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
