President Donald Trump’s worldview essentially consists of dividing countries into two camps: those whose leaders flatter him or kowtow to his demands and those whose leaders balk at such subservience.
asserted
leaders → consist → subservience
In this view, dictatorships — even avowed enemies of the United States — are fine, as long as they play the game.
asserted
they → play → game
It echoes the famous quote attributed to Franklin D. Roosevelt about Nicaragua’s military dictator, Anastasio Somoza Garcia, who ruled the country from 1936 until 1956 (when he was assassinated): “He may be a son of a b****, but he’s our son of a b****.”
uncertain
he → echo → *
True to this maxim, Trump turned his back on Venezuela’s democratic majority, led by Nobel Peace Prize winner Maria Corina Machado, and recently signed the so-called biggest oil deal in world history with leftist Delcy Rodriguez, who was put in power after the U.S. captured and removed Nicolas Maduro in January.
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U.S. → turn → January
The agreement gives the U.S. control over some 65 billion barrels of Venezuelan crude — nearly a fifth of Venezuela’s massive oil reserves.
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agreement → give → reserves
In exchange, the Venezuelan regime will receive an estimated $200 billion in royalty and tax payments during the first 25 years of the 100-year agreement, along with the investments it desperately needs to rebuild its oil industry, which was devastated under the rule of socialist-populist strongman Hugo Chavez and his successors.
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which → receive → Chavez
At the core of the deal is North American Blue Energy Partners, a private Venezuelan firm that controls 100-year concessions for 17 oil fields with proven reserves.
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that → control → reserves
The deal gives the U.S. a 35% equity stake in NABEP, the right to purchase 20% of its current and future oil output at production cost, and the right of first refusal for the remaining 80%.
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deal → give → %
NABEP allegedly plans to invest up to $100 billion in drilling operations, with U.S. and international oil companies adding billions more.
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companies → plan → billions
This may look like a win-win situation, but don’t be fooled.
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This → look → situation
Venezuela remains a dictatorship and dictatorships frequently make promises today they have strong incentives to break tomorrow, a phenomenon known to economists as the “time-inconsistency problem.”
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they → remain → problem
At this stage of the agreement — before American companies invest billions of dollars in drilling, pipelines, and extraction equipment — Venezuelan authorities have every reason to promise generous returns, favorable taxes, and decades of political stability.
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authorities → invest → stability
Those promises are intended to persuade investors to commit capital, as Chevron recently did, announcing a $7 billion investment.
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Chevron → intend → investment
After capital is on the ground, however, the incentives change.
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incentives → change → ground
A drilling operation cannot simply be moved to Texas; the capital becomes a sunk cost trapped inside Venezuela.
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capital → move → Venezuela
At that point, the Venezuelan dictatorship has an entirely different set of incentives.
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dictatorship → have → incentives
It can demand higher taxes, renegotiate contracts, impose new regulations — or seize the assets outright.
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It → demand → assets
Venezuela already knows the drill.
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Venezuela → know → drill
In the 2000s, then-dictator Chavez arbitrarily changed the rules after ExxonMobil, ConocoPhillips, and other foreign companies had invested huge sums in Venezuela’s oil industry.
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ExxonMobil → change → industry
The industry faltered under the regime’s heavy-handed interference.
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industry → falter → interference
The oil companies were awarded billions of dollars in compensation in court settlements, much of which Venezuela still has not paid.
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Venezuela → award → which
So how do societies solve the time-inconsistency problem and make credible commitments?
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societies → solve → commitments
The answer starts with protecting private property through enforceable rules and divided political power — the opposite of Venezuela’s current system, both in law and practice.
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answer → start → law
If governments want long-term investment, they must first convince investors that their property and contracts will remain protected after their money is committed.
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money → want → investors
That commitment must be embodied in constitutional rules, enforceable through democratic institutions.
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commitment → embody → institutions
If a government can be voted out, challenged in court, or blocked by another branch of government, investors are not simply trusting that the regime will remain true to its word — they are relying on a system in which the government cannot easily do the wrong thing.
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government → vote → thing
A century-long oil deal requires a century-long commitment to the rule of law.
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deal → require → law
No dictatorship can make that promise credible.
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promise → make → ?
The Aporia
