Hugo Rafael Chávez Frías was a Venezuelan politician, President of Venezuela from 1999 until his death in 2013. Chávez was leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when it merged with several other parties to form the United Socialist Party of Venezuela, which he led until 2012. Born into a working-class family in Sabaneta, Barinas, Chávez became a career military officer, after becoming dissatisfied with the Venezuelan political system based on the Puntofijo Pact, he founded the clandestine Revolutionary Bolivarian Movement-200 in the early 1980s. Chávez led the MBR-200 in an unsuccessful coup d'état against the Democratic Action government of President Carlos Andrés Pérez in 1992, for which he was imprisoned. Pardoned from prison after two years, he founded a political party known as the Fifth Republic Movement and was elected President of Venezuela in 1998, he was re-elected again in 2006 with over 60 % of the votes. After winning his fourth term as president in the October 2012 presidential election, he was to be sworn in on 10 January 2013, but Venezuela's National Assembly postponed the inauguration to allow him time to recover from medical treatment in Cuba.
Suffering a return of the cancer diagnosed in June 2011, Chávez died in Caracas on 5 March 2013 at the age of 58. Following the adoption of a new constitution in 1999, Chávez focused on enacting social reforms as part of the Bolivarian Revolution. Using record-high oil revenues of the 2000s, his government nationalized key industries, created participatory democratic Communal Councils and implemented social programs known as the Bolivarian missions to expand access to food, housing and education. Venezuela received high oil profits in the mid-2000s, resulting in temporary improvements in areas such as poverty, income equality and quality of life occurring between 2003 and 2007, though these gains started to reverse after 2012 and it has been argued that government policies did not address structural inequalities. Chávez's populist policies led to a severe socioeconomic crisis in Venezuela. On 2 June 2010, Chávez declared an "economic war" due to shortages in Venezuela, beginning the crisis in Bolivarian Venezuela.
By the end of Chávez's presidency in the early 2010s, economic actions performed by his government during the preceding decade such as deficit spending and price controls proved to be unsustainable, with Venezuela's economy faltering while poverty and shortages increased. Chávez's presidency saw significant increases in the country's murder rate and continued corruption within the police force and government, his use of enabling acts and his government's use of Bolivarian propaganda were controversial. Internationally, Chávez aligned himself with the Marxist–Leninist governments of Fidel and Raúl Castro in Cuba, as well as the socialist governments of Evo Morales, Rafael Correa and Daniel Ortega, his presidency was seen as a part of the socialist "pink tide" sweeping Latin America. Chávez described his policies as anti-imperialist, being a prominent adversary of the United States's foreign policy as well as a vocal critic of U. S.-supported laissez-faire capitalism. He described himself as a Marxist.
He supported Latin American and Caribbean cooperation and was instrumental in setting up the pan-regional Union of South American Nations, the Community of Latin American and Caribbean States, the Bolivarian Alliance for the Americas, the Bank of the South and the regional television network TeleSUR. Chavez's ideas and style form the basis of "Chavismo", a political ideology associated with Bolivarianism and socialism of the 21st century, he was born on 28 July 1954 in his paternal grandmother Rosa Inéz Chávez's home, a modest three-room house located in the rural village Sabaneta, Barinas State. The Chávez family were of Afro-Venezuelan and Spanish descent, his parents, Hugo de los Reyes Chávez, described as a proud COPEI member, Elena Frías de Chávez, were schoolteachers who lived in the small village of Los Rastrojos. Hugo was born the second of seven children. Hugo described his childhood as "poor... happy", though his childhood of supposed poverty has been disputed as Chávez changed the story of his background for political reasons.
Attending the Julián Pino Elementary School, Chávez was interested in the 19th-century federalist general Ezequiel Zamora, in whose army his own great-great-grandfather had served. With no high school in their area, Hugo's parents sent Hugo and his older brother Adán to live with their grandmother Rosa, who lived in a lower middle class subsidized home provided by the government, where they attended Daniel O'Leary High School in the mid-1960s. Hugo described his grandmother as being "a pure human being... pure love, pure kindness". She was a devout Roman Catholic and Hugo was an altar boy at a local church, his father, despite having the salary of a teacher, helped pay for college for Chávez and his siblings. Aged 17, Chávez studied at the Venezuelan Academy of Military Sciences in Caracas, following a curriculum known as the Andrés Bello Plan, instituted by a group of progressive, nationalistic military officers; this new curriculum encouraged students to learn not only military routines and tactics but a wide variety of other topics, to do so civilian professors were brought in from other universities to give lectures to the military cadets.
