Maduro’s Squeeze: State Power and the Case for Free Markets in Venezuela

Nicolas Maduro

Introduction: A Conflict Framed by Policy, Not People

The tension between the United States and Venezuela is often narrated through ideology—democracy versus authoritarianism, sanctions versus sovereignty. Yet beneath the rhetoric lies a more structural issue: how states manage resources, markets, and mobility. A neutral reading of recent events suggests that neither maximal state control nor external political pressure has delivered durable outcomes for Venezuelans or for regional stability.

Sanctions, Scrutiny, and the Migration Signal

Venezuela has been under sustained scrutiny since the Trump administration intensified sanctions during its first term. By the time the Biden administration took office, millions of Venezuelans had migrated northward, creating visible pressure at the U.S. border. From a global standpoint, large-scale migration is a market signal: when domestic policy delivers opportunity and security, people generally stay. The persistence of outward migration suggests that existing economic arrangements have not benefited Venezuelans at scale.

Venezuelan Migrants

This does not automatically assign blame to one administration or another. Rather, it highlights a structural mismatch between policy design and lived outcomes. If economic power and opportunity were broadly distributed within Venezuela, the incentive to leave—often at great personal risk—would be far lower.

State Control vs. Market Function

At the center of the dispute is Venezuela’s approach to its natural resources, particularly oil. State-run control of strategic assets has been defended as a shield against foreign exploitation. In practice, however, concentrated control tends to produce bottlenecks, politicized allocation, and persistent opposition—both domestic and international.

Petróleos de Venezuela, S.A. (PDVSA)

From a neutral economic lens, governments are rarely effective operators of trade and enterprise. Their comparative advantage lies in rule-setting, adjudication, and enforcement—not production. When the state becomes the primary market actor, it often crowds out innovation, deters capital formation, and creates parallel power centers that fracture society.

Privatization with a Public Mandate

Privatization does not have to mean dispossession. A free-market framework—properly structured—can prioritize public benefit by broadening ownership, improving transparency, and aligning incentives with productivity. In Venezuela’s case, opening resource development to competitive markets could channel value directly to citizens through jobs, royalties, equity participation, and downstream industries.

The key distinction is governance. Markets require neutral referees, not dominant players. When the state acts as owner, operator, and regulator, conflicts of interest are inevitable.

The Judicial State: A Different Role for Government

A more sustainable model would reposition the Venezuelan government as a mediator rather than a controller—akin to a supreme judicial presence. In this role, the state would oversee trade disputes, enforce contracts, arbitrate ownership claims, and provide legal certainty to domestic and international counter-parties.

This approach mirrors Panama’s institutional posture during disputes surrounding the Panama Canal: the state does not micromanage global trade flows but safeguards the legal framework that allows them to function. Such a model reduces political friction while preserving sovereignty.

Opposition, External Appeals, and the Limits of Intervention

Figures like María Corina Machado emerge in environments where economic power is centralized and political pathways are constrained. Appeals to the United States as a “world police” figure reflect less a preference for foreign oversight and more a vacuum of domestic economic agency.

History shows that external pressure—sanctions, political endorsements, or democratic signaling—rarely substitutes for internal market reform. Without open economic systems, such interventions tend to harden positions rather than resolve them.

Diplomacy Over Doctrine

The current stalemate also exposes a deficit in diplomacy. The United States maintains open economic engagement with many governments that do not mirror its political system, prioritizing stability and mutual benefit over ideological alignment. A similar posture toward Venezuela—focused on trade normalization, legal clarity, and market access—could reduce incentives for confrontation on both sides.

Conclusion: Markets as a De-Escalation Tool

From a neutral standpoint, the U.S.–Venezuela conflict is less about ideology than about economic structure. State-run resource control concentrates power and invites resistance; external political pressure without market reform produces limited returns. A transition toward freer markets—paired with a strong, impartial judiciary—offers a path that benefits citizens first while lowering geopolitical temperature.

Maduro’s squeeze is not merely political; it is structural. The long-term solution lies not in more control or louder condemnation, but in restoring the basic functions of markets and redefining the state as a guarantor of fairness rather than a participant in commerce.

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