Question

Experience in modern countries (such as Venezuela) has demonstrated that state ownership of the means of production:
Select one:
a. Often runs in parallel with the public interest as governments make better decisions to help the population
b. Is the most profitable way to organize production
c. Can lead to high levels of corruption
d. Often runs counter to the public interest as industry becomes less efficient
e. Often leads to increased inefficiency, higher prices and higher taxes, and high levels of corruption

Answer 1

Answer : (e) Often lead to increased inefficiency, higher prices and higher taxes and high levels of corruption

In case of Venezuela, political and economic crisis has been happening since a decade due to the severe mismanagement and corruption where government failed to manage the economic interest of the country. An economic war has been declared on Venezuela caused by unplanned populist policies that were undertaken for political advantage.

Over spending and price controls led to hyperinflation and widespread shortages of essential supplies leading to an economic war which met its worst in 2015 when the economy crashed. The country is still finding it harder to become economically sustainable which is not visible in the near future. Oil is the major revenue source of the country and nowadays, it is using oil as barter to trade with China due to its inability to pay in currency. So the populist policy sentiments that are created without proper management and future studies and allocation fails to deliver the outcome and can lead to corruption