Venezuela in Chaos

Venezuela has enormous oil reserves, it has been selling oil for nearly a hundred years, and its people are impoverished. So what went wrong? Some say it is a fine example of the failings of socialism, but in fact it was plutocratic capitalism that set the rot in place.

Venezuela was possibly the richest country in South America before it struck oil. Because there was so much of it, foreign oil companies poured in, as did their money. This caused the local currency to increase wildly. The oil companies paid locals huge salaries or wages, and the growth was so pronounced that any reasonable contractor worked in the oil industry. That meant that people left agriculture and manufacturing by locals was squeezed for capital.

Worse, when the politicians become corrupt, which is easily done when law and order is weak and there is money flowing like water, the average person was overlooked and they slid into poverty. At first the plutocrats simply walked off with the profits but by 1950 the government reformed the industry and required half the profits to go to the state. This had the effect of making the government essentially totally dependent on oil money. For Venezuela the effect has been so dramatic that oil now accounts for about 98% of its exports, and up to 50% of its GDP. In the 1970s, the Venezuelan government received huge incomes, which led to rampant mismanagement and embezzlement. In the 1980s oil prices plummeted and Venezuela sustained rampant inflation and massive debts, in part due to government investments offshore that were not exactly wise. The IMF gave its usual recipe: austerity, and there were major riots. Austerity hurts the poor, while the rich remain unscathed, which may be why the bankers of the IMF favour it.

In 1998, Hugo Chavez was elected President on a socialist pledge, and while he did significantly improve the lot of the average Venezuelan, he also badly mismanaged the oil industry and the economy in general. Chavez also bailed out Cuba by supplying it with oil, and also managed to greatly increase national debt. His government was authoritarian, and when he was replaced by Maduro, the latter has probably become more authoritarian.

Maduro inherited a mess, and he was not gifted with luck. Between 2014 – 2016, oil prices slumped by a factor of three. The government gets out of its debt problems by inflating the currency, which may be running at a million per cent now. The effect of this is the impoverishment of the middle classes. The very rich get richer by picking up assets at a huge discount in forced sales. Currently, 90% live in poverty.

There are various opinions on what should have been done. The most obvious one is to have strong law and order and fiscal responsibility. The second is to ensure the wealth is controlled. A good example of this is Norway, where oil contributes 80% of its exports, but only 22% of its GDP, and huge reserves are being held for the future. Another good example where I have lived was Calgary. The state government poured money into health care, which was extremely cheap when I was there, and they had excellent roads and general infrastructure. My opinion is that such resource-rich economies must invest a large amount of the income in broadening the economy. In Venezuela’s case, there has been economic broadening, although agriculture contributes only 3% of GDP. It is largely a food importer, for no good reason. Nevertheless, while exports total $32 billion, imports only total $17.75 billion. The problem is with government finance. It has income of almost $93 billion, and expenses roughly twice that.

Maduro replaced Chávez in 2013 and narrowly won an election. There was a recent election that Maduro also won, but which the opposition boycotted. There are accusations that the elections would be rigged, and since then there are accusations that they were, but if there were no opposition candidates that seems somewhat moot. It is one thing to complain that elections were rigged; an entirely different matter to assert they were going to be rigged. Two weeks later, Juan Guaidó, leader of the legislature, declared himself acting President. The US government has declared support for Guaidó and refuses to recognize Maduro, and threatens that if he does not step down, they will make him. They declare the election was illegitimate, but do not cite any grounds. Exactly how Guaidó declaring himself President is more legal eludes me. If the opposition did not stand, it is hard to see how Maduro could not win, and if simply boycotting an election was sufficient to overturn an election, why Mr Trump could consider what would happen if Hillary had boycotted their election. The US claims the majority prefer Guaidó, but arguably the majority voted for Hillary, and I don’t see Trump stepping down. Nor should he, at least on that ground. The rules are the rules. Trump has even hinted at military intervention. Other countries have backed Guaidó. Macron has argued he should note the protests on the street. So should Macron. Hypocrisy runs strong when politicians have a deep problem and they can divert attention from their own failings.

The Venezuelan military is at this moment behind Maduro, and while that is the case, short of a massive US invasion, he is likely to stay there, and the Venezuelans are likely to stay poor. US sanctions are not helping, but US sanctions have been there for quite a long time and are not recent, although the recent freezing of oil money will hurt the poor even more. The history of US intervention is not good, the worst example being, in my opinion, the removal of Allende in Chile, which occurred because (a) he was a socialist, and (b) US corporations could control the copper. The fact that Pinochet murdered a large number of Allende supporters bothers not the US conscience. I heard one speech where it was stated that control of the oil industry would make things better for Venezuela and the US. So at least someone in Washington thinks US corporations should have the Venezuelan oil.

So how do they get out of this mess? Who knows? The economists say Venezuela must diversify its economy and do a number of other things, but the problem is with most of the population impoverished, they cannot start much. One thing I have learned while running my own business is that if you have no money, you are screwed. So what will happen, other than the poor becoming poorer? Who knows?

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Brexit – Where is the Logic?

