Venezuela: Not What You Think

The fact that only a tiny fraction of the American public are ever exposed to balanced coverage of the Venezuelan stories defined by our mainstream media is only one problem. A larger problem is that practically nobody in the United States ever hears anything about truly newsworthy stories in Venezuela. Stories about exciting new political and economic initiatives that are dramatically reducing poverty and challenging popular myths about the abilities of ordinary people to make good political and economic decisions for themselves go virtually uncovered in the United States.

12/01/07 "MRZine" – — -In the case of Hugo Chavez and the
Venezuelan Bolivarian Revolution, the mainstream media and
politicians in the United States have elevated their game of
demonizing all who oppose US foreign policy and business
interests to a higher level of absurdity than usual. According
to the mainstream media, the only newsworthy stories in
Venezuela are one sided diatribes lifted from the discredited,
opposition-owned media in Venezuela. For example, we read about
Chavez shutting down opposition TV stations. We hear that Chavez
is rewriting the Venezuelan Constitution so he can be President
for life. Chavez is a dictator, QED.

All the badly outgunned, alternative media in the US can do is
try its best to rebut the bias in the storylines defined by the
mainstream media. The tiny fraction of Americans who visit the
alternative media discover that Chavez has submitted a proposal
to change the Venezuelan Constitution in a number of ways, one
of which is to eliminate term limits on the office of President.
All changes will first have to be approved by the democratically
elected Venezuelan National Assembly, and then also approved in
a popular referendum before they become law. Only Americans who
search out the alternative media discover that HugoChavez was
elected President by a comfortable margin in 1998, survived an
opposition-sponsored recall in 2004, and most recently was
re-elected in December 2006 with more than 60% of the vote.
International observers certified all three elections as fair
and square. George Bush, on the other hand, was selected
President by a partisan Supreme Court after losing the popular
vote in 2000, and won re-election only because enough black
voters in Ohio were disenfranchised by a partisan Republican
official to keep the Buckeye State in the Republican column in
2004. Few observers believe Bush could survive a recall
election today, but of course this basic element of democratic
rule is not permitted by the US Constitution. Nonetheless, the
only storyline ninety-nine percent of Americans hear remains:
Hugo Chavez is a dictator and George Bush is the democratically
elected leader of the free world.

Similarly, only the small
fraction of Americans who access the alternative media learn
that RCTV was not shut down because it campaigns openly
against the government — which it has for nine years. Instead,
when its license came up for renewal, its application was denied
because it had violated 200 conditions of its licensing
agreement — many violations having to do with its role in
helping to organize a military coup that nearly toppled the duly
elected President of the country. Moreover, the station
continues to broadcast on a cable network, and the opposition in
Venezuela still broadcasts on more major TV channels than there
are channels sympathetic to the government. In stark contrast,
the alternative media in the US cannot be viewed on any major
channel. Consequently the vast majority of Americans receive
all their news from a mainstream media which never questions
whether the US has any right to dominate other nations, but only
debates the wisdom of alternative strategies for doing so, and
would never dream of questioning the desirability of an economic
system dominated by their corporate owners. Nevertheless the
storyline most Americans hear remains: Freedom of the press is
dead in totalitarian Venezuela, but alive and well in the
democratic United States.

It is important to distinguish
between whether mainstream coverage of issues like amendments to
the constitution and the TV license is biased, whether there are
grounds for reproaching the Venezuelan government, and whether
the policies are wise. Clearly the mainstream media has failed
to report relevant facts and their coverage has been grossly
unfair. From what I know, the procedure that led to non-renewal
of the TV license was unobjectionable, and the proposed
constitutional amendment will be decided by a thoroughly
democratic process. So while there are ample grounds for
reproaching mainstream media coverage in the US, as far as I can
see there are no grounds for reproaching the Venezuelan
government in either case. However, this does not mean the
policies are necessarily wise. Those in Venezuela who argue
that the revolutionary government would be hammered by the
imperial press in any case are surely correct. On the other
hand, that does not mean either initiative is good policy,
independent of the news coverage it receives. Moreover, giving
one's enemies an easy chance to focus on a negative storyline
seems unwise — unless the policy has important benefits.

