[NYTr] Venezuela in the Aftermath

[All the News That Doesn't Fit]

Counterpunch - Dec 5, 2007
http://www.counterpunch.org/petras12052007.html


Venezuela in the Aftermath

As Right Gloats, Chavistas Figure Out What Went Wrong

By JAMES PETRAS

Venezuela's constitutional reforms supporting President Chavez's
socialist project were defeated by the narrowest of margins: 1.4 pr
cent of 9 million voters. The result however was severely compromised
by the fact that 45 per cent of the electorate abstained, meaning that
only 28 per cent of the electorate voted against the progressive
changes proposed by President Chavez. While the vote was a blow to
Venezuela's attempt to extricate itself from oil dependence and
capitalist control over strategic financial and productive sectors, it
does not change the 80 per cent majority in the legislature nor does it
weaken the prerogatives of the Executive branch. Nevertheless, the
Right's marginal win does provide a semblance of power, influence and
momentum to its efforts to derail President Chavez' socio-economic
reforms and to oust his government and/or force him to reconcile with
the old elite power brokers.

Internal deliberations and debates have already begun within the
Chavista movement and among the disparate oppositional groups. One fact
certain to be subject to debate is why the over 3 million voters who
cast their ballots for Chavez in the 2006 election (where he won 63 per
cent of the vote) did not vote in the referendum. The Right only
increased their voters by 300,000 votes; even assuming that these votes
were from disgruntled Chavez voters and not from activated right-wing
middle class voters that leaves out over 2.7 million Chavez voters who
abstained.

Whenever the issue of a socialist transformation is put at the top of a
governmental agenda, as Chavez did in these constitutional changes, all
the forces of right-wing reaction and their ('progressive') middle
class followers unite forces and forget their usual partisan bickering.
Chavez' popular supporters and organizers faced a vast array of
adversaries each with powerful levers of power. They included:

    1) numerous agencies of the US government (CIA, AID, NED and the
Embassy's political officers), their subcontracted 'assets' (NGO's,
student recruitment and indoctrinations programs, newspaper editors and
mass media advertisers), the US multi-nationals and the Chamber of
Commerce (paying for anti-referendum ads, propaganda and street action);

    2) the major Venezuelan business associations FEDECAMARAS, Chambers
of Commerce and wholesale/retailers who poured millions of dollars into
the campaign, encouraged capital flight and promoted hoarding, black
market activity to bring about shortages of basic food-stuffs in
popular retail markets;

    3) over 90 per cent of the private mass media engaged in a non-stop
virulent propaganda campaign made up of the most blatant
lies--including stories that the government would seize children from
their families and confine them to state-controlled schools (the US
mass media repeated the most scandalous lies--without any exceptions);

    4) The entire Catholic hierarchy from the Cardinals to the local
parish priests used their bully pulpits and homilies to propagandize
against the constitutional reforms--more important, several bishops
turned over their churches as organizing centers to violent far
right-wing resulting, in one case, in the killing of a pro-Chavez oil
worker who defied their street barricades. The leaders of the
counter-reform quartet were able to buy-out and attract small sectors
of the 'liberal' wing of the Chavez Congressional delegation and a
couple of Governors and mayors, as well as several ex-leftists (some of
whom were committed guerrillas 40 years ago), ex-Maoists from the 'Red
Flag' group and several Trotskyist trade union leaders and sects. A
substantial number of social democratic academics (Edgar Lander, Heinz
Dietrich) found paltry excuses for opposing the egalitarian reforms,
providing an intellectual gloss to the rabid elite propaganda about
Chavez 'dictatorial' or 'Bonapartist' tendencies. 

This disparate coalition headed by the Venezuelan elite and the US
government relied basically on pounding the same general message: The
re-election amendment, the power to temporarily suspend certain
constitutional provisions in times of national emergency (like the
military coup and lockouts of 2002 to 2003), the executive nomination
of regional administrators and the transition to democratic socialism
were part of a plot to impost 'Cuban communism'. Right-wing and liberal
propagandists turned unlimited re-election reform (a parliamentary
practice throughout the world) into a 'power grab' by an
'authoritarian'/'totalitarian'/'power-hungry' tyrant according to all
Venezuelan private media and their US counterparts at CBC, NBC, ABC,
NPR, New York and Los Angeles Times, Washington Post. The amendment
granting the President emergency powers was de-contextualized from the
actual US-backed civilian elite-military coup and lockout of 2002-2003,
the elite recruitment and infiltration of scores of Colombian
paramilitary death squads (2005), the kidnapping of a
Venezuelan-Colombian citizen by Colombian secret police (2004) in the
center of Caracas and open calls for a military coup by the ex-Defense
Minister Baduel.

