Search Engine with PJ Vogt

Episode: The Venezuelan Curse
Air date: January 16, 2026
Guest: Prof. Alejandro Velasco, NYU

Episode Overview

This episode tackles Venezuela’s convoluted, dramatic, and at times tragic modern history to answer: How did a country so rich in oil end up in disaster? Host PJ Vogt speaks with historian Alejandro Velasco, who weaves together Venezuela’s pattern of explosive growth and collapse, shaped by the “resource curse.” The conversation covers the country’s evolution from rural backwater to petrostate, cycles of illusion and amnesia, the rise and fall of its democracy, the seismic impact of oil, the crises of the late 20th century, and the ascent of Hugo Chávez—all leading up to Venezuela’s current state of turmoil.

Key Discussion Points & Insights

1. Why Venezuela? Setting the Stage

• PJ admits that, like many Americans, he let Venezuela’s complexities slip to the periphery. Recent U.S. intervention forced him to learn more (03:20).
• The “resource curse” theme is introduced: In nations blessed with valuable natural resources, prosperity often invites political, economic, and social calamities.

“The story of Venezuela is the story of leader after leader using oil wealth to try some of the most imaginative arrangements of government and economy I had ever heard of.”
—PJ Vogt (10:43)

2. Introducing Alejandro Velasco

• Personal & Professional Ties: Alejandro was born in Venezuela during peak prosperity (1978) but saw steady decline. Family emigrated during 1990s instability. Now a historian at NYU, his research focuses on Venezuelan social movements and democracy (04:29–05:18).
• Unique National Character:
  • Venezuela’s patterns (resource dependency, cycles of boom and bust) reflect broader trends, but its relationship with oil is especially “magical”—inducing illusions of boundless future, collective amnesia of past collapses (06:53–09:01).
  • Caracas physically reflects this: grand, abandoned projects dot the skyline, “the evidence of failures past.”

“Oil induces illusions… the capacity to imagine that the future is infinite in terms of possibilities. But it also…induce[s] catastrophe. The way you get from illusion to illusion is through collective amnesia.”
—Alejandro Velasco (07:44)

3. Venezuela Before Oil (Pre-1914)

• Modest, rural, politics dominated by Andean region; primary export was coffee (11:29).

4. Oil Changes Everything

• 1914: First oil well. Gradual, but by 1930s, oil is central.
• Foreign companies dominate early on; Venezuela’s politics become “how do we relate to oil?” (13:03–14:27).
• Early intellectuals express skepticism—“oil as ‘excrement of the devil’”—concerned it may be a curse, not a blessing (14:37–15:39).

5. The Democratic Experiment (Post-1958)

• 1958: Dictatorship is overthrown, democracy returns with President Rómulo Betancourt.
• Betancourt’s “El 50/50”: Venezuela and oil companies split profits to assert sovereignty (17:45–18:59).
• Democratic governments invest in education, social services, infrastructure—but oil booms/busts determine how much can actually be done.
• Instability remains: Inequality, dependence on oil, and frustration during low price periods (19:39–21:16).

“One of the things that the boom and bust cycles of oil generates is in moments of bust, the breach between those who have and those who have not accentuates... In democracy, you have to worry about the ballot box. And so your time horizon for results is much shorter… The incentive…to spend all the money…right away…is much greater.”
—Alejandro Velasco (21:52)

6. The Petrostate (1970s Oil Booms)

• 1970s: Oil shocks skyrocket Venezuelan wealth.
• Massive migration, creation of a new middle class.
• Attempts to diversify, e.g., building nail/bolt factories, even a Venezuelan car—most of which failed as soon as oil money dried up; visible ruins today (27:52–31:57).
• Import substitution falters: too easy to use oil dollars for quick, consumer imports instead of nurturing domestic industry (32:10–35:19).

7. The Era of Crisis (1980s–90s)

• Alejandro’s youth is marked by successive crises:
  • 1989 Caracazo: Riots over austerity, military repression kills hundreds (36:06–39:44).
  • 1992 Coups: Attempted coups by Hugo Chávez and others; military jets fly over Caracas; public disillusionment grows (41:13–43:37).
  • Family and many others choose to leave Venezuela (44:29–46:48).
• Venezuelans sense the breakdown of the social contract; instability becomes the norm.

