Venezuela as a modern day superpower

[rfmcdonald]

Beyond these, I am deeply skeptical of the idea that it would be possible to keep different immigrant populations from being concentrated in different places. The sadly misused term "chain migration" is entirely right: People tend to move to different locations based on their knowledge of different destinations, very often this knowledge is transmitted by people they know, and very often the people sending and receiving this information share significant identity traits (ethnicity, religion, region, sexuality, et cetera). This is a normal thing, an adaptive trait that helps people become settled in their new homes, by giving them some knowledge in new environments not entirely unfamiliar to themselves and by giving them connections that they can use to find homes and get work and make human connections.

This is normal. This is something that occurs even when there are very low perceived barriers between immigrants and their host populations. I am quite fond of telling the story of Toronto's midtown neighbourhood of Earlscourt, which boomed in the early 20th century as a destination of choice for immigrants from England.

Earlscourt - Wikipedia

en.m.wikipedia.org

The only example I know of a democratic high-income country that lacks this sort of concentration is Singapore. That country stands out particularly for its near-total control over housing, as well as for the fact that many recent migrants are guest workers with relatively little say. Even there, I would argue this relatively even distribution was made possible substantially because, at least when it came to big racial categories, Singapore was homogeneous. A country with a population where 70-75% of the population belonged to a single broad cultural group is already pretty homogeneous.

Immigration to Venezuela, inevitably, will see processes of chain migration. How can it now? The countries that are closest to Venezuela, culturally and geographically, that will become the first and biggest sources of immigrants, but principles associated with chain migration will still manifest here. Why will Ecuadoreans, say, or Catalans, or Neapolitans, not want to congregate? Is it actually worthwhile for this government to actually diminish social capital in this way?

 

[Lord Malikai]

I would like any information you can give me on the impact of existing SWF's, because I couldn't find anything to suggest at what size this amount of investment would become an issue. Since while I'm likely going to have to decrease the amount of public investment involved I want some way to figure out what the pragmatic "cap" and work backwards to get a figure for investment.

P/E Ratio
Elasticity of Demand of Stocks
Value of current SWFs (you already linked this, but for completion's sake)

Everything else I have referenced is my own calculations, which I have not been keeping in organized form, or just random facts I grabbed from wikipedia.

It also seems like this problem of induced instability would apply just as much if the SWF didn't exist, but individuals were still keeping their savings primarily invested. So I don't know whether this indicates that if enough people were using index funds that would create the same issues for the global economy. So I worry if this problem is unavoidable just by virtue of investing being sufficiently common for a population of this size.

Essentially, yes, you're 100% right - whether it's done individually or through a state-managed mechanism, I don't think a modern economy can sustain that level of investment into publicly-traded equities. This is why no major economy operates this way.

How much of this issue do you think could be solved by shifting a large fraction of the SWF away from public investment?
I'm considering putting a lot of the money into angel investing managed by investors who have the best track record for predicting the success of startups within the prediction market. On its own I don't know whether there are enough startups for this angel investing to practically use much of the money involved here. So while I can put a lot of money into different forms of non-public investment these areas will have their own thresh-holds for how much capital they can receive before they suffer from the same over-investment.
I hope to be able to still maintain the social security and government banking systems, but this may depend on how much investment of all kinds the global economy can accommodate.

There are virtually no angel investors who have "the best track record" that aren't purely luck based. Angel investing is also highly speculative.

Fundamentally I think a big issue is that you're trying to use a small economy's advantages when that economy is very large. This simply doesn't work because it doesn't scale. To use a much smaller example to illustrate: if I have 10,000 USD worth of total assets to my name and invest it all in cryptocurrency, I can do that without making much of a splash. If Bill Gates took his 100 billion USD and invested it all in cryptocurrency, he would very nearly own the whole market. There would be literally no cryptocurrency market that he didn't own. By the same token, Norway can act like Norway because it has a tiny population and disproportionately massive natural resources. An economy like the U.S. or Japan would completely overwhelm whatever market if they chose to act like Norway.

 

[rfmcdonald]

If anything the adoption of psychedelics is the cultural shift in the setting that is the least difficult to imagine. Psychedelic drugs are only as vilified as they are because the War on Drugs demonized them

There are no traditions of their use in Venezuela, certainly not on such an institutionalized scale. Expecting this to take off on the say-so of a benevolent dictator is certainly a choice.

