The prioritization of human health, development and self-activity in Chavez-era Venezuela

The Bolivarian Revolution, led by Hugo Chávez until his death in 2013, has undergone multiple phases since President Chávez’s first election in 1999. Twenty years ago, a new form of social services, the mission, was created to bypass recalcitrant bureaucrats and to enable the participation of those receiving social services. Another initiative, the commune, was conceived as a way of enabling people to organize for, and create solutions, to problems at the grassroots level. In this excerpt from What Do We Need Bosses For?: Toward Economic Democracy, the beginnings of these two programs are discussed.

Begun in 2003, the [Venezuelan government created] missions [that were] social-welfare programs organized through mass grassroots participation and funded by the national government. Achieving more control over the state oil company and the sharp increases in oil prices enabled the government to generously fund the missions. Given the corruption and inertia of the state bureaucracy, and the unwillingness of many professionals to provide services to the barrios, the missions were established to provide services directly while enabling participants to shape the programs. Political scientist Juan Carlos Monedero explained the decision to go around established institutions:

“The memory of the [pre-Chávez] Fourth Republic* was too intense, and the sociological fourth republicanism pervaded the state apparatus in an absolute way. The intentions to use the public administration to pay the social debt in education and sanitation were answered by civil servants long established in the state structures with a resounding no. If Venezuelan doctors were not willing to go up the hills (of the shanty towns), it was necessary to resort to other formulae. If the economic administration organs had no answers for over half the population, it was necessary to find other mechanisms. A sort of parallel state with people’s participation was put in motion. The answers required were found by resorting to the organization of the people and in some cases to help from Cuba (which, like any other country, exported what it was competitive in). Around 18 thousand Cuban medics as well as a strong social impulse began to fill in the traditional holes of the Venezuelan state.”

These missions brought positive results, concurs Margarita López Maya, a political scientist and historian who has taught at the Central University of Venezuela since 1982. They enabled access to services and assistance previously denied under the austerity of previous governments, she wrote:

“Missions (programs bypassing uncooperative or ineffective state agencies), such as Barrio Adentro (free 24 hours a day primary health care and disease prevention for low income groups), Mercal (state distribution of food at subsidized prices), Robinson 1 and 2 (literacy and primary education for adults), Ribas and Sucre (secondary and university education for those who had missed or not finished these), Vuelvan Caras (training for employment), and the Bolivarian schools, where a full day schedule has been restored, with two free meals and two snacks a day, plus free uniforms and textbooks: all these undoubtedly had a positive political impact. The government has also invested in the social economy, as in the ‘ruedas de negocios,’ in which the creation of cooperatives is encouraged in order to supply goods and services to the state sector. The government has also created a system of micro-financing with the Women’s Bank, the Sovereign People’s Bank, and so on, which make small loans to lower income borrowers.”

Neoliberal conceptions of micro-finance are based on attempts to put a “human face” on World Bank and International Monetary Fund structural-adjustment programs and designed to accompany the forced opening of Global South economies to predatory multinational financial-service corporations and impose market “solutions” to poverty stripped of all references to relations of power and domination — and not only fail to ameliorate poverty but sometimes make it worse. In contrast, the Women’s Development Bank holds dialogues with recipients to understand what their needs are, and then provides training based on community needs and expectations to go with the credit, and helps women organize themselves and to help them learn to monitor the bank’s performance.

Human health and development become the priorities

Improvements in health care were helped by Cuban doctors, who were assigned to 1,600 medical offices around the country, and eventually trained Venezuelan doctors to replace the Cuban doctors. The Barrio Adentro mission sought to create an integrated health care system including clinics and hospitals. Two other missions related to health are José Gregorio Hernandez (named in honor of a “people’s doctor” known for his dedication), which provides a census of all people with a genetic deficiency or illness, and Milagro, which provides free ophthalmologic pathology services, a program that began to be expanded elsewhere in Latin America.

Among the approximately two dozen missions are Alimentación, which incorporates the Mercal network that provides food at subsidized prices and a distribution system; Cultura, which seeks the decentralization and democratization of culture to ensure that all have access to it and stimulate community participation; Guaicaipuro, intended to guarantee the rights of Indigenous peoples as specified in the constitution; Madres del Barrio, designed to provide support to housewives in dire poverty and help their families overcome their poverty; Negra Hipólita, which assists children, adolescents and adults who are homeless; Piar, which seeks to help mining communities through dignifying living conditions and establishing environmental practices; and Zamora, intended to reorganize land, especially idle land that could be used for agriculture, in accordance with the constitution.

The missions have “permitted poor Venezuelans especially to overcome the effects of two decades [prior to Chávez’s first election] of economic stagnation, political apathy and pessimism about the future,” according to López Maya. The first years of the missions were years of strong economic performance. From 2003 to 2008, unemployment fell by more than half, to 7.8 percent; gross domestic product increased by more than 50 percent; inequality as measured by the Gini coefficient (the standard metric), although still high, noticeably decreased; the human development index strongly increased; and poverty rates strongly declined.

^{A photographic exhibition “Hugo Chávez: Precursor of the multipolar world” inaugurated at the National Assembly of Ecuador in 2013 (photo by Hugo Ortiz Ron / Asamblea Nacional)}

An important factor in these gains was the high price of oil, which doubled from 2003 to 2006. The ability of the government to retain more of the revenue from oil sales also helped. But the dangerous dependency on a single export had not changed, López Maya wrote:

“It is important to emphasize that these advances are almost exclusively based on oil revenues. According to the Venezuelan Central Bank, in 2006, 89 per cent of our exports were oil. We are as dependent on oil as in the past, if not more so. If we examine the current relationship between the state and PDVSA (the state-owned oil corporation) in terms of the hard currency earned by the firm, in 2006 the state received 68 per cent while 32 per cent remained in the hands of PDVSA. The oil sector represents 14 per cent of the [gross national product].”

Concurrent with capturing more revenue from oil, the government sought to make tax collection more efficient. Tax collection had been a traditional weakness in the past. Some success in getting foreign multi-national corporations to pay taxes increased government revenue, although in 2009 what was collected remained below the Latin American average. Because of the strong increase in revenue from oil, that resource became more important to the government’s ability to fund social programs — the percentage of government revenue from oil increased from 25 percent in 1998 to 40 percent in 2008.

Then there is the question of the sustainability of the missions, a question that arises not only because of downturns in the price of oil, but whether they will be institutionalized. The missions represent a parallel government, seen as necessary because of the need to provide immediate relief to large, long-standing problems and a lack of time to dismantle bureaucratic obstructions. Continued mass participation is a crucial element that can guarantee the sustainability of the missions in the long term, but some formality is necessary if the state bureaucracy isn’t to reassert itself in the future. This is an issue that must be resolved, Monedero argues:

“Essential public goods which the Fourth Republic had denied for decades reached the poorest sectors of the citizenry. The novelty of the initiative, the initial success, the people’s mystique which followed the first moments of this parallel state made their recognition most ample. Nevertheless, once that period was over, everything seemed to indicate that the missions need, in order to be consolidated, some sort of institutionality which integrates them in a more stable political realm so that it is not sustained by volunteer labor nor by abstract motivation. The role of the state here appears to be relevant and like a guarantee to complete that process (which does not mean it be the traditional liberal state). Nevertheless it has yet to be resolved what the role of the state apparatus in the discourse and the practice of the so-called socialism of the twenty-first century is.”

Advancing ‘constituent power’ through communal councils

Similar to the establishment of the missions to provide services by going around a recalcitrant bureaucracy, communal councils and communes were established to bypass local and state governments sometimes unresponsive to grassroots demands and in some cases opposition strongholds hostile to the democratizations of the Bolivarian process. The communal councils have their roots in the assemblies that barrio residents created following the Caracazo [a massive 1989 revolt triggered by a new government’s sudden implementation of a severe International Monetary Fund austerity program and the deadly indiscriminate force used against protestors].

The Barrio Assembly of Caracas emerged in 1991 as something of a general assembly representing local groups, coming into being after demonstrations marking the first and second anniversaries of the Caracazo were dispersed by soldiers firing on them from rooftops. Later versions of these assemblies organized on the eve of the 2002 coup attempting to overthrow Hugo Chávez; among their accomplishments were distributing 100,000 fliers calling for a march on the presidential palace to defend the government. With these grassroots organizations in mind, local participation was enshrined in the 1999 constitution. The constitution, through several articles, codifies public participation in municipal budgeting and established local public planning councils to facilitate that participation.

