Archive for the ‘South America’ Category

Meet John McCain: Mr. Big Stick in Latin America

February 15, 2008

Meet John McCain: Mr. Big Stick in Latin America

By Nikolas Kozloff

Nikolas Kozloff’s ZSpace Page


Now that John McCain has presumably wrapped up the Republican nomination, it’s natural to wonder what kind of foreign policy he might pursue towards the rest of the world if he were elected President.  For example, how would the “maverick” McCain deal with Latin America?  In recent years, the region has taken a decidedly leftist turn; new leaders such as Hugo Chávez of Venezuela, Evo Morales of Bolivia, and Daniel Ortega of Nicaragua have openly challenged U.S. diplomatic and political influence.  McCain’s record suggests that he would pursue a very hawkish and antagonistic policy in the hemisphere.  It’s even possible that the Arizona Republican, who has suggested that the United States might be in Iraq for hundreds of years and might “bomb, bomb, bomb, Iran,” could ratchet up military tensions in Latin America and escalate conflict with countries like Venezuela.


The International Republican Institute (IRI)


McCain has chaired the International Republican Institute (IRI) since 1993.  Ostensibly a non-partisan, democracy-building outfit, in reality the IRI serves as an instrument to advance and promote the most far right Republican foreign policy agenda.  More a cloak-and-dagger operation than a conventional research group, IRI has aligned itself with some of the most antidemocratic factions in the Third World. 


On the surface at least, IRI seems to have a rather innocuous agenda including party building, media training, the organization of leadership trainings, dissemination of newsletters, and strengthening of civil society.  In reality, however, the IRI is more concerned with crushing incipient left movements in Latin America. 


One of the least known Washington institutions, IRI receives taxpayer money via the National Endowment for Democracy and the U.S. Agency for International Development (U.S. A.I.D.).  The organization is active in around sixty countries and has a budget of $74 million.        On the board of IRI, McCain has been joined by a who’s who of Republican bigwigs such as Senator Chuck Hagel of Nebraska, former National Security Adviser Brent Scowcroft, and former U.S. Ambassador to the United Nations Jeane Kirkpatrick. 


IRI’s Latin American Activities


In Haiti, IRI helped to fund, equip, and lobby for Haiti’s two heavily conservative and White House-backed opposition parties, the Democratic Convergence and Group 184.  The latter group, comprised of many of the island’s major business, church and professional figures, was at the vanguard of opposition to Jean Bertrand Aristide prior to the Haitian President’s forced ouster in 2004.  At the same time, IRI funneled taxpayer money to hard-line anti-Castro forces allied to the Republican Party.


In Venezuela, IRI generously funded anti-Chávez civil society groups that were militantly opposed to the regime.  Starting in 1998, the year Chávez was elected, IRI worked with Venezuelan organizations to produce anti-Chávez media campaigns, including newspaper, television and radio ads.  Additionally, when politicians, union and civil society leaders went to Washington to meet with U.S. officials just one month before the April 2002 coup, IRI picked up the bill.  The IRI also helped to fund the corrupt Confederation of Venezuelan Workers (which played a major role in the anti-Chávez destabilization campaign leading up to the coup) and Súmate, an organization involved in a signature-gathering campaign to present a petition calling for Chávez’s recall.



McCain and Cuba


McCain has taken a personal interest in IRI’s Cuba work and praises the anti-Castro opposition.  The Arizona Senator has called Cuba “a national security threat,” adding that “as president, I will not passively await the long overdue demise of the Castro dictatorship … The Cuban people have waited long enough.”  McCain wants to increase funding for the U.S. government’s anti-Castro radio and TV stations, seeks the release of all Cuban political prisoners, supports internationally monitored elections on the island, and wants to keep the U.S. trade embargo in place.  What kind of future does McCain envision for Cuba?  No doubt, one in which the Miami anti-Castro exiles rule the island.  McCain’s most influential advisers on Latin American affairs are Cuban Americans from Florida, including Senator Mel Martínez and far right Congress members Lincoln Diaz-Balart and Ileana Ros Lehtinen. 



For McCain, It’s Never Ending Free Trade and Militarization


On Capitol Hill, McCain has championed pro-U.S. Latin American regimes while working to isolate those governments which are rising up to challenge American hegemony.  On Colombia, for example, McCain has been a big booster of official U.S. policy.  Despite Colombia’s status as a human rights nightmare, the Senator supports ongoing funding to the government of Álvaro Uribe so as to combat the “narco-trafficking and terrorist threat.” 


McCain has taken a personal interest in the Andean region.  He has traveled to Ecuador and Colombia so as to drum up more support for the counter insurgency and drug war, now amounting to billions of dollars a year.  McCain’s foremost fear is that the Democrats may turn off the money flow to Uribe.  “You don’t build strong alliances by turning your back on friends,” he has said. 


McCain seeks to confront countries such as Venezuela and Cuba by encouraging U.S. partnership with sympathetic regimes that support American style free trade.  “We need to build on the passage of the Central America Free Trade Agreement by expanding U.S. trade with the region,’’ he has said. “Let’s start by ratifying the trade agreements with Panama, Peru, and Colombia that are already completed, and pushing forward the Free Trade Area of the Americas.”


Chávez has been one of the greatest obstacles to the fulfillment of McCain’s free trade agenda, however.  In recent years, the Venezuelan has pushed his own barter trade scheme, the Bolivarian Alternative for the Americas, which promotes economic solidarity and reciprocity between Latin American nations.  Concerned about growing ties between Cuba and Venezuela, McCain said “He [Chávez] aspires to be this generation’s [Fidel] Castro. I think the people of Venezuela ought to look at the standard of living in Cuba before they would embrace such a thing.” 



Fighting the Information War in Latin America


Speaking in Miami’s Little Havana, McCain said that “everyone should understand the connections” between Evo Morales, Castro, and Chávez. “They inspire each other. They assist each other. They get ideas from each other.  It’s very disturbing.” McCain said Chávez breathed “new oxygen” into Castro’s regime, and that the U.S. government should do more to quell dictatorships throughout Latin America.  Perhaps not surprisingly given his historic involvement in IRI, McCain’s campaign Web site even featured an online petition calling for support in his quest to “stop the dictators of Latin America.”  The petition called for the ouster of Chávez “in the name of democracy and freedom throughout our hemisphere.”


Though the petition was later taken down, McCain has staked out hawkish territory on Venezuela and would surely escalate tensions with the South American nation.  Most troubling is the Senator’s strong push for renewed U.S. propaganda in the region. McCain has criticized the Venezuelan government’s decision to not renew Radio Caracas Television’s license, and has called for reestablishing an agency like the United States Information Agency (the USIA oversaw a variety of agencies including the Voice of America radio network before it was merged into the State Department in 1998).


“Dismantling an agency dedicated to promoting America and the American message amounted to unilateral disarmament in the struggle of ideas,’’ McCain has said. “We need to re-create an independent agency with the sole purpose of getting America’s message to the world. This…would aid our efforts to communicate accurately with the people of Latin America.” 


If McCain was ever able to push through his aggressive media initiatives, he would antagonize many nations in the region which resent the pervasiveness of U.S. dominated media.  Already, Venezuela, Cuba, Argentina, and Uruguay have formed a joint satellite news station called Telesur (in my upcoming book scheduled for release in six weeks, I devote an entire chapter to the issue of media politics in South America).


From Bolton to Big Stick


To make matters worse, the Chair of IRI has sought to promote neo-conservative figures from the Bush regime such as John Bolton.  During the latter’s confirmation hearings in the Senate, McCain urged his Democratic colleagues to approve the diplomat’s nomination quickly.  Bolton has been a hawk not only on Iran but also Venezuela.  McCain, who refers to Chávez as a “wacko,” said it was important to confirm Bolton.  With Bolton at the United Nations, the U.S. would be able to talk back to “two-bit dictators” like the Venezuelan leader.   


Like Bolton, McCain apparently shares his colleague’s disdain for the United Nations and wants to create a so-called League of Democracies.  As envisioned by the Arizona legislator, the new body would take the place of the United Nations on such issues as conflict resolution, disease treatment and prevention, environmental crises, and access to free markets.  Interestingly, McCain’s inspiration for the League is Teddy Roosevelt, who had a vision of “like-minded nations working together for peace and liberty.”


Roosevelt, however, was no dove: he wielded a Big Stick and practiced gunboat diplomacy in Latin America.  It’s a policy which John McCain would probably like to revive if he is elected President in November.



Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave-Macmillan, April 2008), and Hugo Chávez: Oil, Politics, and the Challenge to the U.S. (Palgrave-Macmillan, 2006)


Clashes over Bolivia constitution

September 8, 2007

Protesters say the reforms are aimed at weakening the opposition to Morales [Reuters]


The violence left more than 60 people injured after students attempted to break into the building where the delegates are meeting.


Evo Morales, Bolivia’s president, and his supporters say the country needs a new constitution to right centuries of inequality.



Morales has put the issue at the top of his agenda.


But the opposition says Morales’ drive to rewrite the constitution is aimed at weakening his opponents and winning more time in office.


The constitutional changes would end presidential term limits and redistribute land.




Morales, left, has made the country’s
new constitution a top priority [Reuters]

On Thursday Bolivia’s prime minister appealed to the students to stop almost three weeks of protests.


“We are calling on the authorities and leaders of these groups to put aside their interests so that we can finally open an avenue for dialogue to get out of this situation,” said Juan Ramon de la Quintana.


Until two years ago the majority indigenous country had traditionally been controlled by a small, European-descended elite.


That changed with the election of Morales as Bolivia’s first Indian president.


But despite strong support among the poor majority, the socialist leader has faced a litany of problems.


The constitutional assembly itself has been fraught with delays and bickering that sometimes has sometimes turned into physical confrontation.


Capital move


The protesters are calling for the transfer of Bolivia’s capital from La Paz, a Morales stronghold, to Sucre, the country’s colonial and judicial capital.


Al Jazeera correspondent Craig Mauro says the underlying fears for the opposition are that Morales intends to become a dictator, with critics comparing him to his close ally, Venezuelan President Hugo Chavez.


Morales supporters meanwhile have accused the US of channelling funds to Bolivian opposition groups in an effort to try to destabilise the country.


Washington has denied the charges.


On Monday a group of about 10,000 Morales supporters are reportedly planning to march to Surcre, setting the stage for further potential clashes.


What Comes After The U.S. Empire?

July 21, 2007

What Comes After The U.S. Empire? 

Introductory Speech at the TRANSCEND International Meeting – 6-12 June 2007, Vienna, Austria

By Johan Galtung 

07/20/07 “ICH — – I first want to say a few words about the current G8 meeting, and then talk about major conflicts in the world. This will cover much of the world situation, a reflection on global capitalism, and the US Empire and its imminent demise and what will happen after that. 

            The G8 meeting is actually an act of sabotage, and in my view a deliberate one. It sabotages and undermines the UN. In 1975, the meeting was established as a small forum for intimate meetings between 3 leaders from each participating country. However, from a purely economic agenda it has become much more, incorporating a lot of UN agenda items (security issues and global warming etc.) and thereby actually hijacking the subjects of global importance to about 8 countries only. Russia, which was invited under Yeltsin, is the black sheep in the community. Also, not inviting Chindia is a guarantee for sabotage, as is talking about Africa without having even one African representative present. The good news is that there were 100’000 demonstrators, and the bad news is that there were some violent idiots. 