 

[JDF_01]

Look, i am venezuelan and looking at the POD date and the aim of 'expansion' and power you are looking to have it is basically impossible, at best what you could achieve is a country that in TTL it would have 15-20+ more people if, and only If you manage to keep and stable and steady trickle of migration which we had in the 50's, 70's and 80's but instead from the 50's onwards til the 21st century non-stop, first of all, have MPJ somehow manage to hold power and negotiate a peaceful transition in the 70s providing he will keep the developist policies he had in the 50's (which indeed involved diversifying the venezuelan economy (birth of the siderurgical industries in thecaroní river industrial axis (ciudad guayana and others) and the atoms for peace initiative with american help which it could have developed into full nuclear comercial power instead of just having experimental reactors in the IVIC outside of macarao) in the fifties we had a MASSIVE influx of migrants considering the country was at best around 4-5 million of inhabitants and we received 1 million between 1950 and 1960, but most went back to europe if you somehow manage to keep those peoples in the country (even desperate measures like paying the ticket to all those peoples families just because you want as many european qualified manpower) would help to have a bigger population but it wouldn't be enough to reach that massive numbers proposed, it would need to be steady to achieve at least 45 million inhabitants instead of the 30 we have OTL if Perez Jimenez rules into the 70's i suppose we'd have at least built a national railway network and at least a metro in each major city (Caracas, Maracaibo, Valencia-Maracay, Barquisimeto) which would help to have an urban population without that influx of migrants going exclusively to Caracas and building those misery belts that are barrios today, after a peaceful transition to democracy in the 70's it would be necessary to keep the national politics as multipartisan as possible, avoiding the disaster that was puntofijismo from the 60s, if MPJ leaves a remnant of Seguridad nacional as half efficient as it was in the 50's the turbulent periods of guerrillas in the 60's and 70's could be avoided or at least it would be shorter...

So it may be that i'm glorifying MPJ but not, it was a brutal dictatorship but it left so many infrastructures, institutions and companies that still operate and are in use today, and i am proposing having him at least 15 years more providing he does not devolves into a typical tyranny that lefts the country poorer than it was before, after that it would just be preventing a partisan monopoly like it was with AD/COPEI and instead having multipartisan politics, maybe including turning from a presidentialist republic into a parliamentary republic with a more prominent figure of prime minister than of the president but not necessarily having only one, just wondering how it would turn out if we were as lucky as we could be...

Also regarding immigrant influxes into venezuela, it would not be necessarily steady but we could have it go almost non-stop, preventing many of the european immigrants returning in the fifties, having a somewhat more canalized latin american immigration in the 60's, screwing a bit brazil in the 60's and 70's so more portuguese immigrants go to Venezuela rather than brazil (venezuela easily could go the way argentina went with italians but with portuguese), again canalizing the colombian immigration in the 80's, and planning something with all those people from the former WP-USSR to having them go as many as they can here instead of western europe (want me some commie engineers :v ;v ) so that would grant you would have a big enough population to be a regional ONLY regional power.

At best we would have to resort to soft power from Miss Venezuela, Grand Prix of Los proceres, and having that prototype of Club world cup that MPJ inaugurated in caracas in the 50's and that sadly failed in the 60's thanks to some basque terrorists to build a tourism based economy and of course a diplomacy based power (a powerful seguridad nacional helping Colombia, Perú and Nicaragua fight their guerrillas and somehow toppling castro), using that favors to build a free market-transit area based in Los Andes that could easily expand into Chile and Argentina providing it won't be a dead letter like the Comunidad Andina would be as much as we would achieve a POD as late as that

 

[rfmcdonald]

If anything the adoption of psychedelics is the cultural shift in the setting that is the least difficult to imagine. Psychedelic drugs are only as vilified as they are because the War on Drugs demonized them in order to target hippies and other countries copied the US. Psychedelics were also very prevalent in human cultures until relatively recently, and the modern demonization of them isn't going be the norm for immigrants from countries who don't share the US's hysteria (even if their drug laws are likely to be heavily copied off the US).
The existence of bad trips is also not much of an argument here, it just means people shouldn't treat these drugs carelessly (and plenty of cultures have regularly used psychedelics for centuries or millennia). Thinking bad trips could be prevented with a better understanding of psychedelic pharmacology also displays a poor understanding of how they work. The factors that determine whether a trip is bad are psychological, which is why people emphasize set and setting and starting out small.

There is just no tradition established in Western countries of psychedelic use. There may be groups within Venezuela that do—some Indigenous groups plausibly might—but these are not groups that have been influential. The dictator will be introducing a very novel pattern of drug use to a diverse population that has little experience of this.

More, the scenario being described—of a charismatic dictator who is encouraging everyone to undergo trips—sounds even worse if avoiding bad trips is not a matter of paying more attention to dosages and purity. If bad trips are a consequence not of dosage pissues but rather of internal psychological states, how can a lot of bad trips be avoided? At the very least you would need a mid-20th century Venezuela that had a much more effective mental health system than any country has now. Much more plausibly, you will have a scenario where people feel pressured to try hallucinogens without actually being ready for them, and end up having a lot of bad trips.

