Cato Institute (Ian Vasquez): "We don't want Venezuela to become a totalitarian communist state," declared Peruvian novelist Mario Vargas Llosa yesterday in Caracas at the opening of a major conference organized by the market-liberal think tank, CEDICE. I'm in Venezuela this week with my Cato colleagues Juan Carlos Hidalgo and Gabriela Calderon to participate in the event and to run a seminar for 60 students and young leaders from Venezuela, which took place earlier this week.

Vargas Llosa's concern is not about some remote possibility. Nor is it the opinion of an isolated intellectual detached from reality. His comments received sustained applause from the over-flow crowd of the 600 people in attendance and he has been mobbed by the press since he arrived here yesterday. Venezuela is not yet a full fledged dictatorship, evidenced by the fact that we are meeting here with leading liberal intellectuals from the region. But the environment of intolerance, arbitrary rule, and state vilification of anybody who disagrees with Hugo Chavez's march toward socialism has worsened at an alarming rate in recent months.

Already, Chavez has centralized economic and political control to a degree unmatched anywhere in the hemisphere outside of Cuba. He controls the legislature, the supreme court, the military, the central bank, the national electoral council, much of the media, the state oil monopoly and thus virtually all government spending, and exerts tremendous influence over the private sector through regulatory measures, most especially capital controls.

Freedom of speech is coming under renewed attack. Wednesday was the two-year anniversary of the government's decision to shut down the independent RCTV (by refusing to renew its license) -- until then the country's largest television station. It was the closing of RCTV that sparked mass protests led by the Venezuelan student movement that culminated in the defeat in December 2007 of Chavez's proposed constitutional referendum that would have turned the country into a socialist state. Since then, the opposition has won major victories in leading cities and states and Chavez has had to deal with the steep drop in the price of oil, the source of his astronomical spending. Chavez' response has included the marginalization of elected opposition politicians by depriving them of most of their funding and appointing parallel officials to carry out local government functions with full funding; the imposition by law of many of the measures rejected in the constitutional referendum; a rash of further nationalizations and land confiscations; and threats to close Globovision TV, the only remaining independent television station in the country.

The extent and technological sophistication of state propaganda here is impressive and chilling. Numerous state television stations operate 24 hours a day, relying on a diversity of formats (talk shows, music videos, interviews, "news" programs, congressional "debates," etc.), praising the Chavez regime, and attacking the private sector. The programming is not just pro-government. It is explicitly Marxist thr