Venezuela’s Future

Answers vary greatly, even among non-hysterical commentators.

For example, as to why some astute folks say the protests are an effort by Leopoldo Lopez to usurp leadership of the opposition from Henrique Capriles. Others say the protests seek to push the government into repressive measures in order to undermine its support. Still others say the protests seek to remove Maduro and sweep away all aspects of Chavismo.

As to who, some say the battles are orchestrated by Venezuela’s rich, others say it is discontent from average folks without prodding. Some say it is wealthy students, others say it is students per se. Some say it is militarily savvy thugs and even Columbian exiles, others say it is kids without portfolio. Some say the country is massively against the government, others say this is a serious because violent uprising but is carried out by small numbers with largely elite backgrounds.

As to the government’s response, some say they are engaging in harsh repression, others say they are exercising extreme restraint. Some point to deaths and claim government killers, others point to deaths and claim opposition killers. Some call government interference with media dictatorial censorship, others say private papers and TV operate with near total abandon with only minor curtailments temporarily warranted to reduce violence.

To me, however, the protests appear to be primarily opposing precisely what is good about Chavismo, in particular income redistribution, dispersal of power, and increasing mass participation. They attract ample average folks with serious criticisms of crime, corruption, inflation, and shortages, as well. The popular concerns appear to be used, however, by Venezuela’s most reactionary elements, perhaps to shift the balance of power in their own movement, but perhaps hoping to create enough havoc to attract international intervention to remove the government. The government, in contrast, appears to be trying to curtail public disruptions without resorting to extensive violence, though with some elements no doubt favoring greater repression. To me, the situation mirrors but also escalates the whole Bolivarian history, wherein the government has sought massive change but without coercion and true to  respecting elections, while the opposition has wished to reverse election results and employed any means they could find — including coup, sabotage and overt violence.

Beyond choosing sides on these matters, perhaps I can shed some light on future possibilities and indicate the kind of data that would clarify not only what is occurring, but also what is in the cards for the future.

Factors Propelling the Conflicts

What problems have generated opposition and especially the forceful disruption of social services? What has motivated small numbers of dissidents to blockade streets, set fires, hurl rocks, and even shoot officials and others? What caused the public emergence of fascistic dissidents like the Retired General who outspokenly urged blockaders to kill citizens by stretching nearly invisible clothes line like wires across roads, which, indeed, decapitated a citizen? What caused the government to utilize police and “riot squads”?

The biggest factor generating opposition is the logic of the Bolivarian Revolution. Chavismo seeks to enlarge public participation, undercut old forms of authority and power, develop workers councils and neighborhood councils and communes, and fundamentally redistribute Venezuelan wealth to Venezuela’s poor from its rich. All of this generates fierce opposition from the owning class and often also those high in religious or other hierarchies. Resistance against redistribution and the rest motivates Lopez, Capriles, and the opposition generally, as well as the private media and the owners of private companies and many in their upper strata of employees. Like the rich and well off everywhere — not least in the U.S. — these folks tend to pursue their own interests.

Beyond the opposition’s leadership, however, it is not known how many young people dissenting in the streets are also motivated by a rejection of Chavismo’s virtues. The youth in the streets appear to be overwhelmingly from well off sectors, often private universities, and when interviewed, complain that they have no future. Does “we have no future” mean they are concerned about crime or inflation? Or does it mean they desire great wealth and power, and realize such privileges are at risk? Given their background, their quite violent and impassioned behavior makes some sense if they are worried about their preferred futures as wealthy and powerful elite citizens — but not if they are merely worried about crime. The good news is that the number of students blocking streets and worse remains relatively low.

Factors which concern a far wider population — including most Chavistas — include corruption, crime, inflation, and shortages. The reason to be angry about these problems is they dramatically diminish the quality of life. But, a large issue is, what are the roots of these problems?

Corruption means, to me, people enriching themselves via illegitimate behavior undertaken at the expense of others. (In this sense, to me, all of capitalist business is corrupt, but let’s set that aside.) So where do we see corruption in Venezuela?

