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Opinion and Analysis: Economy

The Decalogue of a Neoliberal Economist

Venezuelan economist Simón Andrés Zuñiga responds to the neoliberal critics of Venezuela’s economic model and the problems it faces.

The internal and international harassment of the Bolivarian and Chavist process has taken the form of a ferocious attack by right-wing economists. The final objective of this campaign is to eliminate from the face of the earth the historical experience of the last fifteen years of an anti-neoliberal and anti-capitalist political process. For the powers of world capitalism, Venezuela is not only a geography to reconquer, for its natural resources, but a threat because of its example of sovereignty, independence and daring to move towards socialism as a promise, for the poor of the Earth, for a life informed by justice.

Wiping out historical memory is a prerequisite for domesticating the revolution. Creating a sensation of chaos and terror is a necessary step in order to discredit the Government and return the conduct of the State to the capitalists.

It is important to note the following: before the guarimbas, the attack of the counterrevolution and the paramilitary action, manifestos were distributed from a number of economists writing in defence of capitalism and the dominant sectors. During the guarimbas the diffusion of articles – by Venezuelans and foreigners – proliferated, all with the more immediate objective of creating a perception of chaos, of confusion and economic collapse. This short-term objective involves what economist Julio Escalona has rightly called the imperial strategy of permanent ungovernability (1).

We are experiencing a phase of the “Shock Doctrine” described by Naomi Klein, in which out of chaos the saviours appear: neoliberal economists (2).

This can open the way to a number of possible scenarios: from overthrowing the government in different ways, to forcing it to negotiate (to sell out) the political model through the negotiation of the economic model.

They have in their favour the situation of scarcity and inflation that they themselves have managed to create since 2003. Through attacks on the Bolivar, speculation, sabotage and programmed hoarding of basic goods needed for the daily life of the population. They can also count on errors and omissions on the part of the government.

In this asymmetric Fourth Generation war, both the mass media (national and international) and the neoclassical economists form the most destructive battalions.  For this reason, we who form the Society of Radical Political Economy have put together a guide to deconstruct the dominant economic discourse employed by neoclassical economists. This is something like a first decalogue to identify visible and hidden vampires.

The private sector is innocent, one more actor in the game:

1. The Market is sacred and the State is quintessentially obscene. Public spending is bad by definition; the public deficit is a demon to be overcome.

2. Organized labour distorts the market. Trade unions or other workers’ organizations are like monopoly capitalists that impose prices (wages) that interfere with the mechanism of the “invisible hand” of the market.

3. Freedom is the freedom of markets, and economic freedom trumps political freedom.

4. The principal cause of inflation is, in any time and place, the quantity of money.

5. People are not the people: people are “the population.” There are no social classes, but simply “productive factors.”

6. The Patria (Motherland) does not exist, nor does the nation. We are not a Patria, we are “markets”. In the language of the World Bank, the IMF and the recent graduates in economics of the UCV, UCAB, ULA and the UC and “the Metro”, we are “emerging markets. The word “Patria” is simply a joke for most of these young people who are formatted and drugged by neoclassical ideology.

7. The military forces are not the People; they must be instruments that should stay in their barracks or, in case of emergency, defend the interests of capitalists and large landowners by repressing the working people, as they did in the Fourth Republic.

8. The economists are the ones who know about economics, especially those who have graduated in “recognized” universities of the capitalist North; and,

9. Economics is an exact science and reality, according to them, is a mathematical model that politicians destroy when they attempt to interfere. 

The asymmetric war and pure economists

Government is the only guilty element according to neoliberal economists. Certainly, any government has a high degree of responsibility in economic policy. Our Bolivarian Government is no exception. We ourselves, by the fact of supporting this Chavist-Bolivarian political process, cannot avoid the constructive criticism of errors and omissions that have been committed during these fourteen years.

Nevertheless, there are two comments that we must make here. First of all, one can be critical of the economic policy of the government, ending up with a right-wing critique. This is what different economists who oppose the Bolivarian process have done. They finish by recommending that the only way out is a radical change in the economic model, substituting “modern” economic policies, framed in terms of the Washington Consensus.

Secondly, the responsible exercise of a revolutionary critique and of self-criticism, is far from going to the extreme of totally ignoring reality, as happens when people make affirmations such as the following:

- “Inflation is the fundamental responsibility of government, not of the private sector”

- “To blame the private sector for inflation is completely erroneous”.

