Crude Nation: How Oil Riches Ruined Venezuela

by Raúl Gallegos

Beneath Venezuelan soil lies an ocean of crude—the world’s largest reserves—an oil patch that shaped the nature of the global energy business. Unfortunately, a dysfunctional anti-American, leftist government controls this vast resource and has used its wealth to foster voter support, ultimately wreaking economic havoc.

Crude Nation reveals the ways in which this mismanagement has led to Venezuela’s economic ruin and turned the country into a cautionary tale for the world. Raúl Gallegos, a former Caracas-based oil correspondent, paints a picture both vivid and analytical of the country’s economic decline, the government’s foolhardy economic policies, and the wrecked lives of Venezuelans.

Without transparency, the Venezuelan government uses oil money to subsidize life for its citizens in myriad unsustainable ways, while regulating nearly every aspect of day-to-day existence in Venezuela. This has created a paradox in which citizens can fill up the tanks of their SUVs for less than one American dollar while simultaneously enduring nationwide shortages of staples such as milk, sugar, and toilet paper. Gallegos’s insightful analysis shows how mismanagement has ruined Venezuela again and again over the past century and lays out how Venezuelans can begin to fix their country, a nation that can play an important role in the global energy industry. This paperback edition features a new introduction by the author.


 

Genres: Nonfiction, History, Politics, Economics, World History, Political Science, Travel

264 pages, Paperback

Published September 1, 2019

Reviews

[Clare O'Beara · Rating 5 out of 5]

The author explains how he found life in oil-rich Venezuela, which as a South American country produces oil fed to the US market, though as a European I am not accustomed to thinking of this as an OPEC country, equating that with Arab states. With an ex-military leader Chavez who wasn't Marxist, but disliked capitalists, an economy which almost paid people to drive and saw its currency continually shrink in value, odd choices were made. Like ex-pats who were paid in dollars, paying relatively less for rent each month as that was set in bolivars; like driving used cars and reselling them for the same price after four years; like importing goods rather than producing; like spending on consumer goods and taking on debt because banking money loses you money.

The currency has three official exchange rates, depending on who you are; the dollar black market is heavily used in Caracas. To stop rampant cheating and profiteering, the government took over most industries and importations. This means that a minimum wage worker would have to put every penny earned over three years towards buying an Apple phone. Both Venezuelans and others set up sham companies outside the country to deal with the government, corruptly hiking transaction costs on every import from food to toilet paper and in one year stealing "20 times the amount of money Saddam Hussein and his son Qusay reportedly stole from Iraq's central bank."

The author spends a chapter on spending a penny, or rather, the price and scarcity of toilet paper. Store owners found hoarding this and other items can be jailed for ten years. Reminding me of a memoir about China, hotels may ask you to bring your own, while nervous householders stock up on industrial sized rolls if they come on the market. Feminine hygiene products and nappies - diapers to Americans - are similarly troubled. Sounds like Soviet Russia. While a medicine made by Pfizer locally for a mosquito-borne drug has a statutory low price though the machinery needs parts from outside the country, so it is hardly manufactured and sells fast on the black market. Some items are rationed and food shortages include milk, with long queues. While you can fill your car's petrol tank for pennies.

Then we get a potted history of oil here from the day in 1914 when it was struck in an illiterate, agricultural land. The world's navies had converted from coal to oil and Ford was in production. Instant wealth. Not surprisingly this made the then dictator wealthy and powerful, with controlling interests in just about everything. We get a tour of householders, business owners, supermarkets, manufacturers, with many brave people commenting - it is illegal to discuss the economy there - and we see that when oil prices drop, as they have, the country is in chaos, its people in debt and its reserves of everything but crude minimal. The author hopes the nation's ministers and bankers will learn from other nations and start changing life for the good-hearted people.

Certainly I learnt a lot from this amiable and astonished travelogue. It's too much weirdness to read in one go and would make you reconsider this as a holiday or business destination, if only because of the complexities. Crude Nation is a fascinating read with a substantial reference of dates and notes in the back.
I downloaded an ARC from Net Galley for an unbiased review.

