It is Necessary to Contextualize the Pragmatic and Populist Policies of the Chavista Government: An Interview with Steve Ellner, Part II

In the first part of the interview conducted by Evaristo Marcano, Professor Ellner contextualized government politics that favored those businesspeople who did not support the general strike of 2002-2003. According to him, the strategy was relatively successful from a political viewpoint, but not an economic one. In the second part of the interview, Ellner argues that populist policies also have to be contextualized in order to be objectively analyzed. At the same time, he calls for a critical examination of the assertion that the government’s social programs and labor policies have generated low levels of productivity.

E.M. Populism is a topic that has been widely studied and has generated considerable polemics. Renowned analysts specializing in Latin America have dedicated considerable effort to understand the phenomenon. Recently, Margarita López Maya, in an article published in a daily of national circulation, maintained that the upcoming elections in Venezuela will pit the populist model against democracy. By framing the issue in these terms, is she not ignoring the complexity of a phenomenon that, at least in Latin America, has many variations?

S.E. Definitively. Some political scientists reject the pejorative connotations of the term “populism.” D.L. Raby, for example, classifies Fidel when he reached power in 1959 as a populist on grounds that that he still did not have a clear vision of the future, nor did he adhere to a well-defined ideology. But he certainly did have the clear intention of incorporating the excluded into the life of the nation, and this, according to Francisco Panizza, is a salient feature of populism.  

E.M. When opposition leaders accuse the government of being “populist,” they are obviously applying the pejorative meaning of the term. What in particular are they referring to?

S.E. Basically, “crass populism” refers to the practice of offering the people free goods and services, or highly subsidized ones, for electoral purposes. In general it refers to unsustainable policies.

E.M. ¿Are you in agreement with the practice of maintaining prices far below those of the market?

S.E. Sometimes it is justified. For example, the prices of the metro of Caracas and of other Venezuelan cities are possibly the cheapest in the world, and furthermore it is completely free for the elderly. When you consider that automobile contamination contributes enormously to global warming, you have to question the logic, not of the low prices that Venezuelan metro users pay, but rather the considerably high prices of public transportation in the United States. It is more expensive to travel between Washington and Nueva York in train during certain hours than by plane!

E.M. The Venezuelan opposition often calls the government’s social program “populist” and in that form questions its legitimacy. Is this assertion fair?

S.E. Programs that stimulate the empowerment of members of the popular classes, or that represent learning experiences for them, cannot be denigrated in this form. One example is the allocation of money to a community council for public works, even when a private contractor could carry out the project more efficiently without community participation. The pegging of social security pensions to the minimum wage, which before Chávez was nothing more than a promise, can also not be classified as crass populism, since it represents a compensation for work carried out during an entire lifetime.

E.M. Henrique Capriles, in his two presidential campaigns, pledged to implement social programs. Does support for social programs cut across the ideological spectrum?

S.E. The Caracazo and other mass disturbances in Latin America taught neoliberals that you could not simply eliminate social programs and hope that the market would work its magic on the poor. But the defenders of neoliberalism advocate focused programs, limited to those in dire need. Neoliberals distinguish between the poor and the very poor and presume that the former will not need state aid because they will soon benefit from the economic boom that neoliberal policies supposedly guarantee. In contrast, the community councils, Barrio Adentro and other programs established by the Chavista governments in popular communities incorporate popular classes that are above the level of dire poverty.

E.M. Give me examples of policies or programs that are highly subsidized that should be examined and possibly modified, especially in light of the difficult situation of the present, in large part due to falling oil prices.

S.E. Beyond a doubt, gasoline prices represent a subsidy for the privileged classes more than the popular classes. There are other examples of highly subsidized prices that in my opinion are not justified, at least at this economically difficult moment. Currently the price of preferential dollars for travelers in 13-14 bolívares to the dollar is virtually a giveaway. The Venezuelan tourist who pays part of his or her costs abroad with dollars purchased on the black market in Venezuela is paying approximately 40 times more than what he or she pays for CENCOEX dollars. A significant increase in the price of preferential dollars for travelers would not represent a heavy burden for the middle class, which is the main beneficiary of the system.  