Governance is an interesting problem, and since I write novels, a number of them are about this. In my Dreams Defiled, one of the characters is given responsibilities on the highest governing body, and what she finds is that while some, as expected, oppose what she wants to do, others, who are supposed to be working for her are busy undermining her. If that sounds like what is happening to Theresa May, it is of course accidental because the novel was published well before this Brexit debacle, but had she read my novel, just maybe she would have taken some of the advice I had given to my character (who ignored it, of course) and would not be in this mess. Of course she could well be in a different mess.

Why logic? Logic may seem a funny requirement to some, but it is a means of reaching conclusions from a given set of premises in an orderly fashion, and it requires you to state the complete set of required facts, which include your objectives, then clearly identify the premises to be used.

In this context, the opportunities for Britain are to remain in the EU, exit with a deal, or exit with no deal. A deal involves both parties, and the EU has stated clearly that the deal Theresa May put to parliament is the onlydeal they will accept, there are precisely three possibilities. Corbyn has voted down the deal, he has stated that no deal must be voted down, which leaves only remain. Except he has not got the courage to say so. He has now proposed that there be a second referendum, except he also refuses to say whether he believes this to be the proper way to go. Brexit has been plagued with leaders who have behaved illogically, starting with Cameron. If you are happy with where you are, it is illogical to offer change. Cameron, satisfied that the people would vote to remain, offered the referendum to silence some vocal members of his party. Risking the country’s future to address a personal deficiency is not “top of the class material”.

If you set out on a journey, logic suggests you should have decided where you are going. It helps to point you in the right direction. Accordingly, before issuing the leave notice to the EU, the British politicians should have decided what they were trying to achieve. Of course they would not get all they wanted, but they most certainly would not get what they failed to request.

The first requirement in any negotiation is you should have a line below which you say, “No deal”. Each side usually starts with a position that is most desirable from their point of view. Each side then decides what from the other’s position they can accommodate, what they cannot give up, and how badly they want the deal. This last part is important, because the more you want it, the more you have to concede. However, the final result must not be too one-sided, because if it is, the losing side will then set about doing whatever to undermine it. However, one of the more bizarre facts of this situation is that the UK politicians are finally realizing they will have to accept some of what they do not want.

For the Europeans, they have several objectives, but one of the main ones is to protect the integrity of the EU. If a leaving country were to get the same advantages as a member, the EU would disintegrate, so the UK has to realize it has to give up something. I believe the major thing the UK values is the free movement of goods and people going into the EU, but what it does not like includes the free movement of people tothe UK, the imposition of Brussels rules, and the concession of sovereignty to the European Court of Justice. There are other issues, such as the potential for a European army, and the trend towards downstream political unity. They are not ready for the United States of Europe. 

If the UK leaves, they can do nothing about the free movement of goods and people to the EU, as the EU determines these. On the other hand, the EU should see advantages in keeping an association with the UK, so reciprocal rights come into play. The fear of sales declining is probably unwarranted. The UK has a trade deficitwith the EU, so the EU has an interest in keeping trade going. The UK is Germany’s biggest market for cars, and the UK could easily purchase vehicles from elsewhere, or even go back and make them, given electric vehicles offer a great start-up opportunity. Of course there have are advantages in being in the EU and these have to be given up, but a trade deal is not imperative. New Zealand has no such deal, and we trade quite harmoniously. Yes, there are limits to how much we can sell, but that is one of the facts of life. There is the rest of the world.

We also hear statement that there will be chaos with “No Deal”. This reminds me that chaos sufficient to bring the industrial world to its knees would occur on January 1, 2000, through the so-called millennial bug. I seem to recall waking and finding things going on more or less as expected. Unless politicians do something very silly, I expect the UK citizens will wake up on March 30 and feel more or less fine.

If you ask, what do border inspections achieve, you will conclude there is no need for a hard border, or border inspections. What would they achieve? Leaving aside the fact they cannot be put in place in time, tariffs do not need to be collected at the border. Sales of all goods have a VAT tax. That can be modified to collect tariffs at the same time. If the objective is to keep out people, why? If they are simply coming to spend money, who cares? If the objective is to stop illegal immigrants from working, then you do that through the tax system. They have to register to get a tax identification number. Sure, they could break such laws, but the simplest way of stopping that is to make it very expensive for the employer. The employer now becomes your immigration officers while you sort out these border issues. The prevention of criminals entering, or agricultural pests or viruses would be dealt with the same way as now. There is no reason why March 30 should be particularly different from March 28. So the EU might block things. That you cannot help; all the UK can do is make things sane where it controls them.Just to add to the complications, the Irish backstop is claimed to be necessary because of the Good Friday accord. As I argue above, the absence of border controls is not insurmountable, butthe recent terrorist attack by the New IRA may be making that accord lose value and harden attitudes. It will be interesting to see what the Republic does about such activities. In the meantime, good luck, UK. The current efforts suggest it might be needed.

