Caracas Chronicles

So I had a fun back-and-forth with P. Challenger in comments about what it might take to end Venezuela’s insane – I really don’t think there’s another word for it – gasoline subsidy. For Challenger, any move to dismantle this well-loved (but, again, crazy) bit of social policy would be extremely risky in the absence of a careful understanding of why people feel the way they do about their fuel subsidies. To ignore that dimension, s/he feels, is to risk a serious affective rift with the population at large.

I’ve thought about this a lot over the years, and actually I think that’s wrong. I think conditioning major reform on building majority support for it first is a recipe for inaction.

Instead, Venezuela needs to move decisively to dismantle the gasoline subsidy. We can do that without setting the country on fire by timing the end of the subsidy to coincide with the introduction of a generous Conditional Transfer program that rewards poor households for keeping their children in school with cold, hard cash. Lots of it.

The key is to make the link between the two policies explicit. As gas prices go up, I think we should print “Thank you, your gas bill pays for poor children to go to school” on every gas station receipt and “This transfer is financed with proceeds from the gas price hike” on every Conditional Cash Transfer receipt.

And I think if you did that, within six months the notion of going back from that policy to the one we have now will seem just as crazy and suicidal as abandoning the gas subsidy seems to some today.

Say that to people and you tend to hear lots about the Caracazo, lots about getting people “ready” for such a policy, about “selling it” to them first. But, actually, I don’t think that’s right. I think that, so long as you sequence it right, it won’t really help to sell it first.

The reason finally came to me reading one of those hundreds upon hundreds of Steve Jobs eulogies we’ve seen this week, one that noted the way Jobs never did any market research reasoning that “people can’t know whether they’ll like an iPhone or an iPad until we’ve actually produced one.”

I think that’s the nub of it right there.

In the same way people who’ve never seen an iPhone can’t know whether they’d want one, can’t really speak logically about how their lives would be different if they had one, and are generally about as useful as guides for how to design an iPhone as an ashtray on a motorcycle, people who’ve never been on the receiving end of a half-way decent social policy framework just don’t have the frame of reference you’d need to contribute that to a debate on it.

To poor Venezuelans, the whole idea of being enmeshed in a wave of law-based reciprocal obligations with the state, one where access to petro-resources depends not on the old clientelist basis, as a reward for political support and ideological fealty, (or on outright destructive behaviour, like driving a lot) but depends instead on fulfilling responsibilities that will make both your family and society as a whole better off, that entire way of conceiving the relationship between the state and the individual is as crazy and impossible an idea to them as the concept of a phone with just one button on it was to all of us on January 8th, 2007th.

Leadership, in a context like this, isn’t about giving people what they want. It’s about giving people something so much better than anything they’ve ever had that they can’t even picture it until you willed it into reality for them. And it takes a visionary to make it happen.