Living in Caracas, he saw more of the endemic poverty faced by working class Venezuelans, said that this experience only made him further committed
The Bolivarian Revolution is a political process in Venezuela, led by Venezuelan President Hugo Chávez, the founder of the Fifth Republic Movement and the United Socialist Party of Venezuela. The Bolivarian Revolution is named after Simón Bolívar, an early 19th-century Venezuelan and Latin American revolutionary leader, prominent in the Spanish American wars of independence in achieving the independence of most of northern South America from Spanish rule. According to Chávez and other supporters, the Bolivarian Revolution seeks to build an inter-American coalition to implement Bolivarianism, nationalism and a state-led economy. On his 57th birthday, while announcing that he was being treated for cancer, Chávez announced that he had changed the slogan of the Bolivarian Revolution from "Motherland, socialism, or death" to "Motherland and socialism. We will live, we will come out victorious"; as of 2018, the vast majority of mayoral and gubernatorial offices are held by PSUV candidates, while the opposition Democratic Unity coalition won two thirds of parliamentary seats in 2015.
Political hostility between the PSUV and MUD have led to several incidents where both pro-government and opposition demonstrations have turned violent, with an estimated 150 dead as a result in 2017. Additionally, there are claims and counterclaims relating to the imprisonment of opposition figures, with the government claiming that their political status neither impedes nor motivates prosecution for the crimes that they have been convicted of, while the opposition claims that these arrests and charges are politically motivated. Since the death of Chavez, the revolution has gone into decline and the political and economic situation in Venezuela has deteriorated. Simón Bolívar has left a long lasting imprint on Venezuela's history in particular and South America in general; as a military cadet, Hugo Chávez was "a celebrant of the Bolivarian passion story". Chávez relied upon the ideas of Bolívar and on Bolívar as a popular symbol in his military career as he put together his MBR-200 movement which would become a vehicle for his 1992 coup-attempt.
South America in the late 1980s and early 1990s was just recovering from the Latin American debt crisis of the mid-1980s and many governments had adopted austerity and privatization policies to finance International Monetary Fund loans. Following the end of the Cold War and the fall of the military dictatorships in Brazil, Argentina and Uruguay, social movements including labor and indigenous currents opposed the austerity and called for debt forgiveness, sometimes resulting in clashes with the state, it was in this context that Chávez and MBR-200 won the 1998 elections and initiated the constituent process that resulted in the Venezuelan Constitution of 1999. Chavismo policies include social welfare programs and opposition to neoliberalism. According to Hugo Chávez, Venezuelan socialism accepts private property, but this socialism seeks to promote social property too. Chavismo support participatory democracy and workplace democracy. In January 2007, Chávez proposed to build the communal state, whose main idea is to build self-government institutions like communal councils and communal cities.
According to the United States Army Combined Arms Center: A few year after Chávez rose to power in 1999, he began implementing a political-strategic plan he called the'Bolivarian Revolution,' which threatened Latin American peace. Chávez's plan was characterized by a hostile and confrontational posture toward the United States, actions designed to export Chávez's autocratic, socialist model to other countries of the region, a foreign policy that embroiled Venezuela in international-level conflicts. Chávez was seen as a leader of the "pink tide", a turn towards left-wing governments in Latin American democracies. Analysts have pointed out additional anti-American and authoritarian-leaning traits in those governments. Chávez refocused Venezuelan foreign policy on Latin American economic and social integration by enacting bilateral trade and reciprocal aid agreements, including his so-called "oil diplomacy", making Venezuela more dependent on using oil and increasing its longterm vulnerability.