^{Hugo Chávez swearing in as president in 2013 (photo by AVN, Prensa Presidencial/Venezuelanalysis)}

The public participation in formulating the budget of the city of Porto Alegre in Brazil was the model, although the Venezuelan version was intended to go further by authorizing the direct financing of community programs through access to a special national fund set up to finance local projects and for citizens to be directly involved in local development plans. But these local planning councils generally didn’t function. Local mayors either found ways to control them or ignored them; in many cases they and other officials sat on them. Their failure is attributed to being organized across municipalities with populations as large as hundreds of thousands, far too large for direct democracy to work, and that these were bodies decreed from above rather than formed as grassroots initiatives and thus lacking a methodology for communities to elect genuine representatives.

In the wake of the failure of the local planning councils, the communal councils were created. These are the basic building blocks of the communal system but in contrast to the citywide structure of the former, the communal councils operate at a neighborhood level and are direct-democracy bodies, with no seats for municipal office holders. In essence, the communal councils are the base of an alternative government structure, one intended to bypass municipal and other local governments and to eventually replace them. This was an attempt to provide a concrete form to the concept of “constituent power,” the idea that people should be direct participants in the decisions to affect their lives and communities, as distinct from “constituted power,” under which decision-making is ceded to elected officials and business elites.

Those most affected are best positioned to make decisions

Legislation passed in 2006 formally recognized the communal councils and the form quickly gained popularity — there were an estimated 30,000 in existence by 2009. These councils are formed in compact urban areas containing 200 to 400 households in cities and 20 or so in rural areas. All residents of the territory are eligible to participate. In turn, communal councils organize into larger communes, and communes into communal cities, to coordinate projects too large for a neighborhood or to organize projects necessarily on a larger scale, such as improving municipal services.

Article 1 of the law governing communal councils states:

“Within the framework of a participative and protagonist democracy, the Communal Councils represent the means through which the organized masses can take over the direct administration of the policies and projects which are created to respond to the needs and aspirations of the communities in the construction of a fair and just society. The organization, operation and action of the Communal Councils are governed by the principles of co-responsibility, cooperation, solidarity, transparency, accountability, social responsibility, fairness, justice, social controllership and economic self-management.”

The communal councils are described in Article 3 as a “system for participation and protagonis[m] of the people” and that, as codified in Article 4, participants have the obligations of “social co-responsibility, accountability, as well as the transparent, timely, and effective management of the monies allocated to them.” All inhabitants of the area encompassing a communal council above the age of 15 are members of the council’s assembly, which is the highest decision-making body. The day-to-day work of the communal council is conducted by committees focused on whatever issues the local community deems a priority. Spokespeople are elected by the assembly for each committee; these are not representatives but are directly accountable and subject to recall. They do not make decisions by themselves. They can be elected for a maximum of two two-year terms. Financial and “social control” (public-audit) committees are also elected.

^{Supporters of the Venezuelan government demonstrate in 2017 (photo by Rachael Boothroyd Rojas/Venezuelanalysis)}

At least 20 percent of the inhabitants older than 15 must be in attendance for an assembly to achieve quorum. The communal council is required to propose three projects that will contribute to development in the community; funding for approved projects will usually come from national-government bodies. About 12,000 communes received a total of one billion bolívares (out of a national budget of 53 billion) in 2006, and in 2007 about six billion bolívares were provided.

Communal councils had already been in formation, and those organizing pushed for the law codifying them. As explained by a Caracas activist, Eduardo Daza:

“It’s not that the president said, ‘here’s a new law, from now on it’s going to be like this.’ It wasn’t like that, we went all the way to the National Assembly [the federal legislature] to fight for the law of communal councils and though many of the demands we made were not incorporated into the law, nevertheless the law let us take the first step.”

Projects for infrastructure and basic services tend to be the priorities for communal councils. Improvements to sewage and water systems, road building and repair, fixing or building housing, and electrical-grid projects were common needs that were addressed. Community activist groups often supported the creation of the councils, and activists and councils tend to work together. Building the councils is also seen by many activists as a route to building socialism. According to a manifesto issued after a meeting of communal council members:

“We as communal councils believe that the most expeditious way to build the communal state is to assume power at the local level, from an economic, political, military, social and cultural perspective; therefore, we must act in a bloc, giving us higher levels of organization and coordination, it being essential that we constitute a movement that gives us voice, body and face as communal power, throughout the process of building socialism in Venezuela.”

An interesting development is that many (in the case of councils studied by researchers, a majority) who have taken active roles in the communal councils were not politically active before the 2002 failed coup. Generally, women outnumber men among the active participants, and it is often older women taking the lead. The culture of participation that the councils encourage and that the Bolivarian government is paying vastly more attention to solving social problems and the needs of the poor than prior governments has facilitated the organizing of women, and the new activity of women in turn is breaking down traditional macho attitudes. Health committees tackling problems of illness, access to contraception and motherhood are often where participation begins. Once involved, women sign up for training programs, with more women than men taking advantage of these.

In turn, increased participation leads to more community involvement in solving social problems that were previously kept behind closed doors. As a communal activist in Caracas, Petra Rivas, a hairdresser who sat on her council’s social-audit committee, said: “My life has changed 100%, … I have changed much. … More than anything, we have humanized, because before it was from the front of your door to inside your house. You didn’t know what was happening with your neighbor, or to that neighbor woman whose husband you saw drinking all night while she had no food. And we integrated ourselves, we spoke with the woman, look, we’re going to bring you in here, look at your husband, speak up, don’t let him mistreat you, this is the woman’s house, go to the prosecutor.”

* Venezuela’s Fourth Republic was the constitutional structure of the country’s government from 1961 to 1999. With the voter approval and institution of a new constitution in 1999, Venezuela’s new constitutional setup is the Fifth Republic.

This is an excerpt from What Do We Need Bosses For?: Toward Economic Democracy, a study of nations that have attempted to construct post-capitalist societies published by Autonomedia. Citations omitted. Sources cited in this excerpt, in the book, are Tom Malleson, “Cooperatives and the ‘Bolivarian Revolution’ in Venezuela,” Affinities: A Journal of Radical Theory, Culture, and Action, summer 2010; Juan Carlos Monedero, “The Social Economy in Venezuela: Between the Will and the Possibility,” anthologized in Beyond Capitalism: Building Democratic Alternatives for Today and the Future; Margarita López Maya, “Venezuela Today: A ‘Participatory and Protagonistic’ Democracy?,” Socialist Register, 2008; Heloise Weber, “The global political economy of microfinance and poverty reduction,” anthologized in Microfinance: Perils and Prospects; Duncan Green, “The backlash against microfinance,” From Poverty to Power Oxfam blog, August 19, 2009; Jason Hickel, “The microfinance delusion: who really wins?,” The Guardian, June 10, 2015; Global Women’s Strike, Creating a Caring Economy; Özgür Orhangazi, “Contours of Alternative Policy Making in Venezuela,” Review of Radical Political Economics, June 2014; George Ciccariello-Maher, We Created Chávez: A People’s History of the Venezuelan Revolution; Dario Azzellini, Communes and Workers’ Control in Venezuela: Building 21st Century Socialism from Below; Roger Burbach and Camila Piñeiro Harnecker, “Venezuela’s Participatory Socialism,” Socialism and Democracy, November 2007; “The Special Law on Communal Councils,” Global Exchange web site; Matt Wilde, “Contested spaces: the communal councils and participatory democracy in Chavez’s Venezuela, Latin American Perspectives, January 2017.

Sorting through the lies about Venezuela

Challenging United States hegemony is never an easy course. A county need not be socialist — it is enough to either voice aspirations toward socialism, or merely demonstrate a pattern of not doing as Washington dictates.

So here we go again, this time with Venezuela. Ironically for a country that the corporate media insistently claims has been ruled by two “dictators” (remember that Hugo Chávez was routinely denounced in the same ways that Nicolás Maduro is today) it would be difficult to find a country with more opportunities for grassroots democracy and for everyday people to participate in the decisions that affect their lives and neighborhoods. There has been backtracking on some of this, and there are legitimate complaints about the top-down manner in which the ruling United Socialist Party of Venezuela (PSUV) is run. The U.S. government is in no position to point fingers, however, given its history in Latin America and the widespread voter suppression that is a regular feature of U.S. elections.