“There’s something about February, February in Venezuelan history, which is kind of curious…But again, early in the morning…[on TV] is this grainy…image of a military officer…It was Hugo Chávez.”
—Alejandro Velasco (39:44–41:13)

8. The Rise of Hugo Chávez

• Background: Born 1954 in Barinas, parents were schoolteachers (“impoverished but not miserable”). Joins the military, influenced by both Peruvian populist models and his radical Marxist brother (49:53–53:19).
• Building a Movement: Forms the Revolutionary Bolivarian Movement-200 (1982), inspired by Bolívar.
• 1992 Coup: Gains national profile through TV appeal after failed coup.
• 1998 Election: Released from jail, wins presidency as a populist.

9. Chávez in Power: Communication and Adaptation

• Launches Sunday TV/radio show Alo Presidente so citizens could literally call the president (55:25–56:24).
• Early “Chavismo” is neither fully socialist nor anti-American. Focuses on participatory democracy and reviving the state’s authority over oil (56:28–58:08).
• When he takes office (1999), oil is just $8/barrel. He works to strengthen OPEC and raise prices, succeeding amid global turmoil and China’s rise (58:18–64:44).

“The price of oil when [Chavez] is inaugurated in 1999 is $8…At the height of peak oil…it was around $160.”
—Alejandro Velasco (58:18)

10. Consolidating Total Power

• After 2002 Coup: Chávez identifies and purges disloyal members from the military and the state oil company, PDVSA (65:31–66:59).
• Televised Purges: On Alo Presidente, Chávez fires 18,000 oil workers by name and whistle (66:59–67:30).
• Opposition Boycott: In 2005, opposition parties boycott elections, gifting Chávez control of Congress. With soaring oil prices, this gives him unchecked power (68:39–69:32).

“It is total power, which eventually will be the Achilles heel and the reason why Chavismo fails.”
—Alejandro Velasco (69:34)

Notable Quotes & Memorable Moments

• Illusions and Amnesia
  “Oil induces illusions…it induces the capacity to imagine that the future is infinite in terms of possibilities. But…the way that you get from illusion to illusion is through collective amnesia.”
  —Alejandro Velasco (07:44)

• Democratic Dilemma
  “In democracy, you have to worry about the ballot box. Your time horizon for results is much shorter… So the incentive...to spend all the money that you're getting right away…is much greater.”
  —Alejandro Velasco (21:52)

• Everyday Collapse
  (Describing the 1989 Caracazo violence):
  “During those two weeks you’re…trying to watch the news, but…also at the same time hearing gunfire from the military that’s trying to quell these protests.”
  —Alejandro Velasco (36:08–39:44)

• Chavez’s TV Power
  “One thing that he does early in his presidency is he starts this talk show...Alo Presidente. To reflect that you could just call up the president, like hello, hello Presidente.”
  —Alejandro Velasco (55:25)

• On Firing PDVSA Workers
  “Chavez conducted these firings live on TV…calling out the employees by name and blowing a soccer whistle to celebrate each termination.”
  —PJ Vogt (66:59–67:30)

• On the Resource Curse
  “The crisis of a petrostate…is not just dependency on oil, but on imports, which… when the bust comes, you can no longer buy those imports cheaply and you have nothing domestically to replace it with.”
  —Alejandro Velasco (34:58)

Timestamps for Important Segments

• Introduction, why this question: 03:14
• Alejandro’s background, Venezuela’s unique character: [04:29]–[09:01]
• Pre-oil Venezuela: [11:29]
• Oil’s arrival and early skepticism: [13:03]–[15:39]
• 1960s–70s Democratic era: [17:45]–[23:46]
• 1970s petro-boom, failed diversification: [27:52]–[35:19]
• 80s–90s crises and youth memories: [35:19]–[46:48]
• Chavez’s origin story & rise: [49:53]–[55:25]
• Alo Presidente & early Chavismo: [55:25]–[58:08]
• Oil prices, OPEC, U.S. relations, 2002 coup: [58:18]–[64:54]
• Consolidation of power (military, PDVSA, legislature): [64:54]–[69:56]

Episode Ending

The episode closes as PJ tees up the second part, which will cover how Venezuela fell from democratic prosperity into collapse and abject disaster following its experiment with oil-fueled power and charismatic rule.

“So how does Venezuela go, really, in just a decade from an oil rich democracy with a popular, democratically elected president to just abject disaster? That story continues in our next episode…”
—PJ Vogt (69:56)

For Further Reading

PJ mentions a forthcoming article by Alejandro Velasco on Chavismo, linked in the show notes.

Summary in One Sentence

This episode unpacks how Venezuela, shaped by the promise and peril of oil, cycles between hope and catastrophe—culminating in the rise of Hugo Chávez and the consolidation of an all-powerful petrostate—setting the stage for the country’s dramatic unraveling.