the Michelena–Pombo Treaty of 1833 (yes—negotiated by my great-great-grandfather), Colombia regained territory including La Guajira, the northernmost point of South America, along with offshore oil potential.
Colombia developed a strong educational tradition early on. Jesuits founded what would become today’s Pontificia Universidad Javeriana in Bogotá in 1604—a sister institution to Georgetown University, which is how I ultimately found myself in Washington, DC in 1986. Venezuela, however, did not develop a comparable higher-education or managerial class at scale, nor a strong culture of institutional governance and private sector.
With immense resource wealth, Venezuela adopted a model of heavy subsidies for its citizens. Until very recently, gasoline cost roughly USD 0.30 per gallon; staples such as milk, beef, rice, and bread were also subsidized to symbolic prices. Housing was subsidized. For a time, this produced a superficially comfortable life. Eventually, however, economic reality intervened. Commodities were increasingly exported, and domestic prices began to reflect global market levels—something the population was neither prepared for nor willing to accept. One military government followed another, each promising reform. Unlike Venezuela, Colombia never normalized military rule. With one brief exception, generals were not accepted as presidents, nor were fuel or food subsidies part of the national culture. Colombia became private-sector-oriented and developed diversified industries under civilian leadership.
GDP figures, therefore, are deeply misleading when taken at face value. They obscure distributional realities. In Venezuela, wealth concentrated rapidly: the rich became richer, while the poor grew poorer. This imbalance created fertile ground for populism and idealistic military coups. Hence the Chavez, Maduros and many more to come.
What prolongs this tragedy—almost in the spirit of Shakespeare’s Comedy of Errors—is the repeated belief by external administrations that Venezuela’s system can be “fixed” through intervention, often with an implicit objective of controlling resources. Chavismo or Populism or Socialism remains in power and blood. Even if Maduro were removed, public tolerance would likely last only a few months before high prices and taxes provoked unrest, paving the way—yet again—for another allegedly strongman. Culture, institutions, and historical patterns do not change quickly or externally. A transitional government run by Americans or American proxies would not endure.
History does not merely repeat itself; it rhymes. Yet humans – specially we Americans – remain remarkably reluctant to understand—and respect—the cyclical nature of political and social systems.
Let’s have a toast for Maduro who is in prison but just wait…for the next one.
Sergio. Thanks for enriching our understanding of Venezuela’s history and agreeing with my pessimism over what comes next
You’re welcome Warren. Indeed, its worrisome and destabilizing for both Colombia and Venezuela, and the region.
Not only does Trump not support international law, but he doesn’t respect international norms. Long before internet, one heard about the “Manchuria Doctrine,” the principle that international boundaries were inviolate and an assault thereon should be met with overwhelming international opposition. Trump’s threat against Greenland tends to undermine this norm.
On the other hand, Trump’s rejection of the “rules-based international order” may be beating a dead horse. America’s adversaries view said order as already dead and view it as a ruse for an American-based international order. But we can still draw hope from Billy Crystal’s insight (Princess Bride): It’s “only mostly dead.” That means it’s “slightly alive.”