[Killian · Rating 4 out of 5]

Edit 8.1.17: I would like to add a note and a star to this review that I wrote in 2016... Obviously Venezuela has been in the news a lot lately, and I've found myself looking back to the things I learned in this book to help me understand their issues. I stand by this review since this book was lacking on a certain level, but since I've found the things I learned here genuinely useful and informative after the fact I'm bumping it a bit. Clearly I got more out of it than I originally thought I did.


Years ago I remember listening to a story on NPR, maybe on Planet Money, about how strange the economy was in Venezuela. Strange meaning upside down, sideways, crazy town, wtf weird. I didn't really think about it again until I saw this book, but I was instantly reminded of that story and wanted a more in-depth explanation on how the most oil-rich country in the world is so damn poor. Unfortunately I walked away even more confused and looking for other resources (hello Freakonomics!) to explain the whole mess to me.

I don't think that's what the author was going for.

Let me first say that I did not major in economics, nor do I study it on the side. Money and exchange rates and national banks, yeah I only understand the surface level concepts. I suppose I was thinking this was a book written for the layman since the author is a journalist, but he just jumped into things without even cursory explanations of the most important concepts needed to understand Venezuela's issues. For instance, I never really understood how the government owns these mysterious US "dollars" that everyone is trying so hard to "buy". Why can't people just buy all the dollars they want? And how do they have three different exchange rates?? Not to mention the whole concept of another country "adopting" the dollar as their currency. How the hell does that even?! Still no idea, and I think it's because there wasn't a basic primer on the concepts the author was using.

The most successful parts were the ones that (surprise!) I actually understood. Like how a permanent toilet paper shortage can really suck, and how hotels are cheaper to live in than buying a home. At least at the Renaissance they have toiletries. Stories about the super long lines to buy even the most basic necessities, and the black market that supplies them as well. The details of how the government has raided the oil company coffers time and again to pay for social programs that don't seem to work were disheartening. In fact, all of the government bloat was disturbing to read, especially since so much of it could be avoided or fixed with a different outlook from the various presidents.

I was mostly just disappointed at how little of the issues I really understood, but maybe that's my fault? I have the feeling that this is a book meant for general consumption, but I really had a hard time understanding the basic economic issues at the heart of Venezuela's problems. I think that if you had that kind of background or understanding this would been more enjoyable, but to me I am just walking away more confused and totally disappointed.

Copy courtesy of University of Nebraska Press/Potomac Books, via Netgalley in exchange for an honest review.

[Moein Esmaeeli · Rating 4 out of 5]

Although sometimes this book got me bored, it was interesting.This book resembles my own country, Iran. It's really easy to replace "Venezuela" with "Iran" and have a new book. Price control, subsidy, free houses for the poor, ideological government, devaluation of national currency, power and water outage... .

This book tries to explain how Venezuela came to this disaster and it has a more historical approach than economical( I don't have much knowledge about economy anyways). If you are interested in Venezuela or live a country that is following the same path, I think this book can help you.

A quote from the book:

"It may also require a more educated population. Giving Venezuelans a compulsory and basic economic education is of paramount importance. The country will continue to make the same mistakes of the past century if people lack the basic understanding of the way money works and the problems that have shaped Venezuela into what it is today. Children must learn early on the source of the problems of their oil-drunk nation."

[Amanda Aller · Rating 3 out of 5]

I was out of my depth here but I would recommend this to someone with more of a foundation in Economics or to someone who is writing a dissertation on Venezuela's economy. It's ripe with facts and statistics which makes it great for referencing for a paper but to read straight through was painfully monotonous.

[Rahul · Rating 4 out of 5]

I found the book very helpful in giving a deep insight into how day-to-day life works in Venezuela and how does the society think. It has been in the news and the author has meticulously made his case giving a context of how things are why they are and what can be done to change it for the better.

The way Venezuela works is shocking and totally unintuitive – people and the government do not believe in saving for the future because the country heavily relies on oil money (ever since they found oil in the early 1900s). Because the government spends heavily all of the oil revenue there is high inflation which causes further incentive to not save as it eventually loses its value kept in a bank. Faced with shortages and resulting ever-lasting price controls make matters worse - smuggling and black market. The government faced with challenges and following populist measures plunders coffers of well-run private companies – nationalizing them, filling them with loyalists, thus increasing payroll and making them heavily inefficient.