Unfortunately, the fact that
only a tiny fraction of the American public are ever exposed to
balanced coverage of the Venezuelan stories defined by our
mainstream media is only one problem. A larger problem is that
practically nobody in the United States ever hears anything
about truly newsworthy stories in Venezuela. Stories about
exciting new political and economic initiatives that are
dramatically reducing poverty and challenging popular myths
about the abilities of ordinary people to make good political
and economic decisions for themselves go virtually uncovered in
the United States.1

I speak fluent Spanish, have
lived and worked in Latin America on two occasions, and have
traveled extensively in Latin America for over forty years. One
of the few Latin American countries I had never visited before a
year ago was Venezuela. I have now made two trips to Venezuela
in the past nine months at the invitation of the
Centro Internacional Miranda
I was in Caracas for one week in October 2006 — before the
December 2006 presidential elections that provided Chavez with a
popular mandate to pursue a more aggressive socialist agenda.
During that visit I met with officials in the Planning Ministry
and faculty and students in the Planning Ministry school. I had
long discussions with people at the Miranda Center working on
projects in critical pedagogy, participatory budgeting, new
models of production, human development through popular
participation, new forms of political participation, and new
models of socialism for the twenty-first century. I also
visited health clinics, subsidized food distribution centers,
community radio stations, and adult education centers in poor
neighborhoods in Caracas. During a two-week visit in July 2007
I visited the rural state of Lara as well as Caracas. In
Caracas I participated in numerous seminars and meetings at the
Miranda Center, attended an adult education class at the new
Bolivarian University, met again with officials in the Planning
Ministry and students in the Planning Ministry school, met with
officials in the new Ministry for the Communal Economy, and
visited with workers in a "recuperated" factory and activists in
a "nucleus of endogenous development." In Lara I attended
meetings of three rural communal councils, a meeting of
spokespersons from ten other rural communal councils, a meeting
of spokespersons from all the communal councils in the town of
Carora, and talked with citizen directors of a communal bank. I
also met with the mayors of Carora (state of Lara) and
Libertador (state of Carabobo) who pioneered participatory
budgeting initiatives in their municipalities. What follows is
an account of some stories I believe many Americans would find
truly newsworthy.


Like most Latin American
economies, the Venezuelan economy deteriorated during the 1980s
and most of the 1990s. From 1998 to 2003 real per capita GDP
continued to stagnate while the Chavez government survived two
general strikes by the largest Venezuelan business association,
a military coup, and finally a devastating two month strike by
the state owned oil company. However, after Chavez survived the
opposition sponsored recall election, annual economic growth was
18.3% in 2004, 10.3% in 2005, and 10.3% in 2006, and the
unemployment rate fell from 18.4 % in June 2003 to 8.3% in June
2007. Moreover, most of the growth was in the non-oil sectors
of the economy, as the oil sector barely grew during 2005 and
2006. While this impressive growth would not have been possible
without the rise in international oil prices, it also would not
have been possible had the Chavez government not ignored the
warnings of neoliberal critics and pursued aggressive
expansionary fiscal and monetary policies.

At the height of the oil strike
the poverty rate rose to 55.1% of households and a startling
62.1% of the population. However, by the end of 2006 the
poverty rate had declined dramatically to 30.6% of households
and 36.3% of the population, which compares favorably with a
pre-Chavez rate of poverty in 1997 for households of 55.6% and
for individuals of 60.9%. While much of this decrease in
poverty was due to strong economic growth, it was also due to a
dramatic increase in social spending by the Chavez government.
Social spending per person by the central government increased
by an average of 19% per year from 1998 to 2007. However, this
does not include social spending by the state-owned oil
company. If social spending by PDVSA is included, there was an
increase of 35% per person per year since 1998. The most
dramatic increase in social spending was in the area of health
care. In 1998 there were over 14,000 Venezuelans for each
primary healthcare physician, and few physicians worked in rural
or poor urban areas. By 2007 there was one primary healthcare
physician for every 1,300 Venezuelans, and many of the new
physicians were working in clinics in rural areas and poor
barrios that had never had physicians before.2
There are also now 16,000 stores in poor areas throughout the
country selling staples at a 30% discount on average.

