Changing Venezuela By Taking Power

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Introduction

La verdad de Venezuela

no se ve en el Country club

la verdad se ve en los cerros

con su gente y su inquietud[1]

—Alí Primera,

Yo Vengo de Donde Usted no ha Ido

With the general disorientation that today dominates left parties and theorists around the world, following the successive failures of state socialism and of social democracy, one would hardly have expected a small, relatively wealthy, and inconspicuous country in Latin America to boldly announce it will create 21^st century socialism. Why and how was this possible in Venezuela? What does it mean? What are its prospects for success? These are the three main questions this book seeks to answer.

The International Context

The election of a leftist president in Venezuela in 1998 foreshadowed what would, in the following seven years, become a wave of successes for left-leaning presidential candidates in Latin America. Leftists who followed Hugo Chavez into the presidency of their respective countries were, first, Luiz Ignacio "Lula" da Silva in Brazil in October 2002, then Lucio Gutierrez in Ecuador in January 2003, Nestor Kirchner in Argentina in May 2003, Tabaré Vázquez in Uruguay in October 2004, Evo Morales in Bolivia in December 2005, Rafael Correa in Ecuador in November 2006, and then Daniel Ortega in Nicaragua also in November 2006. While some of these moderated significantly shortly after taking office, such as Gutierrez and da Silva, they represent a wave of left of center leaders whose election came as a bit of a surprise given the aforementioned disorientation within the left around the world.

For practically the entire 1990's "the left," ranging from moderate social democrats to leftwing socialists, appeared to be somewhat perplexed as to what their concrete political program should be. The fall of the Berlin Wall in 1989 and the subsequent implosion of the Soviet Union and of other state socialist regimes signaled the complete discrediting of state socialism and central planning as an institutional solution for achieving the ideals of socialism. At first, this collapse appeared to vindicate social democrats, who had always argued in favor of mixing state and market, in lieu of a complete abolition of the market.

However, it soon became obvious that social democracy was in a crisis too. In the U.S., in Britain, and in Germany, left of center leaders entered office again in the 1990's, after a long absence, but found that that their old Keynesian recipes of state intervention in the market's dysfunctions did not work as well as they used to. Globalization of financial markets and massive indebtedness and deficits made old-style social democratic programs unviable. Capital had become too mobile and the welfare state too expensive for social democratic policies. As a result, Bill Clinton, Tony Blair, and Gerhard Schrí¶der tried to devise a new more moderate program for the left, which essentially accepted the market imperatives that neo-liberals had created in the 1980's and tried to balance budgets and dismantle social programs. At the same time, they tried to keep their left credentials by being slightly to the left of their more conservative opponents. Meanwhile, in Latin America, similarly centrist presidents governed, partly as a result of the left having been purged from politics during the dictatorships of the 1970's and 1980's and partly because of the constraints that massive state indebtedness and financial deregulation placed on governance in Latin America too.

In short, social democracy had become unviable in an age of unrestricted capital flows and lack of financial resources. Instead, neo-liberalism emerged as the dominant political ideology. This economic program had been applied with a vengeance in Latin America throughout the 1980's and 1990's. The results of neo-liberalism, which meant privatization of state assets, free trade, state fiscal austerity, and deregulation of the labor market, were far from as good as neo-liberalism's apostles had claimed they would be. Between 1980 and 1999, during the height of neo-liberalism in Latin America, per capita economic growth of the continent was a paltry 11%, compared to an 80% per capita GDP growth in the previous 20 years (a mostly Keynesian period), of 1960-1979.[2] Also, these meager economic results and the material hardship many of the policies implied led to wide-spread resistance movements and often to their violent repression. As we will see, Venezuela came to be prime example of the failures of neo-liberalism, resistance, and repression.

A New New Left?

What remained, then, as an economic program for the countries of Latin America and for the left in general? State socialism, social democracy, and neo-liberalism all seemed to have run their unsuccessful course. By the early 21^st century no clear answers had emerged, but voters were willing to give the left another opportunity in Latin America, despite the vagueness of their programs. However, of the leftist presidents that were elected in this first decade, only one, President Hugo Chavez Frí­as of Venezuela, eventually declared that he is following an explicitly anti-capitalist and pro-socialist agenda. At first, despite his somewhat inflammatory (some would say populist) rhetoric, Chavez's policies were equally moderate as those of his fellow Latin American leftists.

