The Trajectory of the Bolivarian Revolution Part Two, ¡Patria o Muerte!

-William Finucane Santiago

April 2, 2009



“The state is [...] a product of society at a certain stage of development; it is the admission that this society has become entangled in an insoluble contradiction with itself, that it is cleft into irreconcilable antagonisms which it is powerless to dispel. But in order that these antagonisms, classes with conflicting economic interests, might not consume themselves and society in a sterile struggle, a power seemingly standing above society became necessary for the purpose of moderating the conflict, of keeping it within the bounds of “order”; and this power, arisen out of society, but placing itself above it, and increasingly alienating itself from it, is the state.”

-Friedrich Engels1


“As Marxists we have maintained that peaceful coexistence [...] does not encompass coexistence between exploiters and the exploited, between the oppressors and the oppressed.”

-Ernesto Guevara 2



The period after the second capital strike and the failed recall referendum on Chávez's presidency was the start of the awakening of a more radical ideology within the government. As with all things which are awakening there was (and continues to be) confusion about where one is and what exactly just happened. Amidst this tumult Chávez announced his intention to create an endogenous Venezuelan 'socialism of the twenty-first century'.3

Chávez and supporters of the PSUV (United Socialist Party of Venezuela) have made clear that Venezuelan socialism is unique in history and has a distinct ideology appropriate to its unique historical condition. This is a genuine articulation of the desires of Venezuelan revolutionaries; however, there are many who employ this discourse in tandem with an ideology that recognizes private productive property. When the Bolivarian government does this it leaves itself open to speculation over whether it constitutes an acceptance of reformism without attacking private property, or whether it constitutes a tactical representation of the party's position, buying time to expand the revolutionary project before the inevitable clash between capitalists and a social economy. If indeed the new socialism of the PSUV is going to be uniquely Venezuelan it will have to deal with the following:


1.) The current global economic depression including: Food shortages resulting from that depression, as well as how to continue support for social misiones which are the most tangible gains of the movement

2.) The persistence of private ownership of the means of production

3.) The history of class within Venezuela and the relation of the proletariat to that history

4.) How to construct a democratic mode of production and consumption

5.) Whether armed struggle is necessary to defeat capitalism

6.) How to deal with the limitations of the inherited bourgeois state


In 1999 Hugo Chávez took power over the capitalist bourgeois state of Venezuela to remake its economy into a more reasonable capitalism. Since that time Chávez and the movement have been radicalized and now profess a socialist ideology. Chávez says of this transformation:

“In this moment there are contradictions, because we still have a state with bourgeois components, with a bourgeois culture, but we are amidst a process of transformation, becoming a revolutionary state at the service of the people,”4

This specific power relation between revolutionary government forces which evolved out of a reformist party on one side and capital on the other is perhaps unique in history. If this is the characteristic which separates and defines socialism of the twenty-first century, what does it mean for the revolution? As explained in part one, the opposition has already lost its power in the government and the military, and largely failed in its use of the capital strike. However many individuals from the Fourth Republic continue in government, private property persists under the Venezuelan economy and constitution, and real protection from violence remains absent for revolutionaries. Each of these three obstacles to socialism are integrally tied to the inherited state structures which define 'socialism of the twenty-first century'.


The State

While Chávez's initial political revolution removed the oligarchy from government posts, there persist from the Fourth Republic many employees and managers who continue to hold the same sentiments as before the revolution, repeat the party line but ideologically oppose the revolution, or believe they are 'chavistas' but who still cannot conceptualize the political, economic, or cultural situation outside of their bourgeois framework. These individuals represent one of the biggest counterrevolutionary threats, those who wear the red shirts but promote the vices of capitalist society: individualism, bureaucracy, and their offspring, corruption.

Corruption inherited from the Fourth Republic continues in the military, police forces, and ministries of the Bolivarian government. Measures have been taken to combat corruption but most have fallen within the framework of the 'bourgeois culture' which prioritizes electoral politics. Since the election of opposition members to key mayorships and governorships in November 2008 there have been conflicts between opposition officials and the central government over the control of Venezuela's economy. In early 2009 the government issued an arrest warrant for opposition leader and mayor of Maracaibo Manuel Rosales on charges of diverting public funds from infrastructure projects and the local lottery5*. Also in 2009 the administration of all ports and airports was transfered to the central government in an attempt to stem the flow of illegal goods. This is especially important in light of the historic dependence on imports that characterizes Venezuela's capitalist class. However, these anti-corruption policies are limited by the pervasive corruption within the government ministries themselves. The measures taken so far on the matter have been politically appealing for even those corrupt officials within the PSUV as they have not yet seriously challenged their own place in the “bourgeois culture” mentioned by Chávez.67

The global capitalist crisis has forced the state to accelerate its confrontation with the other front of counterrevolution, the private owners of the means of production. Since the founding of the PSUV there has been a nationalization drive in Venezuela's most vital sectors (food and construction). Chávez has nationalized individual banks, cement plants, steel plants, and rice processing plants.8910 The nationalized rice plants (which include the US based Cargill) had been dodging price controls by producing rice products other than the normal dry grain rice on which most Venezuelans depend.11 Such violent acts of economic and social sabotage are no longer tolerated under Chávez and are a continuation of the dialectic of counterrevolution and radicalization.

The current crisis of capitalism has proven to the opposition and to the world that the Bolivarian Revolution is decisively anti-neoliberal even in the face of economic depression. Rather than the package of neoliberal reforms predicted by the opposition media, Chávez announced that no social programs would be cut, minimum wage would be increased by 20%, and that the new economic plan would have as its purpose the continuation of social spending and the safeguarding of employment.12 These policies will be supported by an increase in internal debt and a 3% rise in the sales tax. An increase in the public debt is a sound measure considering Venezuela's low over all debt (14.3% of GDP).13 The increased sales tax however is likely to place more of a burden on the poor.

Despite the social nature of the above reforms, the economic policy for 2007-2013 subtitled “The First Socialist Plan” does not aim to end private ownership over production. Capitalist enterprises “will persist” and socialist enterprises will “compete [...] with the capitalist firms”.14 The following graph found in the policy plan for 2007-2013 illustrates the extremely limited nature of this first 'socialist plan':



Rather than seek an entirely social economy the Bolivarian government pursues a mixed economy wherein capitalist relations still dominate over two-thirds of the production process.


Property and Work

While the Venezuelan government moves further away from capitalist ideology there continues to be a gap between official ideology and concrete measures. The bourgeois framework of the state prevents the ideology of the state from penetrating the layers of bureaucracy and controlling the process on the ground. The state officially professes socialist policy but simultaneously supports only partial reform of the modes of production. The official policy of the Bolivarian government in regards to changing the relations of production is the promotion of cogestionada or co-managed factories. The term co-management can have two implications. It can be mean co-management between workers and the state, or co-management between the workers and the owner(s). Though both exist in Venezuela only the latter type is being pursued as national policy.15 To understand this new policy and its possible effects it is helpful to understand the context of the organized labor movement within Venezuelan society.

The labor movement was virtually non-existent at the beginning of the Bolivarian process. Years of anti-labor activity by previous governments, the co-opting of the CTV16 (Venezuelan Confederation of Labor) by pro-business leaders and the lack of a real industrial infrastructure all hampered its formation. The labor movement began in earnest during the failed capital strike of 2002 and 2003 when workers began taking over idle factories. Out of this struggle emerged a new national organization of workers called the National Union of Workers (UNT). In their first congress held in August 2003, discussion was dominated by worker management of factories and worker take over of factories. The UNT even went as far as to endorse the complete nationalization of the banking industry.17 The UNT was clearly a more radical union than the CTV and was the first national labor organization to articulate an ideology of worker control and worker management.

One of the first factories to be occupied was the Venepal paper manufacturing plant. Like many businesses, Venepal had gone bankrupt after participating in the strike. In response to its closing, workers occupied and operated the factory for 77 days, working with the local community and with the support of the local army garrison.* The state, despite its continuing ideological development, was hesitant to support the workers and instead gave the owners of Venepal a line of cheap credit with which to continue operating as a capitalist firm. This kept the factory operating under the control of management until September 2004 when it went bankrupt yet again. The workers reoccupied the factory and this time the government stepped in, expropriated the factory, and set up a system of co-management whereby the state held a 51% stake in the factory and the workers a 49% stake.18 What is important to note is that it was the workers themselves who pushed this process forward and not the reformist government.

