Challenging United States
hegemony is never an easy course. A county need not be socialist — it is enough
to either voice aspirations toward socialism, or merely demonstrate a pattern
of not doing as Washington dictates.
So here we go again, this time
with Venezuela. Ironically for a country that the corporate media insistently
claims has been ruled by two “dictators” (remember that Hugo Chávez was
routinely denounced in the same ways that Nicolás Maduro is today) it would be
difficult to find a country with more opportunities for grassroots democracy
and for everyday people to participate in the decisions that affect their lives
and neighborhoods. There has been backtracking on some of this, and there are
legitimate complaints about the top-down manner in which the ruling United
Socialist Party of Venezuela (PSUV) is run. The U.S. government is in no
position to point fingers, however, given its history in Latin America and the
widespread voter suppression that is a regular feature of U.S. elections.
It is also preposterous to
assert that “socialism has failed” in Venezuela, when 70 percent of the
country’s economy is in private hands, the country is completely integrated
into the world capitalist system and it is (overly) dependent on a commodity
with a price that wildly fluctuates on capitalist markets. Venezuela is a capitalist
country that does far more than most to ameliorate the conditions of capitalism
and in which socialism remains an aspiration. If something has “failed,” it is
capitalism. Leaving much of the economy in the hands of capitalists leaves them
with the ability to sabotage an economy, a lesson learned in painful fashion
during the
1980s in Sandinista Nicaragua.
Before delving into the
significant problems of Venezuela, largely due to the economic war being waged
against it by the U.S. government and the economic sabotage within by
Venezuela’s industrialists and other business interests, it is worthwhile to
briefly examine some of the democratic institutions that have been created
since the Bolivarian Revolution took root in 1998.
Communal councils organize at
neighborhood level
The base of the Venezuelan
political system are the communal councils. Various political structures
designed to organize people at the grassroots level have evolved into a system
of communal councils, organized on a neighborhood level, which in turn build up
to communes and communal cities. These are direct-democracy bodies that identify
and solve the problems and deficiencies of their local areas with the direct
support and funding of the national government. After decades of neglect by
previous governments, there were no shortage of problems to tackle.
Like many institutions of the
Bolivarian Revolution, these have roots in grassroots organizing that pre-date
Hugo Chávez’s first election.
The Barrio Assembly of Caracas
emerged in 1991 as something of a general assembly representing local
groups, coming into being after demonstrations marking the first and second
anniversaries of the “Caracazo” uprising were dispersed by soldiers firing on
them from rooftops. (The “Caracazo” uprising was a massive revolt sparked by
popular resistance to an austerity package dictated by the International
Monetary Fund.) Later versions of these assemblies organized on the
eve of the 2002 coup attempting to overthrow President Chávez; among these
assemblies’ accomplishments were distributing 100,000 fliers calling for a
march on the presidential palace to defend the government.
The communal councils are the
base of an alternative government structure, one intended to bypass municipal
and other local governments and to eventually replace them. This was an attempt
to provide a concrete form to the concept of “constituent power,” the idea that
people should be direct participants in the decisions to affect their lives and
communities. Legislation passed in 2006 formally recognized the communal
councils and the form quickly gained popularity — there were an estimated
30,000 in existence by 2009. These councils are formed in compact urban areas
containing 200 to 400 households in cities and 20 or so in rural areas. All
residents of the territory are eligible to participate. In turn, communal
councils organize into larger communes, and communes into communal cities, to
coordinate projects too large for a neighborhood or to organize projects
necessarily on a larger scale, such as improving municipal services.
Communal councils are required
to propose
three projects that will contribute to development in the community;
funding for approved projects will usually come from national-government
bodies. An interesting development is that many (in the case of councils
studied by researchers, a majority) who have taken active roles in the communal
councils were not politically active before the 2002 failed coup. Generally,
women outnumber men among the active participants, and it is often older women
taking the lead. The culture of participation that the councils encourage and
that the Bolivarian government is paying vastly more attention to solving
social problems and the needs of the poor than prior governments has facilitated
the organizing of women, and the new activity of women in turn is breaking down
traditional macho attitudes. That pensions are now much stronger, proving
material security, also enables participation. Health committees tackling
problems of illness, access to contraception and motherhood are often where
participation begins. Once involved, women sign up for training programs, with
more women then men taking advantage of these.