Day to day life is full of crazy wait in lines at shops and still failing to get basic necessities like spare car parts and even toilet paper. The book contains so many such examples giving a clear view of the life that at a point you find them repetitive. But they are basically needed to understand how things work in an economy gone wild!

The book explains the Dutch disease – a phenomenon that occurs when the success of one natural resource ruins the rest of a country’s economy. Countries like Norway have taken special care to avoid it when they found oil in the North Sea). That was a new learning!

The stark call out in the book was that due to rampant corruption “…Venezuelans wanted a firm hand that would upend the rotten state of things…… Venezuelans lack enough formal education to achieve abstract thinking. Most of them are susceptible to emotions not rational thoughts when it comes to politics.” Sounds like a vicious circle - deny the public opportunities to learn, know better and then play to the gallery. The general public’s view of money and governance is heavily distorted, out of touch than the whole world. They view government’s duties to be as a favor to them and are heavily used to populist measures.

The author calls out well-functioned oil-based economies who have created Sovereign Wealth Funds to diversify and invest for the future as an example. But looking at the present state of affairs it looks unlikely to happen unless there is a sudden painful event. Also, when I picked up the book I hoped it may provide an answer if the “socialist” policies led to its present dismal state but it doesn’t talk about it. You may have to draw your own conclusions.

[Meredith · Rating 5 out of 5]

This is just the crash course I needed on Venezuela. I liked how the author told Venezuela’s history from both an economic and cultural perspective. Would recommend to anyone who is trying to gain a better understanding of current events.

[Candy · Rating 2 out of 5]

Being a news junkie, I read all sorts of articles in various newspapers and websites. I had read several articles about Venezuela and it's messed up economy but I couldn't really understand how such an oil rich nation was on the brink of economic collapse.
Gallegos actually lived in Venezuela and is able to give first hand accounts of the county's drunk spending habits. His research is very thorough and he includes a wealth of information and interviews about what is going on. Unfortunately it is too much information as his points get obscured by the sheer volume of statistics, history, etc. The overall effect is some eye crossing dry chapters.

* ARC provided via NetGalley *

[johnny maldonado · Rating 5 out of 5]

Fantastic book on Venezuela and what has happened there over the last 50 years. It focusses a great deal on the Chavez period but also goes back to how the discovery of oil, from the beginning, had far-reaching consquences for Venezuela's history. Good balance of stories and some light economic theory mixerd with the journalists (Gallegos) experience covering Venezuela over many years. Good read to get a sense of Venezuela and it's economy.

[Michael Davis · Rating 5 out of 5]

One of the best written books I have read. It explains Venezuela’s history with its oil wealth and how this wealth has actually led to many economic problems for the country. Does a really good job explaining the “Dutch Disease” phenomenon and how it has ruined the Venezuelan economy. A great lesson on how financial management policy is key to leading a successful government and just having resources and wealth means nothing for people if it not managed effectively.

[Lynn · Rating 4 out of 5]

Grim Account of a Nation Whose Economy is Gas

The money is concentrated on a few wealthy individuals and international corporations. There is a boom and bust economy. Infrastructure and public needs aren’t planned well and rushed when there is a boom, lost and unfinished in a bust. The economy focuses solely on oil but not public goods so everything is imported.

[Alex Stern · Rating 4 out of 5]

This book explores the sad but revealing story about an oil rich country with a long history of dictators, corruption, and mismanagement. The author explains the problems of modern Venezuela with interesting anecdotes, fascinating interviews, and basic economics.

[Kay · Rating 3 out of 5]

3+

[James · Rating 4 out of 5]

Good case study in how crony socialism can run amok and ruin a democratic country.

[Sara · Rating 3 out of 5]

3.5 only because it was a little over my head at times, however an interesting read on the crisis plaguing Venezuela and the effects of government corruption.

