Life Extension Magazine®

Map of Venezuela that has a current history of a destroyed health care system and longevity

A Triumphant Failure - Life Extension

Despite their vast reserves of oil, Venezuela has no chemo drugs for its cancer patients and even its president fled the country for medical care. This is a classic example of how government bureaucracy can destroy a nation’s vital health care system and hinder the pursuit of longevity.

Scientifically reviewed by Dr. Gary Gonzalez, MD, in October 2024. Written by: Chase Falcon.

According to recent polls, the approval rating of the United States Congress has slipped to as low as 5%.¹

Congress is endowed with the power to “create” new laws and amend existing ones. Members of Congress are sometimes referred to as “lawmakers.”

The power to “create” laws that regulate every aspect of society is enormous. This includes enacting legislation that determines the pace at which medical progress is allowed to occur.

If as little as 5% of the American population approves of Congress, then why isn’t something being done to change it?

Some readers ask why Life Extension features political articles in a magazine dedicated to health and longevity.

The reason is that inappropriate government policies are the roadblock preventing us from rapidly extending the healthy human life span. Inefficiency and corruption within our government is also lowering our standard of living.

Rather than reporting on some new US government scandal, this article describes the suffocating impact that “bad government” has in a country that should otherwise have a very high living standard.

Venezuela should be one of the most prosperous countries on Earth. It has the world’s largest proven reserves of crude oil.²

Instead, Venezuela is a poverty-stricken nation that lies atop a bed of money. This paradox is solely a by-product of bad government.

Venezuela’s vast underground wealth of oil has been squandered to the point that the entire country is teetering on the brink of economic collapse. The middle class has been impoverished, while the lower classes are virtually 100% reliant on government handouts.

Shortages of basic items run rampant, and one effect is that the “free” Venezuelan health care system is in a free fall.³ Cancer patients are being sent home from hospitals because there are not enough chemotherapy drugs and functional equipment to treat them.⁴

Saudi Arabia, on the other hand, enjoys enormous prosperity due to its oil wealth. It has virtually the same population as Venezuela.⁵ The difference is that Saudi Arabia’s government has made a lot of “good” decisions that bestow enormous benefits to the citizenry, as opposed to incessantly bad decisions made by Venezuelan authorities that result in significantly reduced living standards. As a result, Venezuela is a nation wallowing in squalor.⁶

Abundant Natural Resources

Venezuela is a nation abundant in natural resources, having the highest provable petroleum reserves on Earth. Estimates range from 256 to nearly 300 billion barrels.^7,8

This one factor alone should entitle Venezuela to an economic leg up over other nations, as crude oil is the most traded commodity in the world and Venezuela has even more oil than Saudi Arabia.

Venezuela’s primary industry is oil production. Petroleum comprises approximately 96% of the nation’s exports and more than 25% of the nation’s GDP stems from revenue derived from the oil industry.^9-12

To export a commodity like oil, efficient transport is essential. Fortunately for Venezuela, the nation possesses great ocean access for shipping to the world’s largest oil consumers.

In addition to what is considered liquid gold as a resource, Venezuela also has the fortune of having large reserves of actual gold, and the world’s eighth largest reserve of natural gas.¹³ With a nearly equivalent population to Saudi Arabia, one would only assume a country with even greater resources would have at least the same wealth capacity.

Government Mistakes Result In Lost Opportunities

The economic decisions made by the governments of Venezuela and Saudi Arabia are nearly identical, but one small mistake has made the difference between prosperity and poverty.

Both Venezuela and Saudi Arabia nationalized their oil industry and used socialism to distribute their newfound wealth. The problem with Venezuela is that it did so in such a manner that it completely replaced the oil industry’s management and work force with inexperienced bureaucrats.¹⁴ Instead of maintaining and expanding oil production, Venezuela took surpluses generated from existing oil production and gave it away as entitlements, such as “free” health care and food subsidies.¹⁵ Not surprisingly, oil production plummeted as even rudimentary maintenance of oil fields was neglected to fund increasing social programs and the inherent corruption that invariably occurs when bureaucrats dictate the marketplace.¹⁶

Unlike Venezuela, Saudi Arabia decided not to kick out the experienced and technologically literate foreign oil corporations. Instead, they created agreements where increasing shares of ownership were bought out and consolidated under the joint-enterprise company ARAMCO.^14,17 As surpluses surged under this modified capitalistic system, Saudi citizens were rewarded with some of the highest social benefits on the planet.^18,19

Venezuela’s expropriation of oil company ownership began under the Nationalization Law of 1975. The law decreed that Venezuelan contracts held by oil companies were nullified and extraction-based companies were forced to sell off their domestic assets at fire-sale prices to the government-run oil enterprise Petróleos de Venezuela, S.A. (PDVSA).²⁰

As a result, the government of Venezuela was put in charge and able to dictate what technologies would be introduced to maintain and improve oil output. These decisions were made by government bureaucrats since the expertise and foreign investment previously provided by private oil companies was being phased out due to expropriations.