Though Chávez inspired other movements in Latin America to follow his model of chavismo in an attempt to reshape South America, it was seen as being erratic and his influence internationally became exaggerated, with the pink tide beginning to subside in 2009. The social programs that came into being during the term of Hugo Chávez sought to reduce social disparities and were funded in large part by oil revenues; the sustainability and design of the welfare programs have been both criticized. Specific examples of social programs are listed below. Plan Bolívar 2000 was the first of the Bolivarian Missions enacted under of administration of Venezuelan President Hugo Chávez. According to the United States Department of State, Chávez wanted to "send the message that the military was not a force of popular repression, but rather a force for development and security"; the United States State Department commented that this happened "only 23 days after his inauguration" and that he wanted to show his closest supporters "that he had not forgotten them".
The plan involved around 40,000 Venezuelan soldiers engaged in door-to-door anti-poverty activities, including mass vaccinations, food distribution in slum areas and education. Several scandals affected the program as allegations of corruption were formulated against Generals involved in the plan, arguing that significant a
Guaicaipuro was a native Venezuelan chief of both the Teques and Caracas tribes. Though known today as Guaicaipuro, in documents of the time his name was written Guacaipuro. Guaicaipuro formed a powerful coalition of different tribes which he led during part of the 16th century against the Spanish conquest of Venezuelan territory in the central region of the country, specially in the Caracas valley, he commanded, among others, Cacique Naiguatá, Chacao, Aramaipuro and his own son Baruta. Guaicaipuro is one of the most celebrated Venezuelan Caciques; the area occupied by the Teques was populated by several native groups each with its own cacique. Guaicaipuro's tribe, located in what is now San Antonio de los Altos, was the largest one, he had a son named Baruta, himself a Cacique. The name of two is his sisters is known: Tiora and Caycape; the Spaniards discovered gold in the area of the land of the Teques, as they started to exploit the mines, Guaicaipuro attacked, forcing the Spanish to leave. Following the attack, the governor of the province of Venezuela sent Juan Rodríguez Suárez to pacify the area, which he did after defeating Guaicaipuro in several engagements.
Believing he had achieved his task, the Spanish commander and his soldiers left the area leaving behind miners and three of his sons. Once the Spanish soldiers had left, Guiacaipuro assaulted the mines killing all the workers as well as the sons of Rodríguez Suárez. Thereafter, Rodríguez Suárez, on his way to the city of Valencia, with a small contingent of only six soldiers, with the purpose of meeting Lope de Aguirre, another Spanish conquistador, was ambushed by Guaicaipuro and killed. After these successes Guaicaipuro became the main and central figure in the uprising of all the native tribes in the vicinity of the Caracas valley, managed to unite all the tribes under his command. In 1562 they defeated an expeditionary force led by Luis Narváez. Due to the fierce attacks, the Spanish retreated away from the area for several years. In 1567 the city of Santiago de Leon de Caracas was founded in the Caracas valley; the Spanish worried about the nearby presence of Guaicaipuro and his men, given his previous attacks, they decided not to wait for him to attack, as a preventive move Diego de Losada, ordered the mayor of the city, Francisco Infante to undertake Guacaipuro's capture.
In 1568 Infante and his men were led by native guides to the hut where Guaicaipuro lived and they set it on fire to force the native cacique out. Guaicaipuro found death at the hands of the Spanish soldiers; the county of Guaicaipuro in the state of Miranda, Venezuela was named in his honor. The county reformed to the Guaicaipuro Municipality. Amidst the new policy started by former president Hugo Chávez of re-assessing and valuing the role of Venezuela's Caciques and indigenous peoples in a historical narrative which has traditionally given greater prominence to the Spanish conquistadores, Guaicaipuro's remains were symbolically moved under ceremonial pomp to the national pantheon on December 8, 2001. Under the same new policy president Chávez mentioned Guaicaipuro and other native chiefs in his speeches with the purpose of inspiring Venezuelans to resist what he called the policies of American imperialists and interventionists directed towards Venezuela. Most notably, he did it every year during the October 12 holiday, which after being renamed several years ago Dia de la Raza, was renamed as Día de la Resistencia Indígena.
