Chávez: 'Galbraithiano'

Galbraith is celebrated not just by Chávez but by a wide
range of reformers, including Ecuador's
new president, Rafael Correa, himself an economist. This popularity reflects a
growing enthusiasm for the state regulation of the economy that Galbraith
prescribed.

By Greg Grandin - The Nation

galbraith.jpg

Economist John Kenneth Galbraith
Economist John Kenneth Galbraith
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Last year, the New York Times reported that Hugo Chávez, in
his speech before the United Nations--the one in which he called George W. Bush
the Devil and urged Americans to read Noam Chomsky--expressed
regret that he hadn't had a chance to meet the linguist before he died. A call
to Mr. Chomsky's house, the Times writer quipped, found him very much alive.
The Times, though, had to issue a quick correction when, upon review of the
original Spanish, it became clear that Chávez was referring not to Chomsky but
rather to John Kenneth Galbraith, who had indeed passed away a few months
before.

There is something more than a little ironic about this
incident, where the press, in a rush to ridicule the controversial Hugo Chávez,
lost John Kenneth Galbraith in translation, for it is exactly the Harvard
economist's brand of New Deal social democracy, itself long expunged from public
discussion, that would allow for a more honest consideration not just of
Chavismo but the broader Latin American left of which it is a vital part.

Chávez has described himself as a "Galbraithiano"
and says he started reading the economist, whose books have been available in
Spanish in Latin America since the 1950s, as a
teenager. Long before he began referring to Chomsky and other currently
better-known political thinkers, he cited Galbraith to explain his economic
policies; at the beginning of his presidency, in 1999, for example, he urged a
gathering of Venezuelan industrialists to support his mild reform program,
quoting Galbraith to warn that if they didn't, the "toxins" generated
by "extreme economic liberalism" could "turn against the system
and destroy it."

Galbraith is celebrated not just by Chávez but by a wide
range of reformers, including Ecuador's
new president, Rafael Correa, himself an economist. This popularity reflects a
growing enthusiasm for the state regulation of the economy that Galbraith
prescribed. As Latin America struggles to
remedy the damage caused by two decades of failed free-market orthodoxy--which
has produced dismal growth rates and widespread social turmoil and
misery--politicians are rehabilitating key macroeconomic principles unthinkable
a decade ago. Argentina, for example, has generated the region's most
impressive growth by lowering interest rates, maintaining a competitive
currency exchange rate, enacting price controls to stem inflation and driving a
hard bargain with international creditors, thus wiping out two-thirds of the
country's external debt and freeing up state revenue for social spending and
investment.

Galbraith has attracted admirers in Latin
America not just for his macroeconomics but for his critique of
corporate monopolies. His belief that corporations are political instruments
with the incentive and ability to corrupt democracy resonates today in a region
where much of the economy is controlled by foreign firms and where corporate TV
(which Galbraith believed had little to do with free speech and everything to
do with manufacturing consumer demand) has become a bulwark of elite privilege.
Galbraith's solution was to use the state to set up a system of what he called
"countervailing power," enacting aggressive union protection,
unemployment insurance, subsidies, welfare and minimum wage guarantees to
counter monopolies and force a more just distribution of national wealth.

In Latin America, a similar
version of democratic developmentalism held sway in the early 1940s. Reformers
from across the political spectrum believed the region's oligarchy to be an
obstacle to modernization and thought the best way to weaken its deadening grip
was to empower those in its thrall. But the cold war cut short this democratic
experiment, as Washington
threw its support behind reactionary allies in order to insure continental
stability.

Developmentalism continued into the 1970s but under the
auspices of either authoritarian or military regimes, which responded to
demands for a more equitable share of power and wealth with increasing
repression, culminating in the wave of terror that swept the region, from Chile
to Guatemala, in the 1970s and '80s. This violence, which in many countries
decimated the left, made possible the radical free-market economics that
reigned throughout Latin America during the
last two decades of the twentieth century.

The re-emergence of the Latin American left signals a
revival of democratic developmentalism, but with a key difference. While in the
1940s reformers sought to extend political power through unions and peasant
associations vertically linked to parties or leaders, today they rely on a
diverse, horizontal array of "new social movements" to counter their
countries' extreme concentration of wealth and political power--Brazil's
Movimento dos Trabalhadores Rurais Sem Terra, for example, or Bolivia's
Movimiento al Socialismo, less a political party than a coalition of social
movements, or Ecuador's powerful indigenous groups.

But it is Venezuela
that has the most advanced partnership between a state reclaiming the right to
regulate the economy and a diverse array of antineoliberal social movements.
What sets Chavismo apart from past populist experiments in Latin
America is its heterogeneity. It is impossible to spend any time
in urban barrios, among co-op members, community media and other cultural
activists, or in the countryside with peasant organizers and not be impressed
with their diversity of interests, civic investment and commitment to building
a more humane society.

The countervailing power of left civil society
organizations--many existed before Chávez's ascendance; some were founded
afterward--has turned Venezuela into a vibrant democracy and is key to
understanding not just the government's survival in the face of a series of
formidable antidemocratic assaults but its evolving program, as many of its
initiatives come not top-down but from the grassroots. Last December a
respected Chilean polling firm found that in Latin America
only Uruguayans held a more favorable view of their democracy than Venezuelans.

The question Venezuela
faces is how to institutionalize this relationship between a fortified
executive and an empowered citizenry while protecting individual rights and
limiting corruption. Debates are under way over a series of constitutional
reforms, to be voted on in a national referendum in December, that attempt to
do just that. While the international media have focused on a proposal to
remove presidential term limits, other initiatives would greatly strengthen
community councils, created two years ago as the building blocks of Venezuela's
"participatory democracy," in charge of a range of local issues, from
education and healthcare to sanitation and road repair. While critics see the
councils as another mechanism for Chávez to strengthen his power, the
Washington Post writes that in "the neighborhoods, it's hard to find
anything but bubbling enthusiasm."

Could Chavismo devolve into old-style authoritarianism? Of
course. But the record so far indicates otherwise. For all his rhetorical
excess, Chávez has presided over an unprecedented peaceful social revolution,
doubling his electoral support in the process. Save for Chile's Popular
Unity government--which never received nearly as much approval at the polls as
Chávez's Bolivarian experiment has--it is hard to think of another instance
where such a profound reordering of political and economic relations has been
ratified so many times at the ballot box. This is a remarkable accomplishment,
for revolutions, by their nature, tend to generate crises that drain away much
of their initial support, producing cycles of violence and repression.

This achievement is rarely reported on in the US media.
Chávez often repeats an observation by one of his favorite economists to bring
home the point. "Never before," the Venezuelan president quotes
Galbraith as saying, "has the distance between reality and 'conventional
wisdom' been as great as it is today."