            If the nonviolent majority could practice the technique of 20 nonviolent encircling every violent one in a nonviolent way, incapacitating their capacity for violence, it would be an enormous feat. There is, however another piece of what I would call bad news; the 100’000 without constructive, positive ideas. I’ve gone through the whole rigmarole of the slogans. Personally, I don’t like the slogans against globalization; there is no way in the world to stop globalization because it is driven by things we all love: communication and transportation. We are not going to turn that backwards. A good slogan would be “another globalization is possible” and spelling out that better globalization as opposed to the economically exploitative process we know. 

            So, having said that, we have dark days in front of us. We have impending climate and economic disaster and on top of that a political military issue, the so-called Shield. There isn’t hardly a person in the world who believes it is against Iran. It is a part of a policy started in 1996, counter-posing against each other, on the one hand NATO and AMPO (the US-JAPAN arrangement), and on the other hand the SCO countries, the biggest alliance in human history: the Shanghai Cooperation Organization, with 6 full members and 3 observers. The 6 members are China, Russia and four of the former Central Asian republics, excluding Turkmenistan. The three observers are India, Pakistan and Iran. Together, it’s about 50% of humanity, confronting a relatively small country called the United States of America, with only 300’000’000, not a very impressive size these days. 

            I have said this, knowing that of the 10 points of the Project for the New American Century–written by people who are still in power, although there is an erosion among them–point number 7 is to change regime in China. I am of the opinion that whatever be the method, that the Chinese will rather do the change of regime themselves, and are not enthusiastic about being encircled. It is the major conflict confrontation of the world today, between NATO/AMPO and SCO, and since it is the major one, it is also the one least talked about. The Shield has to neutralize missiles from Russia and China. I think Putin understood it correctly in Munich, and sees it in the light of the cancellation of the ABM treaty, which was a cornerstone of the peaceful development during the Cold War. It was canceled unilaterally by the United States, The anti-missile capacities in the Czech Republic and Poland come on top of the US and NATO breaking the promises made to Gorbachev at the end of the Cold War: that the Soviet Union would withdraw from Eastern Europe, including Eastern Germany, and the United States would not follow suit, whereupon the United States had filled almost every base opportunity, and enrolled practically speaking all the countries in NATO. That has heightened the tension immensely. Whether it will dominate the Heiligendamm [G8 meeting] meeting, I don’t know, but I would imagine that it could be quite important. The guess is that the US would do anything they can in order to bribe the citizens of the villages selected in Poland and the Czech Republic with high amounts of money in order not to demonstrate against. So, G8 spells only bad news, as introduction to the six conflicts: 

1.         Economic Contradiction: Global Capitalism 

            Let me just say a word about global capitalism. The two antidotes to the market mechanism that have been effective have been, on the one hand, a welfare state, and on the other hand, protectionism. Microcredit, you can forget about it, these are small drops in the bucket, giving relief to some small groups. The countries that practice it most, Bangladesh and Bolivia, are still at the bottom, economically speaking. The combination of selective protectionism and welfare state, that is the real stuff. The way Japan did it, the way Taiwan did it, the way South Korea did it, the way Hong Kong did it, the way Singapore did it, the way Malaysia did it, with considerable success. You find in the whole of the East Asia/South East Asia conglomerate countries that have been doing exactly this. That is important, and the neo-liberal free market syndrome is of course against that. They are doing everything they can to eliminate the two factors. That means that the global market place becomes a vertical assembly line for the transportation of capital from the bottom to the top. And this works with three mechanisms: monetization, privatization and globalization, border-free market, of which globalization is the least important. The most important is monetization, setting a monetary price on everything. It is the most important because it means that those who have no money have no chance, and they are about 1’000’000’000. Their option, that is very clear, is to join the ranks of the dying; 125’000 dying every day with 25’000 starving and 100’000 dying from preventable and curable diseases,  for which cures exist, but they are monetized. User’s fees in Africa are a disaster. All of this is known today! Adam Smith warned against unmitigated markets; David Ricardo warned against unmitigated labor markets in periods with high labor supply, saying that it would have lasting unemployment as a result, and extreme poverty among the labor. 

            From global capitalism as it is operating today, we can expect no solution to these problems. So let me then add the kind of approach that I, as one person, would advocate; taming capitalism, by introducing at the same time about 14 other types of economies. In other words, it is a little bit like the thinking about energy: we don’t say an unconditional no to hydrocarbons, but we introduce 6, 7, 8 other methods. The energy profile becomes complex. Time does not permit me to get into all 14, I’ll not do it, some of you have the manuscript and the book A Life-Sustaining Economy is close to completion. The point I am arguing is a pluralistic economy. There is no single formula that covers all the alternatives, and the pluralistic profile must be adjusted to the preconditions in space and time. 

2.         Military Contradiction: Terrorism and State Terrorism 

            Number two on this list is the military contradiction between terrorism and state terrorism. The USA state contradiction on terrorism has now entered military intervention number 73 since the Second World War; Number 73 being what they are doing in Lebanon right now: killing Palestinians. There are 470’000 Palestinian refugees in Lebanon, almost half a million, scattered in camps from the north to the south. We now know the number of the people who were driven out of the territory that became the Jewish state during the Naqba, the Catastrophe: the number of Palestinians driven out was 711’000, very far from ‘a couple of thousand’. It is a very major number for a small nation. Some of them, not necessarily in that period, found their way to Lebanon. This is number 73 and the number of people killed in overt Pentagon-driven military action after the Second World War is now between 13 and 17 million. The number of people killed in covert action is at least 6 million. The number of people killed by structural violence could be 125’000 people per day, but for that the USA is not alone responsible. What the USA is responsible for is giving the military cover for that economic system. You can go through the total amount of interventions, 243, since Thomas Jefferson started, and you will find that almost without exception the interventions are triggered by some political action that sounds like or might lead to redistribution of wealth and power somewhere in the world. So, you get this endless pairing: intervening when the Sandinistas are in power but not when Somoza is in power, intervening when Chavez is in power but not when, for instance, Jimenez is in power. Both of them were darlings of the International Monetary Fund, a solid pillar of exploitation. 


            Right now the major arena is Iraq, the coming arena may be Iran. One particularly gifted journalist, Andreas Zumach, has written an article saying that for the Iran war everything is prepared. It is totally wrong to assume that because the US has problems in Iraq it will not attack Iran. I will also say that it is totally wrong to assume that the US is losing in Iraq. You will only assume that if you assume that the major goal of the United States is a cohesive Iraq entity that has some semblance to parliamentary democracy. If you look at the real goals, oil and military bases, they may ever be winning. There could be an oil law, the chances that it could be passed are not that small. And it is the Paul Bremer concept they are working on that essentially presupposes that the oil resources are put on the global market, bought up by the 5 big companies, with 100% repatriation of profit. 

            It is sometimes pointed out that the US Empire is not colonial. That is correct. They had colonies in the past, after they in 1898 stepped into the Spanish empire and acquired some major indigenous problems. One interesting thing about colonialism, however, is that it gave colonizers some paternalistic sense of responsibility that you can forget about when it comes to what’s going on under imperialism. 

            Let me just add one point to that. I find the idea of pulling out of Iraq one of the most cowardly, dishonorable ideas I can imagine, so let me immediately formulate an alternative. Shed the uniform, and start helping the Iraqi people you have brutalized. Compensate, apologize, you have a lot of infrastructure at your disposal, you US army could still do a decent job. And one of the worst proposals in addition to that is to say “Just go to your bases and stay there”. Those bases are for the coming war with SCO, that’s why they are there. Have a look at the analysis of the length of the runways and you will see the purpose behind them. 

            Let me come back for a second to the idea of pulling out, which in my mind is such a bad idea that we could expect it from the US. What it means is that you pull out so that you don’t suffer any humiliating defeat. You make yourself unavailable for defeat. I can understand the reason, it is not difficult. The 30th April 1975, the humiliating defeat in Vietnam became a major trauma. To avoid that situation is the priority of course, pulling out better than to continue killing, but, I just think one should call a spade a spade, and no way I see cut and run as peaceful action. We shouldn’t, I would say, contaminate the concept of peace with cowardice, trying to “save face” after having killed 750’000 so far. Multiply that by 10 for the bereaved–the persons who feel the loss of a friend, a spouse, a brother, a sister, a child, a parent, a colleague, a neighbor–multiply 750’000 by 10 and you have an estimate of the hatred that has been created. Add to that the 4 million who are displaced, some of them among the 7,5 million I just mentioned; and add to that the psychosis induced in the high number of US military who have been to Iraq; and add to that the about 25’000 wounded who have come back to the US and you may probably add 10% of them dying. The definition of a person of the US army personnel killed in the war is that he dies in Iraq, that means “Put them on the plane get them to Walter Ried as quickly as possible, don’t let them die in Iraq”. I am not saying that to get somewhere closer to realism when discussing this enormity. 

            Why don’t the USA with some allies win? Because they are against an enemy that is unconquerable, and why is that? Because of “asymmetric warfare” is too sterile. Of course they are using “improvised explosive” devices against these sophisticated things that the US army used. But they have two more arms at their disposal: time and space. 

            An unlimited time perspective. There is no point called “capitulation” in their rules, that can just be forgotten, it belonged to the old days. We are dealing with a type of warfare where what used to be called the weaker party has any amount of time at its disposal. These people are trained in fighting a government empire for 400, 500 years, like the Serbs were fighting the Turks for 500 years. The Orthodox, among the three Christianities, have a time perspective very similar to the Islamic one. I don’t think you will find 500 years patience in Washington, maybe not even 5 months for that matter. 

            And, they have space, there are 57 members of the OIC, the Organization of the Islamic Conference. 56 of them are states, number 57 are the 160 million or so Muslims in India. Most of the borders of the 56 countries are drawn by the West; they are borders that make no sense to Islam at all. That doesn’t mean there are no fault lines inside Islam. More important than Shia-Sunni is probably Arab-non-Arab. The non-Arab countries are in the majority, of the 56 only 22 are Arab. Of the 1.350.000.000 Muslims, 300.000.000 are Arab. If the Arabs feel that the religion is essentially theirs, then they are in a minority position. That is becoming something interesting, and of course the US plays on those fault lines. It seemed to work as long as they were dealing with Khomeini, he is a Shia, the “bad” Islam. But, bin Laden, a Wahab, was a Sunni, and didn’t look much more attractive than Khomeini. So something went wrong somehow with that Harvard University distinction. 

            Harvard University, by the way, is the university that by far has contributed most economists to the neo-liberal attack on humanity. Like Jeffrey Sachs, a major person in the destruction of Bolivia and of Russia, and now proceeding to the whole world. He has changed his rhetoric, even humanized the rhetoric. But if we look at the measures, they look very much like what he did to Bolivia and Russia. 