The Venezuelan government named as Mission Guaicaipuro one of its ongoing Bolivarian Missions. Venezuela Tuya Short biography of Guaicaipuro. Guaicaipuro County Guaicapuro's life. Misión Guaicaipuro Website for the Venezuelan government's project for the native tribes. Guaicaipuro's gold coins
Mission Barrio Adentro
Mission Barrio Adentro is a Bolivarian national social welfare program established by the late Venezuelan president Hugo Chávez. The program seeks to provide comprehensive publicly funded health care, dental care, sports medicine to poor and marginalized communities in Venezuela. Two features of Misión Barrio Adentro are the construction of thousands of two-story medical clinics and staffing with resident-certified medical professionals. Billed as an attempt to deliver a de facto form of universal healthcare, Barrio Adentro became a way to grant access to medical care to Venezuelan citizens whose political stance the Bolivarian government deemed acceptable; the Latin American branch of the World Health Organization and UNICEF praised the program in 2005. According to WHO statistics, infant mortality fell from 23 to 20 in males and 19 to 17 in females per 1,000 births between 2003 and 2005. Of a planned 8,500 Barrio Adentro I centers, 2,708 had been built by May 2007, using an investment of around US$126 million, with a further 3,284 under construction.
As of 2006, the staff included 31,439 professionals, technical personnel, health technicians, of which 15,356 were Cuban doctors and 1,234 Venezuelan doctors. In 2014, the government celebrated eleven years of the mission, claiming that over 10,000 clinics were created. In Caracas, Mission Barrio Adentro I and II centers in 32 parishes were the subject of constant complaints regarding performance after receiving 1.492 million Bolivares from the government. Councilman Alejandro Vivas stated that "instead of having positive results, what is observed is the discontent of the citizens for a performance that leaves much to be desired"; as of December 2014, it was estimated that 80% of Barrio Adentro establishments were abandoned in Venezuela, with the majority of Cuban medical personnel leaving the country. By the end of 2015, the Bolivarian government reported that one in three of Venezuelan patients admitted to public health facilities that year died. In October 2016, the Miami Herald reported that hundreds of doctors were being recalled by the Cuban government due to a lack of payments by Venezuela.
The Barrio Adentro program was developed against the backdrop of a public health sector crumbling under long-term financial pressure. As part of Rafael Caldera's neo-liberalist programs of the early 1990s, a Venezuela struggling with inflation and low oil prices was forced into spending cuts and privatization in a number of sectors, including healthcare. A 1989 decentralization law contributed to the trend. Cost recovery became prevalent through "voluntary" contributions from users. In addition to the problems with the healthcare system, over the course of the decade, health problems caused by poverty increased. By 1999, 67.7% of the Venezuelan population was living in poverty, from 44.4% in 1990. In 1999, following the election of Hugo Chávez, the Ministry of Health planned to develop a new National Public Health System, with a particular focus on health promotion, disease prevention, community participation, the strengthening of the primary health care infrastructure; the 2000/1 annual report by PROVEA highlighted a number of positive features of the new approach, including a wider availability of health services through progressive elimination of users’ fees.
The Barrio Adentro program is an example of Latin American Social Medicine, which became prominent in the 1960s and 1970s. Among others in Latin America, both Salvador Allende in Chile in the early 1970s and Tabaré Vázquez in Uruguay since 2005 have implemented LASM principles. LASM's roots can be traced back to 19th-century European social medicine, exported to Latin America in the early 20th century. LASM emphasises a collective and holistic approach to healthcare, rather than treating the particular symptoms of an individual, thus the importance of health promotion and disease prevention is stressed—informed by the political and social determinants of health—over a reactive treatment of health problems as they occur. LASM incorporates the concept of primary health care, of which the "simplified healthcare" adopted in rural Venezuela in the 1960s and 1970s was one form. More in 2006, Barrio Adentro was described by the Director of the PAHO as "the culmination of 25 years of experience in Latin America and the rest of the world in transforming health systems through the primary health care strategy."When Hugo Chávez became President in 1999, he sought to implement LASM principles, beginning with their incorporation into the new 1999 Venezuelan Constitution, in articles 83–85 of Title III.