This arrangement of co-management between workers and the state has yielded mixed results. In the case of Venepal (renamed Invepal after the expropriation) hierarchical management relations led to withholding of basic equipment from workers, violations of the rights of temporarily contracted workers, and politically motivated firing of workers who challenge management.19 CADAFE, a state-owned electricity company has experienced similar problems, also resulting from the lack of worker participation. Only two worker representatives sit on the five member coordinating committee, which itself is only an advisory body to management. Other experiments in co-management have functioned more in the original spirit of worker control as in the cases of CADELA (another electricity company) and ALCASA the country's largest aluminum processing plant where management is taken to be the facilitation of worker control, rather than the negation of it.20 Even if a workplace is opened up to a participatory democratic process the culture of work present in the current social and economic system, which prioritizes management over participation, is one of the most difficult obstacles to overcome. When there are managers (elected or not) who do not share a collective or participatory vision with workers, they will necessarily reinforce the bourgeois structure inherited from the capitalist mode of production. Beyond management, when there are state officials either in the Labor Ministry* or elsewhere who are opposed to worker control, the very policy of production may shift to mirror the old regime. From 2005 to 2009 the co-management policy of the Bolivarian state moved away from the state-worker model.

The co-management promoted as of now by the Bolivarian Republic of Venezuela is the 'union' of worker and owner within a variable system of mutual ownership. Under this framework the workers organized as a cooperative and the original owner(s) split the profits of the company 30%-70%, 40%-60%, 50%-50% etc. whichever way is agreed upon. Usually a healthy business is divided so as to give the workers a smaller share of the profits, perhaps 20 or 30 percent.21 In a successful firm, workers are efficiently exploited and do not have the funds to purchase large shares in a company whose value rises proportionally to the degree of exploitation.

This model immediately runs into the contradictions between social ownership and the use of labor as a commodity. In the case of a business with a high rate of exploitation that is then transformed into a co-managed enterprise (with 70% for the owner and 30% for the workers' cooperative) the key element of the production process, the surplus value, the exploitation of the worker remains primary. Rather than eliminate exploitation, the introduction of the cooperative gives workers job security and a limited control over their working day. The result is that workers in this situation will reduce the intensity of their work and continue working the same hours (or fewer). They do not own enough of the business to justify increasing their own productivity. The original owner stays in his role as institutional thief. The workers gain marginal control over their own exploitation. In this arrangement there is no shift in the roles of proletariat and capitalist. The degree of exploitation can vary in relation to the percentages owned by each party, but these are merely different shades of the same process. This framework does not serve the interest of society and cannot in any sense be labeled as socialist.

The cooperative movement, though part of the same economic plan as the co-managed firms, is ostensibly one which privileges worker control. Cooperatives are legally required to A.) not grant privileges to any single individual within the cooperative, B.) make all decisions in a democratic manner through consensus or a voting system (this specifically includes amendments to the cooperative's statute and the hiring and firing of members), C.) have a clearly defined social goal and clearly defined methods for realizing this social goal within the community of which the cooperative is part.22 The Venezuelan cooperative law is one of the best in the world concerning cooperative workplaces but there have been problems with the registration and effectual activity of the cooperatives. In 2005 Venezuela had 100,000 registered cooperatives of which roughly 50,000 were active.23 This figure has grown to 268,211 of which 60,000 are active. As of 2009 the number of cooperatives registering has started to slow, but in light of the failure to get ¾ of cooperatives off the ground the decreased rate of cooperative formation may give the National Superintendence of Cooperatives (SUNACOOP) an opportunity to consolidate this sector of the economy. Beyond the failure of ¾ths of registered cooperatives, there continues to be a lack of essential economic activity under cooperative control. Nearly half of all cooperatives are in the service sector while only one quarter are in the vital area of production (industrial and agricultural combined). Housing cooperatives only make up .51% of the cooperative economy.24

Apart from these structural limitations to cooperative activity at present there are also problems with the cooperative model itself as it is practiced in Venezuela. Many cooperatives are capitalist businesses in disguise that seek preferential government treatment but do not grant workers their full rights. Often a group of workers will start a cooperative and then hire wage labor (which is legal under the Special Law of Cooperative Associations) that does not have the right to cooperative membership until it has been employed for six months. In this way the cooperative can act as a collective capitalist. Even without employing wage labor a cooperative is inherently collective private property and not social property regardless of the legal mandate to assist the community.

These two models, cooperativism and co-management, are the main contenders to replace Venezuelan capitalist firms if the revolution continues to deepen. But which forms of production are inherently reformist and which are inherently revolutionary?

Out of the three options: Co-management between worker and owner, Co-management between worker and state, and cooperativism, only the union of worker participation in a cooperative with citizen participation in a state has the potential to become a truly revolutionary mode of production. The following statement made by an activist at a 2005 Invepal solidarity meeting sums up the argument for worker/ state control:

“Experiences up until now teach us that it is only possible to develop the knowledge of the running of companies by workers when these belong to the state. The workers rejected any idea of turning workers of co-managed or managed factories into small proprietors.” Rather, they insisted, it was the responsibility of workers in co-management “to exert their role as guarantors of the sovereignty of the people established in the constitution, so that the profits of these companies become part of the social funds that help reverse the poverty of wide sections of the Venezuelan population and are not directed toward stimulating new business ventures.”25

This vision (already realized in some corners of the economy) is the most comprehensive vision for socialist economy circulating in Venezuela today. It is a negation of private property rights either for individuals or collectives. It is a commitment to solidarity in the sphere of production. With the state as owner two things happen: 1. The profit motive disappears along with the capitalist and capitalist exploitation. 2. A real solidarity is achieved through the state across society, across firms, and across communities. These are the two fundamental ingredients of socialist economy. On the one hand the negation of exploitation in the sphere of production, and on the other the negation of individualism (be it of a person or an entire cooperative). In light of the experiences at Invepal, CADAFE, and other co-managed firms this route must be accompanied by the continuation of the political revolution, which as of 2009 is incomplete, but which could be put on a trajectory to create a truly participatory government.26

None of this debate means anything however without addressing the question of the worker's historical relation to Venezuelan society. As mentioned above the organized labor movement in Venezuela has only recently turned to the left; the other obstacle to a revolutionary proletarian consciousness is the relative privilege enjoyed by the organized Venezuelan worker. PSUV Vice President Alberto Müller Rojas explained the situation in an interview with LINKS International Journal of Socialist Renewal:

When we talk about the working class here in Venezuela, or better said, when you talk about the working class, you are referring to the idea of a working class in a developed country. Here in Venezuela the working class represents an enclave of capitalism, because the working class, if we want to put it one way, is a privileged class if we compare it to those sectors that have not been incorporated into society. Those sectors, which represent 40% of the population, were often viewed by traditional left organisations as falling within the category of lumpenproletariat, but they are not lumpenproletariat because they do not live off other people's work, they live off their own labour, which is not based on accumulation but simple subsistence: they work to subsist, without accumulating.27

The most exploited and destitute section of Venezuelan society is not (as in the case of Marx's Europe) the working class, but those who have not even been allowed into the working class. The social economy under construction as of 2009 is slowly including these excluded classes in the web of production and consumption. However, agricultural and construction workers still make up a greater percentage of the informal economy than of the formal economy.2829 The revolution needs to not only articulate a truly social mode of production but also to include the excluded and marginalized sectors of society.


Violence

There has been one major obstacle for this revolution which impedes the integration of the excluded classes: the state of Venezuela as an inherited bourgeois state with socialist ideals has attempted to create a peaceful revolution by refusing to confront private property head on. But whether or not the revolution is violent, the counterrevolution is always violent. The 2002 coup attempt is just the most dramatic example of this. Two workers were shot and killed by police while striking at a Mitsubishi factory this year.30 Since the land law was passed in 2001, over 200 campesinos and campesino leaders have been murdered by mercenaries of the Venezuelan oligarchy.31 What is more the military is more often than not on the side of large land owners in these disputes.3233 This is a troubling fact that exposes the contradictions of a revolution from within the state. The military is to a large extent in the hands of the Bolivarian project and has been transformed into a more humanitarian and open organization by Chávez. That they still support latifundistas* in some areas is indicative of the persistence of the culture of the old regime and of the old status quo whereby the military was the guardian of wealth rather than life. Can a revolution which controls the military push an economic and social revolution through the bourgeois state and use its military only to defend itself from the violent counterrevolution? It's an open question and certainly one left unresolved in Venezuela today. The military is under the command of a revolutionary-minded government and when directed by that government carries out revolutionary work (occupying factories, helping with social misiones, etc.) but when left on its own persecutes the most marginalized sectors of society.*

What is clear is that real revolutionaries, workers, and peasants who are pushing forward this revolution, who are occupying land and factories do not have the protection of the state, its military, or its police. What has been attained is the indifference of some military and police forces to revolutionary action; allowing occupations, demonstrations etc., but this falls far short of the role these forces could have in the revolution were they to be radicalized, democratized, and held accountable to the Venezuelan people. Without a deepening of the revolution within the government and its armed forces there can be no revolutionary capacity to fight capital.


