A highlight of every child’s birthday party in Venezuela is a piñata, a brightly-coloured paper container filled with candy or toys dangling from a rope. Taking turns the children try to break the piñata with a stick. When it eventually breaks releasing its precious contents all the children jump at it and try to grab as much of it as possible. It goes without saying that the weaker children are intimidated and squeezed out by the stronger ones. Their share depends upon the size of the piñata, the number of children and, ultimately their capability of standing up to the other children. If there were no interference by the parents, several children would go away empty-handed.
How is this related to the Bolivarian process? How does the game continue? And who are the players? Stuck in the oil slick
In a materialist understanding, the key to the Bolivarian revolution cannot be the man Hugo Chavez with his real or alleged staff of advisers. Rather, the historical structures, the concrete economic interests and the social tensions within Venezuela are key to understanding Chavez's rise to power, his political actions and his particular rhetoric.
Since the 1920s oil has been Venezuela's most important export good. Ever since, it has been central to all economic, political and social life in Venezuela. Unlike agricultural produce, natural resources were at that time already the property of the state which, hence, as a direct trading partner of the foreign oil companies, had a source of capital at its disposal which is to this day largely independent from the rest of the country's economic activity. It was only in the 1920s that the state exerted its authority against the local chieftains, the caudillos, and set an end to the recurring flare-up of bloody civil wars that had shaken the country since its independence in 1821.
Proprietors of natural resources can regulate the access to it, deny it altogether or sell it at a high price. This is the source of the absolute rent Marx analyzed. By founding OPEC, the oil exporting countries could raise this absolute rent and snatch it away from the world market. Moreover, oil has an advantage over its main competitor on the energy market, coal, because the extraction of oil is cheaper than that of coal. Therefore, the oil industry gains a so-called differential rent. Particularly in the years after 1958 the Venezuelan state was in a struggle with the oil companies over a share in this differential rent until it eventually nationalized oil production in 1975, in a way though which still involved the oil companies. For almost a century this state has been trying to strengthen its bargaining power against the transnational oil companies without endangering the whole process of extracting and distributing the oil.
This is at the heart of Venezuela's perpetual anti-imperialism. The character of the negotiations, and which oil concessions are granted, is pivotal for the country's foreign policy. The struggle for political power, the discussion about the attitude towards the oil companies and the appropriation of the oil rent, dominate the political sphere. Also, socio-economic structures have developed in direct dependence on the almighty state and its seemingly inexhaustible sources of capital. This has led to an historically early process of urbanization in the administrative centres and in the areas where the oil is extracted. Today less than 15 percent of Venezuelans live in the countryside (compared to 25 percent of the French and 10 percent of the Germans).
In the capitalist metropoles, the state is financed mainly from the income of its citizens and the surplus value siphoned off from the wage-dependent workers. As the general capitalist it regulates the national economic process as a whole. In Venezuela, however, where one percent of the population is employed in the oil sector, this very sector is responsible for 85 percent of exports, 60 percent of the state’s earnings, and 25 percent of the gross domestic product. Hence, the income of the majority as well as the profits of the entrepreneurs are largely dependent on the distribution of the oil rent which is a share of the globally produced surplus value.
Against this background it is hardly surprising that the state is the main focus of attention in Venezuela. The better part of economic life consists of holding one's ground in the scrap for governmental funding. And the state does distribute its wealth through a vast landscape of bureaucratic institutions by placing orders and granting credits and subsidies of various kinds and sometimes even for social spending. When there is a dramatic increase in the price of oil such as in the years between 1973 to1975 and 2003 to 2006 the whole society lapses into a sort of trance. The rich see a chance to gain even further wealth, while the middle classes sense that their time has come to climb up the social ladder, and the majority hopes that the state will redeem them from their daily misery. Through a variety of infrastructure investments and different forms of social spending the state generates channels for distributing wealth which at the same time alleviate poverty and create a new rank of nouveau riche. For instance, industrial developments are not aimed at creating profitable capitalist enterprises. Rather, they serve as a means of providing the entrepreneurs further governmental incentives while at the same time securing jobs for the majority. When oil prices stagnate or drop, the increased appetite of the nouveau riche is still there. They can satisfy it because they have gained the upper hand and are able to boost state expenditure and import numbers while the majority goes away empty-handed. As a consequence, national debt rises and the masses remain marginalized.
Corruption is an integral part of this process of distribution. A wide-spread net which includes anyone from civil servants who look after number one, over intermediaries, subcontractors, protractors, trades-people, to union representatives, envelopes the society as a whole. A further manifestation of corruption is the existence of petty crime that accounts for a share of the distribution of wealth, in particular in the poorer areas, and causes the death of more than 20 people on an average day. When profits are gained mainly by drawing on governmental funds the ordinary preconditions of capitalist exploitation such as investments, production or the structure of the work itself become an issue of minor interest. As long as the state keeps the oil tap open, cashes in and distributes, there are profit margins to gain which German capital, for example, can only dream of. Thus, maintenance tasks are largely unimportant, in the public as well as in the private sector. Large-scale development projects are followed through, if at all, only in a dilettantish manner. More often than not machines, infrastructures and buildings are left to decay. No wonder that two thirds of the country's food supplies have to be imported and the proportion is increasing
Rebellion of the Marginalized – The Caracazo, 1989
Let us recap our introductory parable: The piñata is continually refilled so that the game never stops and everyone tries to give it a go. When state expenditure, despite the stagnation of the international price of oil, was on the rise again at the end of the ‘70’s, Venezuela went into a debt trap. In the 80s half of the population was excluded from the game and degraded to being mere spectators. Those who had the best state connections on the other hand tried to make as much use of them as possible because they were aware that the game might not run smoothly for much longer. But in 1989 the exploited having lost all trust in state and politicians had enough: for three days the underdogs cashed in and looted the stores and warehouses threatening to smash everything to pieces. Some people tried to break into the houses of the wealthier people. As a consequence police and military searched the poorer quarters and put a bloody end to the rebellion: Official sources reported about 300 dead, but independent estimates amount to ten times that number. For the time being the rebellion of the marginalized had been stopped, but the losers had gained a new sense of power through the experience. Still, both opponents were paralyzed with fear. The ruling classes hesitatingly continued with their political and economical enterprises and tried to reassure the masses with vague promises of social reforms. The impoverished masses mistrusted these announcements, but refrained from taking action and getting to the root of the trouble and challenging the dominance of state and private enterprises over production and distribution.