Supporters of the Venezuelan government demonstrate in 2017 (photo by Rachael Boothroyd Rojas/Venezuelanalysis)

It is also preposterous to assert that “socialism has failed” in Venezuela, when 70 percent of the country’s economy is in private hands, the country is completely integrated into the world capitalist system and it is (overly) dependent on a commodity with a price that wildly fluctuates on capitalist markets. Venezuela is a capitalist country that does far more than most to ameliorate the conditions of capitalism and in which socialism remains an aspiration. If something has “failed,” it is capitalism. Leaving much of the economy in the hands of capitalists leaves them with the ability to sabotage an economy, a lesson learned in painful fashion during the 1980s in Sandinista Nicaragua.

Before delving into the significant problems of Venezuela, largely due to the economic war being waged against it by the U.S. government and the economic sabotage within by Venezuela’s industrialists and other business interests, it is worthwhile to briefly examine some of the democratic institutions that have been created since the Bolivarian Revolution took root in 1998.

Communal councils organize at neighborhood level

The base of the Venezuelan political system are the communal councils. Various political structures designed to organize people at the grassroots level have evolved into a system of communal councils, organized on a neighborhood level, which in turn build up to communes and communal cities. These are direct-democracy bodies that identify and solve the problems and deficiencies of their local areas with the direct support and funding of the national government. After decades of neglect by previous governments, there were no shortage of problems to tackle.

Like many institutions of the Bolivarian Revolution, these have roots in grassroots organizing that pre-date Hugo Chávez’s first election.

The Barrio Assembly of Caracas emerged in 1991 as something of a general assembly representing local groups, coming into being after demonstrations marking the first and second anniversaries of the “Caracazo” uprising were dispersed by soldiers firing on them from rooftops. (The “Caracazo” uprising was a massive revolt sparked by popular resistance to an austerity package dictated by the International Monetary Fund.)  Later versions of these assemblies organized on the eve of the 2002 coup attempting to overthrow President Chávez; among these assemblies’ accomplishments were distributing 100,000 fliers calling for a march on the presidential palace to defend the government.

The Bosque de el Valle in Mérida state (photo by Jorge Paparoni)

The communal councils are the base of an alternative government structure, one intended to bypass municipal and other local governments and to eventually replace them. This was an attempt to provide a concrete form to the concept of “constituent power,” the idea that people should be direct participants in the decisions to affect their lives and communities. Legislation passed in 2006 formally recognized the communal councils and the form quickly gained popularity — there were an estimated 30,000 in existence by 2009. These councils are formed in compact urban areas containing 200 to 400 households in cities and 20 or so in rural areas. All residents of the territory are eligible to participate. In turn, communal councils organize into larger communes, and communes into communal cities, to coordinate projects too large for a neighborhood or to organize projects necessarily on a larger scale, such as improving municipal services.

Communal councils are required to propose three projects that will contribute to development in the community; funding for approved projects will usually come from national-government bodies. An interesting development is that many (in the case of councils studied by researchers, a majority) who have taken active roles in the communal councils were not politically active before the 2002 failed coup. Generally, women outnumber men among the active participants, and it is often older women taking the lead. The culture of participation that the councils encourage and that the Bolivarian government is paying vastly more attention to solving social problems and the needs of the poor than prior governments has facilitated the organizing of women, and the new activity of women in turn is breaking down traditional macho attitudes. That pensions are now much stronger, proving material security, also enables participation. Health committees tackling problems of illness, access to contraception and motherhood are often where participation begins. Once involved, women sign up for training programs, with more women then men taking advantage of these.

Communes often organize enterprises to provide employment for local residents and to help supply needed basic goods. One example is the El Panal 2012 Commune in Caracas. El Panal operates several enterprises and a communal bank. One of the enterprises is a sugar-packaging plant, and there are also bakeries. El Panal activists are also creating links with neighboring communes in Caracas and in other parts of the country. Links are also being created with the countryside — a “Pueblo a Pueblo” initiative brings together urban communities and farmers to distribute food directly, eliminating intermediaries and speculators. El Panal also regularly organizes food fairs at which meats, vegetables and other basic foods can be bought at discounts, well below market prices.

Tackling social problems through missions

There are also the social programs known as “missions” that are based on the direct participation of the beneficiaries. Begun in 2003, there are more than two dozen missions that seek to solve a wide array of social problems. Given the corruption and inertia of the state bureaucracy, and the unwillingness of many professionals to provide services to poor neighborhoods, the missions were established to provide services directly while enabling participants to shape the programs. Much government money was poured into these programs, thanks to the then high price of oil, which in turn enabled the Chávez government to fund them.

Among the approximately two dozen missions are Alimentación, which incorporates the Mercal network that provides food at subsidized prices and a distribution system; Cultura, which seeks the decentralization and democratization of culture to ensure that all have access to it and stimulate community participation; Guaicaipuro, intended to guarantee the rights of Indigenous peoples as specified in the constitution; Madres del Barrio, designed to provide support to housewives in dire poverty and help their families overcome their poverty; Negra Hipólita, which assists children, adolescents and adults who are homeless; Piar, which seeks to help mining communities through dignifying living conditions and establishing environmental practices; and Zamora, intended to reorganize land, especially idle land that could be used for agriculture, in accordance with the constitution.

Venezuelan political scientist and historian Margarita López Maya summarized the breadth of the missions in a Socialist Register article:

“Missions (programs bypassing uncooperative or ineffective state agencies), such as Barrio Adentro (free 24 hours a day primary health care and disease prevention for low income groups), Mercal (state distribution of food at subsidized prices), Robinson 1 and 2 (literacy and primary education for adults), Ribas and Sucre (secondary and university education for those who had missed or not finished these), Vuelvan Caras (training for employment), and the Bolivarian schools, where a full day schedule has been restored, with two free meals and two snacks a day, plus free uniforms and textbooks: all these undoubtedly had a positive political impact. The government has also invested in the social economy, as in the “ruedas de negocios,” in which the creation of cooperatives is encouraged in order to supply goods and services to the state sector. The government has also created a system of micro-financing with the Women’s Bank, the Sovereign People’s Bank, and so on, which make small loans to lower income borrowers.”

Struggles for economic democracy

In the workplaces, there are experiments with co-management, cooperatives, socialist production units and workers’ councils. These forms have been contested — an ongoing multiple-sided struggle over what constitutes “workers’ control” of industry and what forms such control should take continues. Cooperative enterprises are enshrined in the constitution, and a 2001 law mandates that all members be included in decision-making and that an assembly of all members has final decision-making power over all topics. Temporary workers can be hired for a maximum of six months, after which they must be accepted as members. A state ministry was created to provide assistance to cooperatives and small businesses, including the facilitation of securing contracts from state companies.

There are difficulties here. One significant problem were instances of cooperatives being formed only in order to acquire the start-up capital provided by the government, or were small companies that converted to being cooperatives only on paper to take advantage of preferential priority for state contracts or to obtain subsidies. In response to these irregularities, the government began to require coops obtain a “certificate of fulfillment of responsibilities,” which includes financial audits and demonstration of work within their local community. Nonetheless, there are many examples of successful cooperative enterprises.

There are also socialist production units. These are nonprofit, state-owned enterprises that are managed democratically by a combination of their workers, local communal councils and the national government. These enterprises are intended to provide local services, such as transportation and distribution of cooking gas, and the creation of production. Although workers are directly involved in decision-making at these enterprises, the state also has a role, which can sometimes lead to tensions. The goods produced are most often distributed through the Mercal state-owned chain of supermarkets that provides food at subsidized prices, and PDVAL, a state-run food-distribution network. These are often operated at a loss, as they are intended to provide needed goods and services to communities at steep discounts.

A continuing area of contestation are state-owned enterprises. Some argue for state ownership with employee participation, others argue for full autonomy of enterprises and the workers in them, and there are gradations in between. There are managements that don’t wish to cede decision-making authority to their workforce, and there are government officials, despite being part of the Bolivarian movement, who oppose workers’ control, sometimes because they believe in top-down control by the state. There are examples of state-owned companies in which management structures have changed multiple times as different factions temporarily gain control.

The push and pull of competing interests and tendencies is exemplified in the case of the state-owned aluminum smelter Alcasa, which had a well-functioning system of workers’ control under co-management that reversed its debt problems; then had a new director appointed who ignored the co-management structure, with an accompanying fall in productivity and return of corruption; and then a return to co-management when President Chávez named a new company president selected by the workers. Workers’ control was reinstated with new structures, and because of the precarious financial situation caused by the corruption of the middle period, workers began designing parts to be produced internally instead of buying them from suppliers as previously done. More difficulties arose when a dissident union aligned with the local state governor attempted to stop production, and although unsuccessful, caused a significant disruption. Yet another change in management by Chávez led to a renewed deterioration in co-management, and struggles at Alcasa continued.

