Thursday, March 5, 2009
Hugo Chavez Orders Nationalization of Cargill And May Do So With Polar As Well
I remember it like yesterday. My older brother and I were playing Monopoly. He had Boardwalk and I had Park Place. It was at worst a stalemate. At best it was finally the possibility of success. Suddenly he took my deed to Park Place and said, "I am nationalizing this property."
"It's not fair, you are not following the rules." I said to my 12 year old brother who was much older and larger then I. He responded, "That's the risk of foreign investment when there is no international police or authority to enforce rules." That particular game illustrates the reality that when parents, teachers, or other authority figures are absent, the biggest and strongest can make up the rules to their advantage. Today's story about Hugo Chavez is a modern day enactment of that fateful monopoly game 40 years ago.
On Wednesday, Venezuelan President Hugo Chavez ordered the nationalization of at least some of the operations of the U.S.-based food giant Cargill. He also threatened to do the same with food maker Polar. Making up the rules as he went along, the bully justified his actions by accusing Cargill of growing specialized rice to evade price controls. "Begin the expropriation process with Cargill," he bellowed on national television. You see, this is a danger of socialism where the government has too much power. While one may suffer from delusions of grandeur, the delusion can quickly become a reality when a leftist president decides to take matters into his own hands. Mark Klein, a spokesman for Cargill, said the rice "was designed exclusively to manufacture parboiled rice, which the company has done at this site for the last seven years and elsewhere in the country for 13 years."
Will Kleins explanation stop the taking of the company? Unlikely. Cargill is a privately owned business with a presence in Venezuela since 1986. It employs 2,000 workers in 22 locations in Venezuela. Chavez fears no lawyers or court. As he summed it up, "It is the law."In August, Chavez showed his clout by nationalizing the Banco de Venezuela.
As I stared at the old monopoly game last night in between reading articles in the Wall Street Journal, I pondered out loud, do our current citizens really want to keep heading in a socialistic direction? Keep in mind, we are no longer playing with paper money. And unlike 40 years ago, Mom and Dad are not coming home any time soon to straighten things out.