These articles enshrine free and high quality healthcare as a human right guaranteed to all Venezuelan citizens. Notably, Article 84 of Title III follows LASM principles in declaring health promotion and disease prevention a priority. In addition, Article 85 mandates that the government provide adequate funding for the public healthcare system, while Article 84 explicitly proscribes its privatization. Initial attempts to transform the Ministry of Health to LASM principles were met with little success; the Venezuelan Medical Federation was aligned with the Punto F
Mission Mercal is a Bolivarian Mission established in Venezuela under the government of Hugo Chávez. The Mission involves a state-run company called Mercados de Alimentos, C. A. which provides subsidised food and basic goods through a nationwide chain of stores. In 2010 Mercal was reported as having 16,600 outlets, "ranging from street-corner shops to huge warehouse stores," in addition to 6000 soup kitchens. Mercal employs 85,000 workers. Mission Mercal stores and cooperatives are located in impoverished areas and sell generic-branded foods at discounts as great as 50%. While the company is funded by the government, the goal is to become self-sufficient by replacing food imports with products from local farmers, small businesses, cooperatives; this endogenous development is central to Chávez's stated goal of non-capitalistic development from the bottom up. Customers say that there are a lack of products in Mercal stores and that items available at these stores change constantly; some customers complained about rationing being enforced at Mercal stores due to the lack of products.
The antecedent operations to Mission Mercal began operations following the economic hardships following the strike/lockout of 2002. Up until that period, Venezuela's food production and distribution systems were managed by large national corporations, a situation homologous to the present reality in Western nations such as the United States or Europe; as most corporations supported the strike/lockout, aimed at politically damaging Chávez, most of the food-related corporations joined the protests and ceased their operations. On the 25 April 2003 broadcast of the television show Aló Presidente, Chávez expressed his outrage at Venezuela's lack of food sovereignty and the resultant vulnerability to the agenda of major food corporations, manifest in closed supermarkets, growing malnutrition, food shortages. “This offensive served us a lot because we learned from the imperialism’s attack, from the Venezuelan oligarchy, from those who were supporting the aggression against Venezuela and who would liked to have defeated us with hunger.
That we did not have a grain of anything, of food reserves. Before any natural, political or social disaster, Venezuela did not have food reserves," Chávez stated. Afterwards, in the depths of the oil shutdowns and general turmoil of 2002, Mission Mercal's reach expanded rapidly; the Armed Forces were integral in providing logistical support in moving, procuring and distributing food. Military bases and supply depots were used as food supply nodes, while military barracks became storage centers. Chávez acknowledged this by stating that "the army of Venezuela took to the street, gave of themselves and made the task easier with their technology, their human resources, their means of transportation and their installations for storing food.” With only three Mercals and two warehouses, Mission Mercal multiplied to the point where 12,500 Mercalitos, 13,392 Mercals, hundreds of cooperatives, 31 Supermercals, 102 vast warehouses comprised a sprawling distribution system serving millions of barrio dwellers.
In 2006 some 11.36 million Venezuelans benefited from Mercal food programs on a regular basis. At least 14,208 Mission Mercal food distribution sites were spread throughout Venezuela, 4,543 metric tons of food distributed each day. Victuals offered by Mission Mercal include everything from meat and dairy, to fresh produce, preserved foodstuffs and cereals, vegetable oils, mineral salts; these goods are offered in Mercal-affiliated establishments at discounts averaging between 25% to 50%. It has been reported. Customers who wait in long lines for discounted products say that there were a lack of products in Mercal stores and that items available at the stores change constantly; some customers complained about rationing being enforced at Mercal stores due to the lack of products. In some cases, protests have occurred due to the shortages in stores. PDVAL Economic policy of the Hugo Chávez government Misión Mercal — Official governmental portal for Mission Mercal. Mercal — Official Mission Mercal factsheet.
