Venezuela: Socialism for the 21st Century
[Contribution to the Reimagining Society Project hosted by ZCommunications]
For much of the 19th and 20th century, socialism was the hope of millions of working people around the globe, including the
In the 1980's, we were told by government leaders such as Margaret Thatcher, Ronald Reagan, most economists, media pundits such as Thomas Friedman that there is no alternative (TINA) to unregulated market capitalism. This economic model and the related policies are called neoliberalism in
By the early 1990's, the fall of the Berlin Wall, the collapse of Soviet Union, and the defeat of the Sandinistas in
In 1998, Hugo Chávez was elected President of Venezuela. He spoke strongly and acted against savage neoliberalism in his electoral campaign and after taking power but socialism was not a part of his vocabulary or program for his first few years in office. Since late 2004, he has been increasingly calling for Socialism for the 21st Century in
This call for 21st century socialism has resonated throughout the
I will share some of my understanding of the present and possible future of
The Chávez Question
Before returning to the theory and practice of 21st Century Socialism in
Central to understanding the Bolivarian revolution, another term commonly used to describe the ongoing social change in
In the last 10 years, social change from above has caused social change from below which has further moved the government of Chávez to the left
[v] which has furthered popular power at the grass roots level. What is exciting about
It is equally a mistake to only focus on the building power from below as some people who believe the state always supports the capitalist class or is inherently oppressive. I heard David Hernandez, a long-term labor organizer and socialist, and the current director of Venalum, the second largest aluminum plant in
What is also exciting and positive and hopeful is this slowly radicalizing dynamic where President Chávez supports people's power but does not control it.
[vii] This growing power from below makes it possible for him to initiate more socialist-oriented policies and structural change to further challenge the power and privileges of capital, e.g., land-takeovers from wealthy landowners where the resulting farm is then run in a collective or a cooperative manner by the occupants of the land.
What does Socialism for the 21st Century Mean?
One central aspect of 21st century socialism is that it increasingly meets the needs of the Venezuelan people. As can be seen from the following table, Table 1, there has been substantial improvement in social indicators since 1998. Poverty and income inequality have declined sharply. Indicators of health and access to education have substantially improved as have access to water and sanitation. The number of students in higher education more than doubled from the 1999-2000 school year to the 2007-2008 school year.
Table 1
Category
|
|
Year |
% or other measure |
Year |
% or other Measure |
|
Poverty (individuals) |
1998 |
52% |
2008 |
31.5% |
|
Extreme Poverty |
1998 |
20.1% |
2008 |
9.5% |
|
Gini Index(measure of inequality, 0=total equality; 1=total inequality |
1998 |
.48 |
2008 |
.41 |
|
Infant Mortality/100,000 |
1998 |
21.4 |
2006 |
14 |
|
Nutrition related Deaths/100,000 |
1998 |
4.9 |
2007 |
2.3 |
|
Access to Clean Water |
1998 |
80% |
2007 |
92% |
|
Access to Sanitation |
1998 |
62% |
2007 |
82% |
|
Social Security, % of Population |
1998 |
1.7% |
2008 |
4. 4% |
|
Unemployment rate |
1998 |
11.3% |
2008 |
7.8% |
Note: The end year is the last year where data was available, in most cases 2007 or 2008.
There has also been substantial growth in Gross Domestic Product (GDP) primarily since 2003. Real GDP has grown 10% per year since 2003 although at a lower but still respectable growth rate of 4.7% over the entire 1998 to 2008 period.
[x] For most of this latter period oil prices have risen. Also contributing to the higher growth rates since 2003, has been the defeat of the employer's lockout and oil stoppage in late 2002 and early 2003 and the Chávez's government increasing commitment to public investment in infrastructure as well as health and education. There has been significant growth in private and public capital formation including infrastructure, machinery and business and farming equipment, offices, factories, roads and in employment and production in all sectors of the economy including manufacturing and agriculture. This is both a cause of the improvement in the economy of
The growing equality of income in
Inclusion of the marginalized and poor is another central aspect of the construction of 21st century socialism. The improvements in health, literacy and education of the poorest parts of the population indicate a politics of inclusion, a government making central the needs of the formerly excluded and second-class citizens. These progressive social policies also make it more possible for the popular classes to participate in public life. There is a commitment to provide adequate housing with water, electricity, for all but so far the growth of adequate housing has lagged although we saw many, many communities getting money to build housing for themselves. The access to cheaper food through Mercal and Pdeval and through community food kitchens are important steps towards making possible the involvement of people in the politics and community activism in
As can be seen in the 1999 Venezuelan constitution, there have also been major steps taken against the discrimination and exclusion of indigenous people and in support of their rights to land and maintaining their culture. That
Cultural, Political and Economic Revolution
To understand the construction of 21st century socialism in
Cultural Transformation
A central part of the socialist project in
There is a major campaign carried out by publicly funded or run institutions and by non-publicly supported ones in support of women's equality, for worker's dignity, for equality for indigenous people and against all forms of racial discrimination, for food sovereignty and endogenous development and Venezuelan sovereignty, for sustainable development and for solidarity with oppressed people in all of the Americas and throughout the world. For example, we saw much support for the Palestinian struggle.