[Jesus Marquez · Rating 5 out of 5]

Este es uno de los mejores libros en no solo recontar la lamentable situación por lo cual está pasando Venezuela en este momento, pero también en reconocer que es una situación que ya se ha dado muchas veces en la historia de este país. Raul Gallegos explora las increíbles situaciones que se dan en lo que es posiblemente la economía más loca del mundo. Una economía en la cual el venezolano se ha acostumbrado a vivir por generaciones de tal manera que cosas que para un extranjero parecen increíbles simplemente son el modus operandi en Venezuela.

Mientras el enfoque del libro es en explorar la presente crisis económica del país, también resalta la importancia de la cultura política y social que se ha venido desarrollando en Venezuela desde el descubrimiento y la explotación del petróleo en su territorio. Petróleo que cambio el rumbo del país de la noche a la mañana e inundo al país de dinero fácil que nunca ha aprendido administrar. Administración tras administración simplemente han seguido con el vaivén del precio del petróleo pensando en el presente sin ninguna precaución o preparación para el futuro, utilizando cuánto dinero fuese posible para realizar sus propios sueños de grandeza y asegurarse que se mantuvieran en el poder por el mayor tiempo posible.

El libro también resalta las muchas fallas en la administración económica del país bajo el sistema político implementado por Hugo Chávez y que continúan siendo expandidas bajo el mandato de Nicolás Maduro. Fallas, que en la nueva realidad de petróleo a bajo precio, son imposibles de ocultar simplemente con la impresión de más bolívares. Pero, Gallegos deja claro que este sistema político no ha sido el único que ha desperdiciado el boom petrolero. El argumenta que para sacar a Venezuela adelante el venezolano debe aprender sus lecciones y hacer los sacrificios necesarios para cambiar la cultura del dinero fácil que ha sido creada por el petróleo.

Lamentablemente esta forma de pensar esta tan arraigada en la cultura de Venezuela que hace muy poco probable que Venezuela pueda cambiar algún día, sin importar quien este en el poder.

[Noah · Rating 5 out of 5]

What a fascinating book! I already knew a fair bit about Venezuela, but I've learned SO MUCH more! The title is "Crude Nation: How Oil Riches Ruined Venezuela." Notice it isn't called: "How Hugo Chávez and Nicolas Maduro Ruined Venezuela." The book's thesis is that Venezuela never was able to cope with the insane wealth emanating from its oil reserves. And the book does effectively show that Venezuela's economic and political problems emerged long before Chavismo, and that Chavez's populist Bolivarian Revolution was a product of continuous failures of the economic and political climate - not the initial cause. Chavez certainly exacerbated the country's problems and clearly Maduro has taken it to its breaking point, but this economic and political history of Venezuela's relationship with its oil reserves reveals it is so much more complex than these two figures. Venezuela should've created a sovereign wealth fund to use oil wealth to invest in infrastructure or provide rebates to citizens... see Alaska's own resource scheme. In any event, the book further corroborates the "resource curse" which has plagued so many countries in Africa, Latin America, and Asia endowed with natural wealth. I was worried based on other reviews here which said the book was dry and repetitive - but I did not find it to be so at all. 5 stars. Highly recommend.

[A. Roots · Rating 2 out of 5]

I read this a bit ago and just remembered to add it (oops). It is really dull and meandering. Chapter one begins with the author explaining how he exploited the economic crisis in Venezuela, smuggling in a briefcase of money to live a lavish lifestyle while being well aware that those he paid had little access to basic necessities. The book feels deeply narcissistic and without much of a point to it. I have rated the title two stars instead of one because there are a few good illustrations of the cause of the country's economic crisis (such as the number of different exchange rates for the Bolívar in a single day). The author is a decent writer, but it was not an enjoyable or particularly interesting read.

[David Jimenez · Rating 5 out of 5]

An exploration of the lives and habits of Venezuelans and how it has lead them to their current situation. Having the biggest oil reserves in the world but being at the same time one of the countries with the most misery and violence in the world.

“A century of topsy-turvy oil riches has shaped the tastes, spending habits, and political beliefs of generations of Venezuelans. They have learned to prize fleeting things such as physical beauty, cars, and flashy consumer goods today, because they may not have them tomorrow.”