Mision Venezuela: Misión Mercal: Vía a la soberanía alimentaria — A governmental site detailing Mission Mercal. Wagner, Sarah.. "Mercal: Reducing Poverty and Creating National Food Sovereignty in Venezuela". Retrieved 22 Oct 2005. Anna Isaacs. "The Food Sovereignty Movement in Venezuela, Part 1". Venezuela Analysis
Venezuela the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and a large number of small islands and islets in the Caribbean Sea. The capital and largest urban agglomeration is the city of Caracas, it has a territorial extension of 916,445 km2. The continental territory is bordered on the north by the Caribbean Sea and the Atlantic Ocean, on the west by Colombia, Brazil on the south and Tobago to the north-east and on the east by Guyana. With this last country, the Venezuelan government maintains a claim for Guayana Esequiba over an area of 159,542 km2. For its maritime areas, it exercises sovereignty over 71,295 km2 of territorial waters, 22,224 km2 in its contiguous zone, 471,507 km2 of the Caribbean Sea and the Atlantic Ocean under the concept of exclusive economic zone, 99,889 km2 of continental shelf; this marine area borders those of 13 states. The country has high biodiversity and is ranked seventh in the world's list of nations with the most number of species.
There are habitats ranging from the Andes Mountains in the west to the Amazon basin rain-forest in the south via extensive llanos plains, the Caribbean coast and the Orinoco River Delta in the east. The territory now known as Venezuela was colonized by Spain in 1522 amid resistance from indigenous peoples. In 1811, it became one of the first Spanish-American territories to declare independence, not securely established until 1821, when Venezuela was a department of the federal republic of Gran Colombia, it gained full independence as a country in 1830. During the 19th century, Venezuela suffered political turmoil and autocracy, remaining dominated by regional caudillos until the mid-20th century. Since 1958, the country has had a series of democratic governments. Economic shocks in the 1980s and 1990s led to several political crises, including the deadly Caracazo riots of 1989, two attempted coups in 1992, the impeachment of President Carlos Andrés Pérez for embezzlement of public funds in 1993.
A collapse in confidence in the existing parties saw the 1998 election of former coup-involved career officer Hugo Chávez and the launch of the Bolivarian Revolution. The revolution began with a 1999 Constituent Assembly, where a new Constitution of Venezuela was written; this new constitution changed the name of the country to Bolivarian Republic of Venezuela. The sovereign state is a federal presidential republic consisting of 23 states, the Capital District, federal dependencies. Venezuela claims all Guyanese territory west of the Essequibo River, a 159,500-square-kilometre tract dubbed Guayana Esequiba or the Zona en Reclamación. Venezuela is among the most urbanized countries in Latin America. Oil was discovered in the early 20th century, today, Venezuela has the world's largest known oil reserves and has been one of the world's leading exporters of oil; the country was an underdeveloped exporter of agricultural commodities such as coffee and cocoa, but oil came to dominate exports and government revenues.
The 1980s oil glut led to a long-running economic crisis. Inflation peaked at 100% in 1996 and poverty rates rose to 66% in 1995 as per capita GDP fell to the same level as 1963, down a third from its 1978 peak; the recovery of oil prices in the early 2000s gave. The Venezuelan government under Hugo Chávez established populist social welfare policies that boosted the Venezuelan economy and increased social spending, temporarily reducing economic inequality and poverty in the early years of the regime. However, such populist policies became inadequate, causing the nation's collapse as their excesses—including a uniquely extreme fossil fuel subsidy—are blamed for destabilizing the nation's economy; the destabilized economy led to a crisis in Bolivarian Venezuela, resulting in hyperinflation, an economic depression, shortages of basic goods and drastic increases in unemployment, disease, child mortality and crime. These factors have precipitated the Venezuelan Migrant Crisis where more than three million people have fled the country.
