Changing Venezuela by Taking Power – Introduction

La verdad de Venezuela
no se ve en el Country club
la verdad se ve en los cerros
con su gente y su inquietud [1]

-Alí Primera,
"Yo Vengo de Donde Usted no ha Ido"

With
the general disorientation that today dominates left parties and
theorists around the world, following the successive failures of state
socialism and of social democracy, one would hardly have expected a
small, relatively wealthy, and inconspicuous country in Latin America to boldly announce it will create 21^st
century socialism. Why and how was this possible in Venezuela? What
does it mean? What are its prospects for success? These are the three
main questions this book seeks to answer.

The International Context

The election of a leftist president in Venezuela
in 1998 foreshadowed what would, in the following seven years, become a
wave of successes for left-leaning presidential candidates in Latin America.
Leftists who followed Hugo Chavez into the presidency of their
respective countries were, first, Luiz Ignacio "Lula" da Silva in
Brazil in October 2002, then Lucio Gutierrez in Ecuador in January
2003, Nestor Kirchner in Argentina in May 2003, Tabaré Vázquez in
Uruguay in October 2004, Evo Morales in Bolivia in December 2005,
Rafael Correa in Ecuador in November 2006, and then Daniel Ortega in
Nicaragua also in November 2006. While some of these moderated
significantly shortly after taking office, such as Gutierrez and da
Silva, they represent a wave of left of center leaders whose election
came as a bit of a surprise given the aforementioned disorientation
within the left around the world.

For
practically the entire 1990's "the left," ranging from moderate social
democrats to leftwing socialists, appeared to be somewhat perplexed as
to what their concrete political program should be. The fall of the
Berlin Wall in 1989 and the subsequent implosion of the Soviet Union
and of other state socialist regimes signaled the complete discrediting
of state socialism and central planning as an institutional solution
for achieving the ideals of socialism. At first, this collapse appeared
to vindicate social democrats, who had always argued in favor of mixing
state and market, in lieu of a complete abolition of the market.

However,
it soon became obvious that social democracy was in a crisis too. In
the U.S., in Britain, and in Germany, left of center leaders entered
office again in the 1990's, after a long absence, but found that that
their old Keynesian recipes of state intervention in the market's
dysfunctions did not work as well as they used to. Globalization of
financial markets and massive indebtedness and deficits made old-style
social democratic programs unviable. Capital had become too mobile and
the welfare state too expensive for social democratic policies. As a
result, Bill Clinton, Tony Blair, and Gerhard Schröder tried to devise
a new more moderate program for the left, which essentially accepted
the market imperatives that neo-liberals had created in the 1980's and
tried to balance budgets and dismantle social programs. At the same
time, they tried to keep their left credentials by being slightly to
the left of their more conservative opponents. Meanwhile, in Latin
America, similarly centrist presidents governed, partly as a result of
the left having been purged from politics during the dictatorships of
the 1970's and 1980's and partly because of the constraints that
massive state indebtedness and financial deregulation placed on
governance in Latin America too.

In
short, social democracy had become unviable in an age of unrestricted
capital flows and lack of financial resources. Instead, neo-liberalism
emerged as the dominant political ideology. This economic program had
been applied with a vengeance in Latin America
throughout the 1980's and 1990's. The results of neo-liberalism, which
meant privatization of state assets, free trade, state fiscal
austerity, and deregulation of the labor market, were far from as good
as neo-liberalism's apostles had claimed they would be. Between 1980
and 1999, during the height of neo-liberalism in Latin America, per
capita economic growth of the continent was a paltry 11%, compared to
an 80% per capita GDP growth in the previous 20 years (a mostly
Keynesian period), of 1960-1979. [2]
Also, these meager economic results and the material hardship many of
the policies implied led to wide-spread resistance movements and often
to their violent repression. As we will see, Venezuela came to be prime
example of the failures of neo-liberalism, resistance, and repression.

A New New Left?

What remained, then, as an economic program for the countries of Latin America
and for the left in general? State socialism, social democracy, and
neo-liberalism all seemed to have run their unsuccessful course. By the
early 21^st century no clear answers had emerged, but voters were willing to give the left another opportunity in Latin America,
despite the vagueness of their programs. However, of the leftist
presidents that were elected in this first decade, only one, President
Hugo Chavez Frías of Venezuela,
eventually declared that he is following an explicitly anti-capitalist
and pro-socialist agenda. At first, despite his somewhat inflammatory
(some would say populist) rhetoric, Chavez's policies were equally
moderate as those of his fellow Latin American leftists.