            Having said that, if you have time and space on your side, then you are dealing with enormous resources. In principle, the whole Islamic world is on the other side. This constitutes the “Clash of Civilizations” that Samuel Huntington’s publisher stole from Bernard Lewis, a far more important intellectual, professor at Princeton University, and a major advisor to Cheney. One of those who, more than anybody else, has whispered in Cheney’s ears “Attack Iraq!”. Everybody is blaming Samuel Huntington, best read the book, you’ll find almost nothing about civilization. Read Bernard Lewis, and you will find quite a lot, particularly about Islam. 

            It is a complete mistake to talk about this as a civilizational-religious clash only. It’s economic, military, political, it’s the full house. The more one says the “clash of civilizations”, the more is one inclined to forget the economic, political, military interests hidden underneath. It must be wonderful for Washington to have all this clash-of-civilization-talk and establish 14 military bases, and then try to put your paw on all the oil. “Keep them discussing civilization”. And this of courseis why we need the concept of imperialism, because it is holistic, one reason why the concept does not have a very high standing in the USA. The war of state terrorism against terrorism is an elitist warfare against peoples warfare. The people’s war is close to unbeatable, but it may take time. That holds for Iraq and it holds for Afghanistan. Anybody who knows a little bit of the history of Afghanistan and the British attacks in 1838 and 1878 and the Soviet attack in 1978, also know how it ended; with humiliating defeats. The one in 1878 ended even with the massacre in the British embassy in Kabul in 1883. I think they would have wished for good life insurances for those people. 

            How is it possible to enter a thing when so much knowledge would indicate otherwise, with all these negative indicators? Is it permissible to be that ignorant of history? To deny entirely a whole lot of facts that nevertheless somehow play a role? I myself think we give much too much credit to facts, but some facts are quite useful. It tells a lot to have a President who has both ignorance and denial fitted into his mental framework, but I would warn strongly against associating the calamity with Bush alone. 

            The US empire is resting on a deep structure and a deep culture. Let me take the deep culture first. There is both Chosenness, the vision of past and present glory, and a strong sense of trauma. There is Dualism, Manichaeism, and the sense that Armageddon will solve it. But, this is no Republican monopoly. It is found in both corporate parties, with some fringes that feel some uneasiness. And, of course, of those, the Republicans have suffered the humiliation of losing the elections. But the two parties re-cohered, voted for the “surge”, voted for 100 billion more money, adding some clauses. In other words, we are faced with a Republican Democrat entity, a Repucrat, Repurat, whatever we want to call it; a single-party coalition with two wings. That was the bad news, the good news are the 50% who don’t vote. Somewhere in those 50% there is a solution, not as one person. In other words, there is good news and bad news. 

            How does a person like Andreas Zumach, very well informed, think that the war against Iran will be? It could be based on a provocation, constructed, fake and false. Like Racak in Kosovo. A Finnish forensic specialist has now released her report which was silenced by Joschka Fischer at a critical moment, and the report on Racak is very clear: there was a gun-powder slam, but, the slam was on their hands and not on the neck. In other words, it was on those who had been shooting, not on the executed victims. Killing had been done in an ordinary manner and they then assembled the corpses and lay them out. They need a US ambassador to make that, it bears the stamp of William Walker. The total number of killed in Kosovo was not 150’000, but 8’000 over the years, 5’000 Albanians and 3’000 Serbs. I am just saying that because we have been treated to lies, and if there is the war against Iran it will be initiated by lies. To propagate those lies we have the corporate press, meaning press owned by the corporation. Information is easily arranged. 

            From the plans that have emerged it looks as if the 100’000 targets have been identified in Iran. These targets include not only some nuclear arrangements, but the total military infrastructure of the country, that means any kind of center of command, naval points, air bases, anything that has to do with missiles. But that would only amount to one half of the 100’000 targets, the other targets would be anything that has to do with civilian infrastructure in the sense of railroads, airports, roads of course, sewerage, bridges, canals or watering, electric power plants, anything that keeps the civilian population going. Starting at 5 am some morning, 100’000 targets, in association with Israel. As far as I understand the Iranian counterattack will be considerable. I don’t know, but I could guess there could be dirty bombs inside the US, ignited by remote control. Only an idiot will use missiles. They will of course use totally different methods. So I mention it as an example of what we may be facing. 


            In March I was invited to give a talk for three ministries in the UK, the Ministry of Foreign Affairs, the Ministry or Department of Defense, and the Department for International Development (DFID). It was organized by the latter. I was a little surprised when I was asked to give the keynote address, and in the chair was the former Foreign Minister. The keynote was about Afghanistan, Nepal and Sri Lanka. And since I have just been mentioning Afghanistan, let me say some words about what I saw as possible solutions. The basic point I have just made: you can forget any possibility of winning. You may have a lull, and God bless you when it comes to what happens after the lull: Osama bin Laden. You can also forget calling your enemy Taliban, Talib means “student”, it’s a highly anti-student type of word, you can forget about that too. We are essentially dealing with the Afghan people. I remember a discussion I had myself in that meeting, with an Afghan general. He gave a talk about how many small weapons he had confiscated, 90’000, and how his forces were fighting. And I said to him “General, tell me a little bit more about that fighting”, and he looked at me and said, “Of course it doesn’t work. I cannot ask my Afghan troops to kill Afghans, it makes no sense for them. The Russians, no problem.” He didn’t say, but he was thinking “Americans, no problem”, but that was not politically correct at such a conference in London. I will never forget how the twinkle in his eyes met with the twinkle in mine, twinkle meets twinkle, and we understood each other perfectly. 

            The 5 points that would give a solution to Afghanistan would be the following from the TRANSCEND mediation in Peshawar in February 2001. 

1.         Make a Coalition Government with the Taliban. 100% Taliban is intolerable. But the Taliban has a moral fiber, which most others don’t have. If you eliminate them you will get heroin and corruption and not much more. They are needed. 

2.         Afghanistan is the material from which a Federation is made, not a unitary state, even if the Northern Alliance based on Tadjiks and Pashtuns with Kabul in the middle, count for half. There are at least ten others. To call potential Prime Ministers “warlords” is an insult. You have to be very much removed from reality to believe that by insulting them you can eliminate them or make them your friends. 

3.         A Central Asian Community surrounding Afghanistan with the countries that contribute to the national mosaic that is Afghanistan, the Pashtuns from Pakistan, the Tadjiks from Tadjikistan and the Dari-speaking from Iran, and so on and so forth, would make a lot of sense. That will include Kashmir, and Pakistan, and Iran. The Shanghai Cooperation Organization has almost realized it. The Shanghai Cooperation Organization does not publish much, but moves in very, very clever, slow, movements. It moves so slowly that the journalists do not discover it, because it would have to move from day to day in order for a jour-nal to record it. 

4.         Make Basic Needs the leading line of the Government policy. That means food, education, health, clothing, whatever is needed for the somatic human being, shared by all, and available to men and women alike. That last problem can only be solved on a Quranic basis, and is being solved in a number of Islamic countries. One of the most interesting solutions was by Saddam Hussein, number 3 of the 14 good things he did. He told the Iraqi women, “From tomorrow on you decide whether to wear the hijaab or not. Only you. And if anybody tries to change your view come to me.” Now, to come to Saddam Hussein was not a very appetizing invitation, so this was definitely under threat, but it worked. It created a very, very vibrant group of women in Iraqi society. That of courseis now all disappearing. 

5.         Security, provided by cooperation between the UN Security Council and the Organization of the Islamic Conference. The UN Security Council has a veto nucleus of 4 Christian powers, and one Confucian. It has no legitimacy whatsoever in the Muslim world, that has to be understood. To believe that one can organize a UNSC-sponsored security operation in a country that hates the UN, not only because of the composition of the Security Council, but for having killed 1 million through the Iraq sanctions, is naive. And they gave a very clear expression for their hatred by killing the Secretary-General’s representative in the Iraq UN building. It doesn’t help much to call the people who did it “extremists”. In the war we had against the German occupation in Norway, the people who did violent acts were extremists, and most people were sitting on the fence, applauding. But, don’t be confused, don’t call the fence-sitters moderates. They were waiting for the wind to blow a little bit more clearly and then jumped down taking a clear stand. 

            With those 5 points, I think one could arrive at something. It is not for us to impose any solution on anybody, and TRANSCEND in this case was essentially the Canadians. I was an adjunct. One of them was an Afghan Canadian, Seddiq Veera, of considerable diplomatic acumen. When that report was read in front of the working groups, a former Cabinet Member said “This is the best I’ve ever seen, the only problem is it has no chance… Why, because,” he added, “the Americans will attack us in October 2001, because they want to control pipelines, and they want bases.” So I asked him, “How do you know that?”. And he said, “Would you mind coming to my room this evening?” The room was very dark, and had a considerable amount of electronics, and quite good assistants who were very discrete, and he presented quite a lot of very interesting pictures. “When the Americans attack in October, they will put their military bases exactly here”, he took a map and put his finger exactly where a major base is today. You will of course remember that this was to be exact seven months before 9/11. 

            But having said that, the question comes up: “How does one move a plan like those 5 points?” Well, the reports from the conference, with the keynote address, is there, circulated to all kinds of governmental circles, not only in England. I don’t know, but we need a better dissemination technique. The corporate press will do their best to deny us that access, because we are uncontrollable, unpredictable. And I think they want it to remain like that, and so do we. 

3.         Nations and States Contradiction: 200 States, 2000 Nations 

            Let me go on to number three, very briefly, 200 states, 2000 nations. In Kosova they are now practicing the principle of self-determination. They are not practicing it in Republica Srpska, they are not practicing it in Transdniestria, they are not practicing it for the Tamils in Sri Lanka. They are practicing it where they want to practice it. What TRANSCEND tries to do is to open the space between independence and unitary states. And we have a lot of research done and a lot of experience when it comes to the range of in between points. And the three best known points are of course federation, confederation and devolution. Those are in-between parts. We did not have any success so far in Sri Lanka. The parties are not convinced that they can win, but they are convinced that they can deprive the other side from winning. Not quite the same, but almost equally good. If both of them want to deprive the other side of winning it can go on for a considerable amount of time, because you won’t even have the mechanism of victory or capitulation which sets some full stop, for some period. They needed of course the cease-fire agreement brokered by the Norwegian government in order to arm and re-deploy, and both parties make use of it. During that period, there was not a single serious effort to solve the conflict; certainly not by the Norwegian government, nor by the others. A very sad picture. And I’m afraid that whatever beautiful peace-building efforts one can make, it has limited impact. There has to be a solution. The good news from my own experience: the moment you do have a solution, it is incredible how much bad sentiment and behavior can evaporate quickly because the solution is there. 

4.         Cultural Contradiction: Islam vs Christianity 

            Number four, the cultural one. Imagine that you take the TRANSCEND 5 point diagram and you simply say Islam hates Christianity, wants to kick it out, and Christianity hates Islam, wants to kick it out. That formula is called intolerance. We are against that. There is the neither/nor possibility they may both conclude that there is something crazy in both religions. Let us turn to Buddhism, or let’s become secular. Secularism, I think, can partly be traced back to the 30 years war in Europe (1618 – 48). I don’t have the historical evidence, but I have at least the hypothesis that a high number of people came to the conclusion that if these are two Christianities that both define themselves as the only correct one, and that’s the way they treat each other, there must be something basically wrong in the whole Christian message. At the time, they did not have alternative religion, so they turned to secularism. 