the Social Economy

Reforms First: For
eight years the Chavez government went out of its way not to
threaten the private sector. Despite relentless hostility and
numerous provocations from the Venezuelan business association
and the privately owned media, there were few nationalizations
and the state sector did not grow appreciably. While the
government did launch a serious land reform, the program
proceeded more cautiously than government rhetoric and landowner
complaints would lead one to expect. Instead, Chavez
concentrated on redirecting profits from the state owned oil
company to social programs to benefit the poor, and financing
development of what the government called the "social economy."
In addition to increasing spending dramatically on healthcare
and food subsidies, the government launched a massive program of
adult education. Millions of poor Venezuelans have now overcome
illiteracy, and hundreds of thousands have received primary
diplomas and secondary degrees studying in store-front schools
named Mision Robinson I (literacy), Mision Robinson II
(primary), and Mision Rivas (secondary).

But none of this addressed the
high rate of unemployment and the most pressing economic needs
of those who had voted Chavez into office. The business sector
was hostile to the Chavez government from the outset and
oscillated between economic sabotage and capital flight. So the
private sector could not be relied on to increase investment,
production, and employment. Nor was extensive nationalization
an attractive option because Chavez wanted to avoid provoking
the business community unnecessarily, and there was a shortage
of competent officials who were also politically trustworthy to
run more state enterprises. Moreover, neither Chavez nor his
closest associates were enamored of the "state socialist"
model. So increasing employment by expanding the state sector
was also not seen as a desirable option. Determined not to
renege on electoral promises to better economic conditions for
his supporters as many populists in Latin America have in the
past, Chavez launched a massive program to create worker-owned
cooperatives in both rural and urban areas.

Cooperatives: New
worker-owned cooperatives not only provided much needed jobs
producing much needed basic goods and services, they also
featured what was soon to become a hallmark of Bolivarian
socialism — popular participation at the grassroots level.
When Chavez was first elected President in 1998, there were
fewer than 800 legally registered cooperatives in Venezuela with
roughly 20,000 members. In mid-2006 the National
Superintendence of Cooperatives (SUNACOOP) reported that it had
registered over 100,000 co-ops with over 1.5 million members.3
Generous amounts of oil revenues continue to provide start-up
loans for thousands of new cooperatives every month, and the
Ministry for the Communal Economy continues to spearhead a
massive educational program for new cooperative members.
However, the ministry provides more than technical assistance
regarding technology, accounting, finance, business management,
and marketing. It also teaches participants about cooperative
principles, economic justice, and social responsibility.

Participatory Budgeting:
Even before the December 2006 referendum provided Chavez with a
popular mandate to deepen the social revolution, the government
had moved ahead to add participatory budgeting and local
economic development initiatives called "nuclei of endogenous
development" to the educational Misiones, subsidized food
stores, and worker cooperatives comprising the social economy.
Three international experts on participatory budgeting in other
countries were part of the Miranda Center work team during my
visit in July.
Richard Franke

(USA) shared his research on the history of participatory
budgeting in Kerala India, and
Marcos Arruda

(Brazil) and
Daniel Schugurensky

(Canada) shared their research on participatory budgeting in
Brazil with those developing the program in Venezuela. What was
clear to all of us was that while the practice of participatory
budgeting may be more advanced in Kerala and Brazil where
decades of experience have helped people learn how to deal with
important practical problems like how to combine technical
expertise about public work projects with popular determination
about priorities, the prospects for participatory budgeting in
Venezuela are much greater.