There have always been left nationalist tendencies among students, intellectuals and the armed forces in Venezuela. They felt that too much money was wasted on a parasitic bourgeoisie and that the oil business would be more profitable if Venezuela aligned with the self-proclaimed socialist block which still existed at that time in order to stand up more firmly against the interests of the United States. Even if they were determined opponents of a bourgeoisie that was dependant on the favours of the Venezuelan state but still claimed power, they certainly did not aim at abolishing state and wage slavery. As long as the oil rent, although unevenly distributed, trickled into the most remote corners of society, the left nationalists were not able to get the support of the majority they would have needed to take power.
The Caracazo showed that things had dramatically changed in that respect. The marginalized, those who had no regular income, who muddled through from day to day, who were ignored or treated as potential criminals by the state and its institutions – these marginalized strata were susceptible to a discourse which promised to break away from the abhorred rich, as well as from the bureaucracy, to consider the needs of the majority and reintegrate the poor into society, i.e. to involve them in the distributive system .It is telling that one of the parties which belonged to the electoral alliance Hugo Chavez was involved in had the name “Fatherland for everyone”
Among the population trust in the political system and -- after Chavez won the 1998 elections – the institutions of the state was on the rise. Those who hoped that it was now their turn to make the big money gathered around Chavez. They were joined by social technocrats, who had a sincere interest in improving, at least in part, the horrendous living conditions of the population. At first, the new government was supported only by a fraction the armed forces. Hence, it had to rely on the masses in order to hold its ground against the old political and economic establishment. Not without reason a new constitution was passed which demarcated the break from the previous Fourth Republic.
The new constitution and the battle for the oil rent
A feature of this new constitution is the use of the female grammatical form, the emphasis on the “participatory and protagonist” democracy in contrast to representative democracy, and the concession of specific rights to the indigenous population. The first years were spent dispossessing the traditional beneficiaries of their immediate access to the public revenue. In this context members of the former elites attempted a coup d’etat when several crucial public positions were refilled. Moreover there was a bitter struggle over the control of the state-owned oil company, PDVSA. These confrontations between old and new power elites were presented as a battle of the poor against the rich. The marginalized regarded the enemy of their well-known enemy as a friend and saviour and cheered at every rhetorical or real blow the former ruling clique had to take.
The idea that the government was indeed a government of the poor was substantiated by spectacular confiscations of fallow land and the absence of any kind of repression by the military, which was instead employed for public services such as street cleaning and painting schools. This impression was lasting even if the land reform was mainly a propaganda manoeuvre – of the total of 35 million hectares of arable land only 1.5 million hectares are to be redistributed and all big agricultural holdings were spared. The identification of the poor with their head of state, their willingness to go out in the streets for what they felt was their government was key to the failure of the former elites' attempt to overthrow the regime in 2002. After these events the PDVSA remained a stronghold of the old elites, a state within the state. When the government tried to change the management of PDVSA, that management called a strike within the oil sector which was supported by the old union confederation CTV. Soon, this employer’s strike expanded to the private sector, in particular to trading and transport companies and banks. It was no comprehensive lock-out however: Ironically, the wealthier areas were affected most because in other areas only a few businesses got involved.
The strike caused a nationwide shortage of fuel and hit oil exports. Some of the oil workers kept up production and transport, which provided them with a sense of power. The clampdown of the government to maintain the supply, the indecisiveness of the bosses and the unbowed support of the majority for Chavez eventually sealed the failure of the employer’s strike and the old management of PDVSA. In the end, the management as well as more than 18,000 workers were sacked. Some members of the middle management felt it would be unwise to resume production after they had fallen out with the government because of the strike. Even more so, because they had forfeited their own workers' sympathies when they announced that the shop floor wouldn't receive any payment for the strike days. As a result workers and employees demanded guarantees for the preservation of their jobs, and the government responded by introducing the concept of co-management, which will be discussed in greater detail later on in this article.
The right-wing opposition had been defeated politically, but this didn’t mean that the accumulated riches of the old elite had been seriously called into question. But they could no longer help themselves to state funds at will. Large-scale private capital started to look for a compromise. But the social base of the opposition, which started to yearn for the ancien régime, consisted (and still consists) primarily of medium-and small-scale employers, the self-employed and the broad middle class. This opposition sees its living standards and the continuity of its enterprises threatened by the government which excludes them decision-making. Up until now it is principally this social class that has persisted in a rejection of the new government that is as acerbic as it is helpless. Then came the moment when the government consolidated its power and had to satisfy the hunger of the new social climbers, particularly the military. It was also necessary to fulfill the expectations of the excluded, who wanted to reap the rewards of their active participation in the collapse of the abortive putsch. At the same time, the workers wanted their contribution to the failure of the employers’ strike to be recognized. At the same time, the existing managers had shown that they were no longer necessary for the continuation of production. Neither excluded nor worker were prepared any longer to show patience because of the pressing struggle with the bourgeois opposition. Attention was drawn to the measures that were supposed to improve material living conditions and represent the power of the people. In 2003 the year of ‘misiones’ was heralded, presented under the motto ‘21st-century socialism’. It is often ignored, or presented just as a transitional phenomenon, that these measures, always implemented from above, mostly personally by the president himself, served in the first instance to exclude from the state apparatus the bureaucrats associated with the old elite, to create opportunities for new more or less corrupt businesses, and socially and politically to control the socially excluded by integrating them into a new network of state organizations. It is a characteristic of this new ‘socialism’ that traditional wage earners are treated in a step-motherly manner. They are seen as a privileged class whose needs are already looked after. In both the private and the public sector, most existing pay settlements have expired, which affects about three million workers. Negotiations between unions and the health ministry and are now four years overdue. Since 1998, the purchasing power of those employed in the private sector has fallen by about 25%. The fact that the state and its enterprises are not keeping their promises, particularly to former employees, regularly leads to protests. The minimum wage is directly determined by the president – he usually announces it in his speech on May 1, which is broadcast live on TV – and affects principally those employed by micro-enterprises (including co-operatives) in or at the edge of the casual sector, where there are no pay-negotiations. The minimum wage also serves as a means of determining the pensions in the private sector as well as wages and stipends in the ‘misiones’.