            Secularism supported itself as science, and they fell into a very deep dark hole. Science, as you know, is based on data as the ultimate arbiter between hypotheses. But, data come from the past. In opting for science you give the past practically speaking 100 percent of the power. I have been struggling almost all my life to develop epistemology that does not take that dramatic position, but maneuvering even-handedly between past and future. It means that you give the potential, the negatively non-existing, as much praise as the positively existing. The moment secularism allies itself with science, it allies itself with the past. It is very easy to understand why they do it: because they are Christians, maybe Jews, maybe Muslims, and God created the world, and if God is perfection then His work must also be perfection. To talk about an alternative future is to challenge the creation. Any alternative future from a science point of view is speculation. From that point of view Darwinism and intelligent design are very very similar. The driving forces are in the past. What could be a true global future of this relation? We should draw on the potential of future wishes, of the dreams and the wishes and the values as an equally important part of the intellectual enterprise, and here I am not with Noam Chomsky. Brilliant, he is a digger for facts, and I dig him too. But he is chemically free from any concrete, constructive and creative future. There isn’t one single idea except “writing a letter to your Congressman”. And he has proven again and again and again how futile that exercise is. He is called the major intellectual in the world. 

            So, having said that, I am very much attracted by a statement by an Iranian, and that statement by an Iranian is as follows. I will read it to you in English. It is the 14th Century Persian Sufi poet Hafiz and his ultimate words about the distinction and struggle between Christianity and Islam: 

            “I have learned so much from God that I can no longer call myself a Christian, a Hindu, a Muslim, a Buddhist, a Jew. The truth has shed so much of itself in me that I can no longer call myself a man, a woman…”. 

            The latter is going a little bit too far, I’m not sure I can follow him into that! 

            “…An angel or even a pure soul, love has befriended Hafiz so completely, has turned to passion, freed me of every concept and image my mind has ever loved… man/woman, thing.” 

            And that is what I for reasons of time will say about number 5 on the list: 

5.         Sufism 

            It comes straight out of the Axis of Evil. Ahmadinejad wrote a letter of 18 pages to Bush, a little bit repetitive at times, but a fascinating letter. What an indictment of the Western civilization that they are not even able to answer that letter. Nobody is of course expecting any answer from George Bush, but he has a couple of people: couldn’t Condi try her hand at it for instance? I mean, she is a bright woman. Why not? 

            A quote from Daoism: 

            “Sharing the suffering of others, the life and joy of others. Use the good fortune of others as your own good fortune. View the losses of others as yours.” 

            This is “we-ness”, this is swinging in harmony, two persons, or, humanity swinging in harmony, sensing each other’s delight and suffering. Compare that with the profoundly egoistic lex talionis: “Do unto others as you want others to do unto you.” Why is it so profoundly egoistic? Because it ends up with my ego, somebody should do something good to me, but I’m so smart that I know that the best way to get that is to be nice to that person, you get much more from him with that method. If you treat him badly you might get nothing or worse. A light-year away from the Daoism of creating we’s. This is the kind of thing that I find fascinating in connection with religion: it is not neither/nor, it is not the compromise, it is not one dominating over the other. Better, try to take the both/and, pick up the gems from all of them, make them coalesce, cohere somehow! A fascinating challenge, a little bit ahead of its time, or then maybe not. Maybe a lot of people think that way, it only has to be released, perhaps, in public space. 

6.         The US Empire 

            Let me introduce number 6, with a quotation from the South African Nobel Prize winner in literature J.M. Coetzee. Absolutely brilliant. The essay he wrote and published in 1974, when he was 34 years old, was about South Africa and the Vietnam War. He wrote a statement about the USA, putting it in the working of a specialist in a U.S. think tank in California, southern part. The project he is working on is how to break the wild of the Vietcong, and substitute for Vietcong goals goals that are compatible with the sincere US love for the Vietnamese people. He writes: 

            “If the Vietnamese had come singing towards us through the hails of bullets, we would have knelt down and embraced them.”

            If they can come singing through the hails of bullets. A good way of putting it. Yes, if only it’s exactly what happens. The idea that we can bomb the people into submission, and make them love us, is insane. When the Germans were “bombed into submission”, it actually strengthened the Nazi party. What then happened to the Germans was something else. At a certain point they realized that their whole project was doomed, the whole Nazi project was wrong wrong wrong. They were not taught a lesson by being bombed. “If only they would come singing through the hail of bullets, we would go down on our knees and embrace them.” The perception of their own project came from the inside. What Coetzee leads up to is psychosis, diagnosis maybe a combination of narcissism, megalomania and paranoia, maybe with elements of a fantastic detachment from reality. But we are not dealing with psychopaths, we are dealing with socio-paths. Maybe lovely individuals, but with an image of the world totally devoid of any humanitarian reality when those attacked refuse to do what Reagan said when he was entering a helicopter, in connection with Nicaragua. “Mr. President, what do you want them to do?” “All I want them to do is to say ‘Uncle'”, meaning “I submit.” 

            It doesn’t work like that with a deep culture and a deep structure at work. US political science and US economics have no concept of history, and, it seems, only two concepts of structure, hierarchy and anarchy. If you come from a Nordic country, or from the European Union, you have no problem what equity is about, even if I had to make up the word “equiarchy”, to add to hierarchy, polyarchy and anarchy. Their only approach to equity was and is the signed agreement, contract, regardless of the 2nd, 3rd, 4th level consequences. Similarly, solution to them means settlement, a signed document, and I would argue it isn’t good enough, solution is deeper. 

            So how is the US Empire performing these days? There are 15 contradictions at the end in the hypothesis made in the year 2000. Let me say what the basic theory is about. An Empire is a transborder arrangement that combines economic, military, political and cultural power. It’s an enormous power display that obviously brings with it contradictions. Contradictions are problems you cannot solve unless you change the system, but you can coexist with a couple of contradictions. When the contradictions start multiplying, synchronizing and synergizing, they become serious. 

            For the Empire people hit by an Empire start understanding that they have a common cause: get rid of the Empire – like colonialism, like slavery. 

            I can now pick up some of them, such as the amount of Euros passing the Dollars in circulation last December, Toyota passing GM in January, and you have the number of patents in the world with the US proportion sinking in comparison with other countries passing the US in one domain after the other. There is all of this happening, and much much more. 

            Let me point to a key factor. It hasn’t happened yet. But, many Europeans have felt bothered, and the moment they meet people in the Iraqi resistance movement and they compare notes, a sense of a common cause may start arising. If I now take all of these 15 points, some of them also inside the US, and Americans also sense that they are better off without the US Empire, the moment that common cause factor comes about, the US Empire is doomed. That is what happened to the Soviet Union. My prediction made in 1980 was that the wall would fall before 1990 and that the Soviet Empire would follow and they performed on time. The prediction of the US Empire is by 24 October 2020, the UN day and also my 90th anniversary, and you are all invited to celebrate. And let us combine it with a TRANSCEND meeting, but we need to make a jump, because they are now in odd years. 

What comes after the U.S. Empire? 

A.        The European Union as Successor 

            And then what? Three possibilities. 1) A Successor Country or Countries, 2) A Regionalizing World, 3) Another Globalization. Let me say a couple of words on all three. And you will take note, of course, that the end of an Empire is the most natural thing in the world. Empires come and go, it’s been like that all the time. No empire lasts forever. However, this one happens to be so brutal, so killing, so intervening, doing so much damage that you would expect it to be more short-lived than many of the others. It didn’t have the decorum and the sense of responsibility sometimes exercised by the English and the French, to a large extent by the Spanish, to a minor extent also by the Dutch, much less by the Portuguese and the Belgians. You will of coursealso remember that the Portuguese in Brazil, with the US, were hanging onto slavery more than any other. So there is a tradition here. 

            But leaving that point aside, I think China is one of the least likely successor candidates. On my list, candidate number one is the European Union. You need a sense of universalism, China has nothing of that. They are still convinced that it is surrounded by barbarians. They are willing to buy quite a lot. The annual global income is 54 trillion dollars, and China’s reserves are more than one trillion. The US currency reserves right now amount to 47 billion, which is nothing. That means when you want 100 billion for more fighting in Iraq and Afghanistan, you have to take more loans. That they get those loans is something still a little bit strange, but they do pay something in return, namely access to the US markets. So, having said that, a likely successor is the European Union, very universalist, with the 11 major colonial powers all members, and all concerned about their part of the world. And they are willing to say “I’ll not protest if you do something in your part if you’ll not protest when I do something in my part”. It is European political common market. There is much more to the European Union, but this is one important aspect. 

            We had a conference on peace studies in Hull in England one week ago, about democracy and peace. And I launched the idea of the European Union as a successor, after 19 reasons why the hypothesis of “democratic peace” is false, even a fraud, but I leave out all of that. The point I’m making is simply that the European Union has the deep culture and the deep structure it takes to become an empire. There were protests to the effect that there was no such plan also from Members of the European Parliament. Back then, a German from the European Commission raised his hand and said: “I’ll tell you one thing, I work in the European Commission, but occasionally I go over to the Council of Ministers and whenever I am in the building, so many of the people walking around are in uniform, they suddenly disappear into some room, and it is very clear that the doors are closed.” There is of course also the Tindemans plan, and the Tindemans plan is exactly what they need for that successor purpose. So let me proceed to what I think is most likely, regionalization. 

B.        Regionalization 

            We have 4 regions or maybe 5, EU, AU, SAARC and ASEAN. Number 5 is the G8, it’s not contiguous, but it doesn’t have to be contiguous to be a region. And we have 4 regions that are coming, and they have one thing in common: they are not going to ask Washington for permission. 

            The first one is the Estados Unidos de America Latina y el Caribe, the United States of Latin America and the Caribbean. The common currency will be a Bolivar. Nine of the countries met in La Paz in December and drew up the basic plans for the Charter. A basic pattern of thinking is what they call a “social economy” and about that one I will just say one or two lines. When sanctions came to Cuba in 1960, or 1961 rather, the only trading possibility was with the Soviet Union, meaning sugar in return for shoddily manufactured goods. The Soviet Union collapsed, so did the trade, and Washington was already looking forward to the collapse of Cuba. What did they do then? First of all they switched to organic agriculture to be self-sufficient. In industrial products, they have enormous shortages, but they have some trade possibilities. And then you would immediately say that it was obvious, but not everybody thought about it. “We have human material, let us process that human material to as high a level as possible.” That started university education to an extent unknown in most other countries, with a science and training center outside Havana for the training of doctors, dentists, engineers, social workers, educators, teachers of all trades. Thousands and thousands of them, ready to go to Latin America. But they didn’t have the money till Chavez. He had the money, and a messianic complex. He is the Messiah with a budget. Imagine Jesus Christ with an oil budget? You see the triangular theme? Chavez pays Cuba for providing the manpower for lifting the bottom level of those 9 countries, starting with the slums, and they pay Chavez a certain allegiance to the Estados Unidos, which is evolving everyday today. Venezuela then, a couple of weeks ago left the World Bank and the IMF. You cannot leave it unless you have paid all your debts and Venezuela paid them some time ago. The other countries cannot leave because they haven’t paid their debts, so Venezuela is going to pay their debts for them. The Messiah with a budget. The difficulty of it is, that Messianism might go to his head and make his populist democracy, as opposed to the usual Latin American elitist democracy, similar to people’s democracy in Eastern Europe, as opposed to any democracy. As it is obvious I like his policies, I would hate to see that happen. 