Two
things stood out, though, when comparing Chavez with these other
presidents. First, Chavez faced far more vehement and even violent
opposition to his presidency than the others, even though initially his
concrete policies were not much different from those of Brazil's Lula da Silva or Chile's
Michele Bachelet. Second, Chavez's confrontation with the opposition
led him to eventually become a far more radical left politician than he
started out as. It was not until after a coup attempt in 2002, a
two-month shutdown of the country's all-important oil industry in
2002-2003, and a presidential recall referendum in August 2004 that
Chavez declared his political program to be socialist, in January
2005-a full six years into his presidency.

Of
course, just because Chavez announced the pursuit of socialism does not
mean that his policies are socialist. Too often have politicians
claimed to be in favor of socialism, only to pursue policies that ended
either in a centrally planned dictatorship or in capitalism as usual.
Thus, to find out whether Chavez's policies match his rhetoric and to
see if these policies constitute a real alternative to state socialism,
social democracy, and neo-liberalism, it makes sense to examine them
carefully. Also, even if they constitute a real alternative, do they
actually lead towards a better society?

The Path Towards 21^st Century Socialism in Venezuela

Before examining the question of whether Venezuela is actually heading towards something that might be called 21^st century socialism, the present study first tries to explain how and why 21^st century socialism came to be on the agenda in Venezuela.
That is, Chavez and his Bolivarian movement appeared in Venezuela at a
very specific time in the country's history, in a context in which
social democracy and neo-liberalism were probably more discredited than
in most other countries in the world.

Chapter
1, "The Dialectic of Counter-Revolution and Radicalization," reviews
recent Venezuelan history and how this history made a radical project
such as that of Chavez's Bolivarian Revolution possible. [3]
It shows how, ever since the 1920's, Venezuela
had grown accustomed to constantly increasing oil revenues, which
fueled the development of a strong and economically interventionist
state. However, when oil revenues started a long 20-year decline in the
early 1980's and it could no longer support its large state sector and
a political system that bought political loyalty with oil revenue.
Poverty and inequality sky-rocketed to the highest levels in Latin
America
in this period. The old political system, which had grown increasingly
corrupt and repressive and which was held together with an exclusionary
two-party pact, began falling apart, eventually giving a complete
political outsider such as Hugo Chavez, who promised revolutionary
change, the chance to win the presidency in 1998. Another important
factor in Chavez's rise to power was that his movement was based on a
coalition between progressive sectors of Venezuela's military and
Venezuela's traditionally excluded more radical left movements and
parties.

As
stated earlier, once elected, Chavez gave very radical speeches,
promising to eliminate poverty and corruption and to completely
overturn the country's ossified political system with a new
constitution. It is tempting to believe that Chavez's anti-poverty and
anti-corruption program is what incensed the country's old elite to
launch an all-out campaign to oust him. However, it was actually his
success in completely displacing the old elite from positions of power
that provoked their ire. During his first three years in office,
Chavez's anti-poverty, anti-corruption, and redistribution measures
were actually quite modest. Rather, it was the new constitution, which
required the re-legitimation of all branches of government and the
resulting complete removal of the old elite from state power that
incensed them so much.

As a result, Venezuela's
old elite refused to accept Chavez as the legitimately elected
president and engaged in a no-holds-barred effort to get rid of him.
Chavez, though, proved to be a particularly intransigent foe, who
refused to concede to the opposition any of its demands. The heightened
conflict led to both a polarization of Venezuelan society and to the
splitting off of significant chunks of Chavez's coalition and their
joining the opposition. The conflict came to its first major
confrontation with the April 2002 coup attempt, which demonstrated the
extent of the opposition's hubris. Not only did it not recognize Chavez
as the legitimate president, but it had also completely ignored his
growing constituency among the country's poor and excluded. The
opposition's miscalculations about Chavez's popularity among the poor
and among the military spelled the coup's failure.

This
miscalculation of the opposition, which was rooted in its firm belief
that it represented the "reasonable" majority of the country and that
Chavez was not a legitimate president, led to several other failed
adventures. The next such adventure was the two-month shutdown of the
country's all-important oil industry, from early December 2002 to early
February 2003, where the opposition lost its power base in the oil
industry. Next, it tried to oust Chavez via the legal means of a
presidential recall referendum. This too failed spectacularly. Finally,
Chavez was reelected in a landslide victory of 63%, to the 36% of his
main opponent.