[Analisa · Rating 5 out of 5]

I picked up this book to try to understand why socialism didn't work in this country, at a time when has been heavily debated in ours. I tried to peruse it carefully but at the end of the book I still feel a need to read it again. Obviously a country is made up of a thousand different ties all interwoven... its origin, independence, climate, natural resources, etc etc. Gallegos laces it all together pretty seamlessly. But at the end, it all still seems so bizarre and irrational.

[Adrián Olvera · Rating 5 out of 5]

Muy buen libro, te da a entender el porque Venezuela tiene muchos problemas y realmente en pleno 2023 las cosas siguen empeorando a lo que describió el libro en el 2016, también te muestra que otros países de América Latina también pueden caer en la misma trampa aunque no sean países productores de petróleo al nivel de Venezuela.

[B · Rating 4 out of 5]

An unabashedly capitalist viewpoint on how oil started a downward spiral further exacerbated by economic mismanagement of subsequent Venezuelan governments. This is a worthwhile (though far from comprehensive) read for anyone wondering, "So why IS Venezuela rioting?"

[Harini R · Rating 4 out of 5]

Venezuela is an evolving story. A wonderful read to get a perspective on historical, political and cultural habits of oil rich Venezuelans leading up to the current crisis. Would have loved for it to have more narratives on the hard life being lived there.

[Yang Sun · Rating 5 out of 5]

I grow up in more socialism era in China, and always found it's hard to explain to my Canadian acquaintances why socialism is a bad idea, now this book could easily do that for me.

[Henry · Rating 5 out of 5]

The book opens with several paradoxical experiences about a person living in Venezuela, due to the fact that the economics of Venezuela has been so mismanaged (as of I’m writing today, Venezuela is experiencing the largest refugee crisis in the Americas).

However, it should be noted that the election of Hugo Chávez is a symptom of an earlier issue. As the author noted, Venezuela experienced a harsh banking crisis, resulting in the loss of many people’s savings. Under this background, Chávez was elected. Chávez’s main thesis of election is that he believes Venezuela, flooded with oil wealth, ought to spread the oil wealth to the rest of the citizens (as many citizen interviews informed the author that, in their eyes, Venezuelan corporations are akin to their enemies. And they believe stripping away corporation's wealth would solve Venezuela’s problems).

Under Chávez, the Venezuelan government grew increasingly powerful and gradually nationalized many sectors, especially the oil industry. He increasingly spent the money from the oil industry on mass public goods projects. And for a while - buoyant by the record oil price - his policy worked. He also took on massive public debt to fund those projects, in case he couldn't obtain the funding from oil money alone.

After his death, oil prices (unrelated to his death) normalized, leaving Venezuela with a massive budget hole to fill. His anti-business policy also worked, with many of the business people (as well as white collar workers) fleeing the country. Many of the policies set to curb price hike led to massive shortages. Hyperinflation - while it was bad before - got much, much worse.

But my main takeaways are two:

One - people vote with their feelings, not the innate understanding of how things work. An average worker does not pile their free time reading histories of the result of each economic policies (the irony is that, Latin America is a continent full of similar stories of economic mismanagement).

Thus, when a populist policy - however nonsensical in the long run - becomes the national de facto policy, it’s futile to argue with the voters. Yet, because of this human tendency, an arbitrage opportunity would be formed, which leads to my next takeaway:

Two - things do not happen overnight. After a huge policy shift, it takes time for things to play out, even if one could somewhat forecast the ending of the policy. Venezuela’s policy has a high probability of economic collapse. Yet, the collapse does not happen overnight. A wrong way to approach it would be seeing collapse not happening overnight - or over a decade - and wrongly assume since a long time has passed, the collapse won’t happen (that this time is different). A smarter way to approach the issue is knowing the eventual collapse, prepare early, and set bets that would benefit from the paradoxical policies (and - do not aim to make the last penny).