The benefits of becoming autonomous can be enormous for a country like Venezuela if it can manage itself appropriately. The difficulty in becoming completely autonomous is that it stifles a country’s ability to find foreign expertise in management and innovation, which is desperately needed for a nation like Venezuela.

In Saudi Arabia’s case, the oil industry was nationalized without giving up the competence and proficiency of private management.

Saudi Arabia did this gradually by first breaking the unfair and unwanted contracts with the oil companies. These previously held contracts did not allow the Saudi Arabian government to tax the oil industry on corporate profits. The contract was replaced with a tax-centered, profit-sharing system that split profits 50/50 between the nation and the oil companies.¹⁴

Using the tax money received, Saudi Arabia slowly bought ownership positions in the domestically run oil conglomerate ARAMCO. The Saudi’s were then able to utilize the profits to which they were entitled, and keep the foreign experience and private management of their oil reserves.²¹

This objective was realized in the gradual takeover of individual operations within the oil industry. This began when the government of Saudi Arabia acquired a 25% interest in the joint oil enterprise ARAMCO by purchasing shareholder ownership, and slowly expanding its influence by buying out all available positions in the company until it had a 100% ownership stake in the company in 1980.^22,23

Unlike Saudi Arabia, Venezuela was not concerned with its limitations or its long-term viability, and where Saudi Arabia simply owned (but did not initially manage) oil enterprises, Venezuela operated and managed its own oil industry, and did not allow foreign oil companies to remain in charge of running its operations.

The Destructive Force Of “Nationalization”

Venezuela nationalized the oil industry along with other parts of their economy. To “nationalize” or “expropriate” something is a more publicly defendable version of saying “the government stole it!” The series of nationalizations exploded following the inauguration of socialist President Hugo Chavez in 1999.

Since then, numerous industries have fallen into government “management,” where corruption, inefficiency, and waste run rampant. These nationalizations have manifested themselves within the oil industry, power generation/utilities, food production, food distribution, the banking sector, construction, manufacturing, mining operations, and, in one instance, the government has even gone so far as to nationalize people’s homes in popular tourist locations like the “Los Roques archipelago” to turn them into state-run tourist enterprises.^24-26

As a result of the nationalizations, the country is facing massive shortages in nearly every market. Food, water, electricity, basic retail goods, and even toilet paper have all seen rationing.^27-29

The fact that the nation has an issue distributing a basic commodity like toilet paper is a profound example of the adverse ramifications of bad government.

It also seems rather ironic that a nation like Venezuela, which domestically possesses the number-one fuel used to make energy, would have to ration electricity to its major cities. This rationing is a result of chronic power shortages in the nation; these blackouts are periodic and range from citywide to nationwide outages that started in 2009 and continue to this day.^30,31 Again, this is just another failure among a long list of failures of the socialist government’s policies. As Winston Churchill once put it “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

In an attempt to curb the shortages of goods, the new president of Venezuela, Nicholas Maduro, made sweeping legislation across the nation. He mandatorily proclaimed that all businesses in Venezuela couldn’t make above a combined 30% profit margin on the products it sells. A violation of the “30% upper limit profit margin” would result in a prison term not exceeding 14 years.^32-35

The result of this upper limit on profits were immediate price cuts, followed by runs on the stores as consumers quickly cleared out products that all of a sudden were sharply discounted by virtue of government edict. As crowds queued and retailers were forced to sell goods below market prices, consumers saw increasing shortages of goods appear overnight.³⁶

Maduro’s reaction is quite typical and follows the time-tested pattern most governments institute when faced with shortages. They regulate. But regulation seldom ever solves this problem, especially given that, in this case, regulation is the underlying source of the problem. The majority of the time these regulations act only to temporarily mask, if not to exacerbate, the problem.

Yet, Maduro has come to the conclusion that history could not possibly repeat itself in nearly identical settings and he has thus decided to drastically reduce the ability for businesses to make profits; consequently, a severe toll has been taken on the country’s ability to innovate and thrive.

Deteriorating Infrastructure

Bureaucracy is tantamount to inefficiency and waste. The leaders and authorities will often convince the public of its necessity. They claim it is necessary to ensure things like liberty, security, equality, and prosperity.