Communes often organize
enterprises to provide employment for local residents and to help supply needed
basic goods. One example is the El Panal 2012 Commune in
Caracas. El Panal operates several enterprises and a communal bank. One of the
enterprises is a sugar-packaging plant, and there are also bakeries. El Panal
activists are also creating links with neighboring communes in Caracas and in
other parts of the country. Links are also being created with the countryside
— a “Pueblo a Pueblo” initiative brings together urban communities and
farmers to distribute food directly, eliminating intermediaries and
speculators. El Panal also regularly organizes food fairs at which meats,
vegetables and other basic foods can be bought at discounts, well below market
prices.
Tackling social problems
through missions
There are also the social
programs known as “missions” that are based on the direct participation of the
beneficiaries. Begun in 2003, there are more than two dozen missions that seek
to solve a wide array of social problems. Given the corruption and inertia of
the state bureaucracy, and the unwillingness of many professionals to provide
services to poor neighborhoods, the missions were established to provide
services directly while enabling participants to shape the programs. Much
government money was poured into these programs, thanks to the then high price
of oil, which in turn enabled the Chávez government to fund them.
Among the approximately two dozen
missions are Alimentación, which incorporates the Mercal network that
provides food at subsidized prices and a distribution system; Cultura, which
seeks the decentralization and democratization of culture to ensure that all
have access to it and stimulate community participation; Guaicaipuro, intended
to guarantee the rights of Indigenous peoples as specified in the constitution;
Madres del Barrio, designed to provide support to housewives in dire poverty
and help their families overcome their poverty; Negra Hipólita, which assists
children, adolescents and adults who are homeless; Piar, which seeks to help
mining communities through dignifying living conditions and establishing
environmental practices; and Zamora, intended to reorganize land, especially
idle land that could be used for agriculture, in accordance with the
constitution.
Venezuelan political scientist
and historian Margarita López Maya summarized the breadth of
the missions in a Socialist Register article:
“Missions (programs bypassing
uncooperative or ineffective state agencies), such as Barrio Adentro (free 24
hours a day primary health care and disease prevention for low income groups),
Mercal (state distribution of food at subsidized prices), Robinson 1 and 2
(literacy and primary education for adults), Ribas and Sucre (secondary and
university education for those who had missed or not finished these), Vuelvan
Caras (training for employment), and the Bolivarian schools, where a full day
schedule has been restored, with two free meals and two snacks a day, plus free
uniforms and textbooks: all these undoubtedly had a positive political impact.
The government has also invested in the social economy, as in the “ruedas de
negocios,” in which the creation of cooperatives is encouraged in order to
supply goods and services to the state sector. The government has also created
a system of micro-financing with the Women’s Bank, the Sovereign People’s Bank,
and so on, which make small loans to lower income borrowers.”
Struggles for economic
democracy
In the workplaces, there are
experiments with co-management, cooperatives, socialist production units and
workers’ councils. These forms have been contested — an ongoing multiple-sided
struggle over what constitutes “workers’ control” of industry and what forms
such control should take continues. Cooperative enterprises are enshrined in
the constitution, and a 2001 law mandates that all members be included in
decision-making and that an assembly of all members has final decision-making
power over all topics. Temporary workers can be hired for a maximum of six
months, after which they must be accepted as members. A state ministry was
created to provide assistance to cooperatives and small businesses, including
the facilitation of securing contracts from state companies.
There are difficulties
here. One
significant problem were instances of cooperatives being formed only
in order to acquire the start-up capital provided by the government, or were
small companies that converted to being cooperatives only on paper to take
advantage of preferential priority for state contracts or to obtain subsidies.
In response to these irregularities, the government began to require coops
obtain a “certificate of fulfillment of responsibilities,” which includes
financial audits and demonstration of work within their local community.
Nonetheless, there are many examples of successful cooperative enterprises.
There are also socialist
production units. These are nonprofit, state-owned enterprises that are managed
democratically by a combination of their workers, local communal councils and
the national government. These enterprises are intended to provide local
services, such as transportation and distribution of cooking gas, and the
creation of production. Although workers are directly involved in
decision-making at these enterprises, the state also has a role, which can
sometimes lead to tensions. The goods produced are most often distributed
through the Mercal state-owned chain of supermarkets that provides food at
subsidized prices, and PDVAL, a state-run food-distribution network. These are
often operated at a loss, as they are intended to provide needed goods and
services to communities at steep discounts.