E.M. Are there other programs that should be the subject of a national discussion?

S.E. Yes, but not with the idea of deciding whether or not to eliminate them, but in order to design practices to improve their functioning, especially taking into consideration the pressing challenges of the present. I will speak of two of them, which are perhaps the most important in this respect: the system of “just prices” and the Misión Vivienda. I am not in agreement with the proposal to establish a single currency exchange rate system, since it would, in effect, drastically increase the prices of basic commodities. As I said before, I do not oppose highly subsidized prices, but it is necessary to establish distinctions and priorities, particularly given the current situation. The goal has to be to create a structure of prices that puts an end to the market of the bachaqueros and the sale of products calculated on the basis of the parallel market for foreign exchange.

One measure that could be considered is the establishment of two types of “just prices,” taking into consideration the distinction between essential commodities (like milk) and important products that are less than essential. In addition, two different prices could be established for goods like meat. The cheaper regulated price for the popular classes would correspond to products sold in Mercal or through the community councils, but under strict state supervision, and a second price would be for butcher stores in middle class areas. In the present, middle class members who make purchases in butcher stores pay an exorbitant price. That price should be regulated, taking into consideration that the middle class has also been hit hard by the economic problems of the last two or three years.

Two conclusions with regard to this topic. First, heavily subsidized prices for basic products should not be eliminated but rather revised and in some cases modified. Second, the most effective manner to design viable mechanisms in order to eliminate illicit sales is through discussions at the rank-and-file level, beginning with the UBCHs.

E.M. And in the case of the Misión Vivienda?

S.E. It strikes me that many Chavistas –I’m not talking about members of the opposition or even the undecided – are in disagreement with the free distribution of products and services. One example is the case of Misión Vivienda. These Chavistas may be confusing the victims of natural tragedies with people who have a capacity to pay. I am sure that all Chavistas support the granting of free housing to natural tragedy victims and others who are in a similarly desperate situation. The majority of the beneficiaries of Misión Vivienda receive houses or apartments after a socio-economic study has been undertaken to determine their installment plan, although the cost itself does not vary. The fact that the price is far below market value is consistent with the concept of the “social debt,” fervently defended by President Chavez and undoubtedly supported by all Chavistas. The problem is when a beneficiary, for justified or unjustified reasons, delays payment by one or two years. With inflation as it is, such a deferment is the equivalent of a hand out.

E.M. How should the state act in cases like these?

S.E. In my opinion, the state has to be strict in this type of situation, while ruling out home foreclosures and other inhumane practices of capitalism. For example, in the case of delays in payment, I believe the state should reprogram the payment schedule, taking in consideration the rate of inflation, and unless justified motives are demonstrated, it should charge a fine.

E.M. Doesn’t this type of rigidity clash with socialist humanism, which favors the popular classes?

S.E. When it comes to discipline and people assuming “responsibility,” capitalism definitely has great advantages. Capitalism implicitly or explicitly relies on a range of threats that go from unemployment to hunger for the purpose of “disciplining” the labor force. Socialism cannot, or should not, employ the politics of hunger to oblige people to be responsible. But at the same time, it cannot resort to utopian thinking, which Marx confronted in his polemical writings. It is necessary to recognize that cultural transformation, and specifically the sense of responsibility and citizenship, does not advance at the same pace as structural changes. In his writings, Michael Lebowitz cites the phrase “socialism does not fall from the sky.” Socialism needs to invent its own mechanisms that are creative and practical in order to confront challenges of this nature. The first step is to recognize the profundity of the problem and then to analyze and learn from past experiences.

E.M. You say that capitalism has effective mechanisms to discipline the labor force. And in the case of socialism?

S.E. One of the most pressing challenges facing socialism has to do with job security (or “stability”). In practice, “absolute job security,” in which management cannot lay off workers for unjustified reasons, sometimes gets converted into the right of the worker to disregard his or her obligations on the job, and thus be immune to being discharged for any reason. One of the causes of the collapse of the Soviet Union was low levels of labor discipline, and especially worker absenteeism.