[Gabriel Benitez · Rating 5 out of 5]

Hay que leerlo para creerlo. Los que hemos leído libros sobre el caso Venezuela por lo general nos quedamos en lo meramente político y en ese circo populista que ha sido siempre la "revolución bolivariana". Pero olvidamos que detrás de todo ello hay más que solo un mal gobierno y una ideología populachera, sino que existe toda una cultura económica de locura que ha sido desarrollada, irónicamente, en torno a la abundancia. Las increíbles reservas petroleras y todo el montón de dinero que entraron al país (ya no) podrían parecernos una bendición que debería haber llevado a Venezuela a la estratosfera de la modernidad. Pero no fue así. La sobreabundancia es un peligro mortal que puede terminar en desastre si no se sabe administrar. Es una cobra venenosa que parece hecha de oro.
La sobreabundancia lleva a una escalada de precios increíble que causa sobreinflación que intenta ser apaciguada con más dinero y que en realidad es como echarle más fuego al fuego para apagarlo. Destruye también las empresas internas porque al país le resulta más barato importar todo lo que necesita que producirlo por él mismo. La gente acaba acostumbrada a recibir todo prácticamente sin trabajar. Y ahora súmemele a eso un gobierno populista... Si antes la pasaban mal, el gobierno Chavista acabo por hundir al país de una forma brutal, y todo el dinero que habían recibido por una de las mejores compañías petroleras del mundo (Pedevesa) se fue por el caño en solo dos sexenios llevando a los venezolanos a una miseria sin precedentes.
Este libro no lleva a conocer la economía de verdadera locura que se vive dentro del país, desde la gente que intenta sobrevivir el día a día con una moneda que se devaluó en un año ¡180%! hasta las pocas empresas que aun intentan sobrevivir en una economía que parece arrancada de La Dimensión Desconocida.
Pero también es un libro que nos pone en perspectiva: no es solo el gobierno en creador de toda esta miseria, es también un pueblo irreflexivo sumido en una cultura individualista y paternalista que hace que se centren solo en ellos y no en el bien de la sociedad.
Este libro es una advertencia de que, como decía Chávez: "Ser rico es malo" ... cuando no sabes administrar tus riquezas. Pero si en Venezuela ser rico es malo, ser pobre es peor.

[Mario · Rating 5 out of 5]

I read this book because I wanted to understand a nation that often comes up in conversations and the news. I wanted to understand if Venezuela really became such a disaster due to extreme social spending. If so, whose fault is it? Hugo Chavez or Nicolas Maduro?

I suspected the answer was likely to be far more complex than the superficial knowledge I encountered from laymen and journalists writing 500-word articles. As it turns out….yes, it is far more complex.

I came away from the book with a much greater understanding of Venezuela's history, how oil wealth affected it, the psychology of the nation in play, and so on. I held a very negative opinion how the country is operated but learning about it tempered and mellowed my view. Now I just think it's tragic.

There were a few surprises. I knew the book was likely to affect my thoughts and feelings on Chavez/Maduro to an extent, but I came away with a large impression of an important Venezuelan figure (Juan Pablo Perez Alfonzo) I somehow wasn't familiar with despite his importance. I was also surprised to discover how it also affected my view of the state oil company PDVSA.

Amazingly, one opinion that changed is my opinion on Venezuela's spending habits. I already thought it was horrible, but the book actually made it look even worse.

The book really held no punches on that front. As if the rest of the book didn't impress it strongly enough, at one point, the book spends several paragraphs just excoriating Venezuela's horrific budget management. Not just on its own merits, but by comparing it against multiple other countries in similar situations and even against Venezuela's OPEC partners.

Unfortunately, the book didn't touch on the consequences of the sanctions on Venezuela but that's due to it having been published before the sanctions. The afterword ends talking about 2016, but the sanctions on Venezuela didn't become critical until 2019-2020.

Overall, I learned a lot about how Venezuela operated, its history, and how it came to this point in time. I recommend this book for anyone interested in learning as I did.

[Neal Leslie · Rating 3 out of 5]

I found this book to be informative but exceedingly dull. Mercifully it was fairly short...just shy of a couple of hundred pages.