Conclusions

We have seen that the Bolivarian government has definitively left the neoliberal capitalist model but that the unique historical development of the revolution has yoked the process with a system so far incapable of committing totally to the revolutionary transformation of society. Prudent reforms have been made to counteract the global economic crisis, and the social economy has been the centerpiece of these reforms. Venezuela's national development barriers are being confronted with nationalization and socialization of major industry in line with revolutionary practice. However, economy-wide reform of the mode of production is far from revolutionary. Both cooperative and worker/ owner co-management systems fail to eliminate capitalist exploitation and may (if not radicalized) lead to disillusionment with the process. Bourgeois culture of individualism and bureaucracy has stifled revolutionary momentum in the government and in some instances sabotaged the potentially revolutionary form worker/ state co-management. The armed branches of the state apparatus, the police and military are often on the side of the counterrevolution. All of these are indicators that the current state continues to act not as a revolutionary government but as the alienated moderator of class conflict described by Engels.

Socialism of the twenty-first century is still in process, is still being articulated, and is still separating out reform from revolution. Given the extraordinary changes pushed by the Bolivarian government to date in the areas of political representation, the armed forces, and the means of production it is still possible that the state will evolve from moderator to instrument of the oppressed.

The closer the revolution comes to attaining this goal, the more it will need to defend itself. But defense need not wait until the moment of civil war. Violence against workers, peasants, students, women, blacks, indigenous peoples, and activists happens every day perpetrated by private mercenaries, reactionary military and police, and those who can feel their privileges ebbing away in the revolutionary tide. Furthermore, violence is not exclusively carried out with arms; food producers who purposefully raise prices on basic necessities, construction companies who refuse to build homes for the homeless, governors who smuggle drugs and weapons into and out of the country, wage labor itself, these are all acts of violence against individuals and against society. The defeat of capitalism, bureaucracy, individualism, exploitation, and imperialism will not be won without violence. Every day capitalism perpetuates institutionalized violence. In the face of this current threat to its existence, it has become even more violent and with each new victory of the revolution it will increase in its tenacity. Along with this increase in violence comes the increased necessity of victory for the revolutionary project.

'¡Patria o Muerte!'*, shouted to the world by Che Guevara in the halls of the United Nations in 196434, spray-painted on walls, signs, storefronts, and billboards across Venezuela, is not an arbitrary slogan. It echoes the sentiments of all those who long and struggle for their own government and their own economy after centuries of rule by empire, by the elite, by the owners of property, by the lackeys of US hegemony. It also echoes the understanding that the struggle for real freedom is a struggle to the death. If revolution does not smash capital, revolution will die, and institutional violence will again rule over Venezuela.

In the face of this conflict the state will be forced to articulate more clearly what kind of institution it is and what kind of society it plans to build. This pressure could force one of two scenarios: either a commitment on the part of the state to reform within or beside capitalism, or a commitment to completely smash the capitalist system. To accomplish the former it is merely necessary to halt the revolution in the middle of the road to the new society. Waiting in that road the revolution will be run down not only by the tanks of the counterrevolution but by truck after truck of imported goods and exported wealth. Were the process to halt here capital would persist, multiply, concentrate, and devastate as is its nature. To accomplish the latter scenario requires a real commitment to cast off the trappings of the inherited bourgeois state and remake Venezuela as a socially and economically participatory society. This requires ending the private ownership (collective or individual) of the means of production while at the same time ending the private ownership (collective or individual) of the political apparatus, the means of social articulation and control. This includes allowing and providing for the self-defense of revolutionary organizations who are challenging capital on its fincas and in its factories in order to end the monopoly the right currently has over violence in Venezuela.

Marx in his theory of capital, proposed to conquer capitalism by taking its own means of production and remaking them into means of social production.35 Che in his theory of guerrilla warfare proposed to smash the bourgeois state by taking its own weapons and putting them at the service of the armed revolution.36 It remains to be seen if in Venezuela a revolution can smash capital by taking its own government and remaking it into a “revolutionary state at the service of the people”.37

To be sure, socialism of the twenty-first century must find its own road in this struggle to the death. Its historical development is unprecedented and requires a new conceptualization of anti-capitalist struggle, but in searching for the most effective road it should not be blinded by the setting sun of the bourgeois state, lest it become the latest piece of roadkill on the imperial highway.

1Engels, Friedrich The Origin of the Family, Private Property, and the State. 1884. Available in The Marx-Engels Reader Second Edition. Edited by Robert C. Tucker, WW Norton and Company. New York 1978

2Guevara, Ernesto Colonialism is Doomed. Che's first speech to the United Nations December 11, 1964

3Wilpert, Gregory The Meaning of 21st Century Socialism for Venezuela. Venezuelanalysis.com, July 11, 2006 ( http://www.venezuelanalysis.com/analysis/1834 )

4James Suggett President Chávez and Venezuela’s Socialist Elected Officials Meet to Discuss Political Strategy. Venezuelanalysis.com, March 28th 2009 (http://www.venezuelanalysis.com/news/4331 )


5James Suggett Prosecutor Requests Arrest Warrant for Opposition Mayor on Corruption Charges. Venezuelanalysis.com, March 20th 2009 ( http://allyours.venezuelanalysis.com/news/4308 )

*Rosales has since gone into hiding

6Janicke, Kiraz Controversy Erupts Over Nominations for PSUV Candidacies in Venezuela. Venezuelanalysis.com, May 29, 2008 ( http://www.venezuelanalysis.com/news/3494 )

7 Fuentes, Federico Venezuela: “The PSUV is born, destined to make history”. Socialist Voice, March 23, 2008

8 Janicke, Kiraz Steel Worker’s Strike Shuts down Venezuela’s Largest Steel Plan. Venezuelanalysis.com, January 1, 2008

9Sugget, James Venezuelan Finance Minister Announces Indemnity Agreement for Nationalized Steel Plant. Venezuelanalysis.com, March 28, 2009 ( http://www.venezuelanalysis.com/news/4333 )

10Sugget, James Venezuela Concludes Price Negotiations for Cement Nationalizations. Venezuelanalysis.com, August19, 2008 ( http://www.venezuelanalysis.com/news/3734 )

11Sugget, James Venezuelan Government Takes Control of Rice Plants that Evade Regulated Prices. Venezuelanalysis.com, March 2, 2009 ( http://www.venezuelanalysis.com/news/4256 )

12Arturo Rosales Chávez Sweeps Away Budget Predictions of Venezuela's Opposition. Venezuelanalysis.com, March 24th 2009 ( http://www.venezuelanalysis.com/analysis/4314 )

13The Chávez Administration at 10 Years: The Economy and Social Indicators, Mark Weisbrot, Rebecca Ray, and Luis Sandoval - Center for Economic and Policy Research. February 2009

14PROYECTO NACIONAL SIMÓN BOLÍVAR PRIMER PLAN SOCIALISTA DESARROLLO ECONÓMICO Y SOCIAL DE LA NACIÓN 2007-2013 Rupublica Bolivariana de Venezuela. Caracas, September ( http://www.mpd.gob.ve/Nuevo-plan/PROYECTO-NACIONAL-SIMON-BOLIVAR.pdf )

15Interview with economists at INAPYMI (Instituto de Desarrollo de la Pequeña y Mediana Industria) Caracas March 2009

16CTV is the Venezuelan Confederation of Workers mentioned in Part one of this article. It was instrumental in the economic destabilization campaign of the opposition before and after the April 2002 coup.

17Lebowitz, 102

*As noted above the failed 2002 coup resulted in the loss of opposition support within the military. The military has since become of instrumental importance in the process. While they are often an impediment to revolution they are no longer the direct violent threat they have the potential to be under a capitalist state. For example on August 15th 2007, when UNT workers from the Ministry of Labor were refused a meeting with Labor Minister Ramón Rivero to negotiate their contracts, they occupied the building. After being abandoned inside without food water or electricity for days, Rivero called in the army which refused to expel the workers. Rivero eventually resorted to hiring private thugs, telling them the workers were opposition protesters. (Fernando Esteban The Bolivarian Revolution at the Crossroads August 7, 2008. Venezuelanalysis.com: http://www.venezuelanalysis.com/analysis/3700)

18Lebowitz, 103

19Luisana Ramirez Invepal: Desorden Administrativo o Algo Mas?, Aporrea.org, August 8, 2006

20Wilpert, 78

*See above footnote on Venepal

21Interview with economists from INAPYMI during a visit to Hexagon comanaged clothing factory. March 27, 2009

22 LEY ESPECIAL DE ASOCIACIONES COOPERATIVAS Gaceta Oficial N° 37.285 de fecha 18 de septiembre 2001: Articles 6, 13, 20, 25, 27,

23Juan Carlos Baute, Superintendent of SUNACOOP (National Superintendence of Cooperatives). Interview conducted by William Finucane Santiago and Quincy Saul. March 6, 2009. Caracas, Venezuela

24SUNACOOP February 2009 statistical data, from Juan Carlos Baute

25Lebowitz, 105-106

26Gabriel, George The Venezuelan Participatory State. Znet January 9, 2009 ( http://www.zmag.org/znet/viewArticle/20060 )

27Müller Rojas, Alberto PSUV Vice President Müller Rojas: This Party is a Political Necessity. LINKS International Journal of Socialist Renewal March 24, 2008 ( http://links.org.au/node/467 )

28SISOV Sistema Integrado de Indicadores Socialies de Venezuela ( http://www.sisov.mpd.gob.ve/indicadores/EM0201900000000/ )

29Depending on how they are quantified statistics regarding formal and informal employment as a percentage of the economy range from 50/50 to 70 informal/ 30 formal. Muller here claims that the informal economy is 40% of the workforce. SISOV from whence came the statistics on informal labor mentioned above claims that the informal labor accounts for between 40% and 50% of the workforce.