The price of milk is subsidized so the poor get ample. That’s a good policy but it gets a bit complicated. Say you live reasonably near the border with Brazil. If you produce milk and you export it, or even if you just buy lots of milk at its low subsidized price and smuggle it over the border, there is a killing to be made because you can sell it for way more in Brazil. The temptation is great. The margin is high. There is plenty of excess profit, enough, even, to bribe folks. And the milk supply inside Venezuela drops — even into shortages. The same goes for oil/gas, even more so, say, at the border with Columbia. Worse still, the access to corrupt advantage by exploiting subsidized prices is hugely aggravated by Venezuela’s approach to exchange rates for Bolivars and dollars. Suffice it to say that policies aimed at benefitting the poor and stabilizing sensible rather than market-ruled prices inside Venezuela, as a byproduct create avenues for huge financial gains by the corrupt practice of buying with Bolivares inside and selling for dollars outside, and coming back and getting way more Bolivares in exchange than you initially spent — or even by just directly exploiting government largess for travel and the like.

What about crime’s causes? First, we might wonder how could the Chavistas have the slightest interest in generating or even just being soft on crime? That is not plausible. Corruption? Some yes, are complicit. But crime, robbery, kidnapping, murder? No. In contrast, the opposition and local police often have a very real interest in increasing levels of crime. First, some engage in it for personal gain. Second, and more important, they want it to flourish so as to create disenchantment and dissent. The largest uptick in crime, I am told, though I have doubts, had to do with Columbian exiles escaping Columbian repression and arriving to operate in Venezuela. The key factor is criminal behavior of the usual sort, but given considerable room to maneuver by opposition-supporting, or criminally bribed, local police.

Shortages have to do with exchange rates and subsidized goods being smuggled out, and with outright sabotage by opposition owners who stockpile output that they don’t ship out, literally to create shortages. Again, one can ask, what possible motive would the government have to itself promote shortages? Of course, if a wealthy person feels a shortage that isn’t a priority to correct for the government in their high end stores, and realizes that it is caused, in part, by the government subsidizing prices for the poor, this person might see things differently than I indicate. One important point is that shortages do indeed hit the middle and upper classes hardest partly because those constituencies have no experience of not getting what they want and have no patience for it, and partly because the government is very diligent to ensure that lower income citizens aren’t made hungry.

(There are many articles on ZNet about all these matters – the events and their causes – and I would suggest a quick study and overview is the two recent video pieces by Greg Wilpert, first on the events now occurring and their causes, and second on inflation and the economy. From there, I hope you will avail yourself of the other content available on Z, to get a deeper view.)

There is, however, another explanation that some offer for shortages – not obstruction and sabotage by owners, not corrupt export and smuggling of products to neighboring countries for profit – but low productivity. Some see this as due to workers in the public sector not fearing for their jobs and, as a result, slacking off. Others see it as workers in those sectors feeling alienated due to their relations not altering dramatically from past alienated ways, and in that mood, they slow down.

Reactions to the Street Conflicts

So, what’s next? What will the government and population do both about the demonstrations and about the underlying issues – and what will it auger for the future?

First, about disruptions in the streets, there are ultimately only a few short run choices. The first three, I think, are obviously flawed and will be seen as such  in Venezuela.

1. The government and the public can hope it winds down. I think this is likely not wise, because spontaneously winding down is not guaranteed, but friends in Venezuela and the U.S. who know more than I do, think it is quite likely. Also, while most outside Venezuela think these demonstrations are hurting the government, that isn’t the only view. Others, largely from Venezuela, think that the opposition is accepting losing domestic support, which is fed up, in hopes of attracting international aid. If such aid isn’t forthcoming, the opposition winds up losing due to its miscalculation.
2. If disruption doesn’t dissipate on its own, or even grows, the government could bring it to an end by leaving office, or, short of that, by giving very clear and convincing signs that Chavismo will relent in its plans and no longer threaten and instead even support the interests of wealth and power. Both those options would sacrifice the poor for the rich. I hope they are not even being contemplated.
3. I have also heard some say the government could share power. Let the opposition into a revamped government – say 40% opposition to Chavismo’s 60% in federal positions. There are many problems with this seeming high road, not least that for the opposition it would merely be a beachhead in pursuit of attaining full power and eradicating progressive gains and desires. There would be a brief calm, perhaps, followed quickly by the opposition seeking more, and using its newly gained positions to go back on the attack.