These social measures are aimed in the first instance at the margins of the population, still 50% of the entire population, who live in self-built slums and attempt to survive on completely irregular incomes. This necessitates considerable ingenuity, as evidenced for example by the fact that mobile telephones can be hired for a single conversation at almost every street-corner within the inner city. It is significant that most of the best-known measures run under the auspices of the concept of the ‘missions’. A mission can be understood both in the sense of a military assignment, with a clear chain of command that separates those who give the orders and those who receive them, and in the Christian sense, with a separation between active missionaries who already know the way, and passive recipients of the gospel, to whom the benefits of the fruits of the mission are promised, if they follow the prescribed way. At the ideological level, capitalism is condemned for using profit for selfish ends, whereas ‘socialism’ is characterized by the use of profit for the interests of the people. Poverty is supposed to be fought through the transfer of money, without seriously calling private property into question. These could only be overthrown, if at all, by the proletarianised masses and not by the state. The discussion, taking place more and more in Venezuela in the last few years, as to whether Jesus was the first socialist, stems from the unhistorical and moral dimension of the whole talk of ‘socialism’, in which the poor expect to be saved by Jesus and his miraculous feeding of the five thousand.
‘Participatory democracy’ is indeed being implemented – but the population must first be made ready for it. Until then, the disciples and prophets of Jesus, Bolivar and Castro rule, who spread their lessons for several hours a day and several days a week over public radio and TV broadcasts, even if the best known educational broadcast ‘Aló Presidente’, in which Chávez for several hours every Sunday showed how close he was to the people and announced important decisions, was recently effectively put on ice by order from on-high. An alternative is provided by the private broadcasters, inspired by the neo-liberals and Walt Disney, who spew out their own rubbish. Why the license of one of them, the TV-channel RCTV, wasn’t renewed at the end of May, remains a secret … Some suggest that it was a matter of state favouritism of another private media concern, which as a multinational concern employs 35,000 people in the USA, by shutting out an inconvenient competitor from competition for advertising revenue.
There are countless missions nowadays which cover a large variety of social services such as health, education, food supply, housing, energy etc. What they all have in common is that they were set up without consulting the respective governmental departments. A new way to bypass red tape has developed alongside the old one, so that the traditional connections between governmental bureaucracy and economic oligarchy have gradually been severed. In this way the missions also serve as a tool to control the functionaries left over from the old days and dash their connections. Moreover, the funding of the missions is not passed by the parliament, but is financed from hidden sources within PDVSA, which in the meantime has been brought to heel.
As there are no accountability measures for these sources or the missions themselves, doors are wide open for new forms of connivance, corruption and nepotism. There is also a high degree of work turnover within governmental institutions, which might be due to a fear of a new accumulation of power beyond Chavez' control. As a result, old resolutions are constantly ignored or replaced by new ones so that this system of governance might be called a form of systematic improvisation. In this respect, the constantly rising proportion of former members of the armed forces in the administration could be explained as an attempt to gain at least a certain degree of control over this situation.
One of the most successful missions is Barrio Adentro, which is active in the health care sector. It provides a network of preventive healthcare across the whole country and medical care for those who in former times had to leave their quarters and bring material and medicine along in order to receive treatment from public institutions after waiting for days.
The logistics are mostly provided by Cuba which has sent 20,000 doctors and health personnel as well as medical supplies to Venezuela. In return, Cuba receives Venezuelan oil. The so-called módulos in which the doctors live and have their practices are located in the living quarters of their patients. These facilities have considerably improved the standard of health care, in particular in the countryside and remote areas. The ubiquitous posters that celebrate the Cuban revolution in the módulos show however, that the Cuban doctors do not only provide health care but also ideological reinforcement. In the light of the notoriously well-organized network of police and police spies in Cuba there may be a grain of truth to the suspicion that some of the doctors also perform special services. Some see the house calls as a way of screening public opinion, so that the expansion of the system of health care goes hand in hand with a certain degree of intimidation.
Only half of the 5,000 módulos that had been scheduled have been built so far. The pressing construction contracts were usually given to building companies in which higher ranks of the armed forces had a hand and which merely subcontracted to other firms. The estimated cost of 250.000 Euros per módulo was about five times as much as the sum for other buildings of this size and not every módulo that has been built was put to use. Due to a lack of maintenance more and more módulos have to be closed. After four years, euphoria is dwindling.
The new system also clashes with the procedures of the official health sector: The Cuban pharmaceuticals which are often used to treat a whole variety of different ailments are not subject to any kind of control by the Health Department. If patients are referred from a mission to a hospital for further treatment -- and alongside private clinics, hospitals are still the main branch of health care in Venezuela – there is usually an abrupt change in medical strategy that rarely has positive consequences for the patients. Thus, a whole branch of Cuban medicine has been established, which includes diagnostic centres, special clinics and even further treatments in Cuba. As a result there are two parallel self-contained systems of health care. But still, the general state of health in the country is in critical condition: while there is hype about plastic surgery among the women of the old and new upper classes, the number of cases of measles, malaria and dengue fever infections has risen by 30 percent. This is not least due to the disastrous state of waste management: Cooperatives equipped only with brush and scoop compete with private sector firms which are incapable of getting the problem under control, but are favoured by the mayors and pocket considerable amounts for their services. The best health care system is doomed to fail when the mountains of waste in the poorer quarters are home to rats, roaches and other vermin.
Another important tool of social integration is education. The first measures in this sector were aimed at public schools. The about 30 000 schools which had existed up to then were converted into 5 000 so-called Bolivarian schools. This implied an extension of the school days from 5 to 8 hours, which included lunch as well as an enlarged variety of cultural activities. Also, the Bolivarian system of schooling aims at adapting the curricula to local circumstances and emphasizing the values of national identity. In this way, material improvements are mixed up with ideological indoctrination. What also contributed to the overall popularity of the programme was the fact that the extension of school days also brought about a pay rise for teachers and other employees in the schools. Cooperatives comprised of parents compete with private sector firms over the provision of school lunches. But no matter who is awarded the contract – continuous and punctual delivery is not guaranteed so that students sometimes are sent home without a meal at short notice.
Even more spectacular are the “misiones” for adults without education. They range from literacy programs – even though illiteracy is very rare amongst adults, affecting mostly elder people – through high school programs to vocational training. A Bolivarian university for those who could not find a place at one of the public universities or were expelled completes this parallel education system. People’s hopes to increase their income by getting a professional qualification initially caused a massive rush into these programs. Grants for some of the participants – amounting to roughly half of the minimum wage – further contributed to this boom. Of course, some participants – especially those who don’t get a grant – drop out. But what is more significant, being also absorbed by their everyday lives, those who do participate hardly find the time to go through the subjects at home, let alone to actually deepen their knowledge. Thus, a certificate testifies not so much to a real qualification, but rather to loyalty to the government. In Venezuela, this can certainly be beneficial.