For Venezuela, it is particularly important to assimilate this experience and come up with practical measures to confront the problem. I say this because Venezuela has been in the forefront of providing workers with job security, at the same time that it has been reduced to a minimum throughout the world. The Organic Labor Law (LOTTT) of 2012 conferred on workers an important degree of job security and thus undid the modifications embodied in the 1997 reform of the then existing labor law.

The practice of outsourcing has also deprived workers of job security. Chávez was an enemy of the abuses of outsourcing and ordered the incorporation of large numbers of contracted workers by PDVSA and other state companies, even before the promulgation of the LOTT, which put an end to the practice. But measures of this type generate resistance. In the United States, the right grouped in the Republican Party labels criticism of outsourcing “populist.”

E.M. Why populist?

S.E. Because according to the right, outsourcing is a permanent feature of the modern world. The implication is there is no turning back! The populist project, according to this viewpoint, is unsustainable because it blocks progress.

E.M. I have the impression that you support absolute job security and oppose outsourcing, but with reservations.

S.E. As always, the devil is in the details. Both banners are historical and just. What is lacking is a discussion at the grassroots level of the implementation of measures in favor of job security and elimination of outsourcing. Socialism has to overcome the great historical challenge: guaranteeing that labor discipline and productivity equals or surpasses the levels achieved by capitalism. In the case of outsourcing, for instance, a worker who is contracted to carry out a job that by nature is for a specific period of time cannot become a permanent employee, because to do so would be to undermine the company’s productivity.

E.M. In the first part of the interview, you talked of the necessity of contextualizing the adoption of pragmatic strategies and policies. What is the context for the implementation of social programs that the opposition calls “populist”?

S.E. Chávez’s decision at the outset of his presidency in 1999 to prioritize social goals over economic ones was realistic and in my opinion correct. The opposition and many political commentators in those years characterized his social programs as “populist.” But if Chávez had emphasized economic goals over social ones he may not have returned to power on April 13, or may not have survived politically in subsequent years. Indeed, the strategy was so successful that the opposition itself ended up modifying its language in opposition to the social programs. Don’t forget that the Medical Federation went to the courts to try to expel the Cuban doctors from Venezuela. After so many electoral failures the opposition changed its tactics and pledged itself not to touch the mission programs. Indeed, if you want to talk about “crass” or “cheap” populism, the electoral offer of presidential candidate Manuel Rosales of “Mi Negra” in 2006 is a good example.   

No one denies the importance of economic goals and few deny the slowness of economic development of recent years in Venezuela. But it is necessary to take into account political context. In this sense extremes have to be avoided. One extreme is what I would call “technocratic socialism,” which offers a blue print for the maximization of production. Technocratic socialism is very rational, but it is politically fragile. Those who champion this approach criticize the Chavista government, sometimes subtly, for having overemphasized social goals at the expense of economic ones, at the same time that they dismiss the government’s social programs as “populist.” Some of them converge with the opposition in calling the state “rentier,” without taking into account the qualitative changes achieved by social programs.

E.M. You talk of the necessity of finding solutions to problems related to social programs through an open discussion in the rank and file of the Chavista movement. In your book El fenómeno Chávez [Rethinking Venezuelan Politics], you speak of the interaction, in some cases conflicts, between those in positions of authority and the movement’s rank and file. Some have observed that Chavistas in the higher ranks of the PSUV impose their positions, thus disregarding the essence of participatory democracy.

S.E. Although pragmatic and populist policies have generated distortions, the possibility of overcoming them always exists, as I have tried to demonstrate in this interview. To correct past errors, the participation of the rank and file in decision making is fundamental.

With regard to your observation, it is undeniable that the Chavista movement has created channels of participation, but they have to be broadened and improved. I will provide an example. At nearly each instance, the MVR and the PSUV have called primaries to choose candidates and in some cases for leadership positions, in sharp contrast to the opposition, which has generally been reluctant to consult their membership. President Chávez insisted that the Chavistas in official positions should refrain from participation in any way in internal electoral processes in order to guarantee a level playing field for all pre-candidates. This policy has not been put to practice. It is necessary, in my opinion, to define and regulate the norms for primaries, and organize debates among the pre-candidates in order to facilitate the exchange of ideas and permit that Chavista voters make their selection on the basis of proposals and not personalities. Spaces such as these, which produce fresh ideas and proposals, represent the best way to correct negative practices and the problems that have arisen as a result of populist policies.