Chávez is continually stressing the necessity of transforming values for there to be socialism. Socialism requires both the change in values as well as the transformation of economic and political institutions. There is a danger that words such as socialism and solidarity will become merely rhetoric and hollow unless the economic and political institutions are simultaneously being transformed so that these socialist values are fostered and encouraged and can be practiced. If business enterprises, private or state owned, continue to be hierarchically run while Chávez talks on TV about self-management, cynicism about socialism will be the result.
Political Transformation
Participatory democracy is often used as a synonym for socialism in
Another integrally related concept is popular power. The growth of popular power, particularly at the local level is involving large numbers of people, in the millions, in deciding how to develop and run their communities thorough the institution of the communal council is an example of participatory democracy and growing popular power. It is exciting to observe the involvement of people formerly excluded from the political process making decisions about their communities, e.g., who needs housing the most, how to build housing, community priorities, etc. As with many of these institutional changes in
Also significant is the growth in
Economic Transformation
Today, the economy of
The second major state sector is the state sector—enterprises that are owned by the state and whose employees are public employees. This public sector includes PDVSA, the huge state owned oil company. Although much of the revenues of PDVSA now goes directly or indirectly to fund health and education programs, to build housing and infrastructure, it is run in a top down and hierarchical manner with large wage and salary differences among its employees. Wages are also much higher than the national average.
There is little worker self-management in most of the state sector. This sector produces about 30% of
A new and exciting state enterprise is the CVA, the Corporación Venezolano Agraria. They are a worker self-managed company whose objective is to process farm goods and sell them at low prices to consumers, e.g., canned tomatoes, tomato sauce. They also plan to cut out the profits of intermediaries by transporting food at a very low cost from farms to low-income communities and to institutions such as Mercal which will sell the food at an affordable price to consumers. The CVA has the potential to significantly benefit both farmers and consumers.
The third sector is the social economy. This includes what are often called socialist enterprises such as farms that are publicly owned and self-managed. This sector includes cooperatives and firms that are jointly run and owned by the workers and the state such as a cacao factory that we observed in Barlovento. It includes production organized by the communal councils. In enterprises that are part of the social economy, incomes are often equal for all employees. Workers have a large say in the running of the socialist enterprise, and the surplus is shared with a community that extends beyond those employed there. For example, some of the surplus may be used to build a community cultural center, or provide medical services at a medical clinic or by a doctor to the broader community in addition to workers and their families of the social enterprise. Because most of these enterprises are very small, a leading Venezuelan economist, Victor Alvarez estimates the social economy is only about 2% of the economy.
To me, a socialist economy in
[xix] For
Before returning to the construction and meaning of 21st century socialism, I would like to briefly comment on two major and related economic problems of
Overvaluation of the Currency and Inflation
One factor that makes it difficult for
The unofficial or black market rate is more than 6bsf to the dollar (June 8, 2009). Given the much higher inflation rates in
Inflation in
Fall in Oil Prices and the Current Venezuelan Economy
Much but not all of the rapid economic expansion of
Oil prices have begun to rise again in spring 2009 and given the continued global demand for oil and that we are reaching peak oil production, oil prices are likely to grow rapidly again in the future. This will provide
and where workers and communities run the economy. Hopefully these oil and gas revenues will also fund the development of appropriate technologies for domestic production, perhaps in joint ventures with other Latin American countries. This development of appropriate technologies is necessary for the development and diversification of local industry and production that hopefully are environmentally conscious. [xxv]
Internationalism and a Multipolar World
Socialism for the 21st century in
Other Challenges in Moving Towards the Construction of 21st Century Socialism
In addition to the problems already listed in this paper which include private domination of the Venezuelan economy by the multinationals and national capital, the need to produce more and diversify production, inflation, hierarchically run firms, and poverty and economic inequality, there are many others. Socialism requires gender and racial equality and equality for gays, lesbians and other sexual minorities. Gender and racial equality are considered as necessary parts of 21st century socialism and advocated for although their meaning is often quite restricted; there needs to be more of a priority for gender and racial equality at all levels of society.[xxviii] Gay and lesbian equality should be but are not yet a part of the Chávez and public agenda. Bureaucracy, corruption and crime and insecurity are also major issues which I will not deal with in this paper but are of central importance to the construction of a humane socialism.
In spite of these problems and the continued private domination of the economy, I am very excited about the construction of 21st century socialism in
Questions, Conclusion
1. Are the educational and health missions, the communal councils, Mercal, the cooperatives a part of an economy that will coexist alongside a regulated capitalist economy with the state involved in providing many needed social services and doing some income redistribution. I call this the social democratic option. This is the current social and economic reality. A second and more radical interpretation of what is going is that the new society is being built within the bosom of the old; that the social economy and popular power will grow and eventually take over and replace the current profit-based system. Barrio Adentro will become the health system, Mercal will become the food distribution institution, the Bolivarian universities will become the main universities, and the merged social and state economy will become self-managed and expand and become the entire economy. Popular power will replace most or all of the existing state. I call this the socialist option.