The educational concept is quite problematic: all of the instructional material is from Cuba and classes consist mainly of watching videos. The teaching staff is mostly made up of assistants who get the minimum wage and whose knowledge rarely exceeds the content of the videos. Instead of engaging in a dialogue, participants are expected to behave as passive consumers, staring at a screen that undeniably knows what’s right and what’s important. Far from initiating self-empowerment, this kind of education merely reinforces obedience. Prior to the elections in December 2006 participants of some classes were even given forms to fill in the names, addresses, phone and ID numbers as well as the presumable electoral behavior of ten of their neighbors. This was sold as a contribution to better relations amongst neighbors and no one raised any objections.
Almost all participants in the mission for vocational training receive a grant, though this is being questioned at the moment. For this reason it is extremely popular: many want to enroll, but not everyone is admitted; the attitude towards the government sometimes plays a role in the selection procedure. In any case, more than 500 000 people could obtain a certificate so far. Graduates are expected to form cooperatives, being promised credit, state contracts and sometimes land. Initially, this worked out quite well and the government set itself the goal to create almost 100,000 cooperatives. By now, however, the market is already overcrowded with cooperatives; since the government cannot award contracts to all of them, just 5, 000 still have a real existence.
Food supply constitutes another field of action for the state; a new ministry headed by a general was created solely for this purpose. The task of “Misión Mercal” is to procure food and distribute it at subsidized prices 30 percent below market prices. The distribution chain consists of more than 10, 000 sales outlets, complemented in urban areas by occasional central markets. About half of the population makes use of this network. While in theory the mission should distribute goods from small producers and agricultural cooperatives, what can be found on the shelves is rather reminiscent of the food stores in the old German Democratic Republic: storable food like rice, noodles, flour, canned food and bottles of oil or beverages. Fresh food like fruit, vegetables or meat can only be obtained at the occasional central markets, so that people still have to buy essential groceries at regular stores or from street vendors – and after all, in statistical terms “Misión Mercal” provides merely 150 g of food per person and day. Contrary to the official discourse on “food sovereignty,” Venezuela has to import 50 percent of its food, mostly from Colombia and Brazil. Apart from that, this mission provides also “mental food” – cartoons on the packaging help to spread the ideology of Bolivarianism. The military is in charge of logistics and the whole chain of procurement, storage, distribution and selling opens up new opportunities for corruption.
Thus, also in this sector the initial enthusiasm is dwindling. While the provision of free meals for the absolute have-nots and the homeless has somewhat improved the lot of the poorest part of the population, food supply remains a precarious issue. People have to be on the go all day long just to get the necessary groceries. About 10 percent of the population live in extreme poverty, another 30 percent of the families do not have sufficient income to cover basic needs like food, housing, clothing and transport. According to official statistics, families do not have more money to spend than in 1998.
The demand for proper housing with road and water connections is as huge as Venezuela’s slums: it is estimated at 1.8 million units. In addition, 60 percent of existing habitations are in need of restoration, while thousands of people lose their homes every year, or need to be relocated, due to landslides. So another mission was set up to improve housing. The issue is ubiquitous and the expectations of people are high. Depending on the social situation of the applicants, housing is sometimes provided for free. However, the normal case is that people get a cheap credit and have to buy their own places.
How building contracts are awarded by the state is again a not very transparent matter, and many of the hurriedly built houses are not really habitable. Even official statistics document that this mission is the least successful of the major ones. Of the 120,000 units planned per year, not more than 70,000 are actually built. Thus, it is not surprising that the allocation of apartments is also to a considerable degree ruled by bureaucratic arbitrariness and political considerations.
The Myth of Co-management
It would be laborious to go through the other ‘Misiones’: the same picture results each time. We should instead dedicate the next lines to the real or supposed changes in industry. The first thing to note is that in most enterprises, both private and state-owned, it is business as usual. What’s new is simply that a trade union federation (UNT) that’s more or less loyal to the regime has become established, and is in day-to-day life carrying out the same role as the ‘social democratic’ CTV under the previous government. The leading bureaucracy is so occupied with infighting and power-struggles (in which the Trotskyists represent the tendency more independent of the government) that since the foundation of the UNT in 2003 not a single internal election has taken place. For as long as anyone can remember, the unions have controlled a certain quota of hirings. Whoever is looking for work must pay them about the equivalent of a month’s wages. This is particularly lucrative in the oil industry, in which the union bureaucrats take about a thousand euros for every person they provide with a job. The struggle between the construction unions in the state of Bolívar for the control of this lucrative labour market has led to more than a hundred deaths in the last few years.
Whenever private companies close or threaten to, workers not only in Germany but also in Venezuela respond with the demand to save jobs. After the employers’ strike in 2003 a few companies remained closed. The issue of preserving jobs became acute. In a few cases the workers occupied the factories (but didn’t take over production!) as a sign to the state that it had to do something. It did in fact bring in measures which were described as co-management: the owners were offered financial support if they kept business running, diverted a share of the profit for social projects, and made the workers into ‘proud’ company-owners with share options, for which many of the workers went into debt. Beyond this, the workers had to form co-operatives in order to be active as partners. It is obvious that this was for some enterprises an opportunity to get their hands on state cash. In the absence of agreement, the state attempts to expropriate the company, paying appropriate compensation.
In this case the state becomes the new owner and goes through the same motions with the workers: they are brought together into co-operatives, and sold shares. More and more employers and landowners are offering the state their property in order to profit from these forms of aid and compensation. In the best cases, co-management involves workers’ giving advice making decisions about day-to-day problems on the shop floor, while strategic decisions remain in the hands of the real owner, namely the private shareholders or the state. In about a thousand mostly smaller businesses a form of co-management was introduced in which the workers weren’t allowed to own more than 49% of shares in the company, such that it was clear where the power lay when it came down to it. Because the co-operatives are a sort of collective of self-employed workers who have signed a temporary contract with the companies, the workers fall outside the scope of labour law. If the co-operatives presume to meddle in the administration of the workers assert their rights, open conflict results – as at the paper factory Invepal, at Sanitarios Maracay or Cacao Oderí. If this takes place on the streets, the police get involved. There can be no talk of a systematic introduction of co-management within the state sector, particularly not in the oil industry. One exception is provided by the relatively dilapidated state-run aluminium factory,Alcasa, with about 3,000 employees. The director, who describes himself as a ‘revolutionary lent by the state to the company’ was given room to play with a version of co-management in which the workers didn’t receive the usual share-options. Instead there was an experiment from above involving delegated workers. This experiment then fell dormant and the ‘lent revolutionary’ was provisionally sent to the education sector to carry out other tasks.