By 2017, Venezuela was declared to be in default regarding debt payments by credit rating agencies. In 2018, the country's economic policies led to extreme hyperinflation, with estimates expecting an inflation rate of 1,370,000% by the end of the year. Venezuela is a charter member of the UN, OAS, UNASUR, ALBA, Mercosur, LAIA and OEI. According to the most popular and accepted version, in 1499, an expedition led by Alonso de Ojeda visited the Venezuelan coast; the stilt houses in the area of Lake Maracaibo reminded the Italian navigator, Amerigo Vespucci, of the city of Venice, Italy, so he named the region Veneziola, or "Little Venice". The Spanish version of Veneziola is Venezuela. Martín Fernández de Enciso, a member of the Vespucci and Ojeda crew, gave a different account. In his work Summa de geografía, he states that the crew found indigenous people who called themselves the Veneciuela. Thus, the name "Venezuela" may have evolved from the native word; the official name was Estado de Venezuela, República de Venezuela, Estados Unidos de Venezuela, a
Speculation is the purchase of an asset with the hope that it will become more valuable in the near future. In finance, speculation is the practice of engaging in risky financial transactions in an attempt to profit from short term fluctuations in the market value of a tradable financial instrument—rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, dividends, or interest. Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements. Speculation can in principle involve any tradable financial instrument. Speculators are common in the markets for stocks, commodity futures, fine art, real estate, derivatives. Speculators play one of four primary roles in financial markets, along with hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageurs who seek to profit from situations where fungible instruments trade at different prices in different market segments, investors who seek profit through long-term ownership of an instrument's underlying attributes.
With the appearance of the stock ticker machine in 1867, which removed the need for traders to be physically present on the floor of a stock exchange, stock speculation underwent a dramatic expansion through the end of the 1920s. The number of shareholders increased from 4.4 million in 1900 to 26 million in 1932. The view of what distinguishes investment from speculation and speculation from excessive speculation varies among pundits and academics; some sources note that speculation is a higher risk form of investment. Others define speculation more narrowly; the U. S. Commodity Futures Trading Commission defines a speculator as "a trader who does not hedge, but who trades with the objective of achieving profits through the successful anticipation of price movements." The agency emphasizes that speculators serve important market functions, but defines excessive speculation as harmful to the proper functioning of futures markets. According to Benjamin Graham in The Intelligent Investor, the prototypical defensive investor is "...one interested chiefly in safety plus freedom from bother."
He admits, that "...some speculation is necessary and unavoidable, for in many common-stock situations, there are substantial possibilities of both profit and loss, the risks therein must be assumed by someone." Thus, many long-term investors those who buy and hold for decades, may be classified as speculators, excepting only the rare few who are motivated by income or safety of principal and not selling at a profit. Speculation is condemned on ethical-moral grounds as creating money from money and thereby promoting the vices of avarice and gambling. There is opinion that it serves no purposes from a human and economic perspective Nicholas Kaldor has long recognized the price-stabilizing role of speculators, who tend to out "price-fluctuations due to changes in the conditions of demand or supply," by possessing "better than average foresight." This view was echoed by the speculator Victor Niederhoffer, in "The Speculator as Hero", who describes the benefits of speculation: Let's consider some of the principles that explain the causes of shortages and surpluses and the role of speculators.
When a harvest is too small to satisfy consumption at its normal rate, speculators come in, hoping to profit from the scarcity by buying. Their purchases raise the price, thereby checking consumption so that the smaller supply will last longer. Producers encouraged by the high price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant, they sell; this reduces prices, helping to reduce the surplus. Another service provided by speculators to a market is that by risking their own capital in the hope of profit, they add liquidity to the market and make it easier or possible for others to offset risk, including those who may be classified as hedgers and arbitrageurs. If any market, such as pork bellies, had no speculators, only producers and consumers would participate. With fewer players in the market, there would be a larger spread between the current bid and ask price of pork bellies.
Any new entrant in the market who wanted to trade pork bellies would be forced to accept this illiquid market and might trade at market prices with large bid-ask spreads or face difficulty finding a co-party to buy or sell to. By contrast, a commodity speculator may profit the difference in the spread and, in competition with other speculators, reduce the spread; some schools of thought argue that speculators increase the liquidity in a market, therefore promote an efficient market. This efficiency is difficult to achieve without speculators. Speculators take information and speculate on how it affects prices and consumers, who may want to hedge their risks, needing counterparties if they could find each other without markets it would happen as it would be cheaper. A beneficial by-product of speculation for the economy is price discovery. On the other hand, as more speculators participate in a market, underlying real demand and supply can diminish compared to trading volume, prices may become distorted.
Speculators perform a risk bearing role. For example, a farmer might be considering planting corn on some unused farmland. However, he might not want to do so because he is concerned that the price might fall too far by harvest time. By selling his cro