            The second one is an Islamic community from Morocco to Mindanao. 1’300’000’000 Muslims crossing almost 1’300’000’000 Hindus, from Nepal to Sri Lanka, like two highways, but at the same level. A major potential for a major conflict, making small riots in India look microscopic. I use that as an exercise for diplomats and say, “Please come up with 5 solutions for this one”. 

            Third, an East Asia Community, without Japan and with India, possibly combined with SCO. 

            And fourth, possibly, Putin could pull it off, but he may not be the man for it, is a Russian Union with a Chechnya having as much autonomy as the Netherlands in the European Union. Today widely off the mark. Tomorrow? Maybe. It would be widely in Russia’s interest. The problem is that Putin came to power by being anti-Chechen. So, let us see. Maybe somebody can come to power by being pro-Chechen. 

            In a regional world we do not have any guarantee for peace. As a matter of fact, the country that will benefit most from the decline and fall of the US Empire will be the US Republic. They may start sleeping well at night, and they might use their enormous natural and human resources for innovative projects and their capacity for cooperation, all of that, for better purposes, and make a decent country out of the USA. 

C.        Another Globalization 

            That means of course a stronger UN with globalization through the United Nations. I was advisor to the Commission for Global Governance. They had a lot of good ideas whose time had not come, so let me just say the three that for me are most important. 

            Abolish the veto power. They may meet, in the G8, but put their agenda on the UN agenda, and if they don’t like what they come up with, outvote them by expanding the Security Council to 54 members like the Economic and Social Council, and see to it that all parts of the world are there. That’s point one. 

            Point two, democratize the United Nations. They can mobilize an enormous amount of initiatives through a democratic United Nations. Maybe with one representative for each 1 million inhabitants, some say for each 10 million. 

            And, point three, take the United Nations out of the United States and put it somewhere else. Put it in a more friendly environment. This can all be done within a span from 5 to 20 years. If democracy is such a good idea, then why not practice it? 

            My own book on The Decline and Fall of the US Empire–And Then What? is scheduled for next Spring. The book on alternative economics is also for next year, and so is the book on deep culture. Books, books, books, what matters more is peace, peace. 

            So let me end by simply saying that I was asked to say something on the state of the world. I’ve done that. And, if anybody can come up with ideas on how to speed up constructive, creative, concrete development, please don’t hesitate! 

            Thank you.
Johan Galtung, Dr hc mult, Professor of Peace Studies; Founder, TRANSCEND, a peace and development network ( )

15 contradictions of the US 


1.         Between growth and distribution: overproduction, 1.4 billion below 1 dollar a day, 100’000 die a day from preventable and curable diseases and 25’000 from hunger; 

2.         Between productive and finance economy: currency, stocks, bonds, overvalued, crashes, unemployment, contract jobs, not positions; 

3.         Between production/distribution/consumption and nature: ecocrisis, depletion/pollution, global warming; 


4.         Between US state terrorism and terrorism: blowback; 

5.         Between US and allies: except UK-Germany-Japan, allies will say “enough”; 

6.         Between US Eurasia hegemony and Rus-Chindia triangle with 40% of humanity; 

7.         Between US-led NATO and the EU army: a Tindemans follow-up; 


8.         Between USA and the UN: the UN ultimately hitting back; 

9.         Between USA and the EU: vying for Orthodox/Muslims support; 


10.       Between US Judeo-Christianity and Islam: the UNSC nucleus has four Christian, and none of 56 Muslim countries; 

11.       Between US and the oldest civilizations: Chinese, Indian, Egyptian, Mesopotamian, Aztec, Inca, Maya; 

12.       Between US and EU elite cultures: France, Germany etc. 


13.       Between state-corporate elites and working classes of unemployed and contract workers; the middle classes? 

14.       Between older generation and youth: Seattle, Washington, Praha, Genova and ever younger youth. The middle generation? 

15.       Between myth and realities: the US dream and US reality.

Where Is Venezuela Going?

July 17, 2007

Chávez and the meaning of twenty-first century socialism
Where Is Venezuela Going?

Monday, Jul 16, 2007 Print format
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By: Lee Sustar – International Socialist Review

VENEZUELA’S “BOLIVARIAN Revolution” is moving ahead fast. President Hugo Chávez’s government, which began in 1999 with an attempt to implement Tony Blair’s “third way,” now aims to build “socialism for the twenty-first century.” Revenues from the state oil company, PDVSA, have funded vast increases in social spending. Targeted outreach to the poor via government “missions” have largely bypassed the old state structures and have achieved spectacular results.

These include a reduction of poverty from 55 percent of the population to 34 percent as the share of gross domestic product (GDP) on social spending has increased from 7.83 percent to 14.69 percent; the achievement of literacy for 1.5 million adults; the virtual elimination of hunger through subsidized grocery stores that service 13 million people; medical care provided by Cuban doctors via free clinics in slums, reaching 18 million people, nearly 70 percent of the population; access to higher education for the poor and working class; and special affirmative action programs for indigenous people.1 The minimum wage is now the highest in Latin America at $286 per month, and the workweek is to be shortened from forty to thirty-six hours by 2010.2 Land reform has shifted 8.8 million acres to impoverished families, more than half of that from private owners.3 Government seed money has increased the number of cooperative enterprises from fewer than 800 to 181,000 to try and provide more stable employment for the approximately half of Venezuelan workers who toil in the informal sector of the economy.4

All this is being achieved despite the implacable hostility of Venezuelan capital and of U.S. imperialism, which supported the failed 2002 coup against Chávez, and the subsequent oil industry employers’ lockout that did enormous economic damage. If the 2002 coup government—immediately recognized by George W. Bush’s administration—had been successful, Hugo Chávez would have been just another in a long list of reformist Latin American leaders who were overthrown by the U.S. or its local operatives in a roster of interventions that stretches from the Mexican War of 1846 to the Contra war against the Nicaraguan revolution in the 1980s. Instead, Chávez looms ever larger on the world stage, having turned Venezuela from one of the most compliant states in Washington’s “backyard” into the cutting edge of the revolt against neoliberalism and a laboratory for socialism in the twenty-first century—all with oil money earned from exports to the United States. Oil prices are high, of course, owing to the Iraq War, which has also severely constrained the ability of the U.S. to contain Chávez, let alone overthrow him.

As a consequence, millions of workers in Latin America and beyond see Venezuela as evidence that reforms are possible despite corporate globalization and imperialism—and they’re discussing the possibility of a socialist future as well. Chávez’s Venezuela challenges Margaret Thatcher’s famous dictum, adopted by neoliberal policymakers everywhere: “There is no alternative”—TINA. Venezuela is increasingly seen as proof that TINA, if not dead, is certainly suffering from a crisis of legitimacy. Not only has Venezuela begun to reverse decades of what is known in Latin America as “social exclusion,” but the oil boom has facilitated regional economic integration and anti-U.S. diplomatic initiatives that are giving shape to Chávez’s aim of achieving pan-Latin American, anti-neoliberal unity.5 Latin America has seen other populist leaders with a base among the working class and the poor, but rarely with such an immediate international impact.

These changes powered Chávez’s reelection in December 2006 over conservative Manuel Rosales, a state governor notorious for having signed the coup decree of April 2002.6 The opposition’s lackluster campaign ensured that Chávez’s victory would be the biggest yet, with 60 percent of the vote. Afterward, Chávez declared a new phase in what Venezuelans call the “revolutionary process”—the nationalization of sectors of the oil industry that were still in the hands of foreign investors. This move followed the re-nationalization of the telephone company, CANTV, and other companies. Parallel to these nationalizations—carried out by presidential decree following authorization by the National Assembly—are far-reaching efforts to create new political structures, including communal councils and workers’ councils that are presented as cornerstones of the “protagonist” democracy that Chávez has long championed. Earlier, Chávez had marked his reelection with a call to create a United Socialist Party of Venezuela (PSUV), and later denounced parties previously part of his electoral and government coalition for refusing or hesitating to dissolve within it.7

With this turn, certain contradictions in the revolutionary process have surfaced. Are the proposed workers’ councils a step towards workers’ control, or are they an effort to extend state control over organized labor, as some critics in the left wing of the pro-Chávez National Union of Workers (UNT) have argued? Is the PSUV a means to bind Chávez more directly to the mass of workers and the poor, and bypass unresponsive and/or corrupt bureaucrats, as its promoters claim, or is it a move to co-opt and bureaucratize the social movements themselves, as some leading movement activists have argued? Will the companies that have been nationalized—through compensation to capital worth billions of dollars—be democratically run by workers or by the same managers? Is a government that has paid off $3.3 billion in loans to the International Monetary Fund (IMF) and World Bank—the odious debt of previous, corrupt regimes—prepared to carry out a consistent opposition to imperialism in all its forms? What will be the response of Chávez to attempts by unions and social movement activists to advance the “revolution within the revolution,” as the Venezuelan Left has long advocated? Or the response to strikes in state-owned companies? Class polarization is leading to sharper class conflict and political crises, for example, over inflation and the hoarding of staple foods. Will the government attempt to mediate such conflict or support workers and the poor against employers and speculators? Are Chávez’s exhortations to study revolutionary leaders of the past—most recently, Leon Trotsky—the harbinger of more radical policies? Can a government elected within the framework of a capitalist, bourgeois democratic state initiate a socialist transformation of society? Can the prestige of Chávez among workers and the poor in Latin America and beyond contribute to the revival of radical and socialist politics?

These questions are not entirely new. But until recently, the broad Chávista camp was bound together by pressure from the Venezuela Right and imperialism. Tensions, for example, had bubbled up among government supporters over the highhanded way government officials ran Chávez’s campaign in the recall election of 2004.8 But positions didn’t crystallize, given the perceived threat of an electoral victory by the Right or another coup. Moreover, rapid economic growth—more than 10 percent annually since 2003, has nearly cut in half what had been a 20 percent unemployment rate, ameliorating conditions for workers but simultaneously aggravating class polarization. Consequently, sharp political debates in Venezuela are emerging within the Left itself in response to Chávez’s new initiatives. The Right remains a threat, however, as evidenced by the violent protests (which are ongoing as the ISR goes to press) after the government failed to renew the broadcast license of an opposition television station that had allowed active military generals to broadcast calls for the government to be overthrown during the coup attempt.

Where is Venezuela going? This article seeks to provide a framework for answering that question. It will (1) analyze the rise of Chávez within the context of Venezuelan history and politics; (2) examine the government’s economic, social, and political policies; (3) evaluate the Venezuelan revolutionary process from the standpoint of classical Marxist theory; and (4) outline a strategic approach towards the Chávez phenomenon for those committed to anti-imperialist and revolutionary socialist politics.