This is what is affirmed by such self-confessed neoliberal economists as Alexander Guerrero, Maxim Ross, Emeterio Gómez, and in a subtle way, José Guerra.  Nevertheless, to the surprise of some and confirmation of others, the above citation is taken from a response of Felipe Pérez Martí to the comrades of Marea Socialista (3). In recent declarations published in the newspapers 2001 (4) and El National (5), he reaffirms this point of view.

The economist Felipe Pérez Martí, with post-graduate studies in the University of Chicago, former professor of the private Instituto de Estudios Superiores de Administración (IESA) frequently alludes to his experience as former minister of Planning with the Chávez government (in 2002, right after the Coup of April, 2002, until mid-2003). He defines himself as a revolutionary, a utopian communist and a guardian of the Chávez heritage. On the death of Chávez, Felipe immediately produced a document with the hardly original title ¿Qué hacer? (What to do?) which forms part of his strategy to confuse and manipulate with a kind of political bipolarity that is attractive to a certain kind of confused and ingenuous leftists, even as he publishes in newspapers whose good intentions are dubious: the ABC in Spain, the column Runrunes of Nelson Bocaranda in El Universal, the daily 2001, and recently, the openly golpista newspaper, El Nacional.

The only thing that Felipe has in common with the communists is the desire for the disappearance of the State and of monopolistic competition. He hates Bill Gates, and all monopolies. But this for a different reason: he has a dogmatic faith in the market. Hence the sympathy that he gets from some irresponsible anarchists.

Neo-liberals live in an unreal world where there is no confrontation, no social classes. To imply that speculation in monetary exchange rates is an expression of a struggle for petroleum income seems to them nothing but a theoretical “giving the finger”. They trivialize the political power exercised by those who control economic power, since in their fantasy world “the private sector” is an “economic agent” that is directed by rational expectation... So that anyone who does not understand this is a brute, ignorant of “economic science.”

Hence the former Minister of Planning Felipe Pérez shows “great courage” when, faithful to his grounding in occult (economic) sciences learned directly from the high priests of the University of Chicago, would like to see not only several Ministers of the Bolivarian Government in gaol, but President Nicolás Maduro as well, as we read in the following quotation:

“Those that should be put in prison for this immense crime against the people, and against intelligent thinking are the economic team, and the President himself. They are directly responsible.”

He attacks the leadership of Marea Socialista, attempting to ridicule their interpretation of economic conflict. Even though, as he himself recognizes, he is ignorant of Marxism.

He does no doubt employ critiques that could be the honey to trap careless bees. He takes advantage of the discontent and worries existing in revolutionary groups and individuals to plant his proposals that are convergent with those promoted by the MUD opposition in their plan for government or by powers of international financial capital such as the Bank of America.

The diagnostic of the neo-liberals, loaded with the “methodological individualism” that defines them, as well as the recipes that they recommend, both look to the dismantling of alternative institutions and practices that were put in place during the physical presence of Comandante Chávez. Now they attack alternative financial instruments (such as the Fondo Chino or the Fonden), ridicule the government, call for the return of the “independence” of the Central Bank, ask for the dismantling of exchange controls and propose exchange schemes based on faith in the Market. In the end, they want to privatize the whole country.

In the case of Pérez Martí, he proposes as an example the exchange policy that he imposed during his brief period as Minister of Planning. But look at the consequences when orthodox neoliberals are allowed to govern.

At the beginning of the year 2002, the exchange rate bands would not hold up in a scenario of confrontation with capitalist groups that were struggling to capture oil income and take it out of the country. Hence the Minister of Planning Felipe Pérez tried a flotation model that led to an accelerated devaluation and capital flight. Some recall his appearances in Venezuela de Televisión (VTV) standing in front of a Bible asking the surprised television viewers to believe fervently that the exchange rate would fall, because then it would do so. One doesn’t know if this would be due to divine grace or to the sanctified popes Thomas Sargent and Robert Lucas.

Finally, in February of 2003, “the Comandante came and ordered it to stop”: exchange controls were established, the creation of CADIVI was announced, days after Felipe had appeared in his VTV programme, swearing that there would be no exchange controls.

In the document “¿Qué hacer?” the economist Pérez proposed a measure that many of us shared and that helped him to attract support: a fiscal reform according to which the rich would pay taxes. However, in his recent declarations he revealed that this would be untimely:

“At this moment a complete fiscal reform would end up unbalancing the private sector even more than it is already, because this would not be a neoliberal adjustment but a way out of the turmoil so that the economy could start to become rational. With the adjustment we are proposing, the problem of the deficit would be resolved” (See note 5 above).

Lorenzo Mendoza (head of the oligopolistic Grupo Polar) must have made note of this opportune advice, for his negotiation strategy in the Conference for Peace.

