What’s next in Venezuela?

The nationalization of a bankrupt and closed-down paper company, Venepal, under workers’ self-management earlier this year signaled a new turn in Venezuelan politics.
Soon afterward, Chávez used the World Social Forum in Porto Alegre, Brazil to talk about “socialism of the 21st century,” and has continued speaking on that theme ever since.

“It is impossible that we will achieve our goals with capitalism, nor is it possible to find an intermediate path,” Chávez said in a May Day speech in the capital city of Caracas. “I invite all of Venezuela to march on the path of socialism of the new century.”

This shift to the left coincides with a new surge of activism in the social movements and National Union of Workers (UNT, by its initials in Spanish), a new labor federation that is fast displacing the conservative Venezuelan Confederation of Labor (CTV), which aligned itself with employers during the failed U.S.-backed coup of 2002 and during the lock-out and sabotage of the national oil company later that year.

Moving beyond his regular denunciations of U.S. imperialism, Chávez is advocating a new economic and political direction for Latin America and the developing world. And by injecting socialism back into the international debate, Venezuela is challenging the free-market mantra coined by former British Prime Minister Margaret Thatcher: “TINA”—There Is No Alternative.
The leverage to chart a new economic course is the surge in oil prices, which, according to the International Monetary Fund, fueled a 17.3 percent growth rate in 2004, the third-fastest in the world.

Now the question of socialism has sharpened the debate in Venezuela over the nature of “the revolutionary process” itself. The emerging struggle in Venezuela over the meaning of “socialism for the 21st century” will have a major impact on the left internationally.

For the U.S. government and Venezuelan big business, the discussion of socialism has vindicated their claims that Chávez is a would-be Fidel Castro with oil, driving toward a one-party dictatorship fueled by petrodollars.

Venezuela has strengthened economic ties with Cuba. But the two country’s political systems are vastly different. Chávez has won a series of elections since 1998 by big majorities because the Venezuelan ruling establishment had been thoroughly discredited through decades of corruption and, finally, economic collapse.

Chávez’s movement arose following the collapse of the two-party power-sharing scheme between the nominally left-of-center Democratic Action (AD) and social Christian COPEI, established in 1958. The government’s embrace of International Monetary Fund (IMF) austerity measures in 1989 provoked a spontaneous insurrection in which the armed forces killed scores of people.

Thus, when Chávez mounted a failed coup in 1992, even mainstream politicians had to admit that he was widely seen as a heroic populist.

The 1990s saw further economic unraveling, with real wages plummeting 23 percent, and some 60 percent of the population forced to rely on the informal sector of the economy to make a living. Out of a population of some 25 million, about 80 percent lived in poverty.

Even the conservative North-South Institute at the University of Miami published a collection of articles in 1995 that showed how Venezuela’s state and party institutions had lost all legitimacy. “The parties and their tactics are blamed for most of the perceived principal problems in their country: corruption, the high cost of living, the inefficiency of public services and personal insecurity,” went a typical contribution.
Meanwhile, the wealthiest Venezuelans—known as the oligarchy—and the upper middle class maintained living standards comparable to their U.S. counterparts.

Mountaintop villas, gated suburban communities, luxury SUVs and private schools seal off moneyed Venezuelans from the crowded Caracas barrios and hillside slums that are vulnerable to rainy-season mudslides (an estimated 10,000 poor people on the outskirts of Caracas died as torrential rains washed away their homes away in 1999).

This inequality is what won Chávez the support of the poor for his “Bolivarian revolution”—named for Simón Bolívar, the 19th century leader of the independence movement against the Spanish colonists—and set the stage for Chávez’s first electoral victory.

During his first three years in office, low oil prices and a severe recession pre-empted Chávez’s planned economic programs. Instead, his focus was on changes to political structures through a constituent assembly that wrote a new constitution. A new presidential election followed.
This, however, was threatening enough to the oligarchy, which used its control of the private media to relentlessly criticize the government and incite the middle class and military.

A mass march of the middle class and a strike called by the CTV union federation on April 11, 2002, served as a springboard for the short-lived military coup that abolished the national legislature and conferred dictatorial powers on the head of the chamber of commerce. A popular mobilization defeated the coup makers, and Chávez returned to Venezuela in triumph.

The opposition’s next move was a “strike” in the state-owned oil company, PDVSA—in reality, a lockout by top management and technical personnel. Backed by the CTV, the lockout-strike was aimed at crippling the economy and driving Chávez from power. Instead, rank-and-file oil workers, along with soldiers from the armed forces, kept production and transportation of oil going through two difficult months.