E.M. To end the interview, what are the basic arguments in refutation of the view that the Chavista governments have been characterized by “crass populism,” particularly with regard to social programs?

S.E. There are various factors that have to be taken into account. First, the opposition exaggerates and generalizes when it ignores or denies the profound impact that social programs have had. The facts speak for themselves. For example, there is no denying that there are community councils that have not gotten off the ground, but there are numerous ones that have successfully executed more than one or two projects. These cases cannot be compared to the famous zinc roofs that were given away for electoral purposes in the Fourth Republic, and indeed were examples of cheap populism.

Any objective evaluation of the community council program has to contrast two types of situations. On the one hand, money assigned to councils that do not complete their first project. On the other hand, successful councils as well as those whose performance is not one hundred percent satisfactory but provide members valuable learning experiences in participation. In addition, an objective evaluation has to determine whether the state has learned from experiences of over ten years of worker cooperatives and community councils and has improved its practices in order to minimize the squandering of money. A study of this type is urgent. In other words, it is necessary to determine if there has been a learning curve on the part of the state. The political analysts who use the term populism to discredit the government do not analyze social problems with this degree of objectivity or precision.

E.M. You maintained that there are various factors that refute the thesis of “crass populism” put forward by the opposition.  You have just mentioned one, namely exaggerations and lack of precision. What are the others?

S.E. I will discuss two more. The second factor is the political context. Analysts who accuse the government of crass populism fail to take into account the political context as an explanatory factor. The aggressive tactics against revolutionary governments have historically obviated the possibility of putting the new system truly to the test. Once the revolutionaries in power adopt measures that are necessary to confront the aggression but force them to stray from their original path, it is difficult at a future date for them to get back on track. This was the case with the deviations in the Soviet Union under Stalin in the 1930s at a time when the nation faced the threat of an invasion from Nazi Germany. Stalin’s legacy impeded the rectifications that were attempted following his death in 1953.

In the case of Venezuela, the aggressions included a series of attempts to overthrow the government over a short period of time – first the coup of 2002, then the general strike, then the guarimba and after that the recall election of 2004, whose results the opposition refused to recognize. Given this political climate, Chávez was right in his decision to prioritize social programs, including the offering of free or highly subsidized products and services. But once these measures were applied, the policies created expectations among the population – including the middle class, in the case of preferential dollars for travelers – that subsequently made it difficult to change priorities to favor productivity and industrial development. It is misleading, if not deceptive, to talk of crass populism without taking into account these circumstances.

E.M. And the third factor?

The populist leader, in the pejorative sense of the word, does not consult the people. Those who maintain that Chávez was a caudillo-type populist who decreed programs from above in order to buy votes – as political scientist and politician Jorge Castaَñeda claims – do not take into account discussion and debate among the Chavistas. Indeed, two currents within Chavismo correspond to two historical currents within Marxism at the world level. One of them can be called “orthodox” Marxism, based on the centrality of production and the idea that the key class in the struggle for socialism is the industrial working class. The other current is “socialist humanism” (sometimes called “Western Marxism”), which emphasizes the importance of the transformation of values and the necessity to reach people at their own level rather than imposing a model on them.

In effect, those Chavistas who advocated the prioritization of production represent an expression of the first current, that is, orthodox Marxism. Those Chavistas who underscore solidarity with the non-privileged and justify offering free or highly subsidized goods and services represent “socialist humanism.” There is no doubt that the issue does not have simple answers, even while we recognize that economic development is a fundamental long-term goal. But there is a debate within Chavismo. Those who characterize the Chavista movement as populist and its leaders as demagogues pass over this rich internal discussion, at the same time that they implicitly or explicitly write off the Chavista rank and file, as well as the popular sectors of the population, as an ignorant mass.