One, he could just get subsidies from Russia. The recession probably lessens the possibility of that, however.

Two, he could simply find some other industry to plunder, or failing that, some nearby country to despoil.

Or three, the most likely option, he can simply order his citizen-slaves to tighten their belts, and not put their own selfish needs before the good of the state. Total, abject poverty is perfectly consistent with collectivist nations. And one need look no further than the Khmer Rouge for a fine example of the ultimate, gleefully deliberate, brain drain.

It would be funny if it wasn’t so tragic: are we to imagine that Chavez really *didn’t know* that this was going to be the result? As Hank Rearden would say, “What exactly is [Chavez] counting on?”

In one sense, yes. But Chavez has also built his plans for power upon the assumption of ever-increasing oil revenue — with the idea that no matter how much money Chavez wastes or gives away to his cronies throughout Latin America (via discounted oil prices), the cash will keep pouring in.

But Venezuelan oil production has been falling according to this article from last October. The cause is political interference by Chavez.

“The [state oil] company [PDVSA] now grows food after Mr Chavez’s price controls emptied supermarket shelves of products like milk and eggs. Another branch produces furniture and domestic appliances in an effort to stem the flow of imports. What PDVSA seems unable to do is produce more oil.”