A hostile national government in
India limits how far the left united front government in the
state of Kerala can take the program there. And unfortunately
the Lula government in Brazil has done little to build other
elements of a "solidarity economy" to compliment participatory
budgeting, and even damaged the reputation of participatory
budgeting by using it to administer austerity measures. In
Venezuela, on the other hand, the President and Congress are now
fully supportive of participatory budgeting and busy building
complementary components of a full-scale "social economy." In
Venezuela, participatory budgeting is viewed by many not merely
as a better way to make decisions about local public goods, but
as part of a process to democratize all aspects of economic
life. Not surprisingly some local officials have resisted
participatory budgeting because it challenges their traditional
powers and privileges. Others, like the mayors of Carora and
Libertador who turned all municipal revenues over to
neighborhood assemblies to use as they saw fit, have embraced
the program as well as the changes it brings to the role of

Communal Councils:
After the referendum in December 2006, a major campaign to
organize and empower communal councils was launched as a new
step toward building the social economy. The Ministry of
Participation and Social Development, MINPADES, worked to
establish the initial components of the social economy. In 2004
the Ministry for the Popular Economy, MINEP, was created to help
build new components of the social economy. When the government
decided to create communal councils in every neighborhood, MINEP
was strengthened and renamed the Ministry for the Communal
Economy, MINEC. After lengthy debate, it was decided that
communal councils should be comprised of twenty to fifty
households in rural areas and two-hundred to four-hundred
households in urban areas. Since communal councils are the
building blocks of a whole new political structure in Venezuela,
it may seem odd that sometimes they are comprised of fewer than
fifty families in rural areas. The small size was chosen to
ensure that every family, even in rural areas where small
villages are often distant from one another, would have a real
chance to participate in the most fundamental political
decisions that affect them.

All the rural communal councils
we visited in the state of Lara had decided that housing was a
high priority. Each went through the difficult process of
deciding which families would get new houses since there was not
enough to provide new houses for all. We asked the members what
criteria they used. We asked about nepotism. We asked what
happened to families who were disappointed and disagreed with
the decisions. While answers varied, the major criterion taken
into consideration was need — the state of a family's existing
housing and the number of children. While all tried to reach
consensus, in some of the communal councils votes were taken,
and in some cases those who were disappointed threatened to
leave. A major difference between councils was how far they
stretched their housing budget by providing materials locally,
reducing the number of rooms, or providing labor. In one case,
a council member was a builder himself who was able to oversee
much of the building by community members, thereby stretching
the housing budget the farthest. The builder did not receive
one of the new houses because, we were told, his house was
predictably in decent repair. He said he was not disappointed
because he was confident he would receive a new house next year,
or the following, after others whose houses were in worse repair
got theirs. In another council the disappointed family who had
threatened to leave was talked out of it, in part because they
thought they had a good chance of getting a house the following

Other projects varied a great
deal. One communal council built a facility to raise chickens
— against the advice of a government agronomist who thought
they would be better off upgrading their facilities for goat
herding. We asked who would work in the new communal chicken
farm, how they would be paid, and how profits would be shared.
It was clear from their answers that all of that remained to be
thought through, although everyone agreed that not all would be
expected to work in the communal chicken business since some had
paying jobs outside the community that nobody expected them to
give up. Several councils had mud roads paved over so people
would be able to get out to a main road during the rainy
season. One built a health clinic. Both these projects
required coordination with outside agencies. Council
spokespeople lobbied the municipality to pave more of their mud
roads and only used communal council funds to pay for the
remainder. The Ministry of Health had to be consulted about
staffing the clinic. One communal council decided to build a
community building for meetings and festivals.

The meetings we attended were
well attended — with representation from over half of the
households. That was frequently not the case initially, as
facilitators — often municipal employees who had previously
worked in educational Misiones — had to help communities
organize a second meeting after attendance was poor at the first
meeting. Choosing more convenient meeting times, passing out
more flyers, and knocking on more doors was often necessary, but
making clear residents would forego significant funds unless
they created a communal council eventually led to functioning
communal councils in every community in the municipality. Every
communal council had elected a vocero, or spokesperson, and a
suplente, or substitute spokesperson, for each theme decided by
the communal assembly (for example, health, recreation,
electricity, etc.). Of the roughly two hundred spokespersons we
met in rural communal councils and urban communal councils in
the town of Carora, a disproportionate number were poor women of
color with several children. Most of them had only recently
become politically active. Almost all of them were strongly
Chavista. A disproportionate number of facilitators in the
municipality were younger women from working-class families who
had some college education, who were also strongly pro-Chavez.
One spokesperson we interviewed extensively was a middle-aged
white man who appeared to be the wealthiest person in his
community and was active in an opposition political party. His
neighbors were fully aware of his political allegiance, which
few of them shared, but expressed complete trust in his
integrity and described him as the person in the community who
was best at getting things done. For his part, he expressed
strong support for participatory budgeting and communal councils
for which he credited Chavez and the Chavista mayor of Carora.
But he said he had no intention of quitting his opposition
political party or becoming a Chavista himself.