By
then, however, the combination of the opposition's implosion as a
result of its repeated failures, and the start of a new oil boom in
2004, had liberated the Chavez government from the restraints that most
leftists face once in office. Economically, the pressure to please
international capital in the name of foreign investment and development
was practically eliminated thanks to the boom in oil prices.
Politically, the opposition had lost crucial bases of power in the
polity, the military, the oil industry, and in society in general,
thereby freeing Chavez from the need to take opposition reactions to
his policies into consideration. Chavez thus discarded his earlier
moderation and in early 2005 publicly declared his conversion to a new
form of socialism, of "21^st century socialism," which he would work on instituting in Venezuela.
The parties and sectors that supported Chavez enthusiastically went
along with the announcement because they too appeared to have been
radicalized by the preceding confrontations with the U.S. supported opposition.

Identifying 21^st Century Socialism in Venezuela

The
heart of the book, Chapters 2 to 5, provide detailed descriptions and
analyses of the governance policy, economic policy, social policy, and
foreign policy of the Chavez government and the extent to which the
Chavez government manages to approximate institutions that fulfill the
ideals Chavez talks about. In all four policy areas there are clear
indications that indeed the government is pursuing innovative policies
that transcend the institutions of capitalism as usual. However, these
policies are often contradicted or undermined by contravening policy
tendencies. For example, while the Chavez government has embarked on an
important project of increasing citizen participation in a wide variety
of state institutions, it has also increased the importance and
strength of the presidency, which tends to undermine the participatory
policies. In the area of economic policy, the government has gone a
long way towards establishing economic democracy, but the high oil
revenues upon which many of these policies depend, threaten the
long-term viability of self-managed enterprises in Venezuela. These
types of contradictions exist in all of the main policy areas examined
here.

Despite
the frequent contradictoriness of the policies, many of them do lay the
groundwork for institutions that would fulfill the ideals of 21^st
century socialism. This is a crucial achievement, not only for
Venezuelans, because it raises the hope for a Venezuela with more
social justice, but it also serves a broader example of what left or
socialist politics of the future could look like. An analysis of the
Venezuelan institutions that work towards fulfilling society's ideals
can help provide orientation and hope to a disorganized, fragmented,
and often demoralized left throughout the world.

However,
in addition to the frequent problem of contradictory policies, there
are even deeper obstacles lurking within the Bolivarian socialist
project, which have to do with the Bolivarian movement itself. The last
chapter, "Opportunities, Obstacles, Prospects," discusses these
obstacles and finds that the three most important obstacles for the
Chavez government's project are the persistence of a patronage culture,
the nascent personality cult around Chavez, and Chavez's own autocratic
instincts, which undermine the creation of a participatory society. If
Venezuelan society and the Chavez government manage to resolve these
three key issues that are internal to the Bolivarian movement, if the
policies themselves are made more consistent, and if there is no
significant outside interference, then Venezuela might well be the
greatest hope for establishing freedom, equality, and social justice in
over a generation.

Those who are interested in developing a basis for evaluating what 21^st
century socialism might mean in Venezuela and whether the Chavez
government's policies actually lead towards the fulfillment of the
ideals of 21^st century socialism, should read Appendix A, "What is 21^st
Century Socialism?" This appendix first presents some general ideas
about this conception of socialism. Unfortunately, Chavez has not
clearly defined 21^st century socialism, other than to say
that it is about establishing liberty, equality, social justice, and
solidarity. He has also indicated that it is distinctly different from
state socialism. However, such ideals, by themselves, make 21^st century socialism indistinguishable from most other social projects of the 20^th and 21^st century. Surely, what distinguishes 21^st
century socialism would have to be the institutions it aims to create,
not the ideals it is pursuing. At heart, such institutions would be
characterized by their democratic and participatory nature. Also, if
one establishes that the economic institutions of capitalism-of private
ownership of the means of production, the market system, and
pro-capitalist state-are incapable of fulfilling society's ideals, then
the new institutions must clearly distinguish themselves from these
institutions. This chapter goes on to outline what non-capitalist,
perhaps 21^st century socialist, political and economic institutions could look like.

[1]
The truth of Venezuela/one does not see in the Country Club/the truth
one can see in the hills/with the people and their unrest [Note: The
poor majority of Caracas lives in the "hills," while many of the city's
rich live in a part of the city known as "Country Club."]

[2] Weisbrot and Rosnick (2003)

[3] A more detailed overview and analysis of this history will soon be available in a separate book by the same author.