‘Grass-Roots Organization’ at the Behest of the State
Since the beginning of the ‘Bolivarian Revolution’, Venezuela has been flooded with successive waves of different ‘grass-roots organizations’. None of these arose out of popular initiatives or from social struggles. Without exception they were initiated by the state, and often directly from its head. They are however ‘grass-roots’ organizations: they present the socially excluded with the chance to organize themselves such that they are accepted as a partner to the state.
The first wave was that of the ‘Bolivarian circles’, which brought together the more outspoken, uncritical ‘Chavistas’ in different places and social situations and documented their identification with the new government. These circles didn’t serve to articulate people’s concerns, but had the task to defend, primarily ideologically, the ongoing ‘process’ and to make propaganda for it. Because they had no financial resources, and weren’t planned to be used for local decision-making processes, they brought no immediate benefits. After an initial flourish they are now completely meaningless. Afterwards came a succession of local committees – health committees, water tables, urban land committees (CTU) and local planning committees (CLP), which exist to this day. This committees, in which every resident can take part, are in rural areas and slums primarily charged with the responsibility of ensuring that the current state of affairs is understood by those affected by it, of communicating the current deficit, and making any appropriate suggestions for improvement. In practice this had never previously happened, and the authorities were in no position to do it. Under direction from technical advisers, a few committed citizens worked hopefully at bringing in a few desperately needed improvements by informing the state, which can react accordingly. Despite the various activities that took place at the state, very little happened, and what did was very slow. The result was that the few improvements only helped individual groups or individuals, and the activists on the committees were partly taken over by the official district administrations. At the same time, the committees took on a sort of trade-union function as an intermediary between the state and the impoverished population. The evidently increasing levels of protests against local authorities in the name of the promises of the ‘Bolivarian’ constitution and government are often organized and publicized by these committees. Since they systematically direct their demands at the state, they remain fundamentally dependent on it. Facing high levels of disillusion among the population with the results of the local committees, the state announced the large-scale formation of co-operatives. With at least five members they were supposed to be ‘self-organized’ businesses to which the state could give small-scale contracts to implement local measures. The pragmatic hope for state-funded income – and also the insight into the necessity of collective action – led to a proper boom in foundations across the country. Business was booming even for lawyers and advisers with experience in co-operatives. Hastily set up and hardly equipped with financial and other resources, the co-operatives offered services to state-run businesses and institutions, pocketed the money and carried out the work to the lowest possible standards. There are various state-run agencies that can simply give out these contracts, and here there is often a role both for bribery and for ‘fictional co-operatives’. The co-operative members’ income is usually at about the level of the minimum wage. This is therefore basically a means of generating work. The more radical wing of the UNT has pronounced:
‘It is true that unemployment has fallen, but this took place as a result of the precarious employment conditions in the missions and the co-operatives, and we must demand stability and better conditions.’Although there are now around 100,000 registered co-operatives with 1.5 million members, most exist only on paper – increased competition has meant that many co-operatives don’t always have work, and that their performance is often questionable. Only the bigger co-operatives and those who own their own means of production function properly. And in this case, there is still the well-known ‘danger’ that these purchase labour-power from outside and thus become normal capitalist businesses. The high point of the co-operatives is over.
In early 2006 came the new wave of ‘district councils’: the terms of their foundation, their organizational structure and their remit are laid down by parliament, and they were publicized by the ministry responsible. In the cities they are supposed to incorporate between 200 and 400 families; in rural areas about twenty. Up to 50,000 were to be created by the end of 2007. These are neighbourhood organizations, which are supposed to co-ordinate the work of local grass-roots organizations. Their general meetings are charged above all with the task of electing the people responsible for their various sub-areas (working groups). Unlike the previous grass-roots organizations, they are allowed, in accordance with the projects they define themselves, to administer their budget of up to €30,000 themselves – on average a hundred euros per family. In addition, they are allowed to generate their own income, e.g. through the foundation of ‘communal’ banks. It is said that they represent the first step towards smashing the entire traditional structure of state bureaucracy. Mayors and governors could perhaps no longer be sure that they wouldn’t be replaced by ‘people’s power’. And local administrative bureaucracy is also de facto losing part of its power and its budget to the elected district-representatives. As before, those who are represented have to wait for the new form of organization to look after them efficiently – but that’s not how it works. After the first two or three meetings of the working groups, usually only a few people are left, who are either de-motivated, in which case the whole thing is effectively put to sleep, or they start on a small level to siphon off money into their own pocket. This wave is also on the slow road to self-destruction.
The workers’ councils were also announced with a flourish. Whoever thinks that these councils are a sign of any sort of revolutionary development in Venezuela will be very disappointed, and little if anything is heard about them any more. As an answer to trade unionists who saw their own role threatened by the introduction of the workers’ councils, the new Labour Minister Rivero said ‘We want to concentrate on education, because in the end that’s what matters’. After he had mentioned that 10% of the working week would be dedicated to subjects as diverse as Venezuelan history, analysis of capitalism, dialectical materialism, etc., he continued: ‘Socialist education, as it will take place in the workplace after the end of three-way decrees, will be led by the workers’ councils – that is, from the organisms which will arise from the grass-roots workers, in order to implement guidelines which the government will ratify through an institution that will be founded for this purpose.’ That is, the workers’ councils would not be involved in industrial decision-making processes. The trade unionists can therefore remain calm! So much for autonomy, and the radicalism of the ‘workers’ councils.’