Activists, Politicos, and
Experts: While it is important to focus on what is
happening on the ground, and what activists in different parts
of the social economy are thinking, one should not ignore the
influence of politicians and ministries that affect the social
economy. More than anyone else, of course, Chavez has the
greatest effect on the political agenda in Venezuela and
especially on initiatives in the social sector. My impression
from his speeches, and from what senior fellows at the Miranda
Center who are familiar with his thinking have told me, is that
Chavez is both the leader of the entire Chavista movement, but
also the leader of its radical wing. Over the past nine years
Chavez has frequently led the charge to deepen the process of
social change — often through new initiatives in the social
economy. In this respect the role played by Chavez has been
similar to the role Mao played in China during the 1950s and
1960s when he was both the head of government and the party, but
also the leader of the left-wing faction within the CCP.4
What we might call the "Chavista camp" is an amalgam of small
left parties and groups that initially included some small
centrist and center-left parties as well — all predating his
election — and a much larger diverse group of activists
politicized by different campaigns and programs launched by his
government. Although there is now an attempt underway to create
a unified Venezuelan socialist party comprised of all who
typically refer to themselves simply as "Chavistas," one of the
defining features of the last nine years has been the absence of
a unified socialist political party driving the political
process — for better or worse.5

While somewhat arbitrary and
imprecise, it is useful to distinguish between two different
tendencies within this diverse and loosely knit "Chavista"
camp. The vision of the more moderate tendency includes
left-Keynesian policies combined with further welfare reforms,
but does not extend beyond a market system with a "mixture" of
private and public enterprise. Since one of the two opposition
parties representing the oligarchy, Accion Democratica, is
officially a social democratic party and member of the Socialist
(formerly Second) International, one has to be careful when
using the term "social democrat" in Venezuela. But elsewhere
this moderate tendency within the Chavista camp would be
described as solidly social democratic, and mostly unmarred —
at least so far — by retrogressive "third wave," or "New
Democrat" tendencies. These moderates within the Chavista camp
are generally less optimistic than those in the more radical
tendency about the ability of ordinary Venezuelans to make good
decisions for themselves, and therefore tend to be more
skeptical about how well what we might call "power to the
people" as opposed to "serve the people" initiatives will work.

The guiding vision of the more
radical tendency in the Chavista camp reaches far beyond a mixed
economy guided by left-Keynesian policies and humanized by a
substantial welfare state. Most in the radical tendency
describe what they are part of as the "Bolivarian Revolution,"
and call their guiding vision "twenty-first century socialism."
Because these terms are unique to Venezuela, they offer little
help to those of us outside trying to understand what they mean.6
Those in the radical tendency see what is happening as a
revolution because they see it as a profound social
transformation and dramatic change in power relations among
social groups. They also believe this revolutionary
transformation should continue until popular self-rule has been
achieved in every area of social life. These "Bolivarian
revolutionaries" call their vision "socialist," but they do not
emulate any models of socialism developed by those who called
their societies socialist in the twentieth century. For
example, while they see Cuba as their closest ally, pay homage
to Cuba for its lonely but steadfast opposition to US
imperialism for half a century, and admire all that Cuban
socialism has achieved for the Cuban people, they do not see
Cuba, much less any other "socialist" country, as the model of
socialism they aspire to. In particular, they make clear that
their vision of a twenty-first century socialist economy is
quite different from the Cuban economic system and the economic
systems in all other countries that call or called themselves
socialist. Instead, Bolivarian revolutionaries are socialist in
the sense that they are committed to achieving what they believe
those who have called themselves socialist dating back to the
nineteenth century have all aspired to — an economy
qualitatively distinct from capitalism, where production is for
use not profit, and where workers and consumers plan their own
activities democratically and equitably.