A continuing area of
contestation are state-owned enterprises. Some argue for state ownership with
employee participation, others argue for full autonomy of enterprises and the
workers in them, and there are gradations in between. There are managements
that don’t wish to cede decision-making authority to their workforce, and there
are government officials, despite being part of the Bolivarian movement, who
oppose workers’ control, sometimes because they believe in top-down control by
the state. There are examples of state-owned companies in which management
structures have changed multiple times as different factions temporarily gain
control.
The push and pull of competing
interests and tendencies is exemplified in the case of the state-owned
aluminum smelter Alcasa, which had a well-functioning system of workers’
control under co-management that reversed its debt problems; then had a new
director appointed who ignored the co-management structure, with an
accompanying fall in productivity and return of corruption; and then a return
to co-management when President Chávez named a new company president selected
by the workers. Workers’ control was reinstated with new structures, and because
of the precarious financial situation caused by the corruption of the middle
period, workers began designing parts to be produced internally instead of
buying them from suppliers as previously done. More difficulties arose when a
dissident union aligned with the local state governor attempted to stop
production, and although unsuccessful, caused a significant disruption. Yet
another change in management by Chávez led to a renewed deterioration in
co-management, and struggles at Alcasa continued.
Economic warfare at home and
abroad
Shifting from a traditional
capitalist economy toward a participatory economic democracy can’t be expected
to be smooth sailing, especially when this attempt is being done in a country
with subaltern status in the world capitalist system. President Chávez had to
withstand three successive attempts to remove him — the 2002 coup, 2002-03
bosses’ lockout and the 2004 recall referendum. Five times he was elected
president, never with less than 55 percent of the vote, and overall he won 16
of 17 elections and referendums in which his movement participated. The
election system put in place by the Chávez government was declared by former
U.S. President Jimmy Carter’s Carter Center to be “the
best in the world.” None of this prevented the late president from being
furiously denounced as a “dictator.”
Once he died, however, the
attacks were stepped up by the revolution’s opponents, apparently believing
that the loss of the leader would make the revolution vulnerable. In reality,
the Bolivarian Revolution has always been a movement propelled by millions who
will not readily give up the many gains they have achieved and which pushed the
late president to go further. Venezuela also has a long tradition of strong, organized
movements, which predate the Bolivarian Revolution. Despite the difficulties of
recent years and increasing popular disapproval of President Maduro, those
movements do not want their gains to be reversed. During the Chávez years,
unemployment and poverty were drastically reduced and people were able to
participate in the political process for the first time.
So how much of Venezuela’s
serious economic problems are the fault of the current president? Some of the
blame can be laid at his doorstep, but mostly for his inability to act in
timely fashion and allowing problems caused by outside forces to deepen. A
serious mistake that has ran through the past 20 years is that no progress was
made on reducing Venezuela’s heavy reliance on oil exports. When oil prices
were high, the government was content to let the money flow and use it to fund
social programs and finance a wide variety of projects. But the later crash in
oil prices left the government vulnerable. By not diversifying the economy,
much less is earned when the inevitable falls in price arrive and it becomes
difficult to maintain consumption because so many consumer products must be
imported.
The over-reliance on a single
export commodity would be difficult to overcome by itself. But greatly
compounding Venezuela’s problems are U.S. sanctions, a currency that
became drastically overvalued, and an inflationary spiral resulting from that
overvaluation that incentivized black markets and smuggling. Poor management on
the part of the government of President Maduro has intensified the damage done
by those factors. Although the Venezuelan government set an official exchange
rate for its currency, the bolívar, the effective exchange rate was determined
by international currency speculators and thus the value of the bolívar is not
in the control of Caracas.
Speculators caused the value
of the bolívar to be reduced by 97 percent in 2017, and further drastic
reductions in the currency’s value continued well into 2018. The value or
output of the Venezuelan economy hardly declined by anything remotely
comparable, so there are other factors at work for such a drastic reduction in
exchange value. But because the Maduro government did not adjust the official
exchange rate when the bolívar came under attack, the spread between the
official rate and the de facto rate widened to the point that vast
opportunities for smuggling and black-market operations were created. That in
turn caused shortages and hyperinflation.