Science in Action – or Not

For my first post in 2019, I wish everyone a happy and prosperous New Year. 2018 was a slightly different year than most for me, in that I finally completed and published my chemical bond theory as an ebook; that is something I had been putting off for a long time, largely because I had no clear idea what to do with the theory. There is something of a story behind this, so why not tell at least part of it in my first blog post for the year? The background to this illustrates why I think science has gone slightly off the rails over the last fifty years.

The usual way to get a scientific thought over is to write a scientific paper and publish it in a scientific journal. These tend to be fairly concise, and primarily present a set of data or make one point. One interesting point about science is that if it is not in accord with what people expect, the odds on are it will be ignored, or the journals will not even accept it. You have to add to what people believe to be accepted. As the great physicist Enrico Fermi once said, “Never underestimate the joy people derive from hearing something they already know.” Or at least think they know. The corollary is that you should never underestimate the urge people have to ignore anything that seems to contradict what they think they know.

My problem was I believed the general approach to chemical bond theory was wrong in the sense it was not useful. The basic equations could not be solved, and progress could only be made through computer modelling, together with as John Pople stated in his Nobel lecture, validation, which involved “the optimization of four parameters from 299 experimentally derived energies”. These validated parameters only worked for a very narrow range of molecules; if they were too different the validation process had to be repeated with a different set of reference molecules. My view of this followed another quote from Enrico Fermi: I remember my friend Johnny von Neumann used to say, “with four parameters I can fit an elephant and with five I can make him wiggle his trunk.” (I read that with the more modern density functional theory, there could be up to fifty adjustable parameters. If after using that many you cannot get agreement with observation, you should most certainly give up.)

Of course, when I started my career, the problem was just plain insoluble. If you remember the old computer print-out, there were sheets of paper about the size of US letter paper, and these would be folded in a heap. I had a friend doing such computations, and I saw him once with such a pile of computer paper many inches thick. This was the code, and he was frantic. He kept making alterations, but nothing worked – he always got one of two answers: zero and infinity. As I remarked, at least the truth was somewhere in between.

The first problem I attacked was the energy of electrons in the free atoms. In standard theory, the Schrödinger equation, when you assume that an electron in a neutral atom sees a charge of one, the binding energy is far too weak. This is “corrected”througha “screening constant”, and each situation had its own “constant”. That means that each value was obtained by multiplying what you expect by something to give the right answer. Physically, this is explained by the electron penetrating the inner electron shells and experiencing greater electric field.

What I came up with is too complicated to go into here, but basically the concept was that since the Schrödinger equation (the basis of quantum mechanics) is a wave equation, assume there was a wave. That is at odds with standard quantum mechanics, but there were two men, Louis de Broglie and David Bohm, who had argued there was a wave that they called the pilot wave. (In a recent poll of physicists regarding which interpretation was most likely to be correct, the pilot wave got zero votes.) I adopted the concept (well before that poll) but I had two additional features, so I called mine the guidance wave.

For me, the atomic orbital was a linear sum of component waves, one of which was the usual hydrogen-like wave, plus a wave with zero nodes, and two additional waves to account for the Uncertainty Principle. It worked to a first order using only quantum numbers. I published it, and the scientific community ignored it.

When I used it for chemical bond calculations, the results are accurate generally to within a few kJ/mol, which is a fraction of 1% frequently. Boron, sodium and bismuth give worse results.  A second order term is necessary for atomic orbital energies, but it cancels in the chemical bond calculations. Its magnitude increases as the distance from a full shell increases, and it oscillates in sign depending on whether the principal quantum number is odd or even, which results when going down a group of elements, that the lines joining them zig zag.

Does it matter? Well, in my opinion, yes. The reason is that first it gives the main characteristics of the wave function in terms only of quantum numbers, free f arbitrary parameters. More importantly, the main term differs depending on whether the electron is paired or not, and since chemical bonding requiresthe pairing of unpaired electrons, the function changes on forming bonds. That means there is a quantum effect that is overlooked in the standard calculations. But you say, surely they would notice that? Recall what I said about assignable parameters? With four of them, von Neumann could use the data to calculate an elephant! Think of what you could do with fifty!

As a postscript, I recently saw a claim on a web discussion that some of the unusual properties of gold, such as its colour, arise through a relativistic effect. I entered the discussion and said that if my paper was correct, gold is reasonably well-behaved, and its energy levels were quite adequately calculated without needing relativity, as might be expected from the energies involved. This drew almost derision – the paper was dated, an authority has spoken since then. A simple extrapolation from copper to silver to gold shows gold is anomalous – I should go read a tutorial. I offered the fact that all energy levels require enhanced screening constants, therefore Maxwell’s equations are not followed. These are the basic laws of electromagnetism. Derision again – someone must have worked that out. If so, what is the answer? As for the colour, copper is also coloured. As for the extrapolation, you should not simply keep drawing a zig to work out where the zag ends. The interesting point here was that this person was embedded in “standard theory”. Of course standard theory might be right, but whether it is depends on whether it explains nature properly, and not on who the authority spouting it is.

Finally, a quote to end this post, again from Enrico Fermi. When asked what characteristics Nobel prize winners had in common: “I cannot think of a single one, not even intelligence.”