This past weekend in Forbes, Alejandro Chafuen, Acton’s Managing Director, International, offered some perspectives on the current situation in Venezuela. Basing his analysis on traditional principles of justice, he outlines some important points to keep in mind in any project of transitioning from socialism to a more just political and economic model.
Liberation should be coming soon for Venezuela. After liberation will come celebration. Almost immediately should come justice. Punishing the culprits will be difficult, but it will be easier than making restitution to all the victims.
Problems of justice fall under (a) commutative justice (justice in transactions and contracts) and (b) distributive justice (what every participant should contribute to decisions that have a “common” cost, and how much each should receive from the “common pool”).
The usual topic of justice in post-socialist transitions is the restitution of private property to its legitimate owners. Such restitution, though, seems a topic for commutative justice. If the confiscated property came under state control, however, part of the restitution should also be guided by principles of distributive justice.
As St. Thomas Aquinas—in line with Aristotle’s thought—clarified, the role of this justice is to distribute “common goods proportionately.” This is totally different than taking from the rich and giving to the poor, a perverted concept of distributive justice. The late-scholastics, Aquinas followers who focused more on economics, argued that profit, salaries and rents were topics of contract law, a part of commutative justice, it is not the government’s task to determine them.
Under the horrors of 21st-century socialism, Venezuela has suffered many common violations of distributive justice. Favoritism is a typical one of these. Some concrete manifestations of favoritism are nepotism and cronyism. It is an injustice in the distribution of common goods when one party is preferred to another not by reason of merit but for another undue cause, such as family relationships. Multiple accusations have surfaced against family members of government officials, and these will have to be investigated.
Corruption, which often goes hand in hand with favoritism, is another violation of distributive justice. High inflation, overregulation, high taxes and confusing tax structures are powerful corrupting incentives, especially in countries with high inequality. Such cases have always led to widespread tax evasion, justifying a large informal economy and undermining respect for the rule of law. Sadly, giving restitution to all victims of inflation and unjust regulations is impossible and would create further victims and distributive injustices. Venezuela has high rankings of corruption, inflation and overregulation. In the rule of law index compiled by the World Justice Project it ranks last in the world. In economic freedom, only North Korea ranks worse.
Another strong incentive to corruption is differential exchange rates and official exchange rates that diverge from free-market rates. These are easy to evade, can enrich bureaucrats and their associates, and – from the standpoint of natural law – appear so artificial that those who violate their regulations feel justified in their attempts. A merchant who declares that he is exporting less than he really is could be violating rules and lying, but the foreigners who buy from him see nothing wrong when asked to pay the total value to a foreign account or a subsidiary owned by the merchant. I believe that this factor was a primary contributor to the corrupt practices of Venezuelan socialists and their allies.
Read the full article here.