Venezuela's interim government, installed after US ouster of Maduro, is reforming the oil sector to attract foreign investors.
This policy benefits the global energy market and foreign capital interests by increasing the certainty of supply and the potential for profit. It harms the political stability of the Venezuelan populace and the principle of sovereign legitimacy by tethering economic survival to the whims of external investors and the recognition of an unproven interim authority. The arithmetic is uncomfortable, but the arithmetic is the argument.
Let us count.
On one side of the ledger, we have the foreign oil investors. For them, the pleasure is high in intensity and high in certainty. The reform of the oil sector is a mechanism designed to reduce the friction of political risk, transforming a volatile landscape into a predictable stream of dividends. The fecundity of this pleasure is significant; a successful extraction project produces not just immediate wealth, but a secondary wave of infrastructure, employment, and secondary market stability. We must also count the global consumer, whose pain - manifested as high fuel costs and energy insecurity - is mitigated by the increased flow of Venezuelan crude into the global market. The extent of this benefit is vast, touching millions of lives through the stabilization of energy prices.
On the other side, we find the Venezuelan citizenry, a population whose welfare is currently being used as a collateral for economic restructuring. The pain here is profound in its duration and its uncertainty. If the interim government succeeds in attracting investment, the potential for a reduction in physical suffering - hunger, lack of medicine, economic stagnation - is immense. However, the cost of this pursuit is a profound instability in the legal and political order. We are witnessing a gamble where the stakes are the very foundations of domestic governance. If the interim government achieves economic results without achieving democratic legitimacy, it creates a hollowed-out state: a machine for extraction that lacks the social contract necessary to prevent future eruptions of violence. The pain of a failed state, or a state that functions merely as a corporate subsidiary, is a long-term, high-intensity suffering that can haunt a population for generations.
The controversy regarding whether the United States has “effectively seized control” of the industry is, to a utilitarian, a distraction of sentiment. Whether the hand on the lever is Maduro’s or an American-backed interim official’s matters less than the measurable outcome of the lever’s movement. If the movement of the lever results in the feeding of the hungry and the stabilization of the economy, the “rightness” of the hand is a secondary concern. However, we must apply the dimension of purity. A policy that produces economic gain at the cost of permanent political volatility is not a “pure” pleasure; it is a tainted one, because the resulting social unrest will eventually erode the very economic gains it sought to create.
We must also weigh the dimension of propinquity. The benefits of oil investment are immediate and tangible - the arrival of machinery, the payment of wages, the flow of currency. The pains of political illegitimacy and the potential for renewed civil strife are more distant, yet they possess a terrifying certainty if the underlying democratic deficit is not addressed.
The legislator’s test demands that we look at the net result. If we permit an interim government to bypass the difficult work of establishing a democratic mandate in favor of a quick-fix economic reform, we are essentially building a house on a foundation of sand. The structure may look grand and provide shelter from the wind today, but the cost of its eventual collapse will be a catastrophe of much greater magnitude than the current economic hardship.
A rational legislator, seeking the greatest happiness for the greatest number, would recommend that the reform of the oil sector be coupled, with absolute necessity, with a transparent and measurable path toward institutional legitimacy. To attract the investor, one must provide the certainty of law; to provide the certainty of law, one must provide a government that the people recognize as their own. To decouple the two is to invite a cycle of boom and bust, of extraction and explosion, which serves only to increase the aggregate sum of human misery. We must not merely seek to fill the coffers of the state; we must seek to stabilize the lives of the people. Anything less is merely managing the symptoms of a fever while ignoring the infection.