Economic warfare at home and abroad

Shifting from a traditional capitalist economy toward a participatory economic democracy can’t be expected to be smooth sailing, especially when this attempt is being done in a country with subaltern status in the world capitalist system. President Chávez had to withstand three successive attempts to remove him — the 2002 coup, 2002-03 bosses’ lockout and the 2004 recall referendum. Five times he was elected president, never with less than 55 percent of the vote, and overall he won 16 of 17 elections and referendums in which his movement participated. The election system put in place by the Chávez government was declared by former U.S. President Jimmy Carter’s Carter Center to be “the best in the world.” None of this prevented the late president from being furiously denounced as a “dictator.”

Once he died, however, the attacks were stepped up by the revolution’s opponents, apparently believing that the loss of the leader would make the revolution vulnerable. In reality, the Bolivarian Revolution has always been a movement propelled by millions who will not readily give up the many gains they have achieved and which pushed the late president to go further. Venezuela has a long tradition of strong, organized movements, which predate the Bolivarian Revolution. Despite the difficulties of recent years and increasing popular disapproval of President Maduro, those movements do not want their gains to be reversed. During the Chávez years, unemployment and poverty were drastically reduced and people were able to participate in the political process for the first time.

So how much of Venezuela’s serious economic problems are the fault of the current president? Some of the blame can be laid at his doorstep, but mostly for his inability to act in timely fashion and allowing problems caused by outside forces to deepen. A serious mistake that has ran through the past 20 years is that no progress was made on reducing Venezuela’s heavy reliance on oil exports. When oil prices were high, the government was content to let the money flow and use it to fund social programs and finance a wide variety of projects. But the later crash in oil prices left the government vulnerable. By not diversifying the economy, much less is earned when the inevitable falls in price arrive and it becomes difficult to maintain consumption because so many consumer products must be imported.

(Cartoon by Carlos Latuff)

The over-reliance on a single export commodity would be difficult to overcome by itself. But greatly compounding Venezuela’s problems are U.S. sanctions, a currency that became drastically overvalued, and an inflationary spiral resulting from that overvaluation that incentivized black markets and smuggling. Poor management on the part of the government of President Maduro has intensified the damage done by those factors. Although the Venezuelan government set an official exchange rate for its currency, the bolívar, the effective exchange rate was determined by international currency speculators and thus the value of the bolívar is not in the control of Caracas.

Speculators caused the value of the bolívar to be reduced by 97 percent in 2017, and further drastic reductions in the currency’s value continued well into 2018. The value or output of the Venezuelan economy hardly declined by anything remotely comparable, so there are other factors at work for such a drastic reduction in exchange value. But because the Maduro government did not adjust the official exchange rate when the bolívar came under attack, the spread between the official rate and the de facto rate widened to the point that vast opportunities for smuggling and black-market operations were created. That in turn caused shortages and hyperinflation.

These developments were a consequence of Venezuela’s integration into the world capitalist system and the country’s heavy reliance on imports. Food and consumer goods intended to be sold at discounts in state stores were diverted to the black market, where profiteers sold them at prices several times higher or smuggled them into Colombia for huge profits. Government officials have repeatedly discovered vast quantities of consumer goods hidden in warehouses by local capitalists who are artificially causing shortages.

Hardening financial sanctions

United States government sanctions on Venezuela prohibit any U.S. persons or banks from providing financing or purchasing any debt issued by the Venezuelan government or the state oil company PDVSA, the purpose of which is to make it more difficult for the government to raise funds internationally or to restructure debt.

These sanctions are effectively extra-territorial. A non-U.S. bank that seeks to handle a transaction in U.S. dollars (the currency most often used in international transactions) has to do so by clearing the transaction through a U.S. bank; a U.S. bank that cleared such a transaction would be in violation of the sanctions. The Obama administration intensified the U.S. financial war on Venezuela by absurdly declaring the latter a “national security threat” and the Trump administration has issued a succession of decrees tightening the screws.

The latest, issued on January 28, freezes all property and interests of PDVSA subject to U.S. jurisdiction — in other words, blocking Venezuela from any access to the profits generated by PDVSA’s U.S. subsidiary, Citgo, or any PDVSA activities in the United States. The Trump administration expects Venezuela to lose US$11 billion this year, The New York Times reports. That move is in addition to repeated calls by the Trump administration for an overthrow of the Venezuelan government, threats by President Trump to invade, and the Trump administration “recognizing” the opposition leader Juan Guaidó as president although Guaidó has never run for the position and is largely unknown to the Venezuelan public. An added insult is the appointment of death-squad cheerleader Elliot Abrams to “oversee” a “return to democracy,” an idea that would draw laughs if Abrams’ history in Latin America during the Reagan administration weren’t so deadly.

Successive U.S. administrations have subsidized opposition groups — an estimated US$100 million has been poured into Venezuela in an effort to subvert the elected government.

Alan MacLeod, a specialist in media studies, summarized the extra-territorial effect of U.S. sanctions:

“[T]he sanctions strongly discourage other countries from lending money to the country for fear of reprisal and also discourage any businesses from doing business there too. A study from the 2018 opposition Presidential candidate’s economics czar suggested the sanctions were responsible for a 50% drop in oil production. Furthermore, Trump’s sanctions prevent profits from Venezuela-owned CITGO from being sent back to Venezuela. Trump has also threatened banks with 30 years in jail if they co-operate with Caracas and has intimidated others into going along with them.”

President Maduro is repeatedly called a “dictator,” an epithet endless repeated across the corporate media. But when a portion of the opposition boycotts, can it be a surprise that the incumbent wins? The opposition actually asked the United Nations to not send observers, a sure sign that they expected to lose a fair election despite their claims that the election would be rigged. Nonetheless, a coalition of Canadian unions, church leaders and other officials declared the election to be “a transparent, secure, democratic and orderly electoral and voting process.”

Unfortunately, there is every reason to be concerned, given the hostility of U.S. governments and capitalists to any intent to become independent of the U.S. or to direct economic activity to benefit local people rather than maximizing the profits of U.S. multinational corporations. The United States has militarily invaded Latin American and Caribbean countries 96 times, including 48 times in the 20th century. That total constitutes only direct interventions and doesn’t include coups fomented by the U.S., such as Guatemala in 1954 and Chile in 1973. Guatemala was attempting nothing more “radical” than a land reform that would have forced United Fruit to sell idle land at United Fruit’s own under-valuation of the land (a self-assessment made by United Fruit to avoid paying a fair share of taxes). The U.S. overthrew the government and instituted what would become a 40-year nightmare of state-organized mass murder that ultimately cost 200,000 lives. The Chilean effort to build a humane economy was ended with the overthrow of Salvador Allende and the installation of Augusto Pinochet and his murderous regime that immiserated Chileans.

Dissimilar results can hardly be expected if the U.S. were to succeed in overthrowing the Venezuelan government and installing a right-wing government that would reverse the many gains of the past 20 years. Hands off Venezuela!

Venezuela’s revolution is a process propelled by millions, not one leader

Venezuela’s Bolivarian Revolution is much bigger than Hugo Chávez; it is a movement of millions. The movement that drives the process forward long predates his election and his failed 1992 coup.

Saying this should not come as a revelation, for no large-scale social movement can exist as a personal vehicle, nor can any one person, no matter how charismatic, single-handedly carry the responsibility for social change, especially when that change has the long-term, open goal of supplanting the global capitalist order.

Contrary to the myopic, superficial corporate-media narrative of a caudillo motivated by a fathomless desire to poke Uncle Sam in the eye (although we must immediately ask how a leader who won 16 of 17 national elections, almost all by at least 10 percentage points, can be a “dictator”), the Bolivarian Revolution is a continuation of struggles that have been waged since the late 1950s. The defining moments, George Ciccariello-Maher argues in We Created Chávez: A People’s History of the Venezuelan Revolution,* are not President Chávez’s electoral victories but rather two outbursts of people’s power, a 1989 uprising and the 2002 uprising that re-installed him, reversing the business coup.

