Venezuela, oil, and the return of "managed sovereignty"

If you want to understand the difference between globalization and what many people increasingly call globalism, the past 24 hours are a clean, uncomfortable case study.

The United States conducted a large-scale operation in Venezuela, struck targets around Caracas, and took President Nicolás Maduro into custody, transferring him to New York to face charges framed by Washington as law-enforcement driven. The same reporting also makes clear why the episode is already being argued as something else: an intervention with geopolitical intent, justified post-hoc through indictments and “national interest” language that legal scholars describe as incoherent under international law.

This is where the terminology matters.

Globalization is what happens when firms, workers, and consumers intensify cross-border exchange: trade, migration, investment, ideas. It can be messy, uneven, sometimes painful, but its logic is decentralized. It expands because millions of micro-decisions converge.

Globalism, by contrast, is what happens when cross-border interdependence becomes an architecture of control: when the system is kept “open” selectively, closed strategically, and governed through chokepoints: financial rails, payment networks, shipping insurance, export controls, sanctions, and, when escalation arrives, direct force.

What happened in Venezuela is not simply “foreign policy.” It is a reminder that the world economy is not only a market; it is an enforceable network.

Globalization vs globalism in one table

This is not abstract theory. Political scientists Henry Farrell and Abraham Newman have described how global networks create “chokepoints” that powerful states can weaponize "weaponized interdependence" especially through finance and trade infrastructure.

Oil makes the story simpler than the speeches

Venezuela is not just another country with political dysfunction. It is an energy vault with a broken lock.

The U.S. Energy Information Administration notes Venezuela had the world’s largest proven crude oil reserves in 2023 - about 303 billion barrels, roughly 17% of global reserves, concentrated heavily in the extra-heavy Orinoco Belt.

In that light, it is not surprising that early international commentary is already framing the intervention as less about democracy and more about resources and strategic control: exactly the narrative that makes globalism so politically radioactive.

Even if the official rationale is prosecution and narcotrafficking, the economic subtext is unavoidable: who ultimately gets to decide how (and for whom) Venezuela’s oil system is rebuilt.

The economic cost of precedent

There is a tendency, especially in market commentary, to treat geopolitical shocks as “risk-on/risk-off” episodes: temporary volatility that fades once traders price the news. That lens is too narrow here, because the lasting impact is not the strike; it is the precedent.

Legal analysis points to the core issue: without U.N. authorization, self-defense criteria, congressional authorization, or host-nation consent, justifying military force as “law enforcement” stretches both domestic and international norms. [Read more] If this logic becomes reusable, investors and states will rationally adjust:

• Sovereign risk reprices. If leadership removal can be executed and retro-justified through indictments, then political alignment with the network’s gatekeepers becomes a component of credit risk - not just domestic fiscal capacity.

• Capital becomes more “bloc-bound.” Countries that fear coercion will pursue redundancies: alternative payments, alternative insurance, alternative trade corridors, even if less efficient.

• Commodity nationalism intensifies. Resource states will interpret openness as vulnerability and may harden controls, reducing long-run investment attractiveness.

This is the paradox of globalism: it claims to stabilize the system, but by demonstrating enforceable hierarchy, it incentivizes exit strategies that fragment the system.

Rodrik’s trilemma, now with teeth

Economist Dani Rodrik’s “political trilemma” argues you cannot simultaneously maximize democracy, national sovereignty, and deep global economic integration; you can pick two, but not all three.

Venezuela is an extreme example, but the lesson travels: when global integration is enforced through power, sovereignty becomes conditional. And once sovereignty becomes conditional, democratic choice becomes constrained, because the range of acceptable policies narrows to what the system’s gatekeepers will tolerate.

This is why many citizens around the world distinguish organic globalization (which can be negotiated and rebalanced) from globalism (which feels imposed, moralized, and - when challenged - enforced).

A sober conclusion, not a romantic one

None of this is a defense of Venezuela’s regime or a denial of its documented failures. It is simply a refusal to confuse moral narratives with institutional reality.

If the world’s most powerful states can remove leaders abroad while simultaneously presenting it as routine law enforcement, then “rules-based order” stops being a shared framework and starts looking like a brand name for asymmetric capability.

And that is the real economic story: when order becomes branding, trust decays. When trust decays, risk premia rise. When risk premia rise, growth becomes harder, especially for the countries that were promised that integration would make them safer.