 

[cjc]

This is the point where I think you're deliberately trolling. Who ever said anything would exceed 70 trillion dollars? You have said you envision this SWF as combining people's social security and personal bank accounts. In the U.S. this would be approximately 4 or 5 trillion USD, so I assumed the Venezuelan version would be roughly equivalent. You also mused a few posts up that the average company would be owned 10% by the Venezuelan SWF, which translates to a SWF of about 7-8 trillion USD. This implies a SWF of about 4-8 trillion USD. I have consistently used this range in my calculations.

The sum total of all sovereign wealth funds, per Wikipedia (that you already linked) is about 9 trillion USD. However a quick look through the asset allocation of the bigger funds shows that they are not all allocated to publicly-traded equities. In fact you're looking at something closer to 50% allocated to publicly-traded equities, call it 5 trillion USD if you want a round number. In addition if you look at the historic P/E ratio you will find the average consistently inching upwards; at the same time SWFs were growing. I have not done the math on this, but you may have contributed usefully to economics by suggesting directly what the math suggests indirectly: that the increase in SWFs *is already overheating the market to a mild degree*.

Now if you dump a hypothetical 4-8 trillion USD into the equity market that can only sort of handle the existing 5 trillion USD of all SWFs, then the elasticity of demand kicks in just as I calculated and that's how you blow up the market.

I wonder, could we get a Venezuelan SWF up to about the level of UAE or other gulf states by 2010. What would that take?

 

[Dan1988]

I wonder, could we get a Venezuelan SWF up to about the level of UAE or other gulf states by 2010. What would that take?

Not really, no - if one existed, in reality it would have been much more modest because of calls for PDVSA (or whatever its equivalent is in TTL) to fork over its revenue. The common retelling of Venezuelan history IOTL now is that PDVSA was long identified as being an institution of the élite that didn't do much for the people; any SWF created from PDVSA's revenues would thus have that same taint. Having said that, the modern SWF is a very new concept that only came into the public consciousness very late in the 20th century, so it would not have been widely known as a possible solution during the Cold War period and is largely a fad of the post-industrial era. However, smaller-scale SWFs that are narrowly targeted towards funding certain public services could be much more doable that could use some of the surplus PDVSA revenues, and would be much more in tune with Latin American society at the time. For that, there are actually concrete examples - many US states, such as Texas' Permanent School Fund and the Permanent University Fund, have long used the same thing, and before 1973 oil revenues were able to finance public services and infrastructure developments in Venezuela for a long time under both democracies and authoritarian regimes (helped, of course, by having constant and predictable oil prices). After 1973 was when everything broke down because the price fluctuated so much it tore up the old model to shreds, so having smaller-scale SWFs as a price stabilization mechanism could work (as well as having Venezuela treat it as the crisis it was rather than the boom it had been) instead of having a giant SWF to the level of the Gulf states - which would be tempting as a vehicle for corruption.

 

[cjc]

Not really, no - if one existed, in reality it would have been much more modest because of calls for PDVSA (or whatever its equivalent is in TTL) to fork over its revenue. The common retelling of Venezuelan history IOTL now is that PDVSA was long identified as being an institution of the élite that didn't do much for the people; any SWF created from PDVSA's revenues would thus have that same taint. Having said that, the modern SWF is a very new concept that only came into the public consciousness very late in the 20th century, so it would not have been widely known as a possible solution during the Cold War period and is largely a fad of the post-industrial era. However, smaller-scale SWFs that are narrowly targeted towards funding certain public services could be much more doable that could use some of the surplus PDVSA revenues, and would be much more in tune with Latin American society at the time. For that, there are actually concrete examples - many US states, such as Texas' Permanent School Fund and the Permanent University Fund, have long used the same thing, and before 1973 oil revenues were able to finance public services and infrastructure developments in Venezuela for a long time under both democracies and authoritarian regimes (helped, of course, by having constant and predictable oil prices). After 1973 was when everything broke down because the price fluctuated so much it tore up the old model to shreds, so having smaller-scale SWFs as a price stabilization mechanism could work (as well as having Venezuela treat it as the crisis it was rather than the boom it had been) instead of having a giant SWF to the level of the Gulf states - which would be tempting as a vehicle for corruption.

Well like you mentioned SWF have actually been around sense the late 19th century, gust not very large ones and not known by that name. And it seems like the problem is the people not that it couldn't be done. Maybe a authoritarian regime could do it, after all its not like any of the other gulf states SWF are run by democratic governments.