How Venezuela’s experiment with ’21st century socialism’ failed

When a Venezuelan entrepreneur we know launched a manufacturing company in western Venezuela two decades ago, he never imagined he’d one day find himself facing jail time over the toilet paper in the factory’s restrooms.

But Venezuela has a way of turning yesterday’s unimaginable into today’s normal.

The entrepreneur’s ordeal started about a year ago, when the factory union began to insist on enforcing an obscure clause in its collective-bargaining agreement requiring the factory’s restrooms to be stocked with toilet paper at all times.

The problem was that, amid deepening shortages of virtually all basic products (from rice and milk to deodorant and condoms) finding even one roll of toilet paper was nearly impossible in Venezuela—let alone finding enough for hundreds of workers. When the entrepreneur did manage to find some TP, his workers, understandably, took it home: It was just as hard for them to find it as it was for him.

Toilet-paper theft may sound like a farce, but it’s a serious matter for the entrepreneur: Failing to stock the restrooms puts him in violation of his agreement with the union, and that puts his factory at risk of a prolonged strike, which in turn could lead to its being seized by the socialist government under the increasingly unpopular President Nicolas Maduro.

So the entrepreneur turned to the black market, where he found an apparentsolution: a supplier able to deliver, all at once, enough TP to last a few months. (We’re not naming the entrepreneur lest the government retaliate against him.) Theprice was steep but he had no other option—his company was at risk.

But the problem wasn’t solved.

No sooner had the TP delivery reached the factory than the secret police swept in. Seizing the toilet paper, they claimed they had busted a major hoarding...
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