One is tempted to describe these
radicals in the Chavista camp as libertarian socialists because
of their insistence on the centrality of worker and community
self-management, and their rejection of any models of socialism
where it is absent. But this would be misleading in important
respects. Few Bolivarian Revolutionaries seem to trace their
intellectual origins to libertarian socialism. Nor do many of
them share the libertarian socialist critique of
Marxism-Leninism. While Bolivarian Revolutionaries do not
believe any who called themselves socialist in the twentieth
century succeeded in achieving socialism as they envision it,
most of them appear to believe it was the intent of socialists
in Marxist-Leninist parties who achieved state power to do so,
even if they failed to find the means, or got lost along the
way. They also have a different perspective on reforms than
many twentieth-century libertarian socialists. They see their
Bolivarian Revolution as an evolutionary revolution — feeling
its way toward new social relations and new human values —
rather than as an abrupt reversal of class rule derived from a
change in control over the means of production. As best I can
tell, most Bolivarian revolutionaries also regard reforms in
what is still predominantly a capitalist economy as positive
steps in the revolutionary process. Libertarian socialists have
often been inclined to view reforms within capitalism
negatively, as distractions deployed by the enemies of "real"
social change to forestall revolutionary momentum.

My ability to gauge the thinking
of "experts" working in ministries involved with the social
economy is limited. It is based on a few conversations I was
able to have with officials in the Planning Ministry and the
Ministry for the Communal Economy, on reactions to presentations
I made at both ministries, and on my review of the curriculum
students are studying at the Planning Ministry school. I was
constantly surprised and invariably pleased by what these
"experts" were thinking. At the beginning of my first visit, at
the risk of never being invited back, I decided to take
advantage of my opportunity to address the vice ministers,
faculty, and first class of students at the Planning Ministry
school to challenge the traditional conception of socialist
planning. I began my talk by saying that if they thought their
job was to make better and better plans, I thought they were
wasting their time at best, and having a negative effect at
worst. After an embarrassed silence, I went on to say that
instead I thought the job of people working in the Venezuelan
Planning Ministry was to help workers in cooperatives and
consumers in communal councils and assemblies plan how to
cooperate more effectively among themselves. To my surprise my
audience agreed. Moreover, they said they understood this meant
they rejected the foundation underlying previous conceptions of
socialist planning, and had, in effect, accepted a new prime
directive: "Do not plan for others, facilitate planning
by others." Since I was invited back, I have had
several opportunities to confirm that people at the Planning
Ministry were not merely humoring a rude foreigner during my
first visit. I have also studied the curriculum and read the
texts being used to train those who will soon be key personnel
in the Planning Ministry. It is completely different from
standard curricula on national planning and reflects the
perspective of "facilitator" rather than "plan maker."

At the new Ministry for the
Communal Economy, the people I met seemed equally clear about
what their job was. They are busy creating the basic elements
of a social economy — self-managed worker cooperatives,
communal councils, and communal assemblies. They are busy
teaching the elected leaders of these cooperatives, councils,
and assemblies that they must work with one another on the basis
of mutual respect and solidarity rather than treat one another
as antagonists in commercial exchanges. And finally, they are
trying to help cooperatives, councils, and assemblies find
practical ways to plan their interrelated activities fairly and
efficiently among themselves so the market system can be
replaced within the social economy. The fact that nobody before
has ever succeeded in helping large numbers of autonomous groups
of workers and consumers plan their joint activities
democratically, equitably, and efficiently themselves does not
seem to daunt those I met at MINEC. They are sceptical of
formulaic proposals and believe answers for how best to do this
will emerge from trial and error over time. But they seem
convinced it can and will be done.