These two months of effective workers’ control in the oil industry—and in other companies that closed during the strike—became a touchstone for a split within the CTV. The new UNT broke from the CTV’s decades of labor cronyism and corruption to revive class-struggle unionism in Venezuela.

At the same time, the worldwide surge in oil prices enabled the Chávez government to fund a series of “missions”—social programs that bypassed the dysfunctional state bureaucracy in which the old parties remained entrenched.

The new NGO-style programs included funds for Cuban doctors to bring medical care to the slums; literacy and high-school equivalency courses to help workers and the poor gain access to higher education; subsidized grocery stores in the barrios; land reform for poor farmers and the landless; support for indigenous peoples; the creation of new universities and more.

The government missions, supported by the booming oil economy, gave Chávez the momentum to win 59 percent of the vote in the August 2004 recall referendum organized by the opposition.

Despite funding by the U.S. government-backed National Endowment for Democracy, opposition groups lack a credible leader. Divided among right-wing authoritarians, business executives and parties that were formerly part of the socialist left, the opposition had greater room to criticize Chávez when the economy was in crisis, but has offered no alternative other than the discredited old order.

Meanwhile, Chávez has responded to U.S. government threats by purchasing military gear from Spain and 100,000 AK-47 rifles from Russia—which will be used by a popular reserve militia directly under the control of the presidency.

Yet continued social and political polarization has also pressured the Chavista movement itself to put forward a more coherent political alternative—an explicit goal for the “revolutionary process” beyond the vague nationalist aims of the early years.

Chávez’s discussion of socialism is about filling this gap and providing a new orientation for the “Bolivarian revolution.”

Government economists increasingly call for “endogenous economic development” —an effort to divert the country’s oil wealth to spur economic development, create jobs and raise the standard of living for workers and the poor. Within the state bureaucracy, the debate on socialism is being used to separate supporters of the “revolutionary process” from those who oppose or sabotage it.

At the same time, new laws call for co-management in state-owned enterprises —most importantly, the big oil, metals and power-generation companies. Enterprises are to be placed under control of elected delegates from technical personnel and the workers, alongside government appointees.

The government has even raised the possibility of making this a law for all Venezuelan businesses—which would force companies like General Motors, Chrysler and Ford to install worker delegates in their auto plants. Chávez has also spoken of a system of employee ownership in which capitalists would control a maximum of 30 percent of company stocks.

A different path to socialism

Yet although Chávez speaks of taking a different path to socialism, distinct from Stalinism or European social democracy, previous efforts to introduce socialism by means of government laws, co-management or state ownership have failed. For example, in less developed countries, the ouster of colonial governments or puppet states in the 1950s and 1960s saw various attempts at “African socialism” or “Arab socialism”—which turned out to be a variant of capitalism, with the state running things. Venezuela itself nationalized the oil and metal industries in the 1970s, which didn’t challenge capital or democratize the economy.

It is this history that has spurred discussion in the popular movements over how to achieve socialism—and Chávez, for his part, continues to call for such a debate.
For example, the Venezuelan left is critical of the fact that some 21 percent of the government budget for 2005 is being used to repay foreign debt racked up by the corrupt governments of the past, rather than social programs.
Meanwhile, the “classista,” or class-struggle current of the UNT—led by former textile union leader Orlando Chirino and Marcela Máspero of the pharmaceutical workers’ union—has put forward its own vision of socialism: nationalization and workers’ control.

For example, a meeting of regional UNT leaders in the state of Carabobo in March issued a final declaration that condemned efforts by management of the state electrical power company, CADAFE, to denounce UNT union leaders as “counterrevolutionaries” for demanding greater workers’ input in the co-management scheme.

The UNT—which has been denounced by the AFL-CIO as an “arm of the state”—isn’t shy about criticizing government policies, in particular, a currency devaluation that has cut purchasing power for workers and the poor. “There are no reasons that justify this measure, which only favors big business and the bankers; the workers and the poor see that it has produced a wave of price increases in basic products,” said the declaration of a UNT meeting.

UNT leaders also called for the independence of the unions from the employers, the government and political parties. Militants in the UNT have mounted a challenge to more moderate elements led by steelworkers’ union leader Ramón Machuca, whose union remains independent, but who wields influence in the new federation.