The despots display the mirage of success to an eager and gullible public, all while hiding the crumbling foundation of failure the bureaucracy was built upon.

The proverbial cancer that is the bureaucracy starts small, but quickly grows over time as it takes on greater power, and engulfs more and more under its restricting eye of regulation.

This will continue until all progress is tied up in a web of red tape and nothing seems to move. This bureaucratic paralysis is a pivotal moment, as it signifies the underpinnings of a revolution. Only when the foundation begins to cave in, will those living under total tyranny realize the unfortunate truth that bad government is itself a foundation of inefficiency, corruption, waste, and oppression.

For Venezuela, the time of revolution seems to be drawing ever closer, as the literal foundation of society lies within the nation’s infrastructure, and as of now Venezuela’s infrastructure lies in a figurative state of rigor mortis.

After increasing instances of infrastructure collapses in Venezuela, citizens are becoming fed up with the lack of public services they’ve come to expect.

For a developing nation like Venezuela, infrastructure enhancement is vital to ensuring the long-term growth of its businesses.

The reliability of roads, bridges, railways, ports, and airports is essential. These basic infrastructures serve to distribute goods both domestically and internationally, which is the foundation on which all economies depend.

In Venezuela, deteriorated roads and bridges create substantially large traffic backups, while fledgling public transport suffers from seemingly nonexistent maintenance. There’s a certain lack of reliability that accompanies anything government “managed” in Venezuela and the government’s expectation that citizens remain complacent is becoming all the more unrealistic.

So when the Miranda State bridge collapsed from “excessive weight,” citizens who would normally move back and forth from the capital to the eastern region of the country were forced to adjust their plans and cope.³⁷ In fact, many citizens who travel to and from the capital have been forced to take up to a three-hour detour through Guárico State, an area that has made headlines for its “broken roads.”³⁸ Still, residents continue to go about their normal lives all while knowing the government has neglected to perform the basic duty of road maintenance, which has dealt a great blow to the welfare of the people.

Most critics have come to the consensus that the alarming accident rates across the country are directly a result of the government taking money that would otherwise be put into infrastructure and instead using it to fund the nation’s generous welfare and subsidies programs. In fact, Iván Freites, the Secretary-General of the United Federation of Oil Workers, directly blamed the government for the issue. He stated that “there is no investment in industry” after citing the neglect and lack of “proper hygiene and safety” carried out by the federal government.^39,40

Nearly every component of infrastructure in Venezuela has deteriorated to one extent or another. In one instance, the government-run airline Aeropostal had a DC-9 jet lose both its engines upon landing at the airport in Puerto Ordaz.⁴¹ The reportedly hard landing was said to have caused the engines of the 35-year-old plane to fall off, leading many to speculate upon the role the airline played in enabling this to occur in the first place.

Even Venezuela’s primary industry has faced repercussions from the federal government’s lack of investment in infrastructure. Amuay Refinery, Venezuela’s largest oil refinery, felt the “shock and awe” of the collapsing foundation recently when leaking propane and butane sparked a deadly blast at the facility that killed 48, injured 151, and shut down the facility for a significant period of time.^42-44

Inflation

Rampant inflation is among the largest problems Venezuela’s economy is facing.

Inflation started jumping out of control as consumers, desperate to try and hold on to their wealth, have been restlessly searching for traders willing to convert their Venezuelan money into US dollars. Seeing as how the government-announced inflation rate was at 63.4% for August of 2014, it would be wise for Venezuelans to seek an alternative currency, since keeping savings in the Venezuelan currency would mean that buying power of money saved would evaporate by 50% every 9.9 months, compared to 20.5 years for US currency.^45-48

Although the government-pronounced inflation rate is at a catastrophic 63.4% for August of 2014, this is merely the government’s take on the inflation rate. The implied rate of inflation, which is found by measuring the ability to convert the Venezuelan Bolivar Fuerte to an alternate currency, may actually prove to be significantly more daunting. According to independent sources that have tried to measure the lost value of the currency due to inflation, the rate is suspected to be above 300% when trying to exchange Venezuelan Bolivares for US dollars.^49,50

Expectedly, a black market has formed in an attempt to cash in on the Venezuelan public’s desperation to acquire a stable currency. The black market for currency has no shortage of customers willing to trade at exchange rates outlandishly greater than official rates. Though the official rate of exchange is currently set at 6.3 Bolivares to one US dollar, this is not at all in tune with the people’s lack of confidence in the currency.⁵¹ And this is evident as masses wouldn’t gather to trade 80 Bolivares to a dollar (an immediate 1,270% loss over the official rate) if the people believed the currency had a chance at recovering.⁵²

This shocking devaluation of the Venezuelan Bolivar Fuerte is reflective of the people’s distrust in their government. Currency exchange on the Venezuelan black market is subject to buyers’ demand, meaning that if people are willing to lose an astronomical portion of their money’s value just to acquire a more stable currency, their faith in the Venezuelan government’s problem-solving ability is clearly lacking.