The truth of the independence of the ‘grass-roots organizations’ from the state is revealed in the comments of the mayor of Caracas, Freddy Bernal, that there are ‘plans from the mayoral office to intervene in the co-ordinated social organizations, the urban land committees, health committees, district councils [...] wherever it is necessary’. The ‘grass-roots organizations’ turn out to be ambiguous institutions. Many use them as mechanisms to gain favor from the state, others to add weight to demands to the authorities. For the state, organizations are an institutional anteroom, in which large sections of the population can be reintegrated and to channel protest movements. The ‘grass-roots organizations’ whose tasks involve purely sectional or local themes contribute to limiting the targets of protest to local or ministerial functionaries, without allowing the situation as a whole or Chávez himself to come into the firing line. Until now they have mostly served to preserve social peace and to consolidate the new state power by ensuring that problems are always solved by the state and not by people’s own initiatives. Through a climate of perpetual mobilization, the ever-increasing campaigns serve in addition to keeping the initiative with ‘our president’. Earlier unfulfilled promises are compensated for by even higher expectations for the future. It is through this game that Chávez keeps hold of the reins.
Sub-imperialism and ‘socialist employers’
An important contribution to the consolidation of this ‘21st century socialism’ consists in the international support Venezuela has received – first from Cuba, the last bastion of the former eastern bloc, also from ‘enemies’ of and competitors to North-American imperialism, from China, Russia, Iran and Belarus, to the European Union, albeit to a limited extent. The Venezuelan government is trying to increase its political and economic sphere influence within Latin America through discounted oil-deliveries and financial and technical aid. In the light of the long unfulfilled promises at home, these initiatives are increasingly condemned – for example, there is financial aid for a dairy factory in Argentina, while in Venezuela milk itself has become a scarce commodity. Venezuela is pursuing more and more a sort of sub-imperialism, but is increasingly coming up against the emerging economic power of Brazil. The program propagated shrilly by Chávez, the establishment, against US-Hegemony, of a Latin-American block under Venezuela’s leadership, now stands on clay feet, since the economic power of such a block boils down to oil-revenue. The only members of this ‘Bolivarian’ bloc are Nicaragua, Ecuador, Cuba and Bolivia – lightweights, that is, in Latin-American contexts. Meanwhile, a new so-called Bolivarian bourgeoisie has emerged out of the permanently restructured channels of distribution, while parts of the ‘old bourgeoisie’ have put an end to their initial fundamental opposition to the government, and are now trying to adapt to the new situation. Banks, the construction industry, telecommunications companies, the import sector and individual logistic industries which co-operate with the state are particularly happy with the almost record-breaking dividends. This rapprochement of Venezuelan capitalists with the government is not an isolated case: a ‘Confederation of Socialist Employers of Venezuela’ was founded as opposition to the traditional employers’ association Fedecámeras. The official discourse emphasizes that Venezuela’s socialism rests on three economic pillars: not only the state and the communal sectors, but also the private. It was not without reason that the president declared that he was in agreement with the Nobel Laureate Muhammad Yunus, the founder of micro-credit.
Impending crisis and authoritarian turn
Since the last reelection of the “Comandante” in December 2006, a new authoritarian turn has been on the horizon: Chávez has been concentrating more and more power in his own hands, and is harnessing control. A thoroughly acquiescent parliament agreed to an enabling law, through which it made itself almost redundant and allowed the newly elected president to rule by decree for eighteen months in almost all areas. Chávez’s decisions are becoming unfathomable to everyone, and his supporters have been left to believe that he knows what he is doing and why. The president has recently forbidden his followers, ministers and other politicians and elected representatives from commenting on any topic without prior discussion with him. If ‘Chávez is the people!’ is taken seriously, every decision or pronouncement made by Chávez is by its nature ‘grass-roots democratic’, and every other ‘capitalist’. What more could one want? But one thing is sure: through the foundation of the ‘United Socialist Party of Venezuela’ (PSUV) he is trying to attain total power over his supporters. This is an indication of the fusion of party and state: state-run schools are used at the weekend for the registration of new party-members, which is organized by the state election authority. It is not only out of conviction that around five million people have already signed-up as candidate-members. ‘If you’re not for me, you’re against me,’ the motto runs, which contains the threat of the removal of jobs or state-benefits. Applicants are screened before acceptance, but who does this, and according to which criteria, remains hazy. Even violent police-repression of protests is no longer the exception. At the same time, the emphasis on ideological schooling is increasing, and voluntary labour is also under discussion. It seems likely, that this new trend is related to Venezuela’s economic situation. And here the prospects aren’t all rosy right now: after the international crude oil price climbed for three years, it is now stagnant at $60 a barrel. Oil-production has fallen slightly, but state expenditure is growing rapidly – by 47% in 2006. In 2001 it represented 21% of GDP, 34% in 2006. Industrial production, which had fallen in the first years, is now growing at approximately 7%, and has re-attained 1997-levels. In the same time-period, the number of industrial businesses fell from 11,000 to 7,000. Imports rose 40% in the last year, and now account for 75% of oil-revenue. General inflation has reached 18%, while food-prices are rising at 30%. And this is hardly to touch on the dependence on the US-economy: leaving oil out of the equation, 50% of exports are to the US, while 30% of Venezuela’s imports come from the ‘land of the devil’. Despite talk of ‘endogenous’ development, the PDVSA obtains nearly half its turnover from its branches abroad (through shares in the capital of individual firms, such as Ruhr Oel GmbH in Germany, through its own refineries abroad, its own tankers or networks of petrol stations, such as, for example, CITGO, which runs around 15,000 service stations in the USA). In 2006, social expenditure constituted only about 10% of GDP, of which less than half is allocated to the missions. From the total social spending of $13 billion, $5 billion come directly from the PDVSA – the remaining $8 billion constitute 15% of the budget. Meanwhile, the banks, private construction and trade are making huge deals, achieving growth-rates of between 20% and 25%. The emergence of a layer of new-rich is not least evidenced by the 50% growth in sales of new cars in 2006, of which more than half are imported.