From the “Venezuelan dream” to economic catastrophe

Venezuela was long considered perhaps the least likely country in Latin America to become an international reference point for revolutionary and socialist politics. The fall of the military dictatorship of General Pérez Jiménez in 1958 was followed by a political power-sharing deal between the nominally center-left Democratic Action party (AD) and the conservative Christian Democratic party (COPEI). Known as the “Punto Fijo” system, named after the house of then-presidential candidate Rafael Caldera where the pact was brokered, the agreement created a duopoly that excluded the Communist Party (PCV), then dominant in organized labor.9 The communists were also expelled from the Confederation of Venezuelan Labor (CTV), which was soon dominated by the AD and became a vehicle for U.S. imperialism to subvert organized labor across Latin America.10

For decades, the CTV and the puntofijismo political duopoly seemed impervious to challenge from the Left. Since voting for the National Assembly was done by party slate rather than individual candidates, and state governors were appointed, it was almost impossible for individuals or parties outside AD and COPEI to win elections. When threats did emerge, outright fraud ensured that the two parties would retain their grip on power.11 “Acta mata voto”—the tally sheet kills the vote—became the duopoly’s unofficial slogan.

Locked out of elected office and influence in the unions, the Left struggled to make an impact. Unions tied to the PCV formed a separate labor federation that remained small and had only limited influence. A generation of young militants influenced by the Cuban Revolution—mostly young, middle-class radicals—broke away from the PCV and took up armed struggle in the 1960s, but made little headway. The guerrilla actions were used as a pretext for state repression against student radicals and labor militants.12 By the 1970s, however, the Left had partially recovered. A breakaway from the PCV, the Movement Toward Socialism (MAS) reoriented from guerrilla struggle to an electoral strategy.13 In the center of heavy industry in the Bolívar state, a radical union movement led by ex-communists gave rise to the Radical Cause party (La Causa Radical).14 Elements of both would later break away to join Chávez’s electoral coalition.

The 1976 nationalization of the oil industry by the AD government of President Carlos Andrés Pérez was the high watermark of puntofijismo and nationalist economic development, as the U.S. defeat in Vietnam forced Washington to give Caracas a longer leash.15 Venezuela seemed poised to reach a qualitatively higher stage of development than its neighbors.

The Latin American debt crisis of 1982–83 and a dramatic fall in world oil prices shattered the Venezuelan dream. The debt used to finance Pérez’s nationalist development plans couldn’t be repaid. In 1970, Venezuela’s long-term debt had been only 8.7 percent of GDP. By 1985, it was 46.1 percent.16 Subsequent governments turned to the IMF for emergency loans, contingent, as usual, on “structural adjustment” and austerity. The heady days of high growth and expansive plans for economic development suddenly gave way to endless crisis. Debt—and the succeeding IMF loans—strangled many Latin American economies during what became known as the “lost decade” of the 1980s. The income share of the poorest 40 percent of the population dropped from 19.1 percent in 1981 to 14.7 percent in 1997, while the wealthiest 10 percent increased their share of the national income from 21.8 to 32.8 percent.17 “During the 1980s and 1990s, no South American country deteriorated more than Venezuela; its GDP fell some 40 percent.”18

The social explosion, known as the Caracazo, finally came on February 27, 1989, when riots erupted in Caracas against a dramatic increase in bus fares, driven by fuel costs, and by the massive hoarding by supermarkets in anticipation that the government would authorize price increases in regulated food items. The AD government of Carlos Andrés Pérez—who had been returned to office on a populist platform, only to embrace new IMF “adjustments”—ordered the military to clear the streets. Thousands were killed by the repression.19 A state that had been held up as the model for Latin American democracy turned out to be as vicious as any.

Neoliberal policies, combined with low oil prices, took a terrible toll on the Venezuelan working class. Real wages dropped 23 percent during the 1990s, and 60 percent of the population was forced to turn to the informal sector of the economy to survive.20 Poverty rates skyrocketed, reaching, according to one estimate, 66.5 percent in 1989.21

The duopoly responded to rising social polarization by trying to let off steam in the political arena. A series of reforms under an AD government allowed a vote for individuals to the National Assembly and in 1989, the first direct elections for governor in Venezuelan history.22

The Left, it seemed, finally had an opening to consolidate its influence. Thus in 1989, when the first-ever direct elections for governor were held, Causa Radical won the post in the industrial state of Guyana, and MAS made gains in the National Assembly.23 Yet opportunity coincided with crisis: 1989 was the year not only of the Caracazo and electoral reform, but also the year the Berlin Wall was torn down. The collapse of Stalinism in Eastern Europe and in Russia disoriented not only pro-USSR parties like the PCV but also Maoist and Trotskyist groups. Thus the Left, seemingly poised to exploit political reforms and intervene in social struggles in the aftermath of the Caracazo, fragmented instead. Indeed, the rise of Chávez must be seen in part as a consequence of the weakness of the Venezuelan Left.

Enter Chávez

Lieutenant Colonel Hugo Chávez burst onto the scene on February 4, 1992, in a failed coup against Pérez. His plan called for seizing key government and military installations and radio transmitters, through which his group would call for a national uprising. The plan echoed the 1945 coup and AD-military junta that overthrew the military dictatorship of Isaías Medina Angarita. But unlike the AD party of that time, Chávez’s conspirators had almost no contact with social movements, organized labor, or the Left.24 The apparent hope was a repeat of the Caracazo uprising, this time with the military on the side of the people.

Betrayed by spies, the coup failed. Chávez went on television to urge his forces to surrender—“for now”—and was sent to a military prison. Large numbers of Venezuelans saw Chávez not as a would-be dictator but as a hero—a point made by former president Rafael Caldera on the floor of the Senate. Caldera adapted to the Chávez phenomenon by breaking from his COPEI party to win reelection as an independent on a populist platform in 1993. Once in office, he pardoned Chávez, reprising a move he made in his first term in 1969 when he pardoned former guerrilla fighters. But like Carlos Andrés Pérez, Caldera soon abandoned his populist rhetoric and implemented IMF-approved economic policies. It was in this context that Chávez turned towards the electoral road to power. AD and COPEI were discredited as corrupt accomplices of the IMF, while political reform had made the strategy of seeking office viable.

Chávez’s only organization had been his once-secret circle of military conspirators, the Revolutionary Bolivarian Movement-200 (MBR-200, the number signifying the bicentenary of Simón Bolivar’s birth), founded in 1983. The MBR-200 took root among a generation of officers who had no experience of counterinsurgency measures against the left-wing guerrillas of the 1960s. Rather, they were the beneficiaries of a new, university-level training system created at the height of the 1970s oil boom and salaries that were the highest for officers in the Western Hemisphere, after the U.S. and Canada. The training “reinforced nationalist patriotic sentiments among officer cadets after 1974,” writes one researcher. “Some developed an almost mystical attachment to the teachings of Simón Bolivar, and many shared a populist, egalitarian and ultimately utilitarian attitude toward democracy.”25

These young officers considered themselves superior to the less educated high-ranking officers, who were enmeshed in AD-COPEI corruption. The economic shocks of the 1980s, however, shattered the Venezuelan military officers’ world, cutting their living standard from that of the upper middle class to the working class. Many looked askance at Pérez, whose “sale of state industries and the national telecommunications company to foreign investors, were viewed as damaging to national sovereignty by many officers still influenced by a belief system that equated security with state control of ‘strategic industrial sectors.’” On top of all this was revulsion at the military’s role in shooting down poor rioters in the Caracazo.26

Less discussed is the extent to which Chávez’s politics draw upon nationalist traditions within the Venezuelan military itself. As in many Latin American countries in the nineteenth century, Venezuela was divided by civil wars between urban bourgeois liberals and rural conservative landowners. In Venezuela, the conflicts escalated to the point where there was barely a functional central state. Chávez is sometimes compared to the populist figures from this era, such as Ezequiel Zamora, the liberal caudillo “horror of the oligarchy” assassinated in 1860.

Chávez’s politics, in fact, echo broader nationalist—and not particularly left-wing—traditions of the Venezuelan military, for example, that of General Cipriano Castro, an admirer of Bolívar, who seized power in 1899 and formed an assertively nationalist government. U.S. President Theodore Roosevelt called the dark-skinned Castro “an unspeakably villainous little monkey” and plotted a possible invasion. An intervention did take place, but privately: the U.S. asphalt trust financed an invasion by a rival general. Castro prevailed, and survived gunboat diplomacy when Italy, Britain, and Germany sent naval ships to the Venezuelan coast in 1902, with Germans opening fire. Ultimately Castro accepted the U.S. as a broker for the repayment of the debt.27

The subsequent dictatorship of Juan Vicente Gómez—who ousted Castro—paid off the debt by 1930 and collaborated with U.S. oil companies to boost Venezuelan oil production, mainly as a counterweight to Mexican President Lázaro Cardenas’s nationalization of his country’s oil industry.28 But in a development that presaged Chávez’s MBR-200 military conspiracy, a section of more nationalist-minded junior officers led by Major Marcos Pérez Jiménez allied with the AD party in a populist junta that ousted General Isaías Medina Anagrita to initiate the democratic trienno of 1945–48. Anticipating the MBR-200, Pérez Jiménez’s circle considered itself “a movement of political and military renovation” that sought not military rule but to serve “as a mere instrument to bring into being a new government comprised of patriotic, able, and honest men who were backed by popular opinion.”29 Pérez Jiménez turned on his civilian allies three years later and installed himself as dictator-president for a decade. Yet while a reliable guarantor of U.S. oil interests, Pérez Jiménez carried out a planned, nationalist economic development program—laying the basis for state-owned steel and aluminum industries, for example—a program Chávez would later seek to revive and democratize.30

There is another strong military influence on Chávez as well: the populist government of General Juan Velasco Alvarado in Peru, who took power in a military coup in 1968 and held the post of president until 1975. In a process described by one author as “revolution by decree,” Velasco took advantage of a commodities boom to nationalize key Peruvian industries, including mining, transportation, communications, electrical power, and more. An aggressive land reform policy handed out small parcels to poor peasants, breaking up the great latifundia landholdings with minimal compensation to the owners. Velasco’s quasi-governmental National System for Social Mobilization and state-initiated organizations of workers and peasants prefigured Venezuela’s social missions of today. This attempt at revolution from above—including “social property” and “workers’ self-management,” unraveled amid the 1974–75 world recession. The prices of Peruvian exports plunged, leading to social discontent, a revolt by police, and splits in the junta, which forced Velasco from power.31

Yet to the young Hugo Chávez, sent to Peru as part of a military-diplomatic mission, the Velasco experience showed the potential for a military alliance with “the people,” in contrast to the right-wing dictatorships in Chile, Argentina, and Brazil that slaughtered leftists and union militants. Chávez was able to meet Velasco, who gave the young Venezuelan officer a copy of his small book on his “Peruvian revolution.” Chávez would carry the book in his shoulder bag until the day of his 1992 coup attempt.32

Chávez continues to sound the theme of a revolutionary civic-military partnership. In a June 2 address to half a million at a mass rally against the violence from the Right, Chávez devoted a large part of his speech to commemorating the anniversary of one of two failed 1962 military revolts led by officers with leftist sympathies. In a speech otherwise full of references to building socialism, Chávez hailed the “civic, military, patriotic, and revolutionary” uprising against the “treason” of the Punto Fijo pact, adding, “By that road we came, and by that road we arrived at February 4”—that is, the 1992 coup.33 One need not doubt the sincerity of Chávez’s commitment to communal councils and “protagonist” democracy to conclude that the Venezuelan leader accords a leading, if not decisive, role in political change to patriotic and nationalist elements in the armed forces.