As the above three options seem to me badly flawed, I can only offer some hypothetical additional options trying to clarify what else we might see.

1. The government and public institutions and movements could work hard to undermine all support for violent dissent even in opposition constituencies, and perhaps particularly among the young. This means literally going to opposition youth and talking, clarifying, elaborating, etc. It should have been occurring for many years, as a high priority – and one of my criticisms of the Bolivarian process has long been the relative lack of attention to this task. Can outreach be done in such hostile times? I don’t know, but it is certainly worth trying.
2. The government could repress, with restraint, the most violent elements of the opposition in hopes of diminishing violence and opposition energy. I should say, describing the government as violent thugs is ridiculous, at least so far. With opposition blocking streets, burning fires, assaulting citizens, attacking public offices and officials, and attacking police and troops to provoke a response, all while calling for mayhem and even murder, if the government was the bunch of authoritarian thugs most media claims, the death toll would be vastly higher — rather than being low with most seemingly caused by the opposition, and with those in the government responsible for violence being charged, as has occurred.
3. The government could repress with massive force and aggressive tactics. It could jail widely and meet any counter action that is violent with overwhelming repression. In short, it could do the kind of thing that would immediately occur in the U.S.
4. The government and the population could respond to violent dissent with nonviolent organization. This would be unprecedented, I believe. 50 to a 100 to 200 opposition stalwarts occupy an intersection. Instead of police arriving and seeking to forcefully clear them away, imagine a march of a 1000 or 5000 or 20,000 citizens seeking to pass or just continually removing obstacles and cleaning up the mess opposition activity leaves behind. What does the opposition do against that? What makes this hard to organize is that the opposition is smart enough to stay clear of poor neighborhoods. It instead acts largely in middle class and upper class areas where there aren’t such constituencies available to nonviolently displace it. So this adds another possible tactic. Unarmed and nonviolent Chavistas could block and even close in violent actors, reducing their ability to commit mayhem on down town streets. Could nonviolent mass popular activity work fully? Probably not. But such approaches, done in large scale, with the government indicating that it has no intention of fighting with people who have just grievances even if they are acting in consort with those who do not, might go a long way to helping with point 1, above. And if opposition intransigence and violence persists, then a degree of forceful dispersal would be better justified and clearer to implement as well as less likely to slip slide into something lasting.

So, regarding the above options, if we see steadily more of 1 – that is a good sign. More 2 – with restraint, certainly isn’t exemplary, but nor is it likely to be a slip slide into bad outcomes. More 3, however, would augur a potential growing sway of repressive and authoritarian thought, a very sad possibility and one that the opposition would love to provoke. More 4 would, supposing it proved possible, be exemplary.

How will we know which is happening? This is a judgment call. One has to utilize reports and come to tentative conclusions. For myself, I don’t trust mainstream reports — they have been and will remain overwhelmingly absurd — though by repetition also very effective. Opposition claims are reported as fact, even when they are demonstrably and self-evidently ridiculous. Likewise manufactured images and videos are broadcast as fact. So it isn’t just biased spin, which is bad enough, it is description that is horribly unreliable — to put it mildly.

Thus, as usual, one needs to find trustworthy journalists, if possible on the scene. It is true that left and progressive journalists, whether on the scene or not, could also generate information that is biased or just honestly wrong. So, again, one has to find worthwhile sources. I heartily recommend, Z, of course – but also, and especially, Venezuela Analysis. Some will say, but wait, Venezuela Analysis is composed of folks who are pro Chavista. True. But VA’s writers are also, as far as I can determine, independent and aggressively honest, including criticizing the government. They have few material means, but a great deal of drive and commitment to journalism. Strangely, many activists, right now – though in no other case that I can readily remember – dismiss any commentator who likes the Bolivarian revolution, which tends to mean anyone who is writing about Venezuela and sincerely concerned about the well-being of the bulk of the Venezuelan people. On the other side, typically folks will decry, perhaps, but then be very substantially affected by the barrage of reports from mainstream newspapers and TV. Mainstream messages are in our face, over and over. To find reports, isolated and rarely repeated, that contradict the mainstream, one has to look. After a while even many who abstractly understand the motives of mainstream media feel, well, they are professional, they have means, they report frequently and widely, they all seem to agree, and look how polished and large they are. Their reports must be true. Alternative viewpoints are small, few, and I can’t even find them. They must be delusional, biased, etc. The Catch 22 in all this ought to be very evident. We critique mainstream media for their institutional constraints, their connection to wealth and power, and so on. We praise alternative media for the opposite. So far, so good. But then, at least in this case, many of us imbibe what the mainstream pushes, and ridicule what the alternative reports.