30Pearson, Tamara Two Workers Killed During Factory Occupation in Venezuela. Venezuelanalysis.com January 30, 2009 ( http://www.venezuelanalysis.com/news/4156 )

31Borges, Gustavo Tierra y hombres muertos o la vida por una carta agraria. El exterminio del campesinado en Venezuela. El23.net ( http://www.el23.net/noticias3/campesinosmuertos.htm )

32Interview with activist from Frente Campesino Ezequiel Zamora March 25, 2009

33Detenida esta madrugada por el Ejército la Dirección Nacional y Regional Barinas del Frente Campesino Ezequiel Zamora. Aporrea, May 25, 2006 ( http://www.aporrea.org/desalambrar/n78152.html )

*Large land owners

*Recent initiatives to create citizen militias may be response to these failures. They are also a response to yanqui imperialism, a lesson learned from Allende's failure to arm his people.

*'Homeland or Death!

34Guevara, Ernesto Colonialism is Doomed. December 11, 1964, 19th General Assembly of the United Nations in New York available free online at ( http://www.marxists.org/archive/guevara/1964/12/11.htm )

35Marx, Karl Capital a Critique of Political Economy Volume 1. Chapter 32 The Historical Tendency of Capitalist Accumulation.

36Guevara, Ernesto Guerrilla warfare: A method. Written September 1963 The Che Reader, Ocean Press, © 2005.

37 Chávez, Hugo (quoted above in the third paragraph of Part Two)

13

Trajectory of The Bolivarian Revolution Part One, The Dialectic of Reform

By William Finucane Santiago

The Bolivarian revolution as it is called in Venezuela is a revolution of contradictions. It is a revolution which is developing from capitalism toward some goal which is called 'Socialism of the Twenty First Century' but as Marx observes of revolutionary struggle, any revolutionary process is “economically, morally, and intellectually still stamped with the birthmarks of the old society”1 The problem of the Bolivarian revolution is to work out how to deconstruct the culture, politics, and economics of the previous regimes while simultaneously constructing and thereby defining Socialism of the Twenty First Century. But this revolution did not begin as a revolution. It began as a reform and in many ways continues to be a movement of reformist capitalism. To understand the motives behind the trajectory of the movement, and thereby gain insight into the possible futures of the movement it is necessary to retrace the history of the Hugo Chavez and the Fifth Republic by tracing the dialectic of its formation and transformation.

The Caracazo 1989

Hugo Chavez first appeared on the national stage in 1992 when he led a military coup against president Carlos Andres Perez, the last president of the Fourth Republic. In order to understand Chavez's motives and gain some context in which to understand this rebellion one needs to start the time line three years earlier on February 27, 1989.

Andres Perez had run for and won the presidency on the promise to keep Venezuela's economy safe from the International Monetary Fund (IMF) and World Bank who were in the process of dismantling every market barrier and regulation in Latin America in the name of fundamentalist capitalism. Upon taking power however he did exactly the opposite. A combination of a heavy state reliance on oil rents, the lack of endogenous infrastructure, a heavily entrenched system of government patronage, and the drop in oil prices experienced in the 1980s2 led Andres Perez to take out massive loans from the the IMF in order to preserve the life blood of state power. In a pattern which has been seen around the world, obligatory “structural adjustment policies” tied to these loans resulted in massive inflation and a market induced food shortage. It was in reaction to this failure of neoliberal policy that the popular demonstrations known as the Caracazo began on February 27, 1989.

Thirty miles outside Caracas spontaneous demonstrations and expropriations (some would call them riots) of food stuffs by Venezuela's starving citizens erupted and quickly spread to the capital city where thousands took to the streets. In response the military and police forces violently repressed the demonstrations and in reprisal proceeded to carry out a campaign of indiscriminate3 murder for over a week, many were disappeared. Police and military forces fired over 400,000 rounds during the Caracazo which means that if just .5% of those bullets were fatal shots there were 4,000 killed. Nobody knows the actual number of dead as the government buried most of the disappeared in unmarked mass graves.

This brutality was a major radicalizing force for many Venezuelans including Hugo Chavez who three years later would attempt to oust Carlos Andres Perez in an armed rebellion.4 The rebellion was a reaction to the blatant bourgeois dictatorship which was Venezuela during the Fourth Republic. Chavez failed however and there followed six more years of neoliberal economic policy until 1998 when released from jail due to popular pressure, he ran for and won the office of the presidency of Venezuela with 56.2% of the vote.5 Chavez's political career and his Fifth Republic Movement grew out of the repression and violence which radical capitalist dictatorship had brought to Venezuela. In his first years as president he would directly confront and dismantle this dictatorship but would not yet challenge the logic of a capitalist mode of production.

The Early Years

The Political Revolution

Chavez had been elected as an alternative to the kleptocracy which had failed to meet the needs Venezuelan citizens. The declining oil prices had undermined the previous system of patronage, leaving the middle class without material support from the state. In this first election the middle class voted overwhelmingly for Chavez while the poor largely abstained.6 It was at this point the middle class which had seen with the fall of oil prices the fall of their upward mobility, who were most politicized. The poor of Venezuela had experienced only apathy from previous administrations and they in return were apathetic toward a useless political system.

To satisfy these constituencies and indeed to fulfill his personal goal of ridding Venezuela of the Fourth Republic, Chavez immediately struck forth with the political revolution in 1999. True to his word Chavez refused to compromise with the corrupt institutions he had inherited. What is more, to dismantle these institutions of the Fourth Republic Chavez would use the very weapon that the IMF and the kleptocracy had denied the Venezuelan people, democratic reform. His cabinet was appointed entirely from the Venezuelan left. Not even one compromise appointment was made. On April 25th 1999 a national referendum to convoke a constitutional assembly passed with 92% support. On July 25th members of the constitutional assembly were elected as individuals in a break with previous electoral practice whereby members were elected from party lists. Chavez supporters won 125 of 131 seats in the assembly. By December 15th 72% of Venezuelans had passed what is arguably the most progressive constitution in history. Immediately after this victory the transitional congress replaced the Attorney General, the Human Rights Defender, the Comptroller General, the National Electoral Council, and the Supreme Court.7 Also in 2000 Chavez removed every judge with eight or more pending corruption charges which was roughly 80% of all judges.8 This was not political opportunism. This was a sacking of the entrenched elite of the Fourth Republic all of whom were in direct conflict with the reform demanded by the Venezuelan electorate. The most effective measures for removing this entrenched elite were the 'mega elections' called for by the new constitution. Under these mega elections every elected official in the country including the president would have to run for their office again, this time under the laws of the new constitution. Chavez's support had grown markedly from the first election and he easily won reelection with 59.8%. His supporters won 63% of the seats in the National Assembly, 17 out of 23 state governorships, and one half of all municipal mayors' posts.9 In a pattern that will be seen throughout the history of the Bolivarian process Chavez and those who support Chavez continually return to the open democratic process to legitimize the decisions of the party. It is clear from this second set of elections that any misgivings traditional liberals may have about the sacking of an entire political class were not shared by Venezuela's citizens, the difference of course being that Venezuelans had actually experienced the corruption and repression of the Fourth Republic first hand. In a little over a year Chavez had managed to remove the oligarchy from almost every branch of government. Chavez then had proved his willingness to revolutionize national politics but this was not yet an economic revolution.