Two things stood out, though, when comparing Chavez with these other presidents. First, Chavez faced far more vehement and even violent opposition to his presidency than the others, even though initially his concrete policies were not much different from those of Brazil's Lula da Silva or Chile's Michele Bachelet. Second, Chavez's confrontation with the opposition led him to eventually become a far more radical left politician than he started out as. It was not until after a coup attempt in 2002, a two-month shutdown of the country's all-important oil industry in 2002-2003, and a presidential recall referendum in August 2004 that Chavez declared his political program to be socialist, in January 2005—a full six years into his presidency.

Of course, just because Chavez announced the pursuit of socialism does not mean that his policies are socialist. Too often have politicians claimed to be in favor of socialism, only to pursue policies that ended either in a centrally planned dictatorship or in capitalism as usual. Thus, to find out whether Chavez's policies match his rhetoric and to see if these policies constitute a real alternative to state socialism, social democracy, and neo-liberalism, it makes sense to examine them carefully. Also, even if they constitute a real alternative, do they actually lead towards a better society?

The Path Towards 21^st Century Socialism in Venezuela

Before examining the question of whether Venezuela is actually heading towards something that might be called 21^st century socialism, the present study first tries to explain how and why 21^st century socialism came to be on the agenda in Venezuela. That is, Chavez and his Bolivarian movement appeared in Venezuela at a very specific time in the country's history, in a context in which social democracy and neo-liberalism were probably more discredited than in most other countries in the world.

Chapter 1, "The Dialectic of Counter-Revolution and Radicalization," reviews recent Venezuelan history and how this history made a radical project such as that of Chavez's Bolivarian Revolution possible.[3] It shows how, ever since the 1920's, Venezuela had grown accustomed to constantly increasing oil revenues, which fueled the development of a strong and economically interventionist state. However, when oil revenues started a long 20-year decline in the early 1980's and it could no longer support its large state sector and a political system that bought political loyalty with oil revenue. Poverty and inequality sky-rocketed to the highest levels in Latin America in this period. The old political system, which had grown increasingly corrupt and repressive and which was held together with an exclusionary two-party pact, began falling apart, eventually giving a complete political outsider such as Hugo Chavez, who promised revolutionary change, the chance to win the presidency in 1998. Another important factor in Chavez's rise to power was that his movement was based on a coalition between progressive sectors of Venezuela's military and Venezuela's traditionally excluded more radical left movements and parties.

As stated earlier, once elected, Chavez gave very radical speeches, promising to eliminate poverty and corruption and to completely overturn the country's ossified political system with a new constitution. It is tempting to believe that Chavez's anti-poverty and anti-corruption program is what incensed the country's old elite to launch an all-out campaign to oust him. However, it was actually his success in completely displacing the old elite from positions of power that provoked their ire. During his first three years in office, Chavez's anti-poverty, anti-corruption, and redistribution measures were actually quite modest. Rather, it was the new constitution, which required the re-legitimation of all branches of government and the resulting complete removal of the old elite from state power that incensed them so much.

As a result, Venezuela's old elite refused to accept Chavez as the legitimately elected president and engaged in a no-holds-barred effort to get rid of him. Chavez, though, proved to be a particularly intransigent foe, who refused to concede to the opposition any of its demands. The heightened conflict led to both a polarization of Venezuelan society and to the splitting off of significant chunks of Chavez's coalition and their joining the opposition. The conflict came to its first major confrontation with the April 2002 coup attempt, which demonstrated the extent of the opposition's hubris. Not only did it not recognize Chavez as the legitimate president, but it had also completely ignored his growing constituency among the country's poor and excluded. The opposition's miscalculations about Chavez's popularity among the poor and among the military spelled the coup's failure.

This miscalculation of the opposition, which was rooted in its firm belief that it represented the "reasonable" majority of the country and that Chavez was not a legitimate president, led to several other failed adventures. The next such adventure was the two-month shutdown of the country's all-important oil industry, from early December 2002 to early February 2003, where the opposition lost its power base in the oil industry. Next, it tried to oust Chavez via the legal means of a presidential recall referendum. This too failed spectacularly. Finally, Chavez was reelected in a landslide victory of 63%, to the 36% of his main opponent.