Reactions to Deeper Concerns

Now what about the deeper issues – crime, corruption, inflation, and shortages? What lies behind those? What might the government and the population do on those fronts, and what would the choices auger?

The broad indicators are these. Does a particular policy that seeks to deal with any of these problems – or any other problems, for that matter – improve the conditions of the poor and weak and not the rich and powerful, or vice versa? Does such a policy increase the capacity of the poor and weak to seek further gains and diminish the capacity of the rich and powerful, or vice versa?

Venezuela is still a capitalist country with many institutions and associated constituencies that want to keep it that way but also with a federal government and a great many grass roots and also federal institutions that are seeking change toward a new system. When there are problems – and there are – the question is, are they addressed in a manner that moves Venezuela back toward old repressive relations, or in a manner that moves Venezuela toward liberating new relations?

Indicators to consider when deciding are the likely effects of proposed policies on the consciousness and organizational wherewithal of constituencies on either side of the old system versus new system divide, and on their well being and the resources they can utilize for their own current lives as well as for fighting for or to prevent more gains in the future.

So, take crime. Reducing the ease of committing crime it is positive, as is prosecuting within the dictates of the constitution, particularly if there is also sympathy and attempts at rehabilitation. Removing the incentives to commit crime and making it harder to undertake is positive, as well. So is reducing the temptation to commit crime and the ease of gaining advantage by it. A very risky option, however – but I think much needed – was to find a way to override local police who were in some instances in thrall to capital and abetting crime. A contrary approach ultimately benefitting wealth and power would be harsh repression, stop and frisk type policies, and overly harsh penalties.

For corruption the situation is somewhat similar, but with a twist. When government officials violate the public good by selling their favors or coercing self-serving results, the penalty can and probably should be quite firm and prompt. The same goes for companies that are making a killing by exporting goods needed in Venezuela, or by smuggling or withholding output, etc. But what about a person smuggling, or a guard accepting a bribe. Here I think far more leniency is in order, and would be a good sign. But there is more to say, in accord with the criteria noted above.

Take the case of a business owner who is selling abroad or smuggling. Jail may be warranted, but it doesn’t increase the relative power of the poor and affects only, and temporarily, individual violators. A different option would be, in any such case the firm in question is nationalized and put under the auspices of its work force. If an owner wants to violate the public good, fine, they forego their ownership. Once transferred to workers, a question arises – how to operate – but this clearly aimed at increasing the wherewithal and improving the conditions of the poor, not the rich.

What about shortages? They owe, as indicated earlier, largely to subsidized prices on some goods leading to sales abroad, and to sabotage. But another issue is productivity. So, first, regarding low prices, what to do? Well, simply raising the prices, for example of milk, removes the incentive to export or smuggle, but it also hurts low income people. However if you keep the price down, the incentive to export or smuggle is huge. There may be other choices, but one that I can imagine is to have the price rise — but then directly aid the poor. How? Their price, and only their price for milk, for example, could be reduced by their receiving some government subsidy beyond their income — or, for that matter, by their getting a dramatic increase in their income that more than offsets the added costs for their milk. But then what about prices, they could be frozen – risking the corruption dynamic, again – or they could rise, but there could be a major tax on profits, with the revenues used, in turn, for working people. These are possible routes out of this conundrum to look for. Or take oil and automobile gas. Again, in Venezuela oil is hugely subsidized. The price, that is, is nearly zero. The incentive, therefore, to buy or produce inside Venezuela and sell in Columbia, say, is intense. What to do? Again as long as that price difference exists violations will occur. But also again, raising the price would have horrible repercussions for those of the poor who drive, or even use public transit if those prices were to rise. Solution – raise the price, but tax profits and then return the revenues to the poor in diverse ways. Free greatly improved public transport would be one example. A reverse income tax for low income people would be another. One can think of other options.