The manifestation of the political revolution, the constitution, is a document which while granting more rights and encouraging more cooperative economic activity than its predecessor, is still fundamentally capitalist. In its text can be found Article 112 which mandates state promotion of private enterprise, Article 115 which guarantees the right to private property, Article 299 which acknowledges a private sector role for creating employment and development, Article 311 which requires a balanced federal budget, and Article 318 which grants autonomy to the central bank in setting monetary policy.10 One of the most telling passages is from article 299 under the section titled “On the Socioeconomic Regime and the Function of the State in the Economy” the first sentence of which reads “The socioeconomic regime of the Bolivarian Republic of Venezuela is based in the principles of social justice, democratization, efficiency, free competition, protection of the environment, productivity, and solidarity, toward the ends of securing an integral human development and a useful dignified existence for the collectivity.”11 While this is truly a progressive framework for a socioeconomic system in a capitalist context, it is precisely because of that context an inherently contradictory progression. The coexistence of actual solidarity, dignity, and environmental protection with 'free' competition is impossible as any solidaritous economy would by necessity have to be cooperative and not competitive. But this document reflects the confused nature of the Bolivarian process at this specific point in its development. Not yet a socialist movement, the Bolivarian process was specifically a rejection of neoliberal capitalism, that is of radical fundamentalist capitalism, but not in any way a rejection of capitalism as a mode of production. Instead the idea was to do capitalism better than the neoliberals.

Early Economic Policy

In his rejection of neoliberalism Chavez had turned to to writings of Chilean economist Osvaldo Sunkel and his 'neostructuralist' theory of endogenous development. Neostructuralist development called for an active state role in the economy but unlike previous structuralist theory this involvement would not consist of Import Substitution and replacing imported goods with identical endogenous goods but instead would create new endogenous markets using endogenous resources. To do this the state would work with the existing capitalist firms in a “government assisted free market strategy”12 based on the experience of successfully developed East Asian countries like Japan and South Korea.13 There is an obvious common thread here between neoliberalism and neostructuralism. Both attempt to encourage capitalism with the help of the state. The shift embodied in neostructuralism is merely a shift from supporting the capitalists of the developed imperial nations to supporting the the nascent imperial-inspired economy within the country itself. Chavez took this modified theory of development and combined it with a weak support for something called an 'alternative' economy which included cooperatives, self management, and co-management.

The history of Venezuelan economic development has several peculiarities which make it an unsuitable candidate for this kind of development. Flight from the country to the city which started in the 1940s and continues to today largely erased the small farmer as an economic or social actor and left most of the country's land further consolidated in the hands of latifundistas. The over valuation of domestic currency caused by massive oil wealth undercut domestic agricultural production which caused the emigration to the cities. It also undercut and development of national industry and left Venezuela with little industrial development, large swaths of idle land, and a rapidly growing urban population.14

Massive dependence on oil exports have created a peculiar level of capitalist class. The capitalist class of Venezuela assumed a role as a parasitic government based capitalist class. This class was parasitic in a triple sense. Firstly it was parasitic in the traditional sense of Marxist exploitation, it expropriated labor time from workers without remuneration. Secondly it expropriated this labor time from other people's workers in its capacity as a renter state. Rents were collected from foreign oil companies who did the work of exploration and extraction. Thirdly this wealth now twice removed from the worker was the stolen a final time from the state for whom this peculiar capitalist class was supposedly working. This is a capitalist class which does not even produce commodities to be traded , which does not even bother to produce anything in the process of exploitation. Capitalism in Venezuela before Chavez was to a large extent more a matter of corruption than an actual mode of production. Without articulating this basic contradiction between Sunkel's theories and Venezuela's reality Chavez set out along the neostructuralist path.

A major problem to be dealt with was that of PDVSA the state owned oil company. PDVSA had been intentionally running at a loss and ignoring OPEC regulations providing massive quantities of cheap oil for foreign companies. PDVSA also regarded itself as somehow separate from the national government and as such had taken steps to hide its revenues from the rest of the state. This was all the result of original false nationalization of PDVSA in 1976 under Carlos Andres Perez. Though formally nationalized the company retained its management and ideology, functioning effectively as a private company ignoring government directives.15 Much of Chavez's clash with the traditional elite would play out in PDVSA over the following years but to start Chavez made some strategic moves. Firstly he passed a Hydrocarbon Law which increased taxation on foreign oil companies operating in Venezuela and thereby returned much of the oil revenue to the government proper. Secondly he conducted a worldwide tour of OPEC nations and succeeded in strengthening the organizational solidarity of OPEC and in raising global oil prices.16

The first real economic policy Chavez implemented upon taking power was the passage of 49 laws in November 2001 designed to stimulate domestic small scale industry including microfinance for cooperatives and increase national oil revenue. The three laws which provoked the most indignation from the bourgeoisie were the Hydrocarbon law, the Land Law, and the Fishing Law. The Land Law targeted feudal style estates known as latifundios and was to break up idle private holdings greater than 5000 hectares. The fishing law required large scale commercial operations to fish in waters further from the coast to give 'artisanal' fishers a better opportunity to make a living. These laws did not propose radical socialist changes but rather insisted upon reform that would more easily accommodate capitalism by marginally reducing Venezuela's gross inequality.17 Nevertheless the bourgeoisie accustomed to the Fourth Republic were outraged and began to mobilize to oust Chavez. From this point on began what Gregory Wilpert has correctly called a “dialectic of counter-revolution and radicalization” whereby the opposition attempts to crush a revolution which in reality has not begun and in the process radicalizes the government reform.18

Counter-Revolution and the Radicalization of the Bolivarian Process

Protest against the 49 Laws was organized by Venezuela's largest business organization Fedecamaras which called for a national business strike. Fedecamaras was joined in their call for a strike by CTV (Confederation of Venezuelan Workers) Venezuela's largest labor union which argued that the laws were anti-business and therefore anti-worker. The December 10 th strike was moderately successful and coincided with the global recession which followed the September 11 th attacks on the United States forcing down global oil prices. The cumulative result was that for 2002 the government had to cut expenditures across the board by 10% and unemployment began slowly rising after having fallen since Chavez's first election. 19 During this period polls show support for Chavez fell to 30%-40%. 20 The opposition took this opportunity to launch a coup against Chavez backed by members of the military and the CIA in April 2002.

The coup was carefully orchestrated between members of the military, business leaders, the police which were in under control of opposition leaders, and the notoriously anti-Chavez private media. Opposition marches were scheduled to cross paths with pro-Chavez demonstrations happening near the Miaflores presidential palace while police snipers began massacring opposition supporters, as well as Chavez supporters who were on a bridge in the downtown area. After people began dropping with bullets in their heads, the Chavez supporters quickly took cover behind the buildings on either side of the bridge and as many Venezuelans carry handguns for protection, they began firing back in the direction of the sniper bullets from behind these buildings. Private media outlets played footage of Chavistas firing from behind these buildings over and over claiming that in fact these marchers were firing on unarmed opposition demonstrators. What they failed to show however was that the street running under the bridge was entirely deserted. The Chavez supporters were firing at the building the sniper fire was raining down from. The opposition had never taken that route. 21 This blatantly false reporting was rebroadcast around the world and even picked up by the New York Times. 22 Venezuelan military officials threatened to bomb the presidential palace (a la Chile 1973) unless Hugo Chavez agreed to resign the office of the presidency. Chavez refused to resign but willingly left the palace and for all intents and purposes was kidnapped under military custody. He was held at a military base without communication and his location was a military secret. Upon receiving the news that Chavez had been ousted in a coup, the people of the barrios that stretch up into the mountains surrounding Caracas flooded the streets in protest and marched to Miaflores. With pressure form the hundreds of thousands gathered outside the palace, the presidential guard (still loyal to Chavez) retook the palace and arrested the coup plotters. Within 48 hours Chavez was flown back to Caracas and constitutional government was reinstated. This was the first and most violent attempt to remove Hugo Chavez from power and its failure meant that the opposition had lost its base of support in the military.

Chavez did not however immediately radicalize his position in the face of the counter-revolution. Instead directly after the failed coup attempt Chavez moderated his positions for fear that there would be a repeat. He reshuffled his economic advisors so as to appease capital and compromised on the appointment of the all important president of the PDVSA. 23

This compromise was however interpreted as weakness by the opposition and in December 2002 a second attempt to oust Chavez was launched in the form of another capital strike this time with the participation of the PDVSA management and technicians and instead of lasting a day, it lasted for months. The strategy was to starve the government of funds by completely shutting down PDVSA with the management lockout and sabotage by technicians. Thanks to the help of regular production workers who did not participate in the strike, retired technicians, and military personnel the oil and money kept flowing during the strike. In response to the strike citizens were forced to mobilize on a massive scale to provide basic necessities like food and gas. Groups guarded petrol stations to make sure they stayed open, and new avenues of food distribution had to be found. Factories that had been closed by their managers were reopened by workers. 24 This struggle between capital on one side and workers and consumers (summed up in the phrase prosumidor or 'prosumer') on the other cemented more than anything else the capacity of average Venezuelans to involve themselves in the revolutionary process. The factory movements in particular provided an impetus for the real Venezuelan labor movement to emerge. After months of struggle the capital strike was defeated and Chavez began the radicalization of reform in earnest.