Comically, the use of the Spanish word “fuerte,” meaning “strong” was added to the currency name by the government of Venezuela in 2008, primarily for propaganda purposes.⁵³

Soaring Crime

Venezuela is a living model of the effects “bad government” has on society. The impropriety and corruption that manifested at the onset of the Chavez/Maduro regimes has been slowly spilling over to the helpless and unsuspecting populace.

Externally, it’s difficult to determine whether the government’s police force is completely bought off, grossly understaffed, outlandishly inefficient, or just blatantly incompetent, but seeing as how think tanks estimate that “only 8% of crimes in Venezuela are prosecuted,” it is pretty safe to say that it’s all of the above.⁵⁴

Even worse, the Minister of Interior and Justice in Venezuela decreed that an estimated one in five crimes are committed by the police of Venezuela.⁵⁵

So not only are the police failing to do their job, they are being paid to essentially break the law they are tasked with enforcing.

It would seem just about impossible for a government to top this degree of failure, so trying to imagine a more daunting scenario would leave most in a state of bewilderment and incredulity.

Unfortunately, however, Venezuela has yet to reach the summit of this mountain of failure.

At the start of Chavez’s “Bolivarian Revolution” in 1998, the murder rate in Venezuela was approximately 19 killed out of every 100,000 inhabitants.⁵⁶

Today, the murder rate has reached 79 out of every 100,000, the second highest in the world.^57,58 To put this scale of failure into perspective, South Sudan, a nation torn into existence by full-scale conflict and infamous for its still raging Darfur Genocide, has a homicide rate of just 21.3 out of every 100,000 people.^59,60

You did not read that wrong. A country undergoing an active genocide has less than one-third the murder rate of Venezuela.

Lack Of Medical Care

Very few would be surprised to learn that governments routinely lie to their citizens. In fact, the unscrupulous behavior of some governments makes it seem as if there is no line that can’t be crossed. This includes promising the naïve and the unfortunate anything they want to hear to gain power, and even though these incredulous promises seem to be perpetually regurgitated, the masses never cease to believe claims of the government and the politicians.

So when Hugo Chavez promised his citizens free, universal health care and even went so far as to have it put into the 1999 Venezuelan constitution, how could he possibly have misled his citizens?^61-63 Well, the answer is quite simple. There is no distinction between good health care and appalling health care. The current Venezuelan government does not enable the public medical system to give quality care to its citizens; it just proclaims that citizens are entitled to some form of health care, free of charge.

In an environment such as this, where there is little to no incentive to be persistent, creative, and innovative, progress will be brought to a standstill.

Combine this with government-mandated price cuts, restricted profit margins, and the rampant inflation rate that has led to shortages throughout the nation, and you will see progress start moving backwards.

For example, if told that your local hospital had just 5% of the materials it needed to assist patients and perform surgeries, would that be a comfortable and reassuring statement? If you were then told that 95% of all the other hospitals in your nation were in a scenario that was either the same or worse due to government-incited shortages, would it be reasonable to expect citizens to remain complacent and keep a firm stance of approval? It would be difficult to imagine a scenario so grim, but in Venezuela, that scenario is all too real.⁶⁴

Another report from the Venezuelan Association of Distributors of Medical Equipment indicated that of the 239 necessary items a hospital needs in order to even function, 200 were “absolutely lacking” in the country.⁶⁴

To show how serious the impact on health care has been, during Chavez’s reign, half the public health care doctors quit, and half of those doctors left the country. In October of 2013, the situation got so severe that organ donations, transplants, and nonemergency surgeries were all suspended due to shortages in operating supplies.^4,63

This complete failure should be condemned as an intolerable atrocity, if not revolution worthy, but most citizens still sit idly by as the cancerous grip of “bad government” strangles the nation’s welfare.

Venezuela’s public hospitals have taken on a massive amount of the impoverished citizen’s needs, but the hospitals remain understaffed, undersupplied, and underfunded, making them incapable of meeting the demand.⁶⁵ The private sector, although equally crippled by the same government-incited shortages, is picking up the tremendous slack the public medical facilities have left.