What about productivity? This issue, which gets almost no attention from anyone, at least that I have seen, may actually wind up being most revealing. If it is true that public firms are producing at a low level, what should be done? One idea would be to call in owners and managers and exert market discipline via their command. The claim would be that the workers don’t put out sufficiently due to knowing they won’t be fired, and that they need to be pressured to produce more. The left version would be to claim this is required for output, even if disliked, and will be temporary once the workers are better trained. I would say all of it is nonsense. This step would not be a temporary deviation from a path toward a new type economy, but a hard retreat toward the old, greatly empowering forces seemed reaction, and demoralizing the base of movements for change. But if this isn’t the way, what is? If workers aren’t producing sufficiently in public firms, what will cause them to do so other than aggressive market discipline and one man management, for example?

The answer, however hard to implement given all kinds of habits and expectations from the past, must be a serious push toward self management. The task is to get workers in plants to feel solidarity with one another, and with society, to leave behind alienation and want to control their own lives, while contributing to social well being by their labors. The steps that would move in such directions, I believe, are trying to introduce a new division of labor nurturing and using all actors’ capacities to participate and contribute to decisions, council based self management, and, to the extent possible — and steadily more as time passes – coordination of actions with other firms via collective negotiation, not command or market competition. This is a longer discussion, and of course I have my own favored ideas, but for purposes of assessing in the short and near term – the issue will be is there a rhetoric of worker failure requiring discipline, or a rhetoric of organizational failure requiring steadily more democratization and even self-management, plus job innovation and moves toward a new kind of participatory planning.

Returning to the more proximate and in the news issues, the exchange rate causes all kinds of trouble. If I can buy a car, say, again to make things simple…for 100,000 Bolivares, take if over the border, sell it for dollars, and come back and exchange the dollars for 800,000 Bolivares, say — you can see the incredible incentive to do it, whether I am a citizen or an auto manufacturer. The exchange rates need to be equilibrated so what you get with currency in surrounding countries, and what you get for the Bolivares that that currency would exchange for in Venezuela, is quite comparable. This means rising prices for many items, particularly imports, in Venezuela, which would hurt the poor, again. But this is like above. If the exchange rate is corrected and prices rise for Venezuelans, those of low income need an offsetting gain. That is rising wages and even a reverse income tax, funded via profit taxes.

What about inflation? Inflation is a climb in prices and wages and basically all indices, which means a Bolivar yesterday is worth less than a Bolivar tomorrow. What is the impact? There are quite a few, but one thing is clear — spend today, don’t wait until tomorrow because tomorrow what you have will purchase less. Suppose I earn 5,000 Bolivars a month. And I do it all year, and all next year, too. Suppose inflation of prices was 50%, but my salary did not climb. Egad, I will earn the same number of Bolivars next year as this, but it will be worth only half as much when purchasing items for myself and my family. This imposes irrational pressures to spend fast as well as hurting wellbeing. In the large, if inflation occurs in prices, but isn’t matched in wages, wealth redistributes to the rich and powerful. That is horrible. What can be done? Price controls plus steady wage increases for those earning less than some ample amount and income freezes for those above that ample amount is one option. Because of the exigencies of market economics, however, this can have unwanted side effects. Another way to do it is to wait until things settle down, and then use strong taxes to redistribute the benefits of economic activity toward the poor, from the rich. This is all serious business, for sure, but the key idea is simple.

If Venezuela moves to reduce clashes by giving the opposition more means to make demands and demobilizing the public, much less by simply reneging on positive programs, it will be on a road toward the old days. If it reasserts social programs and finds a largely non forceful way to reduce clashes, it is moving forward. Likewise, if it deals with issues like crime, corruption, inflation, and the exchange rates in ways that strengthen elites and weaken the poor — materially and organizationally — it is moving toward the old days. If it adopts, instead, approaches like those mentioned above, that will reveal positive future likelihoods. The issue is having the poor and working people bear the burdens (as in the U.S. response to its own crises), or having the share of social product that goes to those with lower incomes rise, and the share that goes to the rich fall, as would occur in any morally worthy country.