This time Chavez did not moderate his position. He fired 18,000 managers and technical staff (40% of the payroll) who had participated in the strike and later reinstated Jorge Giardoni who had been removed after the 2002 coup as economic planning minister. 25 This second failed attempt by the opposition resulted in their loss of their base of support in PDVSA. Now without support in the armed forces or the oil industry the opposition was left in its weakest position to date. With the opposition on the ropes and with the support of the newly reorganized PDVSA Chavez launched a series of misiones designed to address the problems of the 80% of Venezuelans who live in poverty. In April 2003 Chavez began Mision Barrio Adentro which brings thousands of doctors from Cuba to work in the poorer Venezuelan communities which traditionally have not had access to health care. This is especially important because most Venezuelan doctors derive from the upper or upper middle class and will not 'lower' themselves so to speak to treat those who need it most. Mision Robinson was started in July to address massive illiteracy in the country and has proved outstandingly successful with Venezuela's literacy rate now around 93%. 26 In early 2004 Mision Mercal was launched which created a system of of subsidized food distribution. 27 One of Venezuela's main developmental obstacles is that of food sovereignty which is complicated by its heavy dependence on imports of all kinds including food. These misiones were the beginning of a specifically non-market solution to Venezuela's economic problems. This was the beginning of the change from neostructuralist to a radical endogenous based development for Venezuela.

In the face of this surge of the Bolivarian process the opposition made one final attempt to oust Chavez, this time through legal channels. Opposition leaders worked with the Carter Center and the Organization of American States to negotiate conditions for a recall election. Some changes were made to the National Electoral Council and after 3.1 million signatures were collected and 2.5 million verified by the Electoral Council a recall referendum on Hugo Chavez's presidency was held. On August 16 the National Electoral Council announced the results and Chavez had won with 58% of the vote. 28 Unlike the 1998 election where Chavez was swept into power by the middle class vote, the middle class had by this time largely left Chavez but the poor who had traditionally been apolitical turned out in massive numbers to support the president. This was a direct result of the radicalization of the governments vision for the economy and the beginning of the misiones. 29 This election like the others before reassured Chavez that he did indeed have the support of the country's majority poor population and emboldened him to move onto a new phase in the reform of the economy.

Chavez now faces the real developmental challenges of Venezuela's economy. These included the lack of an organized labor movement, the lack of formal employment for Venezuelan workers, the continuation of a political culture of corruption inherited from the Fourth Republic, an underdeveloped agricultural and industrial sector, repression of campesinos by large land owners, and most importantly the lack of a method, direction, or ideology for true democratic development. To address this last challenge Chavez decided to abandon dreams of capitalism lite and instead opted for socialism, a social economy, and a new social society. The father of Neostructuralist theory Osvaldo Sunkel had said “radical socialist revolution seems to me a very improbable historical event in the near future in Latin America, owing to a combination of external and internal circumstances of a geographic, military, political, and economic nature” 30 Having largely removed the traditional bourgeoisie from the state, the oil industry, and the military Chavez has the opportunity to create the foundation of a radical socialist economy. But what are the limits of a parliamentary socialist project? What will be the driving force behind this project in the absence of a consolidated threat from the Bourgeoisie? To answer these questions we need to ask: what exactly is this Socialism of the Twenty-First Century?

1 Lebowitz, Michael. Build it Now. Monthly Review Press, New York 2006 (pg 62)

2 Over 90% of Venezuelan exports are petroleum

3 In fact they stayed mostly away from rich neighborhoods

4 Wilpert, Gregory Changing Venezuela by Taking Power. Verso, New York 2007 (pg 17)

5 Wilpert, 18

6 Wilpert, 18

7 Wilpert, 21

8 Wilpert, 45

9 Wilpert, 22

10 Lebowitz, 90

11 Constitucion de la Republica Bolivariana de Venezuela (translated by the author)

12 Sunkel, Osvaldo Development from Within: Toward a Neostructuralist Approach for Latin America. Boulder, CO: Lynee Rienner Publishers, 1993 (pg 394)

13 Lebowitz, 92

14 JP Leary Untying the Knot of Venezuela's Informal Economy. Dec. 6, 2006 NACLA (https://nacla.org/node/1427)

15 Wilpert, 89-91

16 Lebowitz, 94

17 Wilpert, 23

18 Wilpert, 9

19 Wilpert, 23

20 Wilpert, 24

21 The Revolution Will Not Be Televised Kim Bartley, Donnacha O'Brian. IRELAND, 2003 74 MINUTES (Available on the website Youtube and Google Video: http://video.google.com/videoplay?docid=5832390545689805144

22 Larry Rohter Venezuela's 2 Fateful Days: Leader is Out and In Again. New York Times: April 20, 2002

23 Lebowitz, 96

24 Lebowitz, 95, 96

25 Lebowitz 97

26 CIA World Fact Book: https://www.cia.gov/library/publications/the-world-factbook/print/ve.html

27 Lebowitz, 97

28 Wilpert, 26

29 Wilpert, 20

30 Osvaldo Sunkel National Development Policy and External Dependence in Latin America. Lecture delivered at the University of Chile during a series of Inaugural Lectures of the Institute of International Studies.Reprinted in Development Studies Revisited by Charles Cooper and Edward Valpy Knox Fitzgerald. London, 1989

The Next Great Transformation

From Capitalism to Socialism: The Revolutionary Process in Venezuela

by Quincy Saul, March 2009

“[E]s la marcha a fondo...” -Hugo Chavez Frias, 2006
“[T]he long term starts now...” -Raul Prebisch, 1983

In 1944, the Austrian scholar and activist Karl Polanyi published his famous and most influential book, The Great Transformation. In this book he attempted to chronicle and describe the transformation of the world by markets. Simply, Polanyi endeavored to describe the emergence of capitalism. Markets existed before capitalism, Polanyi argued, but always within a social framework that limited their size and prerogative. The emergence of capitalism, as Polanyi described it, entailed the subordination of all of these social frameworks to the rules of the market. What transpired was nothing less than the most consequential and explosive revolution in the history of the world. Even today, the great transformation continues. Capitalism continues to transform lives and landscapes on both massive and intimate scales in unprecedented, and perhaps irrevocable ways.

Capitalism, understood as the systematic organization of the world around market forces,has unleashed productive capacities on scales never before imagined. What we call the industrial revolution was a tributary of the larger revolution of capitalism, which overturned ancient societies and power structures in mere generations on every continent. By subordinating the social to the economic, the power to change and create was abundant as never before. But the astounding dynamism of this new way of life has come a price. Markets are amazing at creating wealth, but they do so indiscriminately. Markets on their own know neither restraint nor regret. In their insatiable need for new resources, both human and natural, markets take too much too fast, leading to widespread abuses resulting in both human crises and ecosystem collapses. And in their equally insatiable accumulation of profits, markets are again indiscriminate. In markets, money and power talks, and it is those few who have them that reap their benefits. Meanwhile, those who lack them are forced into ever greater poverty, subordination and exclusion. As Eduardo Galeano writes in the opening lines of his book The Open Veins of Latin America, “[t]he international division of labor consists of some countries who specialize in winning, and others in losing.” (p1) To summarize, capitalism creates breathtaking possibilities, and simultaneously prevents humanity from enjoying them in either a sustainable or a collective way.

From this realization has come the demand for the next great transformation. The social and environmental catastrophes that accompany the first great transformation are intolerable -- no progress could be worth such horrors. “The perpetuation of the current order of things,” writes Galeano, “is the perpetuation of crime”. (p11) The next great transformation would preserve the economic dynamism of the first great transformation, but bring it under the control of social priorities. This reconciliation of the social the economic, which recognizes the possibilities of the economic but which demands the primacy of the social, has been and is still today called socialism. Socialism would be a systematic (re)organization of human society around a harmony of the social and the economic. The transition from capitalism to socialism -- the next great transformation -- has not only been the subject of hundreds of books, but millions of people have lived and died for it, and many more are sure to make the ultimate sacrifice in its name. The scope of this essay will be necessarily humble -- I intend only to make some simple explanations and to raise a few significant ideas and questions about this next great transformation as it is taking place today, in the Bolivarian Republic of Venezuela.

In a speech in 2007, Venezuelan president Hugo Chavez Frias reflected on the difficulties of constructing socialism on the foundation of capitalism. “Men and women make history,” Chavez quoted Marx, “but only so far as history lets them.” In other words, the immense task of transforming an entire society is always shaped by the particular conditions of the already existing society. Socialism, after all, must be built somewhere, and that where is always already full of people with all their particular histories and relationships. Michael Lebowitz, in his book about socialism in Venezuela called Build It Now! writes that “[s]ocialism doesn’t drop from the sky. It is necessarily rooted in particular societies. And that is why reliance upon detailed universal models misleads us”. (p67) The first important point I would like to emphasize is that the next great transformation will necessarily be a greatly diverse transformation, specific to people and places. As any Venezuelan can tell you, it is a process, not a blueprint. However, this simple explanation may hide a great deal of contradiction and conflict that this process contains.