The 1992 coup’s failure, however, compelled Chávez to forge political relationships with civilians. While imprisoned, his contacts with the Venezuelan Left broadened, and included former guerrilla fighters, trade unionists, and politicians to the left of the AD. After his pardon by Caldera, he traveled to Havana to speak and meet with Fidel Castro and the Cuban leadership.34 By 1998 he was a credible presidential candidate, as the AD-COPEI duopoly had reached its terminal crisis. Caldera had won presidential elections in 1993 on a populist basis, breaking from his own COPEI party, and pardoned Chávez as a symbol of reconciliation with those who suffered in the economic decline. In short order, though, he embraced a new IMF austerity package.35 It is difficult to overstate the resulting crisis of legitimacy of the Venezuelan political system.

Chávez won election with 56.2 percent of the vote in December 1998, the highest percentage of a presidential winner in decades. While he sounded themes of social justice and nationalism, his central platform was a call for political reform through a constituent assembly to write a new constitution to replace that of the so-called fourth republic of the Punto Fijo accord. Chávez’s electoral vehicle, the Fifth Republic Movement (MVR) was small and lacked roots; it relied on a coalition initially drawn from a split from Causa Radical called Patria Para Todos and MAS (which would later split itself).36 This lack of a political party of working class and the poor that Chávez aspired to represent has been a persistent problem for his political project—and as we shall see on the debate over Chávez’s proposed unified socialist party, the problem persists nearly a decade later.

Once in office in 1999, Chávez was besieged with the effects of the economic crisis—the economy contracted by 7.2 percent, and unemployment jumped from 11.4 percent to 15.4 percent. Compounding the misery, a catastrophic mudslide killed thousands. He retained Rafael Caldera’s budget-cutting finance minister in that post. Chávez’s main focus was the constituent assembly that was charged with creating a constitution that would implement political reform “while emphasizing the importance of the free market and recognizing private property.”37 With the new constitution in place, Chávez ran for president again in 2000 and increased his vote while still keeping within the framework of third way economic policy. In November 2001, Chávez proposed new legislation to implement land reform, strengthen state control over the oil industry, and increase spending on social security.38 Many government economic measures, though, had the character of pragmatic, improvised interventions, such as the creation of military-civilian projects to boost economic development in poor and rural areas to supplement an increase in social spending.39 While Chávez did assert the importance of the state in economic management, particularly in regard to PDVSA, he hardly positioned himself as an anti-neoliberal rebel. Shortly after taking office in 1999, the Venezuelan president traveled to Wall Street to “assure the moneymen of the ‘credibility’ of his government and its aims of a ‘diversified’ and ‘self-sufficient’ economy,” as well as throwing the first pitch at a New York Yankees baseball game and ringing the bell at the New York Stock Exchange.40

The empire strikes back

Nevertheless, Chávez’s economic policy did antagonize Venezuelan capital—and more important, the U.S.—in one respect. Chávez moved to restore government control over the state oil company, PDVSA, and reversed Venezuela’s longstanding policy of undercutting OPEC quotas. Chávez’s moves were credited with helping to reverse the trend towards low oil prices and restore pricing clout to oil producing nations.

The incoming Bush administration soon assumed a hostile stance towards Chávez. Since the 1920s the U.S. had relied on Venezuela’s oil and had insisted on compliant governments ever since, be they military or civilian. It was only in the post–Vietnam shock of U.S. imperialism that the Venezuelan bourgeoisie felt confident enough to follow the example of nationalist governments in the Middle East and nationalize its oil industry. But this nationalist phase didn’t survive the economic shock therapy that the U.S. imposed on Venezuela via the IMF.41

Chávez’s resurgent nationalism, however, represented an obstacle to George W. Bush’s plans for a more aggressive U.S. imperial control of oil resources. A weak economy left Chávez vulnerable to pressure from Washington and the domestic Right. Sections of the middle class that had voted for him turned against the government, seeing no immediate benefit for themselves in the government’s fledgling anti-poverty programs. Meanwhile, Chávez’s coalition was fraying. Already in the 2000 election he faced a fairly strong electoral challenge from Francisco Arias Cárdenas, his former military co-conspirator in the 1992 coup attempt, and in the months before the coup Chávez couldn’t be assured of a majority in the national legislature.42

The middle-class opposition and conservative military officers were egged on by an utterly hostile corporate media that raised the specter of a Castroite communist dictatorship in Venezuela. The Venezuelan oligarchy, led by billionaire media magnates like Gustavo Cisneros, called the shots. But the oligarchy astutely relied on a handful of prominent ex-leftists and the leadership of the CTV union federation to provide a supposed progressive political cover. The CTV called the general strike and mass march that served as the launching pad for the April 11, 2002, coup attempt, which began as unknown snipers opened fire on the defenders of the Miraflores presidential palace.

United States government foreknowledge and support of the coup has been thoroughly documented. Venezuelan-American attorney Eva Golinger has used the Freedom of Information Act to publish documents that show how the government-chartered National Endowment for Democracy (NED) funneled $2 million to the Venezuelan opposition in the six months prior to the 2002 coup, and that the NED had given the AFL-CIO’s foreign policy arm more than $750,000 to support the CTV, a key opposition group.43 The CIA knew of the coup beforehand, and the U.S. immediately endorsed the would-be dictator Pedro Carmona, head of the FEDECAMARAS chamber of commerce who decreed the abolition of the National Assembly and declared martial law.44

The coup collapsed because of pressure from below. Journalist Michael McCaughan describes the scene:

In the absence of any communication from the missing president “Radio Bemba,” the word-of-mouth network that carries rumor, gossip, innuendo, and hard news like a powerful breeze through Latin America’s popular barrios, suddenly sprang into action. The message carried on the wind was that Chávez had never resigned, and that the dead and injured outside Miraflores were mostly Chávez supporters. The next day, Chavistas gathered in small groups and descended from the hillsides to besiege the presidential palace demanding their leaders’ safe return…

The growing clamor of the angry crowds unnerved the “transition government,” sending generals, bishops, and business people scuttling to their cars to beat a path to the safety of their homes.45

Meanwhile, Carmona’s power grab, the “coup within a coup,” alienated the CTV leaders who had backed it and isolated within the military key sections of which rallied to Chávez and returned him to Miraflores under pressure from officers and soldiers loyal to the president.

The slums that rallied to Chávez are the same ones that had revolted against IMF austerity in 1989; Chávez had sought to call them into the streets against the old order in his attempted coup three years later. On April 11–13, 2002, the two elements fused together. The Bolivarian Revolution, however ill-defined, had shown it had won the active support of the impoverished and oppressed in a struggle against counterrevolution.

The search for revolutionary agency

The uprising against the coup seemed to vindicate the notion of a “revolutionary process” in Venezuela. But there was still relatively little organized connection between Chávez and the masses.46 Various attempts had been made since 1999 to solve this problem: the constituent assembly process aimed at creating genuine “protagonist” democracy; the civic-military projects of 1999–2001; an attempt to legislate the CTV out of existence and create a new labor federation, later withdrawn; the effort to create grassroots Bolivarian Circles to form a popular counterweight to the Right.

The coup attempt posed the question of lack of political organization still more acutely—as did the lockout by top management at the PDVSA state oil company in late 2002. Supported by technicians and a section of workers tied to the CTV, the shutdown sent the Venezuelan economy into free fall. Other private employers supported the lockout as well, as shortages of gasoline and fuel oil led to widespread factory shutdowns. It was only the determined efforts of pro-Chávez oil workers who restarted production under their own control, assisted by a scattering of technical personnel rushed in from abroad and soldiers who transported gasoline. In other sectors of industry, workers kept production going in spite of management sabotage.47

While the episode was “ephemeral,” it was successful, wrote oil workers’ union leader José Bodas and two other labor militants, Richard Gallardo and José Joaquín Barreto:

The dream of workers’ control of production became flesh in Venezuela and made an indelible mark in workers’ consciousness, and managed to convince them in a matter of hours that it was not a revolutionary socialist utopian idea to expropriate to the capitalists, to control production, to plan the economy and to put the goods produced at the service of the majority…. The workers democratically chose their authorities, managers, shift leaders; distributed the working hours and began to plan the rhythms and quantities of production.48

The working class, faced with an unavoidable choice of whether to support Chávez or the CTV alliance with the oligarchy, opted for Chávez. The result was the formation in 2002 of a new labor federation, the UNT, a formation committed to the revolutionary process and led by a coalition of social Christians who split from the CTV, veteran socialist labor organizers, and Chavistas of the Bolivarian Workers Front (FBT).49

The wave of oil revenue in 2004 gave Chávez new leverage in his efforts to consolidate a mass base, providing funding for the social programs known as “missions.” Funded by huge revenues from oil exports, the missions are controlled directly by the central government in a kind of NGO-ized twist on traditional clientelism of Latin American populist governments of the past (Cárdenas in 1930s Mexico, Juan Perón in Argentina in the 1940s and 1950s). The missions enabled Chávez to bypass the state bureaucracy, still largely staffed by the opposition, and provided him with a recruiting base for cadre as a substitute for a grassroots political party organization. In this way, Chávez could begin to have a more organized relationship with the barrios that mobilized to defeat the coup at a time when his electoral operation was embattled.

“[A]ctive participation and mobilization are key components of the process,” Venezuelan labor expert Steve Ellner wrote in 2005.

Chávez has relied on more than just electoral or passive support. He has followed a strategy of ongoing popular mobilization to face his insurgent adversaries, actions that have proven essential for his political survival including his comeback after the April 2002 coup. The massive street actions in favor of the Chavista process have been made possible by the conviction among rank-and-file Chavistas that Chávez’s rhetoric is based on substance and commitment to thorough change, not manipulation.50

More recently, the Venezuelan government has provided seed money for cooperatives—worker-owned and run businesses aimed at providing stable employment for those who labor in the informal sector, which still includes nearly half the working class. The intention is to supplement the oil revenue-funded social reforms with lasting economic change and what Chávez’s economic policymakers call “endogenous economic development”—self-sustaining economic activity that can create jobs and growth without overdependence on oil revenues. The political byproduct of this effort would be the consolidation and extension of Chávez’s political base among the poor.

The analog to the cooperative initiative is the creation of communal councils, locally organized bodies that are established in parallel to existing municipal structures, and which are given grants by the state for local projects. Created under the Chávista constitution established in 2000, the councils received new emphasis following Chávez’s re-election in 2006. The ultimate aim, according to Chávez, is the replacement of existing municipal and state structures.51 Just how this will work isn’t clear. “The current law presents weaknesses,” writes left-wing sociologist Margarita López Maya. “The councils are mini-governments with many tasks. Questions arise, such as, will people act through pure solidarity? Will they have enough time and desire to do so? Many people who work arrive home tired, and women in particular have a double workday. How is that to be resolved?”52

Politically—and most controversially—Chávez aims to consolidate mass participation in his project through the PSUV, which will be discussed in detail below.

Toward socialism?