2. The second option is very exciting and libratory as both a strategy and a goal. What stills needs to be addressed in this alternative is how production, distribution and exchange of goods, services and labor will be coordinated? There are major problems with both markets and central planning.[xxix] Both undermine central values of socialism for the 21st century such as solidarity, self-management and environmental justice. There are other possibilities such as participatory planning that are worth pursuing.[xxx]
3. A revolution is transformation of a social system. The 1998 elections were an important beginning and there have been many hopeful small and big steps since. Thus far, it has been a large peaceful and certainly very democratic transition. Democracy has expanded in the sense of the growing inclusion of the formerly excluded, the popular classes, in determining the present and future of
4. 21st century socialism is opposed and resisted not only by the U.S. and Venezuelan elites but also by many members of the PSUV, the United Socialist Party of Venezuela. Terms we often heard while we were in
[i] A Rasmussen national telephone survey of 1100 adults on April 6-7, 2009 found 53% saying capitalism is better than socialism, 27% not sure and 20% saying socialism is better. Among those under 30, the respondents were almost evenly divided, 37% prefer capitalism and 33% socialism with the rest undecided. April 9, 2009. http://www.rasmussenreports.com/public_content/politics/general_politics/
[ii] A common measure of income inequality is the Gini coefficient. 0 is total equality, 1 is total inequality. The higher the number, the greater is the inequality. In
[iii] By anti- imperialist, I mean where one actively opposes the economic, political and cultural domination of a country in the global South by governments and multinational corporations centered in the global North and by international institutions such as the IMF, World Bank and WTO which are dominated by the global North.
[iv] Gregory Wilpert, Changing
[v] By left, I mean moving towards furthering economic and other forms of equality, in a socialist direction.
[vi] By popular classes, I mean 80% of the Venezuelan adult population. It includes those who work in the formal sector for wages and whose income and status is below what is called middle class. The popular classes also include those employed in the informal sector, farmers with small plots of land, the unemployed and underemployed, and single mothers who work in the home. It includes the working class but is a broader and more inclusive concept.
[vii] For example, there are many communal councils where the majority of its members do not support Chávez and are not members of the party he leads, the PSUV.
[viii] Mark Weisbrot, Rebecca Ray and Luis Sandoval, "The Chávez Administration at 10 Years: The Economy and Social Indicators." Center for Economics and Policy Research. February 2009, pp. 13. According to these authors, university attendance grew by 138% between these two periods. I refer to this article which I use for much of my data as Weisbrot, et. al.
[ix] For more explanations of these data, see Weisbrot, et. al. The numbers in my table are from this article. The authors use data primarily from the Venezuelan National Institute of Statistics (INE) and the Banco Central de Venezuela (BCV).
[x] Ibid., pp. 6-8
[xi] Ibid., pp. 7,8, 15
[xii] See the excellent article by Courtney Frantz in this book for the development of this point.
[xiii] Surplus is similar to but not identical to profits. Surplus is the remaining revenue of an enterprise after its pays out wages to its workers and all other costs. The objective of these socialist enterprises is not to maximize the surplus but to meet human needs.
[xiv] Víctor Alvarez, an economist and former minister of Basic Industry and Mines, and graduate professor at the Central University of Venezuela used this three sector model formulation of the economy. These are the estimates of their relatives proportions that he gave to us in a talk at the Centro Instituto Miranda in January, 2009 and in a private conversation on March 25, 2009. See also Víctor Alvarez, "Responsible del Programa de Investigación Sobre un Nuevo Modelo Productivo", in El Viejo Topo, October, 2008, pp. 24-31. He said these numbers were approximate proportions of their contribution either to GDP or to employment
[xv] Weisbrot et al, pp. 8. They do not provide data on agriculture but based on my looking at Venezuelan government data and from many conversations I had in Venezuela, I am quite certain that agricultural production has been growing but slower than the overall growth rate of output.
[xvi] James Suggett, "Venezuela Nationalizes Gas Plant and Steel Companies, Pledges Worker Control", May 22nd 2009, www.Venezuelanalysis.com
[xvii] See endnote xiv.
[xviii] See Robin Hahnel, Economic Justice and Democracy, (Routledge, 2005), Chapter 1, for an in-depth discussion of economic justice.
[xxi] If
[xxii] This could be done by bigger price subsidies for goods that fill basic needs, and by raising the minimum wage. Other alternatives could be multiple exchange rates that vary for different goods and/or further rationing foreign exchange in order to promote domestic production.
[xxv] Development and use of alternate energies and the promotion of trains and mass transit to reduce dependence on both oil and cars are openly discussed and to some extent being implemented. It is unlikely in the near future that
[xxvi] See "The Declaration of Cumaná", April 23rd, 2009, www.venezuelanalysis.com
[xxviii] For example, neither the PSUV nor Chávez have publicly raised the issue of the right to abortion for Venezuelan women.
[xxix] See Hahnel, op. cit., for an excellent critique of centrally planned and market socialist models and experiences.
[xxx] See Michael Albert, Parecon: Life After Capitalism (Verso, 2004) for a feasible participatory planning model that is an alternative to market socialism and central planning.