Each sector of the right-wing led counter-reform coalition focused on
distinct and overlapping groups with different appeals. The US focused
on recruiting and training student street fighters channeling hundreds
of thousands of dollars via AID and NED for training in 'civil society
organization' and 'conflict resolution' (a touch of dark humor?) in the
same fashion as the Yugoslav/Ukrainian/Georgian experiences. The US
also spread funds to their long-term clients--the nearly defunct
'social democratic' trade union confederation--the CTV, the mass media
and other elite allies. FEDECAMARAS focused on the small and big
business sectors, well-paid professionals and middle class consumers.
The right-wing students were the detonators of street violence and
confronted left-wing students in and off the campuses. The mass media
and the Catholic Church engaged in fear mongering to the mass audience.
The social democratic academics preached 'NO' or abstention to their
progressive colleagues and leftist students. The Trotskyists split up
sectors of the trade unions with their pseudo-Marxist chatter about
"Chavez the Bonapartist' with his 'capitalist' and 'imperialist'
proclivities, incited US trained students and shared the 'NO' platform
with CIA funded CTV trade union bosses. Such were the unholy alliances
in the run-up to the vote.

In the post-election period this unstable coalition exhibited internal
differences. The center-right led by Zulia Governor Rosales calls for a
new 'encounter' and 'dialogue' with the 'moderate' Chavista ministers.
The hard right embodied in ex-General Baduel (darling of sectors of the
pseudo-left) demands pushing their advantage further toward ousting
President-elect Chavez and the Congress because he claimed "they still
have the power to legislate reforms"! Such, such are our democrats! The
leftists sects will go back to citing the texts of Lenin and Trotsky
(rolling over in their graves), organizing strikes for wage increasesin
the new context of rising right-wing power to which they contributed.

Blunders of the Constitutional Reformers

The Right-wing was able to gain their slim majority because of serious
errors in the Chavista electoral campaign as well as deep structural
weaknesses.

Referendum Campaign: 1) The referendum campaign suffered several flaws.
President Chavez, the leader of the constitutional reform movement was
out of the country for several weeks in the last two months of the
campaign--in Chile, Bolivia, Colombia, France, Saudi Arabia, Spain and
Iran) depriving the campaign of its most dynamic spokesperson. 2)
President Chavez got drawn into issues which had no relevance to his
mass supporters and may have provided ammunition to the Right. His
attempt to mediate in the Colombian prisoner-exchange absorbed an
enormous amount of wasted time and led, predictably, nowhere, as
Colombia's death squad President Uribe abruptly ended his mediation
with provocative insults and calumnies, leading to a serious diplomatic
rupture. Likewise, during the Ibero-American summit and its aftermath,
Chavez engaged in verbal jousts with Spain's tin-horn monarch,
distracting him from facing domestic problems like inflation and
elite-instigated hoarding of basic food stuffs.

Many Chavista activists failed to elaborate and explain the proposed
positive effects of the reforms, or carry house-to-house discussions
countering the monstrous propaganda ('stealing children from their
mothers') propagated by parish priests and the mass media. They too
easily assumed that the fear-mongering lies were self-evident and all
that was needed was to denounce them. Worst of all, several 'Chavista'
leaders failed to organize any support because they opposed the
amendments, which strengthened local councils at the expense of majors
and governors.

The campaign failed to intervene and demand equal time and space in all
the private media in order to create a level playing field. Too much
emphasis was placed on mass demonstrations 'downtown' and not on
short-term impact programs in the poor neighborhoods ­solving immediate
problems, like the disappearance of milk from store shelves, which
irritated their natural supporters.

There were two basic problems which deeply influenced the electoral
abstention of the Chavez mass supporters: The prolonged scarcity of
basic foodstuffs and household necessities, and the rampant and
seemingly uncontrolled inflation (18 per cent) during the latter half
of 2007 which was neither ameliorated nor compensated by wage and
salary increases especially among the 40 per cent of self-employed
workers in the informal sector.

Basic foodstuffs like powdered milk, meat, sugar, beans and many other
items disappeared from both the private and even the public stores.
Agro-businessmen refused to produce and the retail bosses refused to
sell because state price controls (designed to control inflation)
lessened their exorbitant profits. Unwilling to 'intervene' the
Government purchased and imported hundreds of millions of dollars of
foodstuffs--much of which did not reach popular consumers, at least not
at fixed prices.

Partially because of lower profits and in large part as a key element
in the anti-reform campaign, wholesalers and retailers either hoarded
or sold a substantial part of the imports to black marketers, or
channeled it to upper income supermarkets.

Inflation was a result of the rising incomes of all classes and the
resultant higher demand for goods and services in the context of a
massive drop in productivity, investment and production. The capitalist
class engaged in disinvestment, capital flight, luxury imports and
speculation in the intermediate bond and real estate market (some of
whom were justly burned by the recent collapse of the Miami real estate
bubble).