The Bolivarian Revolution can’t be understood without a bottom-up perspective, without analysis of the pressure from below that buffeted President Chávez, pushed forward by organizations that support the revolution. Professor Ciccariello-Maher, as his book’s title signals, provides that necessary background:

“Hugo Chávez is not a cause but an effect, not Creator but creation; in this sense, the history that follows is literally a defetishization, a demystification. His election and even his failed coup did not mark the beginning of the Bolivarian Revolution, but were instead the results and reflection of its long and largely subterraneous history.” [page 21]

That history has roots two centuries old, and the modern manifestation of Venezuelan struggle begins in the late 1950s, ironically with the downfall of Venezuela’s last dictator and the establishment of a formally “democratic” republic. Marcos Pérez Jiménez was overthrown in 1958, replaced by a two-party system designed to stifle popular participation. The “social democratic” party, Acción Democrática — unusually ruthless in attacking its base even by the standards of world social democracy — mostly was in power, alternating with Copei, the Christian democrats.

‘Democracy’ proves little different than dictatorship

Acción Democrática leader Rómulo Betancourt won office in the first post-Pérez Jiménez election. Within a year, his government was shooting people dead in the streets and ruling under states of emergency. Violent repression was the swift response by the new president to his unpopularity; repeated massacres sparked uprisings across the country. A revolutionary situation developed, but Professor Ciccariello-Maher argues that the Venezuelan Communist Party waited too long while the Revolutionary Left Movement went too soon. A series of tactical mistakes doomed this armed struggle, not least of which was a lack of connections with the people, the author writes.

A series of groups blossomed and declined, rural guerrilla strategies failed, the electoral Left floundered, and mass fronts and other popular organizations faced severe state repression during the following years. The net of state repression was cast steadily wider — the government provided little services but attacked those who asked for them. Out of this situation, barrio assembles and popular militias began to be organized for self-defense; the latter forcibly ended the drug trade in neighborhoods in which they operated. These popular organizations organized sporting and cultural activities, and expelled the police — their militancy propelled people forward.

Professor Ciccariello-Maher argues that the 1989 uprising known as the “Caracazo” is the first of two “ruptures” (the 2002 coup reversal the other) that are the critical moments in the process that is the Venezuelan Revolution. Carlos Andrés Pérez took office as president that year as the Acción Democrática candidate on an explicitly anti-International Monetary Fund platform. It took him two weeks to jettison his campaign pledges and impose the full IMF-dictated austerity package. Riots broke out the morning of imposition, led by informal workers. But because political organization was widespread, these were not blind lashings-out — the target of the anger quickly went from bus drivers (a doubling of oil prices prompted large fare increases) to the state and its system.

A curfew was declared the next day, and a violent crackdown ensued, with as many as 3,000 left dead. The author leaves no doubt as to the severity of the government crackdown:

“Known organizers were dragged from their homes to be either executed or ‘disappeared,’ and when security forces met resistance from rooftop snipers, they sprayed entire apartment blocks with automatic machine guns. … The human toll of the rebellion has never been fully revealed, especially because the Pérez government subsequently obstructed any and all efforts to investigate the events. … A recent study has shown that some four million bullets were fired to quell the rebellion, and the Relatives of Victims Committee, an organization founded around the victims of the Caracazo, reports that 97 percent of the documented victims died in their own homes.” [pages 96-97]

Grassroots organizations build opposition

The author writes that the Caracazo crystallized and focused organized opposition within the military while civilian armed groups sought to unify the popular militias with the military opposition. By 1991, barrio assemblies in Caracas were organizing and coordinating opposition. The military uprisings in February and November 1992 (the former the one led by Hugo Chávez) were the “detonators” for subsequent popular rebellions. State repression could not break popular control of the streets, and these social movements led to the 1998 election of President Chávez.

“[D]efeat notwithstanding, the Caracazo sounded the death knell of the old system, simultaneously reflecting and contributing to the inevitability of its collapse and thereby setting into motion the entire process that came after it. In symbolic terms, it smashed in a single stroke the façade of [Venezuelan] ‘democratic exceptionalism,’ revealing the bankruptcy and the violence of the existing system for all to see. Neither completely spontaneous nor fully organized, the Caracazo was an instant in which widespread disgust and revolutionary capacity met on the streets, generating historical agency by emboldening the faithful and converting the waverers: it was 1989 that enabled 1992, and 1992 that enabled 1998.” [page 89]

The author’s second moment of rupture, the reversal of the 2002 business coup against President Chávez after two days, was a product of the connections between militias and military, of political understanding and experience. Millions poured into the center of Caracas in defiance of the coup. Venezuela’s corporate media had unleashed an orgy of lies before and during the coup; the state television channel was closed while the private media blacked out any coverage of the mounting resistance. The coup leader, Pedro Carmona Estanga, the head of the national chamber of commerce, dissolved all branches of government and declared the 1999 constitution void, despite its having been approved by 72 percent of the electorate.

Loyalist military units, taking their cues from the mass popular resistance to the coup, took the presidential palace back, with officers giving the credit to the people and their “spontaneity” — but the “spontaneity” was the product of years of organizing, with Left activists seeking much more than the mere return of President Chávez to the palace.

“[M]ass spontaneity, while fundamental in its importance, is often the result of serious organizing that, in the case of Venezuela, spans decades. As with the Caracazo, then, this spontaneous mobilization and its spontaneous grasp of the strategic realities of the situation it confronted should not lead us merely to a panegyric of spontaneity for spontaneity’s sake. Rather, every moment of this spontaneity and every gesture of these spontaneous masses contained an aspiration toward increasingly conscious organization. In this explosive dialectic between spontaneity and organization that was resistance to the 2002 coup, such conscious effort would be especially important in the realm of mediatic and popular armed organizing.” [pages 172-173]

Struggle within the struggle

Can an engaged people go back to the ancien régime? We Created Chávez was published just before Hugo Chávez’s untimely death, but given the context of this story the president’s passing in no way renders the book out of date. The modern history of Venezuela is that of regularly employed workers, informal workers, peasants, students, women, Afro-Venezuelans and Indigenous peoples in a many-sided struggle against domestic elites and the country’s subaltern status in global capitalism. Then there is the struggle within the Bolivarian Revolution.

There are tensions between economic and political demands, between workers’ autonomy and the state, over the nature and content of “co-management” and over if co-management is a step toward a higher level or a capitalist trick, as well as opposition to developing the Bolivarian process from managers and within the ranks of the movement.

What forms should workers’ control take? Some argue for state ownership with employee participation, others argue for full autonomy of enterprises and the workers in them, and there are gradations in between. Enterprises under state ownership presumably should be managed to benefit the community, but how much management should be ceded to the workforce? Should workers fortunate enough to work in the oil industry be able to reap benefits far in excess of other workers? How should autonomous enterprises be managed to benefit the community, not only those who work in them?

There are similarly serious questions regarding agriculture. Venezuelan land ownership remains highly unequal, with owners of large ranches in control of the countryside. Moreover, because the countryside emptied out and the economy grew overly dependent on the oil industry before 1998, the country lost its food sovereignty. This exodus to the cities has swelled the size of the informal workforce, who get by with street vending and whatever other means they can to survive.

Less than half of the workforce has formal employment, Professor Ciccariello-Maher writes, but although the Chávez government had difficulty with informals, to the point of occasional hostility, the author argues that this sector has been the staunchest base of support for the revolution and is neglected at the government’s peril. Informal workers played no small role in reversing the 2002 coup, for example.

There is no stasis

Ultimately, the revolution can only succeed through creating mechanisms for self-government. “Patriotic Circles” became Bolivarian Circles after 1998, and were tasked with drafting and defending the 1999 constitution. Communal councils (local bodies that manage policy and projects in their communities) came into existence after a 2006 law. These are legally on par with state institutions and have oversight over them; these are views as potential replacements for the state bureaucracy. The councils are linked horizontally to one another and vertically in communes with a goal of them exercising sovereignty.

Due to the timing of the book, the author concludes with an analysis of President Chávez’s “complex and nuanced position” as someone who is not purely a representative of the state but also an ally of the social movements that have driven Venezuela forward in past decades:

“[M]ore often than not he has pushed a radical agenda that facilitates the transformation of that state, a fact most visible in the recent development of communal councils and popular militias. Here there are no guarantees, and despite the fact that the collective ‘we’ of the Venezuelan revolutionary movements … ‘created him,’ this does not mean the creation will not betray the creators. However … to do so would certainly require a fight.” [pages 254-255]

The necessity of struggle to deepen the revolution is unchanged by the president’s death. Social movements have driven the process forward, and will continue to do so, regardless of who occupies the palace. We Created Chávez is indispensable toward understanding the process that is the Bolivarian Revolution and the path taken by Venezuela.

