Three Lessons from Venezuela’s Economic Collapse: Policy choices turned an oil-rich democracy into a petrostate, then into an authoritarian economy where repression followed redistribution. (Matthew D. Mitchell, January 23, 2026, Daily Economy)
Oil was not the only explanation for Venezuela’s 1970s prosperity. The government spent and taxed modestly. It left most industry in private hands. Inflation was low. And international trade was almost entirely free of tariffs and regulatory barriers to trade.
In 1970, Venezuela scored a little less than 7 on the Fraser Institute’s 10-point Economic Freedom of the World index, making it the 13th most economically free country in the world, just ahead of Japan.
But as the rest of the world liberalized in the 1980s and 1990s, Venezuela went in the opposite direction.