In 1908, in her book Reform or Revolution, Rosa Luxemburg published many interesting thoughts that are very relevant to the process of transformation in Venezuela. One “particularity of the capitalist order,” she wrote, “is that all the elements of the future society that exist in it initially assume a form that doesn’t bring us closer to socialism, but takes us farther away from it.” In other words, capitalist society contains in embryo many of the characteristics of socialism, but develops them in a way that makes the realization of socialism ever harder. For instance, the capitalist productive process increasingly brings people together to work. This move towards increasingly ‘social production’ has lead many to predict that capitalism will lead directly, if not perfectly smoothly, towards socialism. Luxemburg’s insight is that this transition is neither direct nor necessarily inevitable. Capitalism brings people together to work in factories, but it does so under conditions of alienation, exploitation and repression, while simultaneously spreading ideologies that legitimize and reinforce business as usual and the status quo, all of which actively prevents the emergence of socialism.

Luxemburg’s insight also has implications for that is known as ‘stage theory’. According to stage theory, the first great transformation must be complete before the next great transformation can be possible. Specifically, many stage theorists argue that only capitalism is capable of accumulating the productive forces from which socialism can be developed. In other words, socialism cannot be realized until capitalism is fully developed. Stage theories of this kind have been frequently rebutted on both moral and scientific grounds, but Luxemburg is particularly relevant here in that she predicts that the development of capitalism actually takes us ever farther way from socialism.

All of this raises many difficult questions about visions and strategies for the transition from socialism to capitalism. Capitalism continues to grow, the first great transformation continues, and more and more of our lives and our lands are every day put on the market. The breadth and resilience of capitalism has lead many to resign themselves to it, to settle for it, and to denounce the socialist process as impossible, naive, or “utopian”. But conversations with people in the barrios of Caracas, the capital city of Venezuela, can go a long way in challenging this kind of outlook. The historically oppressed poor are ever more empowered, politicized, educated and organized, not to mention healthy. Problems persist in great abundance, but Venezuela has made it clear that the next great transformation is not an impossible dream. On the contrary, writes Venezuelan Rafael Ramon Castellanos in his latest book,

we are seeing it in the new socialism for the 21st century in which are immersed not only Venezuelans but all people of thought in the universe who see the light of integration imposing itself on the horizon, while the goal-keepers of the empire vacillate and sow fear and terror everywhere. (p23)

The process is incomplete and in many ways fragile. Goal-keepers of empire wear many masks. The people of Venezuela know that the next great transformation will take many generations of struggle. And in many ways, this struggle is just beginning.

Venezuela is a capitalist country with a socialist government. Neither the declarations of a president nor improved education and health care are enough to transform a thoroughly entrenched economic and social system. While this is obvious to anyone living in Venezuela, international followers of simplistic leftist media may need to be reminded. Centuries of colonization and political dictatorship, along with many decades of subordination to foreign markets, cannot be transformed into democratic socialism in a few years. Big and easy profits from oil exports have created over the generations a small but very rich, powerful and developed political oligarchy and consumer society. Leftist Venezuelans will be the first to tell you that Venezuela is the most capitalist country in Latin America. There is even a hummer assembly line. In every sphere of state organization; legislative, judicial and executive, a lot of corruption persists. Meanwhile, “the bureaucratic monster,” as one Venezuelan described it to me, has only continued to grow. Another explained to me simply that “there are many rats, and only a few cats to eat them”.

Much of the persistence of these problems can be attributed to the particular form that the revolutionary process has taken until now in Venezuela. Since Chavez first publicly declared the revolutionary process to be a socialist one in 2004, he has been very careful to establish important qualifying conditions. The Venezuelan socialism of the 21st century is to be both democratic and peaceful. Moreover, Chavez has been explicit that the revolution does not intend to challenge private property. All of these conditions and the last one in particular, laudable though they may sound, have very vital consequences for the way that the revolutionary process develops.

Almost all socialist revolutions in world history have challenged private property, specifically private ownership of the means of production. In the strict sense of the terms, this has neither been a democratic nor peaceful procedure. Owners of the means of production are not given a voice in the process, and their property is taken by force. Instead of taking this traditional path, the revolutionary process in Venezuela until now has instead emphasized redistribution and democratization. Instead of promoting and sponsoring immediate takeovers of the means of production, Chavez and the United Socialist Party of Venezuela have advocated instead that workers be given a larger share of the profits and a louder voice in decisions that affect them.

In 1983, the Argentine economist Raul Prebisch wrote an article titled Five Steps of My Thoughts About Development, reflecting on the many decades of his work in government and international institutions as an economic advisor. Prebisch is worth quoting at length here, because he makes several ominous predictions that are quite relevant to the current course of the Venezuelan transition from capitalism to socialism:

Democratic processes have demonstrated a great efficacy in the improvement of real incomes and in the evolution of the state. But in the current system a limit exists that the power of redistribution can’t exceed, a limit that, once reached, puts the dynamic of the system in danger. When it arrives at this limit, surplus achieves its maximum level, and the privileged society of consumption can’t continue anymore like it could before the redistributive process that tends to improve the distribution of income... redistributive pressure will lead in this case to a crisis of the system. The democratic process tends to devour itself... I must lamentably conclude that, in the advanced course of peripheral development, the process of democratization tends to become incompatible with the regular functioning of the system. This is not due as much to the failure of this process, derived from the prevalent political immaturity in the periphery, but to the grave socioeconomic bias of the mechanism of distribution of income and accumulation of capital in favor of the upper social classes.

The revolutionary process in Venezuela is currently reaching the limit and undergoing the crises to which Prebisch referred 26 years ago. In recent years, the limit and the crisis have not been manifested in a giant cataclysm that shakes the entire society. Instead, it is a diffuse crisis, less visible than a generalized crisis but no less deadly. I will cite only two recent examples of how the democratic process is, as Prebisch predicted, devouring itself.

On January 12th of this year, workers at a Mitsubishi factory in the state of Anzoategui occupied a factory in protest of the company executives’ decision to not rehire 135 contract workers. 18 days into the occupation, on January 30th, three of the workers participating in the occupation, Javier Marcano, Pedro Suarez and Alexander Garcia, were shot dead by police. Six other workers and two police officers were wounded and taken to the hospital. Relevantly, Felix Martinez, general secretary of the union Singetram, said that the company is trying on a national level to convert into a “capitalist cooperative”. The precarious limit of this tenuous dual strategy of capitalist management and socialist organization is clearly defined by the events of January 30th.

More recently, on February 12th of this year, Nelson Lopez, a leader of the farmer organization Frente Campesino Jirajara, was murdered on his way home. He was shot 14 times in the back by hired assassins under the orders of Luis Gallo, a large landowner in the state of Yaracuy. Both of these examples reveal the limitations of the “peaceful and democratic” revolutionary process in Venezuela. As Prebisch warned, policies of democratization and redistribution, when they take place within a capitalist system, have definite limits. They become incompatible with the regular functioning of the system, and result in crises as the upper classes retaliate against the loss of their privileges.

I should be clear that my intention here is not in any way to condemn the revolutionary process in Venezuela. In a very brief amount of time (it has barely over four years since the socialist project was announced) the Chavez government has achieved immense progress in spite of powerful and organized domestic and international opposition. I merely offer a sympathetic analysis of the revolution, which has come a very long way, but which I fear in some important ways is reaching a structural limit imposed by the capitalist economic system which is still very much alive in Venezuela. It is an open question how much longer the revolutionary process can proceed without directly confronting capitalism on more than an ideological front, before the contradictions become an unbearable strain on society. “We know that the desire to develop a good society for people is not sufficient,” writes Lebowitz, “-- you have to be prepared to break with the logic of capital in order to build a better world”. (p72)

“[T]hose who choose the reformist path... don’t in reality elect a more tranquil path,” wrote Rosa Luxemburg. This has become undeniable in Venezuela today, proven by the deaths of Nelson Lopez and the factory workers in Anzoategui, among many others. The peaceful revolution, in the effort to avoid a large scale conflagration of violence, has necessarily invited a slower and smaller-scale but predictably extended and dispersed quantity of violence, as the old power structures attempt to defend their privileges against the new. As Luxemburg knew and Prebisch predicted, the path of reform, (in the Venezuelan case democratization and redistribution without challenging private ownership of the means of production) quickly reaches its limit. This limit is no secret to Chavez, who in the same speech warned that “[r]eformism can accompany a revolution for a time, but there is a barrier past which this reformism becomes counter-revolutionary”.