* George Ciccariello-Maher, We Created Chávez: A People’s History of the Venezuelan Revolution [Duke University Press, Durham, North Carolina, USA, and London 2013]

Dangers from a ‘mixed’ economy that brought down Sandinista Revolution exist for Venezuela

A revolution meant to advance the material conditions of large numbers of previously disenfranchised people is necessarily larger than one individual. That is true even when the individual who embodies the revolution is a charismatic leader such as Hugo Chávez.

There is no denying that the death of President Chávez is a setback for Venezuela’s Bolivarian Revolution. That revolution is a process — it is perhaps more akin to a steady evolution than a revolution — and will go forward if Venezuelans continue to see the process as beneficial to them. That was true throughout the 14-year reign of President Chávez and is true whether or not he occupies the presidential palace.

Ultimately, the survival of the Bolivarian Revolution rests on two factors: Effecting a change in economic relations and becoming a constituent component of a larger bloc that effects a similar change in economic relations. Simply put, the Bolivarian Revolution has taken political power away from Venezuela’s capitalist elite but largely has left economic power in the hands of that elite. As Nicaragua’s Sandinista Revolution of 1979 to 1991 demonstrated, leaving economic power in the hands of a capitalist elite enables that elite to destabilize a revolution.

That represents a larger threat to the future prosperity of Venezuelans than the many-sided struggles going on within the country’s institutions, including disagreements inside unions, government departments and social organizations. The process of the Bolivarian Revolution is hardly straightforward, with some interests, such as union leaderships, that should be behind the socialization of production instead opposed. President Chávez often acted as an arbiter or a court of last resort, able to settle disputes due to his personal authority.

No other person possesses the charisma to arbitrate in such a manner; nonetheless, that personal authority — based on the late president’s popularity and repeated electoral victories — was invoked only in extraordinary circumstances. Such disputes will remain solvable, but may require more negotiation and grassroots struggle. The much larger question of who owns, controls and/or manages production and distribution is what will be decisive, and no one person, no matter how charismatic, can be decisive. This is a social question.

Sandinistas left economic power in hands of capitalists

A generation ago, another Latin American experiment held the world’s attention. The Sandinista Revolution, like the Bolivarian, tended to be seen through ideological prisms. The same hyperventilating language — “dictatorship” “communist” “repressive” — was used to describe Nicaragua during the Sandinista era. It was not a perfect government — is anything of human creation perfect? — but real progress was made despite the many mistakes that are inevitable when people previously blocked from any meaningful participation in their society suddenly find themselves in government.

The Sandinistas never declared that they would implement a socialist economy, and didn’t. For those who cared to pay attention, the Sandinista leadership repeatedly said their goal was a mixed economy. The Nicaraguan economy came to include large enterprises owned by the government; commonly owned collectives; marketing collectives composed of individual privately owned small farms; small-scale private businesses and independent farms; and private big-business manufacturing and agricultural operations left intact from before the revolution.

The property of the Somoza family, which came to personally own large portions of the Nicaraguan economy during its decades-long dictatorship, was confiscated by the Sandinistas following the revolution. Doing so was not necessarily opposed by Nicaragua’s capitalists, who were disgusted with the Somoza dictators because they had forced their way into many business sectors, muscling out capitalists when they saw an opportunity. Because of that, many business leaders came to oppose the dictatorship however much they applauded its ruthless, frequently deadly, suppression of labor.

The last dictator, Anastasio Somoza Debayle, ordered factories owned by capitalists opposed to him bombed, looted the treasury, laid waste to the economy and ultimately killed 50,000 in his bid to retain power. After the Revolution, the remnants of Somoza’s National Guard and the United States government, which had been the Somoza dynasty’s protector, created the terrorist groups known as the “Contras” that inflicted huge damage. The Contras specifically targeted public infrastructure and cooperative enterprises for destruction.

Nicaragua’s capitalists had expected to assume political leadership after the revolution, and when they discovered that the people and organizations that had carried out the revolution and had suffered the most repression would have the majority of political power, they swiftly began to undermine it. Although credit was now available for the first time for small farmers, most loans went to the country’s capitalists, who instead of using the capital for investment, spirited the money to overseas banks and began stripping their factories of assets. A few factories where this took place were nationalized, but the legal process to do so was lengthy and a factory owner determined to de-capitalize an enterprise could do so before the legal system could act.

The contradictions of a mixed economy

Strange as it may appear, the Sandinistas, more than once, imposed austerity on their own country, reducing living standards for working people while continuing to provide subsidies for capitalists. The Sandinistas had sought to raise living standards for working people in the cities and the countryside, provided large subsidies to the capitalists and were forced to fund an expensive military effort to defend the country. These factors were further aggravated by the U.S. embargo, with the resulting shortages fueling inflation. The only way to support all these policies simultaneously was to print more money, which touched off more inflation.

To combat inflation, the government implemented an austerity program in 1985 designed to “rationalize” these competing interests by reducing consumer consumption through reductions in the earning power of wages while increasing subsidies for capitalists and small farmers to induce more production. But since the capitalists controlled a much bigger share of the economy than did small farmers, the result was more subsidies for the already wealthy. Thus, “austerity” meant austerity only for working people — their reduced living standards would pay for the government money that would be channeled into capitalists’ pockets.

Nonetheless, the capitalists continued to refuse to invest, pocketing the money instead. Those local capitalists had strong links with capitalists in the United States and in other advanced capitalist countries, creating a web of interests. Under the impact of the intense military pressure of the Contras and the U.S.-imposed economic blockade, Nicaragua’s mass-participation social groups lost their grassroots characteristics and became more vertical organizations with imposed leaderships; progress on social issues, such as combating discrimination against women, halted because so much effort had to be put into basic defense.

In 1988, the Sandinistas imposed another round of austerity, a program similar to those demanded by the International Monetary Fund, although in this case without the often dubious benefits of the loans nor the debt burden. Speculators and smugglers had taken advantage of price imbalances by buying products cheaply in Nicaragua and selling them for more in foreign markets and, internally, by diverting subsidized food from intended markets and instead selling it at inflated prices, earning themselves windfall profits while increasing costs to consumers.

The country was also hurt by international currency speculators, who drove down the exchange-rate value of its currency, forcing costly devaluations. Wages were reduced in these austerity programs, to the applause of Nicaragua’s capitalists.

A strong contrast to the Sandinistas’ intentions, this was the result of maintaining a “mixed” economy in which economic power was left in the hands of capitalists. Although capitalists did not possess formal political power, political leaders were forced (by the “market”) to implement policies benefiting capitalists and hurting working people in agriculture and industry.

Social successes during the Chávez era

History does not repeat itself neatly, and the Venezuela of the 2010s is a different place than the Nicaragua of the 1980s. With no equivalent of the Contras and a high-priced commodity (oil) that Nicaragua does not have, the Bolivarian Revolution is on firmer ground. Venezuela also has a far larger population, making it is a much less attractive target for armed interventions. Nonetheless, its stated goal of empowering working people on a road to “21st century socialism” is an example that capitalists, and their governments, around the world would like to stamp out.

Venezuela is a country not without problems, although problems such as high crime rates and inflation were part of the Venezuelan fabric well before President Chávez took office. It is legitimate to argue that these problems have not been sufficiently tackled; it is unfair to insinuate that these are new problems caused by the Bolivarian Revolution as the corporate media repeatedly does. There have been many successes, among them these reported by the Center for Economic Policy and Research:

• Annual economic growth of 3.2 percent during the Chávez administration (4.3 percent since 2004, after the government asserted control over the state oil company, PDVSA) as opposed to 1.4 percent annual growth in the 13 years preceding President Chávez.
• Inflation, although high, is less than half of what it was in 1996, two years before President Chávez took office.
• The unemployment rate is now half of what it was during the former PDVSA management’s lockout in 2003 and is far below what it was when President Chávez took office.
• The rate of poverty has been halved, and the rate of extreme poverty reduced by three-quarters.
• The number of higher-education graduates has tripled.
• The number of Venezuelans receiving a pension has quadrupled.

And none other than the International Monetary Fund reports that Venezuela has the lowest level of inequality in the Latin America/Caribbean region, as measured by the Gini coefficient. Venezuela has also made the greatest improvement since 2005 in this widely used metric of any country in its region, at a time when inequality rose in many countries throughout the world.