In the all-important oil industry, leading union members recently launched the Workers’ Class-Struggle Option (OCT) to challenge what they called the “new technocratic bureaucracy” in PDVSA and to build on the legacy of workers’ control during the oil strike. Aiming to unite workers in different unions, the OCT is trying to lead new fights—for example, to restore contract workers to the status of full-time employees with benefits.

In its founding statement May 14, the group criticized union leaders for “the most deficient contract negotiations in our history” and failing to attain major gains for the workers in view of the record oil industry gains.

More generally, the socialist left is taking the opportunity to spell out its own vision of Venezuela’s revolutionary transformation.

“One cannot speak of socialism without proposing to break with the perverse logic of capitalism, without attacking individual property by radical means, without speaking of democracy—more precisely, the workers and the people deciding in their majority what is to be done,” a member of the group Revolutionary Left Option (OIR) wrote in a recent pamphlet on workers’ control and co-management.

Certainly the expectations of workers in the big state industries—who haven’t seen real wage increases since the 1980s—are rising. And with high oil prices, exceptional natural resources and a developed manufacturing base and sizeable population, Venezuela has far greater scope for economic and social change than, for example, the Nicaraguan revolution, in which a small and shattered economy was battered by U.S. sanctions and a Washington-funded civil war.

Nevertheless, Venezuelan capital and U.S. imperialism are digging in against further change—which points to an even greater level of class confrontation in the future.
A continent in rebellion

Venezuela’s turn to the left coincides with a new wave of mobilizations in Latin America, this time directed mainly at the new populist and center-left governments—new mass protests in Bolivia over proposed privatization of gas, a strike wave in Argentina and renewed marches by the landless workers’ movement in Brazil.

The biggest revolt so far has been in Ecuador, where President Lucio Gutiérrez, was forced from office in April by a popular rebellion.

Gutiérrez himself had led an uprising that ousted a president in 2000, and then campaigned as a Chávez-type populist to win the presidential elections of 2002. In office, however, Gutiérrez implemented the International Monetary Fund’s economic policy and embraced Plan Colombia, Washington’s program to militarize the Andes.

Gutiérrez was even praised by Bush as “the United States’ best ally in the fight against drugs and terrorism.”
His fall is a major blow to Washington, which counted on Ecuador to revive the stalled Free Trade Area of the Americas (FTAA) and give momentum in Congress to the proposed Central American Free Trade Agreement (CAFTA, an extension of NAFTA).

Another linchpin of U.S. policy in South America, Colombian President Álvaro Uribe, has failed to consolidate power and is in danger of losing upcoming presidential elections. Meanwhile, in Mexico, the recent mass protest in defense of the populist mayor of Mexico City, Andrés Manuel López Obrador, forced President Vicente Fox to drop attempts to prosecute him.

Even Brazilian President Luis Inácio “Lula” da Silva—a former union leader and head of the Workers’ Party, whose conservative policies have disappointed supporters, but pleased the White House and Wall Street—has raised Washington’s ire by hosting a recent Latin American-Arab summit and challenging the U.S. trade agenda.

In this context, Chávez is projecting Venezuela as a leader of regional cooperation and the main promoter of alternatives to the FTAA, such as the ALBA or Bolivarian Alternative for the Americas, and using oil to advance regional economic and political ties.

Examples of those efforts are Petrosur, an association of Latin American oil companies, and Telesur, a new regional satellite TV network owned by several Latin American states, under the leadership of the Venezuelan government, which aims to compete with CNN in the region.

These setbacks for U.S. imperialism in Latin America have only put more pressure on Washington to turn the heat up on Venezuela. The upcoming Summit of the Americas, set for Buenos Aires in November, has effectively given Washington a deadline to try to recapture momentum in its own “backyard.”

But the dynamics of Venezuelan politics and the debate on socialism highlight the fact that the opposition to Washington and neoliberal free-market economics goes far beyond the policies that have so far been pursued by the center-left governments.

The debate in the Latin American left is moving from what the labor and social movements are against—free trade deals, privatization and “flexible” labor policies—to what it is for: an economic and political system based on genuine democratic control by workers and the poor.

Lee Sustar is a US-based journalist specializing on labor issues. His articles are regularly featured in Socialist Worker, the newspaper of the International Socialist Organization (in the U.S.), and in the International Socialist Review. Sustar has traveled to Venezuela several times, from where he has reported on developments such as the recall referendum against Chávez in 2004, and the National Workers Union (UNT).