The Government's half-way measures of state intervention and radical
rhetoric were strong enough to provoke big business resistance and more
capital flight, while being too weak to develop alternative productive
and distributive institutions. In other words, the burgeoning crises of
inflation, scarcities and capital flight, put into question the
existing Bolivarian practice of a mixed economy, based on
public-private partnership financing an extensive social welfare state.
Big Capital has acted first economically by boycotting and breaking its
implicit 'social pact' with the Chavez Government. Implicit in the
social pact was a trade off: Big Profits and high rates of investment
to increase employment and popular consumption. With powerful backing
and intervention from its US partners, Venezuelan big business has
moved politically to take advantage of the popular discontent to derail
the proposed constitutional reforms. Its next step is to reverse the
halting momentum of socio-economic reform by a combination of pacts
with social democratic ministers in the Chavez Cabinet and threats of a
new offensive, deepening the economic crisis and playing for a coup.

Policy Alternatives

The Chavez Government absolutely has to move immediately to rectify
some basic domestic and local problems, which led to discontent, and
abstention and is undermining its mass base. For example, poor
neighborhoods inundated by floods and mudslides are still without homes
after 2 years of broken promises and totally inept government agencies.

The Government, under popular control, must immediately and directly
intervene in taking control of the entire food distribution program,
enlisting dock, transport and retail workers, neighborhood councils to
insure imported food fills the shelves and not the big pockets of
counter-reform wholesalers, big retail owners and small-scale black
marketers. What the Government has failed to secure from big farmers
and cattle barons in the way of production of food, it must secure via
large-scale expropriation, investment and co-ops to overcome business
'production' and supply strikes. Voluntary compliance has been
demonstrated NOT TO WORK. 'Mixed economy' dogma, which appeals to
'rational economic calculus', does not work when high stake political
interests are in play.

To finance structural changes in production and distribution, the
Government is obligated to control and take over the private banks
deeply implicated in laundering money, facilitating capital flight and
encouraging speculative investments instead of production of essential
goods for the domestic market.

The Constitutional reforms were a step toward providing a legal
framework for structural reform, at least of moving beyond a capitalist
controlled mixed economy. The excess 'legalism' of the Chavez
Government in pursuing a new referendum underestimated the existing
legal basis for structural reforms available to the government to deal
with the burgeoning demands of the two-thirds of the population, which
elected Chavez in 2006.

In the post-referendum period the internal debate within the Chavez
movement is deepening. The mass base of poor workers, trade unionists
and public employees demand pay increases to keep up with inflation, an
end to the rising prices and scarcities of commodities. They abstained
for lack of effective government action--not because of rightist or
liberal propaganda. They are not rightists or socialist but can become
supportive of socialists if they solve the triple scourge of scarcity,
inflation and declining purchasing power.

Inflation is a particular nemesis to the poorest workers largely in the
informal sector because their income is neither indexed to inflation as
is the case for unionized workers in the formal sector nor can they
easily raise their income through collective bargaining as most of them
are not tied to any contract with buyers or employers. As a result in
Venezuela (as elsewhere) price inflation is the worst disaster for the
poor and the reason for the greatest discontent. Regimes, even rightist
and neo-liberal ones, which stabilize prices or sharply reduce
inflation usually secure at least temporary support from the popular
classes. Nevertheless anti-inflationary policies have rarely played a
role in leftist politics (much to their grief) and Venezuela is no
exception.

At the cabinet, party and social movement leadership level there are
many positions but they can be simplified into two polar opposites. On
the one side, the pro-referendum dominant position put forth by the
finance, economy and planning ministries seek cooperation with private
foreign and domestic investors, bankers and agro-businessmen, to
increase production, investment and living standards of the poor. They
rely on appeals to voluntary co-operation, guarantees to property
ownership, tax rebates, access to foreign exchange on favorable terms
and other incentives plus some controls on capital flight and prices
but not on profits. The pro-socialist sector argues that this policy of
partnership has not worked and is the source of the current political
impasse and social problems. Within this sector some propose a greater
role for state ownership and control, in order to direct investments
and increase production and to break the boycott and stranglehold on
distribution. Another group argues for worker self-management councils
to organize the economy and push for a new 'revolutionary state'. A
third group argues for a mixed state with public and self-managed
ownership, rural co-operatives and middle and small-scale private
ownership in a highly regulated market.

The future ascendance of the mixed economy group may lead to agreements
with the 'soft liberal' opposition--but failing to deal with scarcities
and inflation will only exacerbate the current crisis. The ascendance
of the more radical groups will depend on the end of their
fragmentation and sectarianism and their ability to fashion a joint
program with the most popular political leader in the country,
President Hugo Chavez.

The referendum and its outcome (while important today) is merely an
episode in the struggle between authoritarian imperial centered
capitalism and democratic workers centered socialism.


[James Petras, a former Professor of Sociology at Binghamton University,
New York, owns a 50 year membership in the class struggle, is an
adviser to the landless and jobless in brazil and argentina and is
co-author of Globalization Unmasked (Zed). His new book with Henry
Veltmeyer, Social Movements and the State: Brazil, Ecuador, Bolivia and
Argentina, will be published in October 2005. He can be reached at:
jpetras at binghamton.edu ]