In Venezuela, there are approximately 50,000 hospital beds available at any given time, only 8,000 of which are held by private, nongovernment run hospitals. Despite this massive difference in available resources, the public system is so inefficient that the private system treats 53% of the nation’s patients.^4,66 Laughably, government employees who are entitled to universal government health care have, by and large, not utilized it. Instead, public employees are given insurance, which most use to get health coverage from the private, for-profit hospitals.

It’s amazing the amount of confidence the government pretends to have in its system, but that’s not even the most of it. Chavez, the inventor and aggrandizer of the public health system, had such little trust in his own system that after he was diagnosed with cancer he flew to Cuba to undergo medical treatment.⁶⁷

Following his death, instead of attempting to increase the welfare and efficiency of the medical system up to the standards Chavez pretended they were, the government decided to point the finger in an unbelievable direction. It blamed the United States. That’s right, Venezuela actually launched a full investigation as to whether or not the United States gave President Chavez a kind of cancer that could not be treated.⁶⁸

Apparently, that could be said with enough confidence that the public had a chance of believing it. If Venezuela can get by with saying something so impossibly moronic, then there truly is no line that can’t be crossed, and any informed skeptic should hesitate to take the Venezuelan government’s word with anything short of a mountain of salt.

Systemic Corruption

Measuring the immensity of a country’s corruption is often a difficult task, as corruption tends to manifest itself through so many different avenues, and dishonesty and fraud occur mostly behind closed doors.

But when unpopular President Nicholas Maduro ran for re-election in 2013 against opposition candidate Henrique Capriles, corruption became an in-your-face experience.

It came in the form of campaign advertising. Venezuelan law says no candidate can have more than three minutes of campaign advertising in any given day.^69-71 The law may have been intended to make elections less influenced by money, but the law has a fatal flaw that the president eagerly took advantage of.

As president, Maduro had the power to address the nation however often, and as widely broadcasted as he saw fit.^72,73

That must have been quite convenient for Maduro, since all presidential addresses, no matter what the form, are funded by the state.⁷² This makes the act of overwhelming your political opponents astonishingly easy. Maduro simply had the federal government buy all the airtime and fill it with self-aggrandizing propaganda, effectively drowning out the opposition. Cumulatively, Maduro garnered more than 65 hours of airtime for speeches made during the campaign for presidency. Unfortunately, his opponent Henrique Capriles was only able to acquire an approximate total of six hours of airtime for his speeches.⁷⁴

Money, media, and message make up the foundation of any campaign. It goes without debate that media and money are essential to making any campaign’s message heard.

It’s also quite obvious that a president who wields the state’s budget (money) in one hand and publicly owned television (media) in the other, as if they were weapons, would seek to water down his opponent’s message.^75,76

After the results of the election came in, candidate Henrique Capriles refused to accept the result, claiming the election was illegitimate. He claimed “they stole the election.”⁷⁷

Beyond face value, Capriles has some serious weight to his claim. Past elections in Venezuela have proven that expectations of fair elections and free choice are a fool’s dream.

Electoral fraud is not ancient history in Venezuela. During Chavez’s election in 2006, there were countless reports that government workers were forced to vote for Chavez in addition to being forced to march in his parades.^78,79

Failure to comply would not only result in the employees losing their jobs, but they would also be privately labeled as political dissidents and consequently blacklisted from holding future public employment.⁷⁸

It would be just about impossible for an honest government to get away with such blatant extortion.

But Venezuela does not have an honest government. Venezuela has been ranked the most corrupt country in the western hemisphere, and internationally it’s the 17^th most corrupt nation, found about midway between the corruption levels of Iran (less corrupt) and North Korea ( more corrupt).⁸⁰

Unfortunately, not every instance of deficiency and failure can be addressed in a single article.

If there were ever to be a complete list of the hardships and indignities that the people of Venezuela have been forced to endure, its content would span many books.

This truth teaches an important lesson.

The lesson is that Venezuela should be a prosperous country, but instead, it is a nation nearing ruin and rubble, crumbling under the foot of “bad government.”

Citizens of the United States should not turn a blind eye to the wrongdoings of our current government. Unlike countries that physically repress dissidents, US citizens retain the individual power to speak out against government waste, inefficiency, and corruption.

It’s unfortunate that US citizens have become resistant to change. The penalties for failing to demand meaningful corrective actions in the present can lead to catastrophic reductions in our future living standard and even our life span.

We should remind ourselves of the mistakes of our fellow man. We should be emboldened to never tolerate governments that oppress their citizenry, to reject any feeling of complacency when we are promised so much, yet given so little. We the people have the power to rise up, resist, and free ourselves from oppression. We have all the power in the world, if only we would unite to use it.

For life, rationality, and prosperity, Chase Falcon