A sum bigger than its parts:
At present the social economy — made up of educational
Misiones, healthcare clinics, subsidized food stores, worker
cooperatives, nuclei of endogenous development, participatory
budgeting, communal councils, and assemblies of communal
councils — is the most rapidly growing sector of the Venezuelan
economy and is the driving force behind the Bolivarian vision of
twenty-first century socialism. Its typical promoter in policy
circles is a new breed of left intellectuals thoroughly
convinced that ordinary people can make their own economic
decisions and determined to devise means to help them do so.
Its typical face is a newly empowered, poor mother of color —
and make no mistake, she is a force to be reckoned with! It is
in the social economy, not the state sector, that the future of
Venezuelan socialism lies. The state sector is in many ways
disappointing. Attempts to promote worker participation in
state enterprises have been largely unsuccessful. There have
been no serious attempts to plan within the state sector, as
state-appointed managers are expected to keep their individual
enterprises out of the red — both economically and
politically! What one must hope for in Venezuela is that, as
the new social economy deepens and grows, its values and
institutions will eventually absorb not only the private sector
but the state sector as well.

What I found particularly
impressive was how clear Venezuelan revolutionaries are for the
most part about how they want their social economy to function,
and why it must differ from both a market system and the kind of
bureaucratic planning common in twentieth-century socialist
economies. They have correctly identified the Achilles' heel of
centralized planning — failure to allow for self-management.
Every component of the new social economy is self-consciously
designed to give "direct producers" and consumers control over
the economic decisions that affect them. There are no
bureaucrats to tell workers in their cooperatives what to
produce and how to produce it. There are no politicians to tell
residents of barrios what local public goods to prioritize in
the participatory budgeting process. The families in the new
communal councils discuss and decide on their own spending
priorities in open meetings, and spokespeople from communal
councils decide on municipal spending priorities in communal
assemblies. Communal banks, whose officers are members of the
communal councils that the banks serves, allow communities to
make their own decisions about who among them most deserve loans
and can make best use of available funds. And nuclei of
endogenous development are designed to organize local resources
to meet local needs through local initiatives in ways that
devotees of community-based economics in the developed
capitalist world can only fantasize about.

But those building the social
economy in Venezuela also reject the anti-social effects of
commercial relations inherent in the market system. From the
very beginning, those working with the new cooperatives worried
that market forces lead worker cooperatives to prioritize their
narrow self-interest at the expense of community and social
interests. MINEP training programs for new members emphasized
that cooperative values include serving the social interest.
The decision to encourage cooperatives to join nuclei of
endogenous development was intended to build community ties,
involve cooperatives in local planning initiatives, and help
cooperatives see themselves as part of a larger community. The
vision for the social economy is clearly one where producers in
worker councils, and consumers in communal councils, and
communal assemblies plan their own activities and coordinate
their interrelations among themselves equitably.

In his Alo Presidente
program on September 14, 2003 devoted to the social economy,
Chavez emphasized: "The social economy bases its logic on the
human being," and its purpose is "the construction of the new
man, of the new woman, or the new society." Popular
participation, equitable cooperation, and solidarity — the
defining features of the social economy — also permeate the new
Bolivarian Constitution. Article 299 emphasizes the need to
ensure "overall human development." Article 102 calls for
"developing the creative potential of every human being."
Article 62 declares that participation by people is "the
necessary way of achieving the involvement to ensure their
complete development, both individual and collective," and calls
for democratic planning and participatory budgeting at all
levels of society. Article 70 refers to "self-management,
co-management, and cooperatives in all forms" as examples of
"forms of association guided by the values of mutual cooperation
and solidarity."

for the Twenty-First Century

I was invited to work with the
Miranda Center and speak at both the Ministry of Planning and
the Ministry for the Communal Economy primarily because my chief
research interest is how to make economic planning more
participatory. As traditionally studied this subject has two
subfields: Most researchers focus their attention on how to
broaden and deepen participation of members within a
worker council or cooperative, or how to facilitate
participation of consumers within a consumer or
communal council. A smaller group of us focus our main
attention on how production and consumption units that are
internally self-managed can coordinate their interrelated
activities among themselves fairly and efficiently while
preserving their autonomy. A unique feature of a theoretical
model of a participatory economy7
I helped design is a "participatory planning" procedure which
solves this problem without resort to either markets or a
planning bureaucracy. The participatory planning procedure is
designed to give worker and consumer councils autonomy of action
while helping them discover and commit to an equitable and
efficient division of labor among themselves — with as little
time wasted in discussion and meeting as possible. To what
extent my research in this area proves useful to those building
the social economy in Venezuela remains to be seen.

