Carlos Sabino is an adjunct fellow at the Oakland-based Independent Institute and a fellow of the Francisco Marroquín Foundation in Guatemala City. He is also a director at CEDICE, a public policy institute in Venezuela. A Marxist in his youth, today he is an ardent critic of Venezuela’s Hugo Chávez and a staunch advocate of free markets. In mid-January Sabino corresponded with ET’s Robert Bryce from Caracas via e-mail.

ET: In a recent piece for the Independent Institute, you wrote that “The nations in our region still do not understand that governments like Chávez’s and Evo Morales’s are a real threat to peace in Latin America as a whole.” What do you mean by that?

CS: They are blind to the totalitarian trends that are developing in Venezuela and…[that present] dangers for their countries. The Venezuelan form of socialism is, by its nature, totalitarian and expansionist, as was the Cuban form. Every country in the region is in danger because Chávez is pouring huge amounts of money into the hands of opportunistic leaders and leftist groups that could destabilize the frail democracies that we have in Latin America.

ET: Why are so few Latin American leaders willing to challenge Chávez and Morales?

CS: Because they, in general terms, are mild socialists or don’t understand the challenge that their countries are facing. Most of the Latin American leaders think that the problem of the poverty can be solved by transferring money to the poor, that more public expenditures can ameliorate the conditions of the population. Most of them, I suppose, are really fascinated with [Chávez’s] bold figure of caudillo, as they were with Fidel Castro.

ET: Given that Chávez controls so much of Latin America’s oil and Morales controls so much of the region’s gas, what – if anything – can be done to counter their influence?

CS: The problem is not the economic power that the oil gives to Chávez or the power that gas gives to Morales, but the ideological and political struggle that is developing. If the people see Chávez as just a populist, a bit ridiculous or cumbersome, and the intellectual leaders agree with him on part of his agenda, it is very difficult to counter his influence. Chávez has money, but the other people have a lot of money too. In Venezuela, a lot of people, very rich people, owners of important businesses, gave money to Chávez and made – and are making lots of money with his government. They are paving the way to totalitarianism, the same totalitarianism that, sooner or later, can expropriate their businesses and impoverish them.

ET: You have an interesting personal history. You went to Chile in the early 1970s to support Salvador Allende. But you write that the experience “was devastating to [your] beliefs in Marxism” and that you gained a “new sense of the importance of personal liberty.” Please tell us about that.

CS: In Allende’s Chile I discovered that a totalitarian bias is an inherent part of socialism, not just an “error” or a “little mistake”; it is a constitutive part of socialism. After that…I began to search for the political and economic forms of societal organization that could most guarantee the liberty of the individual. I rediscovered “capitalism” and the market, I began to understand the values and the institutions needed for personal liberty. And I understood, too, that you cannot fight against communism halfheartedly, because if you do communism wins.

ET: Can you explain what you mean by the totalitarian bias? And why life in Chile under Allende was so difficult?

ET: Latin America has seen other leaders like Chávez, including Juan Perón and Allende. Why do you think the region has a recurring fascination with socialist/Marxist leaders?

CS: Yes, but the Marxist component is not the essential part; much more important is the populism, in the sense of the demagoguery that pits the poor against rich, the cult of the leader, and the emotional appeal of envy as a political force. This is the mix that creates the caudillo, the “providential man,” “the unique.” Chávez is, rather than a Marxist, a pure caudillo, a caudillo that assumes Marxism, not the other way. Perón, Castro, Haya de la Torre and several previous dictators were caudillos, strongmen who imposed their will over the entire population of their nations.

ET: You are an advocate of free markets and of thinkers like Ludwig von Mises and Friedrich Hayek. Doesn’t that make you something of a novelty in Latin America? And to follow up on that, why have so few countries in the region adopted the Austrian school approach to markets and freedom?

CS: Yes, I am an advocate for free markets, for a State with clear and definite limits. There are not many Latin Americans who agree with this line of thinking, of course, but I am not alone, there is a network of think-tanks, people, and universities who follow these thinkers in Latin America.

ET: Chávez has gained power by promising to reduce poverty. But your writing shows that you believe that government subsidies are the wrong way to go. If Chávez were to appoint you his economics minister (an unlikely proposition, I know) what measures would you take?

CS: Oh, yes, it is very unlikely indeed, and if I were the economics minister I would not stay in charge more than a couple of hours, because Chávez would be horrified at the very first measures that I would propose. First of all, I would eliminate the controls over foreign currencies, then I would stop inflation, privatize the entire oil industry, promote public security against crime, and open the country to international trade. It is like a dream, of course, because neither Chávez, nor most of the opposition, believes in the capacity of markets to generate wealth…but good ways to reduce (and eliminate) poverty already exist and several countries have used them to make the transition to wealthy societies. Even China, Communist China, is on a better path than Venezuela today.

ET: You also stress the importance of judicial and civil security as a key element in fighting poverty. Has Chávez done anything to strengthen those elements of civil society in Venezuela?

CS: Not at all. Crime is rampant: we have 44 homicides per 100,000 inhabitants, the second worst in the world. The atmosphere here is one of fear and despair.

ET: Let’s discuss Morales and Bolivia. Perhaps no other country in the region has a more fractured political history than Bolivia. Why has the country had so much turmoil?

ET: What should Argentina and Brazil – both of which desperately need Bolivian gas – be doing to deal with Morales?

CS: Argentina and Brazil are uneasy over the nationalist and conflictive attitude of Morales’s government, but both countries have leftist governments too. It is not easy for them to confront Evo, although his politics are hurting their interests. Moreover, as you say, they desperately need the gas. I think they are waiting to see if Evo can consolidate his grip on power. If he does they may press for better economic conditions in their contracts.

ET: Finally, let’s talk about your plans. Will you be staying in Venezuela?

CS: Well, as a matter of fact, I’m not staying in Venezuela for more than two to three months each year. I have family and a lot of friends in Venezuela and, if it is possible, I’ll continue to maintain these links. But, of course, I would not live in a totalitarian state; it would be unthinkable for me and for my work.