In a vain effort to distance himself from neoliberalism, pointing out that there is no need to drastically cut public spending, Felipe suggests that the fiscal deficit will be terminated in a magic way: eliminating overvaluation! So that national businesses can compete with importations! This last proposal conceals a conclusion of his proposal for adjustment: workers would pay for it while the rich would continue their fiesta.

For reasons of space and time, we shall not add further comment to this kind of analysis. As in the case of the former advisor to General Baduel, Heinz Dieterich, we shall simply repeat the phrase: “a confession of a party relieves us of the need for proof.”

Giordani and I? The denunciation of Felipe Pérez

According to his sources of information, Felipe Pérez has revealed to the world: he says that Simón Andrés Zúñiga is Jorge Giordani. I hate to disappoint him. I am NOT Jorge Giordani, I am a Venezuelan economist, researcher; I am a collective, hence a great part of the content of the articles are the result of consultation and discussions.

In response to a recent article by a US economist, in defence of the Government, Felipe, in his group ¿Qué hacer? cites Zúñiga negatively to argue against this economist (6). He attempts to disqualify the comrades of Marea Socialista, through a harmless threat, and because of this notes that he knows that they are advised by the other I of Dr. Giordani. In the final version of the document “¿Qué hacer?” Felipe Pérez adds his reply to Zúñiga (where Felipe does not reply to the vital characteristics that we provided). Why such rage?

One supposes that the economist Felipe Pérez is having nightmares, since 2003, with Jorge Giordani and now the spectre of Zúñiga appears. The solution for the mind of this neoliberal was a superposition of oneiric images.

I am aware that Felipe has had a traumatic experience with Giordani, since after having replaced him in 2002, appointed by President Chávez, the same Comandante reappointed Giordani in February of 2003. Chávez brought in the former pitcher (Jorge Giordani) because the relief pitcher (Felipe Pérez) had let the exchange rate fall to dangerous levels and had to leave the pitcher’s mound.

We do not understand the need to get involved in this controversy: this is something between Pérez and Giordani, and above all, between Filipe Pérez and Chávez, who let him go with the sharp edge of a saber . . .

Excuse me, dear reader, but I want to take advantage of this unfortunate and false accusation of Professor Felipe Pérez (which the information services of the CIA in the country were quick to take up and spread) to inform the brief former Minister of the advice of a friend, former militant of the PRV, known as “el iluminado.”

This old comrade knows that you – Felipe – believe in things of the great beyond, in metaphysical beliefs, and we are not talking about the religion and the metaphysics that you learned in that monastery called the University of Chicago, we are talking of your spiritual beliefs, which of course we profoundly respect. Based on this presumption, El Iluminado told me, “say to Dr. Pérez Martí that he is making an enemy of someone with a very powerful karma”. According to El Iluminado “the monk Giordani represents three powerful reincarnations: he is the reincarnation of Nicolás Maquiavelo (1469-1572), later resuscitated in Giuseppe Garibaldi (1807-1882), then in Antonio Gramsci (1891-1932).”

Don’t worry, Dr. Felipe. My karmas are not as lethal. I suspect that personally and collectively, I am the reincarnation of the Negro Primero.

(Translated for ALAI by Jordan Bishop)

Notes

[1] Article by Julio Escalona, "La estrategia imperial de ingobernabilidad permanente contra

el gobierno bolivariano". En http://www.aporrea.org/tiburon/a183746.html

[2] See the video summarizing the thesis of "The Shock Doctrine: The Rise of Disaster Capitalism" by Naomi Klein, in http://youtu.be/KLu7aAPhxAk

[3] See: "Ex Ministro de Planificación de Chávez pide prisión para Giordani, su equipo y hasta El Jefe Máximo" http://runrun.es/runrunes/90051/ex-ministro-de-planificacion-de-chavez-p...

[4] Interview with Felipe Pérez Martí. "Si no hay un cambio radical, el pueblo chavista tumbará

al gobierno". Entrevista de Luz Mely Reyes, Diario 2001, pág. 23, domingo 02 de marzo de 2014.

[5] Interview with Felipe Pérez Martí. “Nuevo préstamo de China es perjudicial y nos pone al borde del precipicio” http://www.el-nacional.com/economia/Nuevo-prestamo-China-perjudicial-pre...

[6] Article by Mark Weisbrot "Respuesta al exministro Felipe Pérez Martí. La economía

venezolana tiene desequilibrios pero no se está derrumbando". http://www.rebelion.org/noticia.php?id=178397

- Simón Andrés Zúñiga, Venezuelan economist, member of the Society for Radical Political Economy.