These developments were a
consequence of Venezuela’s integration into the world capitalist system and the
country’s heavy reliance on imports. Food and consumer goods intended to be
sold at discounts in state stores were diverted to the black market, where
profiteers sold them at prices several times higher or smuggled them into
Colombia for huge profits. Government officials have repeatedly
discovered vast quantities of consumer goods hidden
in warehouses by local capitalists who are artificially causing
shortages.
Hardening financial sanctions
United States government
sanctions on Venezuela prohibit any U.S. persons or banks from providing
financing or purchasing any debt issued by the Venezuelan government or the
state oil company PDVSA, the purpose of which is to make it more difficult for
the government to raise funds internationally or to restructure debt.
These sanctions are
effectively extra-territorial. A non-U.S. bank that seeks to handle a
transaction in U.S. dollars (the currency most often used in international
transactions) has to do so by clearing the transaction through a U.S. bank; a
U.S. bank that cleared such a transaction would be in violation of the
sanctions. The Obama administration intensified the U.S. financial war on
Venezuela by absurdly declaring the latter a “national security threat” and the
Trump administration has issued a succession of decrees tightening the screws.
The latest, issued on January
28, freezes all property and interests of PDVSA subject to U.S. jurisdiction —
in other words, blocking Venezuela from any access to the profits generated by
PDVSA’s U.S. subsidiary, Citgo, or any PDVSA activities in the United States.
The Trump administration expects Venezuela
to lose US$11 billion this year, The New York Times reports.
That move is in addition to repeated calls by the Trump administration for an
overthrow of the Venezuelan government, threats by President Trump to invade,
and the Trump administration “recognizing” the opposition leader Juan Guaidó as
president although Guaidó has never run for the position and is largely unknown
to the Venezuelan public. An added insult is the appointment of death-squad
cheerleader Elliot Abrams to “oversee” a “return to democracy,” an idea that
would draw laughs if Abrams’ history in Latin America during the Reagan
administration weren’t so deadly.
Successive U.S.
administrations have subsidized opposition groups — an estimated US$100 million
has been poured into Venezuela in an effort to subvert the elected government.
Alan MacLeod, a specialist in
media studies, summarized the extra-territorial
effect of U.S. sanctions:
“[T]he sanctions strongly
discourage other countries from lending money to the country for fear of
reprisal and also discourage any businesses from doing business there too. A
study from the 2018 opposition Presidential candidate’s economics czar
suggested the sanctions were responsible for a 50%
drop in oil production. Furthermore, Trump’s sanctions prevent profits
from Venezuela-owned CITGO from being sent back to Venezuela. Trump has also
threatened banks with 30
years in jail if they co-operate with Caracas and has intimidated
others into going along with them.”
President Maduro is repeatedly
called a “dictator,” an epithet endless repeated across the corporate media.
But when a portion of the opposition boycotts, can it be a surprise that the
incumbent wins? The opposition actually asked the United Nations to
not send observers, a sure sign that they expected to lose a fair election
despite their claims that the election would be rigged. Nonetheless, a
coalition of Canadian unions, church leaders and other officials declared the
election to be “a transparent, secure, democratic and orderly electoral and
voting process.”
Unfortunately, there is every
reason to be concerned, given the hostility of U.S. governments and capitalists
to any intent to become independent of the U.S. or to direct economic activity
to benefit local people rather than maximizing the profits of U.S.
multinational corporations. The United States has militarily invaded Latin
American and Caribbean countries 96 times, including 48 times in the 20th
century. That total constitutes only direct interventions and doesn’t include
coups fomented by the U.S., such as Guatemala in 1954 and Chile
in 1973. Guatemala was attempting nothing more “radical” than a
land reform that would have forced United Fruit to sell idle land at
United Fruit’s own under-valuation of the land (a self-assessment made by
United Fruit to avoid paying a fair share of taxes). The U.S. overthrew the
government and instituted what would become a 40-year nightmare of
state-organized mass murder that ultimately cost 200,000 lives. The Chilean
effort to build a humane economy was ended with the overthrow of Salvador
Allende and the installation of Augusto Pinochet and his murderous regime that
immiserated Chileans.
Dissimilar results can hardly
be expected if the U.S. were to succeed in overthrowing the Venezuelan
government and installing a right-wing government that would reverse the many
gains of the past 20 years. Hands off Venezuela!