As I have previously written, although nationalization of the state oil company receives most of the attention, the bedrock of the revolution are the formations of small cooperatives in a variety of industries; the creation of “social production companies” in which existing enterprises were to create co-management structures and create chains of supply with cooperatives; shuttered enterprises that are expropriated by the workers who re-start production; and experiments in “co-management” with workers’ participation conducted in large state-owned resource enterprises.

The transformation of Venezuela’s industry is not only resisted by capitalists, but faces resistance from within government bureaucracies and even inside the Bolivarian movement itself. Resistance from unions, for example, has contributed to setbacks in creating workers’ co-management of the large state-owned resource enterprises.

‘Endogenous development’ in response to sabotage

The Bolivarian process took a step forward in the wake of the PDVSA lockout carried out by the revolution’s opponents, which followed the failure of their 2002 coup against President Chávez. A 2006 Dollars & Sense article written by Betsy Bowman and Bob Stone noted that the need for internal development was a lesson learned from the lockout and coup:

“Cooperatives also advance the Chávez administration’s broader goal of ‘endogenous development.’ Foreign direct investment continues in Venezuela, but the government aims to avoid relying on inflows from abroad, which open a country to capitalism’s usual blackmail. Endogenous development means ‘to be capable of producing the seed that we sow, the food that we eat, the clothes that we wear, the goods and services that we need, breaking the economic, cultural and technological dependence that has halted our development, starting with ourselves.’ To these ends, co-ops are ideal tools. Co-ops anchor development in Venezuela: under the control of local worker-owners, they don’t pose a threat of capital flight as capitalist firms do.

The need for endogenous development came home to Venezuelans during the 2002[-2003 management] oil strike carried out by Chávez’s political opponents. Major distributors of the country’s mostly imported food also supported the strike, halting food deliveries and exposing a gaping vulnerability. In response, the government started its own parallel supermarket chain. In just three years, Mercal had 14,000 points of sale, almost all in poor neighborhoods, selling staples at discounts of 20% to 50%. It is now the nation’s largest supermarket chain and its second largest enterprise overall. The Mercal stores attract shoppers of all political stripes thanks to their low prices and high-quality merchandise. To promote ‘food sovereignty,’ Mercal has increased its proportion of domestic suppliers to over 40%, giving priority to co-ops when possible.”

A new stress on workers’ control of industrial enterprises was one of the responses to the capitalists’ attempts to sabotage the economy during and after the PDVSA lockout, when management halted oil production. Since 2005, enterprises in a range of industries have come under various forms of workers’ control. This has not been a straightforward process. According to analyst Ewan Robertson, who wrote in August 2012:

“The many achievements by workers in taking over and collectively running individual factories, and in driving forward a project of worker control for the state owned heavy industries in [the eastern region of] Guayana, have generated a backlash, not only among the US-backed conservative political opposition, transnational companies and private bosses, but also among a reactionary and bureaucratic faction within the Bolivarian revolution itself.

This is because progress made by workers threatens those who only support Chavez for personal gain and political opportunism, and see their special privileges or vested interests threatened by worker control: there is little need for state managers or union bureaucrats if workers eliminate hierarchies and operate factories themselves in a participatory democratic manner. It also undermines those who hold a more restrictive view of what socialism is and argue that workers are ‘not ready’ to operate factories themselves. Indeed, there are those in the government that hold socialism to be little more than state ownership of industry and central planning from above, with little participation from workers.”

Socialism is the full and free democratic participation of everybody in all spheres of life. In the workplace, that means a concrete and genuine workers’ control whereby all workers have a say in their enterprise’s decision-making, whether the enterprise is fully or partially owned by a government or fully owned by the workers themselves in a cooperative. Understanding the concept of socialism is one part of ongoing Venezuelan struggles. Another part is that about 70 percent of the country’s economy remains in private hands, according to the country’s central bank.

That means that capitalists still have the power to disrupt the economy and undermine the Bolivarian process. Venezuela’s continuing over-dependence on oil exports is another potential source of destabilization. Venezuela remains tied to the logic of capitalism and, no matter how much progress it makes in implementing its “21st century socialism,” it is too small to be a self-contained island of socialism in a vast turbulent sea of capitalism. No country on Earth can be self-sufficient, not even a country with as much exportable mineral wealth as Venezuela.

The Bolivarian Revolution can only advance and stabilize itself as part of a large regional bloc, large enough to withstand the economic, financial, political and military attacks of capitalist powers. But as of today, the furthest description that could be given to the Venezuelan economy is that it is a “mixed” economy. Capitalists hostile to the revolution still retain considerable ability to undermine it. The history of the Sandinista Revolution demonstrates what happens to a mixed economy. History has also demonstrated that an economy held in state hands has its own serious weaknesses.

Venezuela’s stress on workers’ control and cooperative enterprises demonstrates that the latter lesson has been learned; cooperation is at the center of the country’s “21st century socialism.” But there is also the lesson provided by the Sandinistas — that experience, too, should not be forgotten.

A tale of two elections: Venezuelan accountability and U.S. irregularities

There were two widely watched national elections earlier this month. In one, a popular incumbent won for the fifth time in a voting system called “the best in the world” by former U.S. President Jimmy Carter. The other election featured widespread attempts at voter suppression with many localities using computer systems with no paper backup that do not confirm the results.

The incumbent in the first example is nonetheless routinely referred to the corporate media as a “dictator” while the second country is portrayed by the same corporate media as “the world’s greatest democracy” that has the right to dictate to other countries.

The first example, as you have by now surmised, is Hugo Chávez of Venezuela. Just for the record, here are the results of his presidential contests:

• December 1998: Elected president with 56.2 percent of the vote.
• July 2000: Re-elected president with 59.8 percent of the vote under a new constitution.
• August 2004: Retained presidency by defeating a recall referendum with 59.3 percent of the vote.
• December 2009: Re-elected president with 62.9 percent of the vote.
• November 2012: Re-elected president with 55 percent of the vote (81 percent of those eligible voted).

If we were to count elections to the parliament, state and local elections, and various referendums, President Chávez and his United Socialist Party of Venezuela have won 15 of 16 elections since 1998. The lone exception was a ballot on constitutional changes that lost by two percentage points – and his reaction was simply to accept the results. Accepting a narrow defeat and allowing an opposition that bitterly hates you and everything you stand for to place a recall referendum on the ballot — it would seem that President Chávez needs to work much harder to become a “dictator.”

All parties confirm voting process in Venezuela

What most stands out in Venezuelan elections is the transparency of the electronic voting system. Voters in Venezuela make their selections on computers in which party and independent observers participated in 16 pre-election audits, according to a report by the Carter Center. The center’s report further states:

“One of the key aspects of the security control mechanisms involves the construction of an encryption key — a string of characters — created by contributions from the opposition, government, and [National Electoral Council], which is placed on all the machines once the software source-code has been reviewed by all the party experts. The software on the machines cannot then be tampered with unless all three parties join together to “open” the machines and change the software. In addition, each voting system machine has its own individual digital signature that detects if there is any modification to the machine. If the voting count is somehow tampered with despite these security mechanisms, it should be detectable … because of the various manual verification mechanisms.” [page 5]

As an added precaution, each voter has a fingerprint on file, with a voter having to provide a fingerprint to avoid anyone attempting to vote more than once, and this system is also encrypted to guarantee secrecy. Finally, there measures to ensure accuracy in the vote count, including printouts of all votes and an automatic audit. The Carter Center reports:

“The voting process permits voters to verify their ballots through a paper receipt generated by the voting machine. A comparison of a count of the paper receipts and the electronic tally at the end of the voting day with the presence of voters, political party witnesses, domestic observers, and the general public is conducted in a large sample of approximately 53 percent of the voting tables, selected at random. Additionally, party witnesses receive a printout of the electronic tally from every machine. The [National Electoral Council] gives the party a CD with the results of each machine and publishes them on the website so that all of these results can be compared. The human element is therefore still important.” [page 7]

The opposition coalition that supported President Chávez’s main opponent, Henrique Capriles, approved the voting lists and electoral process ahead of the vote; the opposition campaign therefore had no basis to contest the results afterward and indeed conceded soon after the polls closed. It took only “minutes” for the vote to be announced, based on 90 percent of the vote total, according to a commentary by a Venezuelan journalist writing for the business publication Forbes magazine.