The persistent appeal of reform in spite of its known and predictable failures is nothing new. “Everyone wants to see new results without changes and changes without movements,” wrote Simon Bolivar. (quoted in Castellano, p38) Luxemburg is worth quoting at length. Reform and revolution may at certain times appear initially to to share the same path, but they are essentially at fundamental odds. The path of reform and reformers

is not one that moves slowly and surely towards the same objective... in place of creating a new society, they choose some insubstantial modifications of the old... they don’t seek the realization of socialism, but the reform of capitalism, they don’t seek the suppression of the system of salaried work, but the diminishing of exploitation. In summary, they don’t seek the suppression of capitalism, but the attenuation of its abuses.

As many revolutionaries all over the world have realized, reformers can become the most resilient and insidious obstacles in the way of revolutionary transformation. Again, this reality has not been missed by Chavez. “Beware of the reformist currents that fear a real revolution,” he reminded: “This is one of the greatest threats that we face, within, it is like cholesterol, some call it the silent assassin, it is the counter-revolutionary reformism, within ourselves”. Even self-declared enemies of empire can function as its gate-keepers. Many people who support the revolutionary process in Venezuela today are opposed to challenging private ownership of the means of production, in favor of the peaceful and democratic redistribution of profits. In response to the strategy and ideology of reform, there is perhaps no better response than something that I heard Subcommandante Marcos of the Zapatista Army of National Liberation say at a conference in 2007:

“Maybe some of you have seen those commercials that announce products that make you thinner without doing exercise... there is an advertisement for a cookie that will give you a spectacular figure, without doing more exercise than putting the product in your mouth and chewing it. In the same way... is the idea that one can transform social relations without struggling and without touching the privileges that the powerful enjoy.”

Private possession of the means of production is perhaps the core material essence of capitalism. Around this axis turns the accumulation of profits and power. Modifying the distribution of profits while leaving intact the concentration of power is the equivalent of one of Marcos’ diet cookies, that is at same time high in what Chavez characterized as counter-revolutionary cholesterol. Private control of capital is irreconcilable with socialism. As a factory worker’s slogan during the Russian revolution demanded, “The right to life is higher than the right to property!” It may be relevant that this slogan did not come from and was not approved by the Bolshevik party.1

Rising contradictions rock all boats. Chavez and revolutionary socialists all over Venezuela, along with capitalists and the historically privileged, are well aware of the struggle that awaits them. A socialist project which commits itself both to democratic and peaceful methods and to radical anti-capitalist ideology has never before been attempted, and the whole world is watching. How much longer and how much farther the revolution can advance without more directly challenging the powerful capitalist economic system that still dominates in Venezuela, and at what cost this delay will come, is very difficult to calculate. But we can be sure that these contradictions cannot be suffered forever. Chavez addressed this specifically in his 2007 speech:

[T]he internal situation is going to sharpen, in the coming months, more contradictions will arise, simply because we don’t have plans to detain the march of the revolution; on the contrary, it is a thorough march, and as the revolution goes deepening itself, expanding itself, these contradictions are going to flower, including some that, until now, have been covered up, they are going to sharpen, they are going to intensify, because we’re talking about economics, and there is nothing that hurts a capitalist more than their pocket, but we have to enter this theme, we cannot avoid it.

Whether Chavez has a plan up his sleeve, or whether he intends to wait for the ever more organized and empowered people to carry the revolution to its next stage on their own, we can only speculate. But the next great transformation cannot fully continue until the core material essence of capitalism is effectively challenged.

Meanwhile, capitalism continues to gestate and metabolize society, and if Luxemburg is right, the longer it takes to begin, the harder the transformation will be. Prebisch wisely alerted in his 1970 book Transformation and Development that “[t]ime doesn’t resolve problems on its own”. On the contrary, “it incessantly aggravates them”. (p152) Not only in Venezuela but in the entire world, all of these questions are of intense urgency. While “revolutions are not exported”, as revolutionaries from Che Guevara to Nora Castaneda have reminded us, we all have a lot to learn from a close analysis of the development of socialist revolution in Venezuela today.

The Bolivarian vision of international unity in resistance to capitalism is the most significant and promising advance for the next great transformation that the world has seen in generations. But no one in the world can simply sit back and watch. As Marcos wrote in one of his communiques, “there are no seats outside the ring”. We all have an important role to play in the next great transformation, and if we aren’t promoting it we are more than likely impeding it. “We need an international politics inspired in a long term vision of centers and peripheries,” wrote Prebisch, “But the long term starts now”.

Peaceful revolution is an appealing prospect, but perhaps a disingenuous dream. The price of postponing the inevitable conflict between the fundamentally opposed structures of capitalism and socialism is an intensifying climate of contradiction and hate where individuals and small organizations must face the brutality of reactionary power structures on their own. By preventing a nationally organized movement to advance the transformation to its next stage, the revolutionary state arguably puts its citizens at greater and more prolonged risk than if it were to lead the movement itself. While the social and ideological transformation in Venezuela continues to grow and expand in essential ways, the economic transformation for the moment has been stalemated. It is a very serious and grave matter, for which there will be no light answers. “I,” declared Josue de Castro, “who have received an international peace prize, think that, unhappily, there is no other solution than violence for Latin America.” (quoted by Galeano, p5)


1. History of the Russian Revolution, by Leon Trotsky, 1930 (vol.1 p419)


References:
(in order of appearance)
Las Venas Abiertas de America Latina, por Eduardo Galeano, 1971
El Discurso del Inicio de la Construccion del Partido Socialista Unido, por Hugo Chavez Frias, March 24, 2007
Build It Now! Socialism for the 21st Century, by Michael Lebowitz, 2006
Reform or Revolution, by Rosa Luxemburg, 1908 Referenced chapter: The Conquest of Political Power
Simon Rodriguez, Las Misiones, Y el Socialismo del Siglo XXI, por Rafael Ramon Castellanos, 2008
Cinco Etapas de Mi Pensamiento Sobre Desarollo, por Raul Prebisch, 1983
En Yaracuy, privados de libertad asesinos del dirigente campesino Nelson Lopez, por Frente Campesino Jirajara, March 1st, 2009: www.aporrea.org/ddhh/n129863.html
Two Factory Workers Killed During Factory Occupation in Venezuela, by Tamara Pearson, January 30th 2009: www.venezuelanalysis.com/news/4156
Transformacion y Desarollo, La Gran Tarea de la America Latina, por Raul Prebisch, 1970
Ni Centro Ni Periferia, por Subcommandante Insurgente Marcos, speech delivered at the International Colloquium on Anti-Systemic Movements, La Universidad de la Tierra, Chiapas, Mexico, December 2007. (Part One: La Geografia y el Calendario de la Teoria)
Creando Una Economia Solidaria, por Nora Castaneda

(all translations by Quincy Saul)

A Gringo Glimpse of the Bolivarian Project - "De Pana" Newspaper

By Lila Goldstein and William Finucane Santiago

An Article for "De Pana" newspaper in Caracas Venezuela: http://www.depana.org.ve/

As U.S. students witnessing the Bolivarian process here in Venezuela we have been en-heartened and amazed by the achievements of this revolution which continues to move forward. In November the opposition was given a boost when their candidates won positions in five states and some urban centers. Media in the United States and all over the globe claimed that the Venezuelan president did not have the power and persuasion that he once had. Being in this country only a month it is clear that this setback for the revolution has been blown out of proportion and the socialist current in the country has remained strong. This is evident in the results of the February 16th referendum to remove term limits.

Although many in the United States are apathetic towards Venezuela there is a base support for Chavez and the alternative that he represents. In leftist and radical circles he is revered, but in 2005 when he offered assistance by giving oil to poor neighborhoods in the United States, such as the South Bronx, and sent aid during hurricane Katrina, he struck a cord with many of the working class and people of color across the country.

The most impressive facet of this process for us has been experiencing the participatory and open nature of the revolution. Those outside of Venezuela are shown an inaccurate depiction of the Bolivarian process, we are told that Chavez is dangerous and centralizing state power. It is apparent from our experience here that while Chavez provides direction and unity at the national level, the revolution itself is carried out by the people from below, by the popular ministries, and by persons working outside the government those who have been empowered by this government to make their own revolution. This is the process we are excited to learn from which develops with each new phase of the transformation from capitalism to socialism.

There are still obstacles on this road, that of the private media which lies,and that of the private companies who monopolize expertise and refuse to participate in the stripping of their own privileges, but these are recognized by the revolution and with the deepening of the revolution there comes more resolve to defeat these enemies of economic and political democracy.

Venezuela is truly a remarkable example to the world and we thank all who struggle for justice in this country for sharing your experiences with us.