In my opinion, all the
essentials for a truly participatory, social economy are already
in place in Venezuela — worker cooperatives, communal councils
and assemblies, and participatory budgeting. A strong political
campaign encouraging popular participation, economic justice,
and solidarity is in full swing. And the search for practical
ways for worker cooperatives, communal councils, and communal
assemblies to coordinate their interrelated activities
themselves — democratically, fairly, and efficiently — is on.
From what I saw during my visit, a great deal is being
discovered about how to coordinate effectively with other units
in the social economy by those who are making participation
within worker cooperatives and communal councils a reality.
From what I heard, most involved in developing the social
economy in Venezuela understand that traditional solutions to
the coordination problem should be studied as negative, not
positive, examples to learn from. And from what I experienced,
those involved on both the grassroots and ministerial levels in
the first, great social experiment of the twenty-first century
have open minds about how best to coordinate semi-autonomous
groups in their social economy, and are asking all of the right
questions about the pros and cons of different options.

There is no guarantee that all
of this positive momentum will succeed, and one does not have to
look hard to find reason for concern. In the US, the foreign
policy establishment, which includes the leadership of the
Democratic Party, remains adamantly opposed to the Venezuelan
alternative to neoliberalism. Prior to the rise of Chavez,
socialist political parties were not as strong in Venezuela as
in some other Latin American countries, and therefore socialist
ideology is still quite new to most Venezuelans. The hostility
of the oligarchy and opposition parties has not diminished, and
it is possible that disagreements between the moderate and
radical wings of the Chavista movement will create dangerous
political moments in the next few years. And finally, while
much of what I saw and described above is extremely encouraging,
the process of building the social economy has been very
uneven. While millions of Venezuelans have been deeply affected
and undergone a profound political transformation, there are
still millions who remain passive even if they have benefited
materially from a government-sponsored program. Socialism is by
no means yet secured in Venezuela, and "all the right
moves" is a lot to ask for. But what is happening in Venezuela
should make us all more confident than ever that "a better world
is possible," and millions of people in Venezuela are
busy building it now.


I intend no criticism of alternative media coverage of
Venezuela. For the most part, the alternative media does the
best it can given the restrictive conditions under which it
operates. In particular

provides high-quality, professional coverage of Venezuela on a
regular basis.


For an informative report on the new neighborhood clinics where
healthcare and medicines are free and the emphasis is on
preventative medicine, see a three-part series by Rebecca
Trotzky Sirr on the Upside Down World web site:


For a description of the cooperative sector in Venezuela, see
Betsy Bowman and Rob Stone,
"Venezuela's Cooperative
& Sense, No. 266, July/August 2006, Camila
Pineiro-Harnecker in MRZine,
and articles by C. Pineiro-Harnecker, S. Wagner, and F.
Perez-Marti at
For an excellent account of the role the "social sector" played
prior to 2005, see Michael Lebowitz,
Build It Now: Socialism for the
Twenty-First Century
Monthly Review Press, 2006, Chapters 5, 6, and 7.


I am not likening Chavez to Mao in any other way, and
certainly not suggesting that Chavez is a "Maoist."


A discussion of the pros and cons of attempting to organize a
unified socialist party is beyond the scope of this essay. The
initial local meetings of the five million Venezuelans who
signed up to join the new party were beginning during my visit
in July.


On the other hand, because the terms are new and unique to
Venezuela, they do help us avoid the mistake of thinking that
the process and associated vision can be neatly pigeon-holed
into familiar leftist categories from the past — which they


Michael Albert and Robin Hahnel, The Political Economy of
Participatory Economics (Princeton University Press, 1991), and
Robin Hahnel, Economic Justice and Democracy: From Competition
to Cooperation (Routledge, 2005).

Robin Hahnel is a
Professor of Economics at American University.