To finance this dynamic, the national debt has almost doubled during the course of the ‘Bolivarian Revolution’ – from about $40 billion in 1998 to $70 billion today – primarily through new government bonds, bought by the private banks in Venezuela, while external debt has remained on about the same level. The trade surplus looks more and more likely to be overtaken by growing imports and the drain of capital. Is the model reaching its limits? And will state hand-outs have to be distributed increasingly unequally, between those who are completely dependent on them and those who are not? In other words: while a well-placed minority has been able to tap into the oil-revenue, and is rapidly increasing its wealth, will people look at the small improvements for the people, which this minority frenetically points out. 21st-century socialism? Charitable kleptocracy! A kleptocracy, indeed, which is steering the country to its next economic and social crisis. Agricultural production is stagnant, and supplies are critical. Conflicts in individual co-managed companies have made clear how deep the difference between nationalization and socialization can be. The co-operative at Cacao Oderí expressed it as follows: ‘In Venezuela, it is civil society that must become a stronger economic agent, not the over-powerful and corrupt oil-state. [...] That is obsolete state capitalism. For us, socialism means self-management.’ A state bureaucrat saw it differently. Justifying why the state should have the final say in the business, and not the workers, he said ‘President Chávez is an instrument of God’s will’. Rally at Sidor
Protests are taking place throughout the country – because of unfulfilled promises, water and electricity supplies, the state of the streets, crime, shortages of teachers or housing, delayed payments of credits, grants or wages, refuse, the rights of street-vendors, or industrial conflicts. There are about fifty protests every day, sometimes accompanied by barricades in the city-centre or of important traffic-axes. The government is slowly becoming nervous, and police interventions are becoming more violent – particularly, but not only, against workers’ protests. It is often warned of the ‘danger’ that these protests pose for the ‘process’: ‘Acting in this way is counter-revolutionary, because it sows the seeds of anarchy.’ Longer prison-terms are being given: disturbance of public order – blockading streets, in simple terms – can be punished by more than a year. And in a few cases, such sentences have already been handed out. Given the catastrophic state of the prisons, in which there are 400 deaths a year, such a sentence is equivalent to a murder-threat. The unmanageable numbers of ‘grass-roots organizations’ and arbitrations that make all sorts of promises leads to competition and overlap. It has happened that the same plot of land, or the same residential building, has been promised by different authorities to different groups. For example, an empty factory was occupied for months by its former workers in order to demand payment of withheld wages. One night the same factory was occupied by another group, to demand the construction of houses on the same empty land; they have been waiting for new housing since the earthquake of December 1998. Violent conflicts seem likely.
Light at the end of the tunnel?
Living conditions for the poorest sections of the population have improved in some respects. That benefits are preferable to starvation is without doubt. Indeed, we insist on the goal of a life without need, without money, without nations, in which humans, as species-beings, can consciously make their own needs into the sole criterion of society. The potential dozing in the lap of modern society easily allows this. But it could only be realized through the self-determined actions of the exploited. In the face of such possibilities, the improvements attained in Venezuela remain miserable – and even they cannot be guaranteed.
The chaotic process by which new campaigns and institutions, new grass-roots organizations and promises, are regularly announced, also carries a certain risk for the new holders of power. For the people often take promises at their word, and demand their fulfilment more confidently; sometimes they even insist on really getting involved in decision-making. The frustration that emerges from the discrepancy between hope and reality leads to daily protests and in smaller circles also to ‘theoretical’ discussions of a socialism that goes beyond the mere fighting of poverty and ‘Soviet Marxism.’ But new forms of organization that aren’t initiated by the state, and that are actually involved in autonomous struggles, have not yet emerged either within or outside the workplace. A practical critique of wage-labour, which implies the suspension of all commodity-relations, is still lacking: at best the aim is the self-management of one’s own exploitation and poverty. However, a few recent events suggest a sharpening of conflicts, and the development of a more radical perspective cannot be ruled out. There are massive class struggles taking place in a few newly industrializing countries, and they are once again also imaginable in the centres of the globalized world. If these conflicts began explicitly to relate to one another, some optimism would be in order.
After the crushing of the Paris Insurrection of 1848, Louis-Napoléon Bonaparte came to power as a bearer of hope for the masses. The figure of his uncle was jeweled with the aura of the French Revolution. The nephew, who shortly after became emperor, defended universal suffrage, remained in power through constitutional changes and several referenda, modernized the school-system and opened it to girls, introduced the right to strike and to free assembly for workers, laid the cornerstones of a pension-system and of disability-insurance for workers, and organized people’s kitchens for the poor. At the same time, banking and trade flourished, large infrastructure projects (railways, sewers) were implemented, and there were scores of corruption-scandals. It was all embedded in not very successful colonial politics, which ended in 1870 with the Franco-Prussian war and the defeat and imprisonment of the emperor. Shortly afterwards, in 1871, the population of Paris, without emperor, clergy or professional politicians, took power into their own hands. 23 years passed between 1848 and 1871. The ‘Bolivarian Revolution’ is nine years old. Another fourteen years until the ‘Venezuelan Commune’? How long will people continue to beat the ‘Piñata’ blindly? For how long will its contents be distributed to the strongest? For how long can the poor be fed on leftovers, just so the game can start again from the beginning, and so rich can flaunt their wealth? How long before the beneficiaries of the grace of the instrument of God’s will storm heaven and overthrow God?
“21st Century Socialism” – Politics as usual
In the two years since this article was written, a lot has happened on the political level in Venezuela. Three elections took place, revealing that the enthusiastic support for Chavez is eroding, without however posing a serious threat to his power. At the same time, the country is still economically dependent on oil and the tendencies described in the text are still at work. There is no sign of an autonomous workers’ movement that could challenge the foundations of capitalist relations. As regards other social groups such as peasants or the marginalised population, this is even less the case. After the staggering oil price hike continued until roughly August 2008, pushing the price up to $150 per barrel, Venezuela is now faced with the world economic crisis. Even though the current oil price of $50 is not below the level of 2005, over the last few years the state und the economy had quickly grown accustomed to some, extra change so that the current level causes some abstinence symptoms.
After Chavez’s re-election in December 2006, the five driving forces on the road to “21st Century Socialism” were proclaimed: 1) amendments to the Bolivarian constitution passed under Chavez in 1999, 2) enabling statutes, 3) massive education campaigns, 4) the geographical restructuring of the public administration [“geographical restructuring” is probably a strange expression; it’s about redrawing the lines of authority between central government, local states etc] and finally 5) nationwide extension of the communal councils [so far they exist only in certain places, now they shall exist everywhere]. Immediately, the next electoral campaign about the planned amendments to the constitution began. These include indefinite re-election of the President, reorganisation of the state territory – partly based on the communal councils - , abolition of the independence of the central bank, and – as a kind of carrot – reduction of the working week to 36 hours. The overall objective of all these policies was described as building a socialist economy and the slogan “Fatherland, Socialism or Death” became part of the obligatory rhetoric at every official or political event. Meanwhile, the build-up of the PSUV [United Socialist Party of Venezuela], the new political party of Chavez’s followers, was being forced through by exerting pressure on state employees and people involved in the “misiones”. According to the PSUV, it was able to reach the mark of 5 million members just prior to the referendum on the constitutional changes in December 2007.
