As of yesterday, Venezuela’s oldest newspaper, El Impulso, has closed up shop. The editorial board named an inability to obtain paper as but one of many reasons for the paper’s decline, writing, “The obstacles we’ve faced to get paper, which we’re running out of, represent just one link in a difficult chain of adversities inherent to the country’s serious economic situation.”
Like other Venezuelan businesses, El Impulso faces a vast array of problems. Its ability to acquire essential inputs is compromised by government controls on the currency. These controls have led to sharp inflation, generating a crisis of uncertainty in the economy and leading trading partners to demand payment in more stable currencies, such as dollars or euros. However, restrictions on the foreign currency trade – primarily due to the government’s concern about capital flight, itself caused by utter disdain for property rights – have foreclosed this option.
Even setting these issues aside, businesses and consumers in Venezuela often face tremendous difficulty acquiring essential goods at any price, due to stifling import restrictions, price controls, and nationalizations. Over the last year, dozens of reports have shown empty store shelves while queues outside extend for literally hours. Meanwhile, daily operations are hamstrung by red tape and outright government thuggery.
There’s a lesson for Americans in the demise of Venezuela’s oldest, privately-owned newspaper – and not the immediately obvious one that central planning is a terrible way to organize economic activity.
Half a century ago, Nobel Laureate Milton Friedman wrote in his timeless Capitalism and Freedom that economic liberty is not merely a means to material wealth, but an essential prerequisite for – and component of – social and political freedoms. Over the decades, many have dismissed this idea out of hand; one of the guests on Friedman’s later PBS series, “Free to Choose,” refused even to acknowledge the concept of economic liberty, instead calling it “economic license”.
According to Friedman’s critics, this “license” is nothing more than a set of activities that government holds to be presumptively permissible; the contours of this domain are not matters of right – in the way something like freedom of speech is – but are ultimately subject to government control. The extent of this “license” depends only upon the extent to which it is useful in bringing forth the material wealth the government desires; when other government objectives – income equality, for example – are deemed more important, it can be dispensed with.
This view has enduring popularity largely because the connection between each sort of freedom – economic, social, or political – is not obvious. What, after all, could the corporate tax rate possibly have to do with individuals’ right to free speech? How do restrictions on imports affect the right of assembly?
Sometimes, this plays out in dramatic ways at the margins, such as in the recent Hobby Lobby decision. There, closely-held, religious businesses were pitted against regulations imposed under Obamacare that would have required them to pay for a handful of contraceptive services. While the businesses did not object to contraception as such, paying for some of the mandated services would have violated their sincerely-held religious beliefs. It would seem that Hobby Lobby was a cut-and-dried instance of economic interference curtailing the practice of religion, and indeed this was the position of the Court. Nevertheless, supporters of those regulations claimed that the business’ religious objections were merely a front for dodging regulations they found objectionable.
In contrast, the shuttering of El Impulso highlights, in stark terms, the intimate relationship between economic, social, and political freedoms. Whether or not it was their intent, the regime in Caracas has effectively starved out the private press by making it economically unsustainable. Without passing a law muzzling the press – though there’s been a bit of that, too – the government has effectively incapacitated the private media and substantively curtailed individuals’ ability to report and comment on current events and policies. In so doing, the government has done more than simply restricting free speech: it has also stifled the political opposition, leaving state media outlets to propagandize unchallenged. In short, the government’s assault on economic liberty, ranging from property rights to free exchange, has effectively suppressed the nominally social liberties of free speech, which has gone on to threaten citizens’ right to political participation.
We should never forget the relationship between economic liberty and the other freedoms we cherish. While recent events in Venezuela emphasize this relationship, we must also be careful to remember that these connections exist broadly, not just for media companies. To preserve our social and political freedoms, we need to defend our economic freedoms.