By then, however, the combination of the opposition's implosion as a result of its repeated failures, and the start of a new oil boom in 2004, had liberated the Chavez government from the restraints that most leftists face once in office. Economically, the pressure to please international capital in the name of foreign investment and development was practically eliminated thanks to the boom in oil prices. Politically, the opposition had lost crucial bases of power in the polity, the military, the oil industry, and in society in general, thereby freeing Chavez from the need to take opposition reactions to his policies into consideration. Chavez thus discarded his earlier moderation and in early 2005 publicly declared his conversion to a new form of socialism, of "21^st century socialism," which he would work on instituting in Venezuela. The parties and sectors that supported Chavez enthusiastically went along with the announcement because they too appeared to have been radicalized by the preceding confrontations with the U.S. supported opposition.

Identifying 21^st Century Socialism in Venezuela

The heart of the book, Chapters 2 to 5, provide detailed descriptions and analyses of the governance policy, economic policy, social policy, and foreign policy of the Chavez government and the extent to which the Chavez government manages to approximate institutions that fulfill the ideals Chavez talks about. In all four policy areas there are clear indications that indeed the government is pursuing innovative policies that transcend the institutions of capitalism as usual. However, these policies are often contradicted or undermined by contravening policy tendencies. For example, while the Chavez government has embarked on an important project of increasing citizen participation in a wide variety of state institutions, it has also increased the importance and strength of the presidency, which tends to undermine the participatory policies. In the area of economic policy, the government has gone a long way towards establishing economic democracy, but the high oil revenues upon which many of these policies depend, threaten the long-term viability of self-managed enterprises in Venezuela. These types of contradictions exist in all of the main policy areas examined here.

Despite the frequent contradictoriness of the policies, many of them do lay the groundwork for institutions that would fulfill the ideals of 21^st century socialism. This is a crucial achievement, not only for Venezuelans, because it raises the hope for a Venezuela with more social justice, but it also serves a broader example of what left or socialist politics of the future could look like. An analysis of the Venezuelan institutions that work towards fulfilling society's ideals can help provide orientation and hope to a disorganized, fragmented, and often demoralized left throughout the world.

However, in addition to the frequent problem of contradictory policies, there are even deeper obstacles lurking within the Bolivarian socialist project, which have to do with the Bolivarian movement itself. The last chapter, "Opportunities, Obstacles, Prospects," discusses these obstacles and finds that the three most important obstacles for the Chavez government's project are the persistence of a patronage culture, the nascent personality cult around Chavez, and Chavez's own autocratic instincts, which undermine the creation of a participatory society. If Venezuelan society and the Chavez government manage to resolve these three key issues that are internal to the Bolivarian movement, if the policies themselves are made more consistent, and if there is no significant outside interference, then Venezuela might well be the greatest hope for establishing freedom, equality, and social justice in over a generation.

Those who are interested in developing a basis for evaluating what 21^st century socialism might mean in Venezuela and whether the Chavez government's policies actually lead towards the fulfillment of the ideals of 21^st century socialism, should read Appendix A, "What is 21^st Century Socialism?" This appendix first presents some general ideas about this conception of socialism. Unfortunately, Chavez has not clearly defined 21^st century socialism, other than to say that it is about establishing liberty, equality, social justice, and solidarity. He has also indicated that it is distinctly different from state socialism. However, such ideals, by themselves, make 21^st century socialism indistinguishable from most other social projects of the 20^th and 21^st century. Surely, what distinguishes 21^st century socialism would have to be the institutions it aims to create, not the ideals it is pursuing. At heart, such institutions would be characterized by their democratic and participatory nature. Also, if one establishes that the economic institutions of capitalism—of private ownership of the means of production, the market system, and pro-capitalist state—are incapable of fulfilling society's ideals, then the new institutions must clearly distinguish themselves from these institutions. This chapter goes on to outline what non-capitalist, perhaps 21^st century socialist, political and economic institutions could look like.

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