Venezuela is a country whose economy has been turned upside down because of oil. During the Great Depression, while most economies were suffering, Venezuela was experiencing a boom which led to the bolivar actually being worth more than the dollar. The end result was that it was cheaper for Venezuelans to import their products than manufacture. Over time there was a migration from the countryside to the city as Venezuelans gave up their agrarian economy in favor of one based on oil. Unlike other countries like Norway that set aside some of their oil revenue for harsher times, Venezuela's constant theme was (and is) spend, spend. Irresponsible economic policies have also exacerbated the situation: Using the central bank as a slush fund. Price controls for basic necessities that have created a black market in neighboring countries. Having 3 different exchange rates. Also their state oil company PDVSA remains unprofitable because it also serves as a bank account for the president's social programs.

Raul Gallegos calls it "Mango Management," named after an incident in which a woman threw a mango at Maduro with a note attached wanting a free house (which she got). The Venezuela government careens from one crisis to the next as if being hit in the head with a mango with no long-term policy to address the underlying problems.

Raul Gallegos does a good job in presenting the facts without too much prognosticating. Venezuela has become such a talking point on the right for an example of the failure of socialism. Venezuela's problems long predate Hugo Chavez. They found oil in 1914 and haven't yet understood basic economic principles on when to spend and when to save or how to diversify their economy to be less dependent on oil. Bad policies are bad policies. Whether you want to label them as socialism or just plain bad.

[David Chabot · Rating 4 out of 5]

Browsing the shelves of my local library, I came across this highly relevant book given current events. As Venezuela is going through a unique geopolitical crisis, it is useful to understand where the country comes from and where it was headed.

Although somewhat dated today (it was written in 2015), Crude Nation is a journey into an economically ailing society. This grand socialist experiment was destined to collapse, despite the country’s virtually infinite oil wealth.

From the boom years of the 1970s and 1980s, social sclerosis gradually set in as the lofty socialist principles of Chávez and Maduro collided with reality. Price controls, supply management, and rigid currency controls piled up, creating a society that borders on the dystopian.

The book offers valuable insights into macroeconomic turmoil, but also into the daily lives of ordinary people on the street. Frenzied consumption, superficiality, and short-term thinking prevailed over saving and investment in a society where “tomorrow” could bring runaway inflation or a collapse in oil prices—the source of all wealth.

This is a book every politician should read. It is a true journey into the world of what not to do in economic policy.

[Avil Ramírez Mayorga · Rating 4 out of 5]

¿Por qué se jodió Venezuela? Una pregunta que formulada en el 2024 -el libro es del 2016- podría superficialmente decir que se jodió por permitir la entrada del socialismo al país, ya que es un modelo inviable y que tiende a un camino de servidumbre hacia el totalitarismo. Parte de razón se tiene, pero no permite comprender tal descalabro económico.

El autor sostiene que el petróleo, ese oro negro, ha sido la gran bendición y condena de los venezolanos. La adicción a la que tanto gobernantes como gobernados se sometieron hicieron de esto una fatal dependencia, ya que sirvió como caldo de cultivo para populismo fiscal, y generar la sensación social de que el gobierno debía ser un "papá Estado" a punta de generosos e irrealistas subsidios.

Pero, ya entrados en la poco fascinante etapa del socialismo del siglo xxi, veremos como elementos -no necesariamente nuevos en la historia venezolana- como el control de precios de todo tipo de productos o la libre conversión del Bolivar al Dólar fue distorsionando la realidad económica hasta llevarla al desastre que hoy conocemos y que en el libro se quedó corto en el año 2016.

En fin, no saber administrar una riqueza más ignorancia económica no es una buena combinación. Este libro debería ser leído por todo aquel interesado en las finanzas públicas, sobretodo en aquellos países bendecidos por los recursos naturales.

[Kat · Rating 5 out of 5]

July 31st, 1914: The day one of the biggest oil reserves in the world was discovered in Venezuela.⠀
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How can a country with one of the biggest oil reserves in the world be in such economic turmoil? It's quite simple actually. Politicians continue to mismanage the oil wealth while situated under the disguise of socialism. ⠀
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This book is an incredibly insightful look into Venezuela's economic past and present (2015). The sad thing is, the economy has already changed drastically again after only 5 years. "The truth is, I cannot write fast enough to keep up with the bolivar's loss of value."⠀
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For some tips on how to create economic success out of oil wealth, read this book! It goes through failures and successes from many countries around the world. You may even learn something about your country! I sure did. 🇨🇦⠀