It was not so much a new strength of the opposition that turned this referendum into the first defeat of the “Comandante” – in fact, the opposition could only slightly increase its share of the votes – but rather the lack of enthusiasm amongst some segments of Chavez’s traditional supporters. The fact that he got 1.5 million votes less than the party claims to have members indicates that the poorer part of the population has other things to worry about – precarious food supply, rotten infrastructure, deficient garbage disposal and frightening levels of street crime. The camp of Chavismo got more and more cracks and since the referendum was not about the future of the government, the usual “blackmail” of pointing to the looming threat of the opposition hardly worked. Already at this point it was becoming clear that the marginalised population in the urban centers does not constitute a Chavist bulwark any longer (a fact to which the permanent conflict between local authorities and street vendors has certainly contributed).
After the first of the driving forces towards socialism began to falter, the remaining four were also propagated less loudly. So with an eye to the upcoming regional elections, the next campaign was launched – the “three R’s” (revision, rectification and re-launch). In addition, the enabling statutes had been passed in early 2007 – though limited to 18 months – and theoretically they would have allowed the government to put into practice the constitutional changes that were rejected at the polls. Numerous decrees were passed in the last minute before the 18 months ended, without however having any real impact – not to mention the implementation of the 36 hour working week. Chavismo won the regional elections (November 2008) in absolute numbers of votes, hence also taking most of the local states. However, the bigger cities (including the capital Caracas) and the three economically most important states fell to the opposition. Thereupon it was announced that a further referendum on the apparently central issue of indefinite re-election was to be held in February 2009. This time Chavismo was successful. It seems that for now the permanent electoral circus has come to an end, but who knows...
Leading members of both the old and the “new” opposition are confronted with increasing attacks, some even being criminalised. The central government is working hard to undermine the power of the local states controlled by the opposition. State buildings are not being handed over, funding is being delayed and, most importantly, air and sea ports as well as highways previously run by the local states were taken over by the central government without further ado as they constitute a lucrative source of taxes.
From time to time the government announces expropriations and nationalizations with great hullabaloo, while in the oil sector joint ventures are being set up. The former owners often have to wait for their compensation, but the workers’ situation remains quite unchanged. Sidor, the biggest steel plant in Venezuela, constitutes a paradigmatic case: after a months-long contract dispute in 2007/08 threatened to turn into large-scale industrial conflict, the enterprise was swiftly nationalized in May 2008. This move was also enthusiastically hailed by the workers. Initially, one of their demands was the hiring of 9,000 contract workers as “regular” workers. More than a year later, 8,000 of them are still waiting to see this happen. Time and again demonstrations take place and factory gates are being blocked – so far to no avail.
This is not the only case in which the growing gap between government and workers manifests itself. It is with good reason that the government is making another effort to get a loyal union federation going, after its first attempt – the setting up of the UNT – rather failed. But the continuous deferral of wage talks for the public sector workers leads to ever-new conflicts. When the tube workers went on strike in March this year it was made clear to them that communal councils and other “popular” organizations might get rather angry about this. The workers took this hint seriously and ended the strike. It is rather obvious what this reveals about the autonomy of the so-called grassroots organizations. But also paramilitary groups more or less tolerated by the state can be deployed to do the dirty work – for example, at the time of writing it still remains unclear who was actually behind the attack on a synagogue in Caracas in January this year. If things get out of hand, paramilitary groups can suddenly be denounced as “agents of the empire”.
By now, even guns have been employed in labour conflicts, causing first death-victims. A few months ago a comrade reported from Venezuela:
While the Presidents of the “Axis of hope” (Venezuela, Bolivia, Paraguay, Ecuador) were giving radical speeches against capitalism to their loyal audience at the World Social Forum in Brazil, on January 29th 2009 special police forces shot dead two workers in the course of the eviction of the Mitsubishi-Hyundai assembly plant in the north eastern town of Barcelona which had been occupied by workers for 10 days. Demanding the payment of wages still due and the hiring of 135 contract workers, the 1,600 workers had occupied the plant on January 20th. After two local courts had intervened on behalf of the Japanese car manufacturer, a judge ordered the vacation of the factory. Apart from the two workers shot dead, six others were seriously injured.This should come as no surprise – after all, it was Chavez himself who was led by recurrent street protests to declare in January 2009: “From now on anyone setting ablaze ... trees or blocking a street shall learn how good our tear gas is and then be arrested. I will personally fire any officer in charge who does not follow this guideline.” He even threatened to take care of such measures himself in case chiefs of police or ministers should fail to do so.
Meanwhile, the authorities have lost their faith in the cooperatives: in Chavez’s view, they are “tending towards capitalist values.” The “misiones” still exist, but they have lost their dynamic. And since lean years are now dawning, they are also increasingly confronted with financial problems. During the years of the oil boom, the revenue of the national oil company PDVSA and hence the state budget rose significantly, the latter going up by more than 50 percent. In contrast, the initial budget draft for 2009 was cut by 20 percent but might still turn out to be problematic: it was based on the assumption that the oil price would not fall below $60, but due to the world economic crisis Venezuela earned no more than $38 per barrel in the first months of 2009. So far, the PDVSA has neither made any contribution to the state budget nor paid its subcontractors in 2009. Further funding of the welfare programs is far from assured and the popularity of the government is slowly deteriorating.
While currency reserves rose significantly to almost $120 billion, state foreign debt also increased by 70 percent over the last two years, thus reaching $46 billion. The sales tax reduced last year was raised again for 2009, inflation climbed from 17 percent in 2006 to 30 percent in 2008, while the minimum wage is lagging behind – and an average household of two adults and three kids today needs two minimum wages just to survive. The annual increase of the minimum wage, traditionally declared on Mayday by Chavez himself, will most likely be rather modest this year – maybe 10 percent, i.e. way below the current rate of inflation.
If the oil price remains below $60 for the rest of the year, Venezuela’s economy could face a collapse with incalculable consequences. If not, the authoritarian tendencies will continue to assert themselves, while the oppositional forces within the new Bolivarian bourgeoisie known as the “Boli-bourgeoisie” will make itself heard. The situation will certainly continue to generate social conflicts in the near future, but they will remain isolated and nothing indicates that they will be able to open up a perspective that would point beyond the state.