One would not expect to see an article praising Hugo Chávez’s government in a publication like Forbes, which proudly refers to itself as a “capitalist tool.” So all the more noteworthy is this commentary by Venezuelan journalist Eugenio Martinez:

“[I]t may be time for the greatest democracy in the world to take a lesson from Venezuela on how to develop and administer an efficient electronic voting system spanning across all stages of the electoral process.”

Controversy in U.S. presidential elections

We can contrast that with the U.S. election, in which it took days for many local races to be known; the Florida vote for president wasn’t decided until the following weekend. A week after the election, the winners of six congressional races could not be determined.

U.S. elections are rarely without controversy, and the last four presidential elections have featured significant attempts to suppress the vote, controversies concerning unverifiable voting machines, hours-long lines at polling places sometimes due to manipulations in the distribution of voting machines and even (in 2000) a sacking of an election office to prevent a re-count from being conducted.

That 2000 sacking occurred in Miami when a mob organized by Republican Party operatives stormed the election office, physically preventing the vote count from continuing in an area expected to vote for Al Gore, the Democratic Party presidential candidate. The 2004 election saw the first widespread use of electronic voting machines. And in 2012, many states with Republican governments passed laws aimed at keeping groups of people, particularly African-Americans, from being able to vote, and on election day there were widespread reports of shortages of machines in areas expected to vote heavily for Democrats, leading to long lines while nearby areas expected to vote Republican had no lines at all. Similar problems also occurred in 2004 and 2008.

In contrast to Venezuelan voting machines which can be checked, many U.S. voting machines are not equipped with any way to confirm the results — and the machines use private, proprietary software belonging to the manufacturers of the machines that is not accessible to election officials, nor do they provide printouts for confirmation. The 2004 presidential election was noteworthy for the extraordinary 5.5 percentage-points disparity between exit polls and the announced results.

In the U.S., the presidential vote is actually 51 separate votes because each state plus the District of Columbia distill their individual totals into the electoral college. Statistically, it would not be unexpected that two might report a result that is a small amount outside the polls’ margin of error, with the divergences evenly distributed. In 2004, seven states reported results that were so far beyond the margin of error that the odds of any one happening are less than one percent, according to a study by the group US Count Votes. The odds of seven outliers (all in one direction, for George W. Bush) to such an extent is one in ten million!

The study then broke down discrepancies between exit polling and official results, and found that in jurisdictions in which paper ballots were used, the aggregate discrepancy was within the margin of error (and thus statistically unremarkable), while the aggregate discrepancy for electronic machines was far outside the margin of error, sufficiently so to conclude that an impartial investigation be conducted (which was not done).

A separate watchdog group, Election Defense Alliance, said of these unexplained discrepancies and other problems following the 2008 election:

“The central process of our elections is the counting of our votes. Yet we now have electronic machines that count our votes out of view [of U.S.] citizens — in other words, in secret. … In the presence of large exit polls discrepancies, there is no way to know whether or not extensive fraud has been committed without an extensive investigation, including access to the voting machines. After three consecutive national elections manifesting large exit poll discrepancies well beyond the margin of error, and all in the same direction, it is way past time that we find a way as a nation to ensure that our elections are conducted fairly.”

The three largest manufacturers of voting machines in the U.S. at that time each had strong connections to the Republican Party, and machines of each were involved in problems with the 2004 vote, according to exhaustive accounts chronicled in the book Fooled Again by Mark Crispin Miller.

The 2012 presidential vote aligned very closely with polling; perhaps sufficient safeguards have begun to be implemented. But the shortage of machines in areas with heavy concentrations of Democratic voters in several Republican-controlled states demonstrates that clean elections remain an aspirational goal. The attempted voter suppression may have backfired, as most of the voting-suppression laws were overturned by courts and news reports were full of African-Americans and others determined to vote to defy those who didn’t want them to do so.

Enthusiasm in Venezuela a contrast to U.S. voters

The sanctity of the vote itself aside, the U.S. election was mostly a sterile affair of voting against the other candidate; neither Barack Obama nor Mitt Romney could generate much excitement. Certainly there were millions of people in Venezuela motivated by opposition to Hugo Chávez, but there were many more who voted for the incumbent enthusiastically. A reporter writing before the election for the online news site Venezuelanalysis wrote:

“Talking to people at the Merida rally, I was impressed by the depth of political consciousness and variety of opinions among the crowd as to why they supported Chavez’s re-election. For some, Latin American integration was the reason, for others, free healthcare. For many, their main reason for supporting Chavez, as one middle-aged couple put it to me, was that ‘he’s the president who has most given power to the people’ while another man told me, ‘he’s the president who has awoken the people of Venezuela and fellow peoples.’ Another young woman told me her reason was quite simply ‘I love him.’ …

Indeed, the young woman who told me that ‘love’ was the reason she voted for Chavez wasn’t being tricked by some populist image or last minute spending burst. She came from a poor family which used to live in a shanty house near where the Merida rally took place. Now she is about to graduate as a doctor in the government’s integral community medicine program, and would have been excluded from the Venezuela’s traditionally elite medical system. Her shanty house had also been transformed into a dignified home through the community driven ‘homes for shanties’ program, part of the government’s mass housing construction mission. It’s transformations like these that have earned Chavez such strong support, as much as it pains the international media to say so. Indeed, according to corporate media sources, gaining the support of the popular majority through directing government policy toward their needs seems to be a bad thing for ‘democracy.’ ”

President Chávez is often accused in the corporate media, by no means only in the United States where the most vigorous opposition to the Bolivarian Revolution originates, of “buying” votes. Yet the presidential campaigns of President Obama and former Governor Romney spent approximately US$2 billion while an additional $1.7 billion was spent on congressional races, according to The Center for Responsive Politics. A handful of billionaires, most notably but not limited to oil barons David and Charles Koch and casino magnate Sheldon Adelson accounted for tens, perhaps hundreds, of millions of dollars each thanks to the a string of decisions in the U.S. Supreme Court that equate money with speech, capped by the Citizens United vs. Federal Election Commission decision.

How does that staggering amount of money not constitute buying votes and offices?

Uneven progress for Bolivarian Revolution

The point here isn’t that Venezuela is perfect or a paradise — it is neither. But President Chávez’s Bolivarian Revolution has repeatedly received Venezuelans’ approval to continue progress toward what he calls “21st century socialism.”

That process is aimed explicitly at putting an end to the neoliberalism that has imposed so much misery and putting power into the hands of local communities so that people can make the decisions that affect them. Doing so is bitterly opposed by the former rulers of Venezuela, who were the leading backers of opposition candidate Henrique Capriles; by industrialists and financiers throughout the advanced capitalist countries; and by the numerically minuscule capitalist elites of regional countries.

The Bolivarian Revolution is a sometimes chaotic process that does not advance in a straight line; aspects of its are opposed by some leaders inside President Chávez’s government. Although nationalization of the state oil company receives most of the attention, the bedrock of the revolution are the formations of small cooperatives in a variety of industries; the creation of “social production companies” in which existing enterprises were to create co-management structures and create chains of supply with cooperatives; shuttered enterprises that are expropriated by the workers who re-start production; and experiments in “co-management” with workers’ participation conducted in large state-owned resource enterprises.

The last of these initiatives has suffered setbacks for a variety of reasons, including resistance from existing managements. A need for modernization and resistance from unions has also contributed to setbacks in creating workers’ co-management of the large state-owned resource enterprises. Considerable differences of opinion on the appropriate forms of management and ownership of enterprises continues not only among working people but among officials in the government.

Dario Azzellini, in a chapter covering Venezuela in the book Ours to Master and to Own (the source for the preceding two paragraphs), summarizes the progress of the Bolivarian Revolution:

“The transformation and democratization of the economy has proved the most difficult. The administration of most companies is neither under workers’ nor community control. Surrounded by a capitalist system and logic, it has been extremely challenging to establish collective production processes. Questions over the distribution of work and the resulting gains are particularly conflictive. However, where workers have succeeded in gaining control of their workplace, it can be observed that they have usually developed ties with the surrounding communities, abolished hierarchical structures, made themselves accountable to the workers’ assembly, and in most cases introduced equal salaries and increased the number of employed workers.” [page 397]

Professor Azzellini concludes that “The search for an alternative economy is thus firmly on the agenda.” We need not look any further to discover the solution to the puzzle of Venezuela being falsely painted as a “dictatorship” when it has elections much more transparent and fair than those of the United States.