In January 2005, Chávez declared himself for a “socialism of the twenty-first century” in a speech at the World Social Forum in Porto Alegre, Brazil. Sidelined on a trip to the forum two years earlier—he was forced to speak at City Hall rather than at the event itself—Chávez now emerged as the most radical voice among the Left and center-left forces that had, or would soon, take office in Argentina, Brazil, Chile, Uruguay, Bolivia, and Ecuador.

But what kind of socialism? Chávez distinguished his vision from European social democracy and the “state socialism”—really Stalinist state capitalism—of the old USSR and its Eastern European bloc. He even made a point of distinguishing his vision for Venezuela from the Cuban experience, despite his close alliance with Castro. Leaving aside for now the nature of socialism for the twenty-first century, it’s clear enough that Chávez is seeking a model of nationalist economic development directly counter to the trends of the previous three decades, when the turn toward corporate globalization, or neoliberalism, had begun.

The question is whether Chávez’s Venezuela would evolve differently from previous attempts at economic nationalism in the Third World, which also presented themselves as variants of socialism—African socialism, Arab socialism, and so on. In his recent wide-ranging history of the Third World, Vijay Prashad sums up the dilemma that faced postcolonial governments that tried to initiate socialism from above through radical reforms:

As output increased, regardless of the means to do so, the state would have a larger aggregate pool of capital and resources to distribute to the population. Market socialism or the mixed economy was a socialism of consumption not production. In the attempt to industrialize and create agricultural change, there was only a muted effort to change the relations and methods of production. The process of industrial as well as agricultural production remained similar to that found in any advanced capitalist country: workers had no say in the process of production, which was run by a detached management class. Deliberation was kept to a minimum. Socialism made its appearance in the marketplace and on the threshing floor—to more equitably divide the spoils rather than to more equitably produce them in the fist place.53

The Venezuelan government aims to avoid such an outcome by promoting what Chávez calls the “five motors toward socialism.” The first “motor” is the enabling law, called by Chávez the “mother law” of the transition to socialism.54 The law, passed by the National Assembly in the weeks after Chávez’s inauguration, gave him the authority to govern by decree in specific areas. It was the enabling law that allowed Chávez to order the re-nationalization of the CANTV telecommunications company and to nationalize sectors of the oil industry still under direct foreign control.

Conservative critics, especially in the U.S., point to the decrees as evidence of dictatorship. In fact, the decrees are considerably easier to alter than George W. Bush’s unconstitutional “signing statements” appended to legislation stating which parts of laws the president will enforce. In Venezuela, the National Assembly has the opportunity to revise Chávez’s decrees, and they are subject to review by the Supreme Court.

Defenders of the measure point out that previous Venezuelan presidents have used enabling laws—including Carlos Andrés Pérez during his first presidency in the 1970s—and cite the need for rapid change. Neither argument is convincing. The nationalizations come eight years after Chávez took office, which makes the urgency claim dubious. Moreover, Chávez’s supporters have overwhelming control of the National Assembly in a government based on a constitution that many of them helped to draft. Surely the goal of participatory democracy would be furthered by a public legislative debate over such crucial issues.

A more reasonable explanation is that Chávez presents the enabling law as “the direct way to socialism” because it allows him personally to take the initiative and control the pace of political change. This is not a concession to the Chávez-as-dictator complaints of the opposition. Rather, it recognizes the contradiction of the attempt to initiate a socialist transformation from above by circumventing the layers of state bureaucracy and elected officials tied to the status quo. While the left wing of organized labor and the social movements have called for nationalization and greater transformation, Chávez’s decrees are essentially attempts to substitute for the class struggle to achieve those demands. The decrees of an individual, however, no matter how revolutionary or enlightened, can’t substitute for the self-organization of the working class, still less the workers’ democratic control that is the essence of genuine socialism.

Chávez does aim to raise political consciousness and stimulate organization. The remaining four motors to socialism are apparently intended to fuse Chávez’s leadership to a more politically educated and active population through greater participatory democracy. Thus the second motor is constitutional reform that is to involve invoking “constituent power.” The third motor is education with socialist values: “A fighter, a revolutionary, has to study every day of his life, every night of his life, has to study theory and practice to navigate in the waters of the dialectic,” Chávez declared. The fourth motor is a “new geometry of power”—essentially the redrawing of Venezuela’s internal political boundaries to overcome imbalances of population density, wealth, and political clout. “If we don’t have the capacity to demolish the old customs, the odious differences of class, the obscene privileges, and generate a new culture of equality, of solidarity, of brotherhood, we’ll lose the moment,” Chávez said following his reelection. “But we’re not going to lose the moment. We’re going to achieve this!”

The fifth motor of the revolution is an “explosion of communal power: Protagonist, revolutionary, and socialist democracy.” The aim is to create self-organized communal councils that will develop to replace existing municipalities, and eventually, “at the national level, a confederation of communal councils,” Chávez said. It is necessary, he declared, to “dismantle the bourgeois state” because all states “were born to prevent revolutions.” The Venezuelan state, he said, must cease to be a “counterrevolutionary state” and become a “revolutionary state.”55

Yet no revolutionary state that attempts to build socialism can coexist with capitalism indefinitely, particularly in smaller countries historically dominated by imperialism. Chávez seeks to expropriate the bourgeoisie politically by excluding it from state power and its dominance in the media (for example, through the government’s refusal to renew the broadcast license of the RCTV channel because of its aggressive support for the opposition). Yet such a change will ultimately be superficial unless the class relations that gave rise to that state are also overturned. Nationalizing industries isn’t equivalent to socialism—a point Karl Marx and Frederick Engels always insisted upon. After the conservative German leader Otto von Bismarck “went in for state ownership of industrial establishments, a kind of spurious Socialism has arisen,” Engels complains, “degenerating, now and again, into something of flunkyism, that without more ado declares all state ownership, even of the Bismarckian sort, to be socialistic.”56

Nor does nationalization necessarily even mean the democratization of management. While workers at Venezuela’s state-owned Alcasa aluminum plants were able to elect their own bosses as part of an experiment in “co-management,” militant trade unionists at the PDVSA oil company complain that many of the old managers from the lockout are still on the job.57 As a major player on the world market, PDVSA faces pressure to mirror the practices of its competitors—including maximizing profits. Nor would foreign multinationals with Venezuelan operations—like Ford or Chrysler—simply stand pat if workers’ control were legislated into being.

Reforms have been possible due to increases in oil revenue—but will this add up to revolution? The question remains as to whether, and how, this “socialism in distribution,” as Prashad put it, can be transformed into the direct rule of the working class. To assess this possibility, it’s necessary to review Venezuela’s economic policy.

“Bolivarian” internationalism

Chávez’s Venezuela is often compared to Castro’s Cuba by supporters and enemies of both. The two countries have, of course, forged a close alliance via the oil-for-doctors arrangement and by jointly forging opposition to U.S. imperial aims in Latin America. Castro’s association with the Venezuelan “revolutionary process” has rehabilitated Cuba’s revolutionary credentials more than fifteen years after the collapse of the USSR forced the country into prolonged economic crisis and political isolation. In the last years, Castro has reemerged as the grand old man of the Latin American Left, an adviser to Chávez, Evo Morales in Bolívia, and Rafael Correa in Ecuador. Chávez’s attempts to form Bolivarian Circles (which never took off) recalls Cuba’s Committees for the Defense of the Revolution, and Chavez’s PSUV initiative invites comparisons to the merger of Castro’s July 26th Movement and other socialist organizations to eventually form the Cuban Communist Party.58

Making an alliance with Cuba, however, has not led Chávez to copy Castro’s bureaucratic state-capitalist economic model that was derived from Stalinism in the Soviet Union. That system could work as long as the Cuban economy was functioning as part of a large political and economic bloc dominated by Moscow; without that alliance, the country has been forced to reintroduce the market and private investment, deepening the inequalities that had already emerged under the “socialist” economy.59 While there are Castroist elements around Chávez who favor a hard turn toward state capitalism, Venezuela is hardly likely, or willing, to move in this direction, writes Latin America analyst Hampden Macbeth:

Despite appearances to the contrary, Chávez and Castro differ on several critical ideological issues. Castro believes in traditional “real socialism,” in which the economy is controlled by the state and it exerts a strong influence over the economic affairs of its citizens and foreign trade. However, Chávez thinks “real socialism’s” time has passed, saying: “[w]e have to re-invent socialism. It can be the kind of socialism that we saw in the Soviet Union, but it will emerge as we develop new systems that are built on cooperation, not competition,” with this being seen as “new socialism.” One manner in which “new socialists” differentiate themselves from “real socialists” is that they are significantly more tolerant of private economic enterprise and considerably more experimental in the approaches they are willing to take to achieve their socialist goals. Evidence suggests that Latin America might be returning to its traditional “mixed economy” where an important role is assigned both to the public and private sectors.60

The Cuban-Venezuelan economic relationship is significant. Venezuela supplies Cuba with upwards of 90,000 barrels of oil per day at subsidized prices in return for the services of 20,000 doctors and other medical personnel. “The increase in daily oil imports allowed Castro in May of 2005 to double the minimum wage for 1.6 million workers, raise pensions for the elderly and deliver cooking appliances to poor Cubans.”61

Rather than mimic Cuba, the international focus of Chávez’s economic policy has been to (1) promote economic regionalism and greater integration of Latin American countries through trade internally and with non-U.S. partners; (2) organize alliances of hydrocarbon-producing countries, boosting OPEC and advocating the creation of a similar cartel for natural gas producers; and (3) wean Latin American countries away from the International Monetary Fund, the World Bank and U.S.-European finance through the creation of the Bank of the South. Chávez’s course reflects not a turn to economic autarky, or self-sufficiency seen in Third World nationalist governments of the past, but a pan-Latin American attempt at “sovereign insertion” into the world economy, to borrow the phrase of Brazil’s President Luis Inácio “Lula” da Silva. In fact, a flurry of Brazil-Venezuelan business deals ranging from oil and gas to infrastructure—Brazilian exports to Venezuela increased 60 percent in 2006—are at the heart of this change.62 Lula’s friendly relations with George W. Bush and the U.S. are very different from Chávez’s anti-imperialist stance, but the aspirations of Brazilian capitalism coincide with those of Chávez insofar as regional integration creates more space for what is the world’s ninth-largest economy. The same point can be made about Argentina, which rode a commodities export boom out of the economic collapse of 2001. Today, Argentine President Néstor Kirchner, certainly no radical, finds it convenient to ally with Chávez to develop export markets and obtain cheap energy. By spring 2007, Venezuela had purchased $3 billion in Argentine government bonds, and the two governments jointly issued additional bonds worth $1.5 billion.63

Chávez’s international economic initiatives have had some important successes. With the U.S.-proposed Free Trade Area of the Americas (FTAA) dead in the water, Chávez has been able to flesh out his proposed Bolivarian Alternative for Latin America (ALBA), which to date groups Venezuela, Cuba, Bolivia, Nicaragua, Haiti, and, as an observer, Ecuador. Among the more important initiatives under the ALBA umbrella is the creation of PetroCaribe, in which PDVSA will offer oil at preferential prices to fourteen Caribbean nations, finance up to 40 percent of the purchases, allow twenty-five years for repayment, and bar U.S. oil companies from purchasing or distributing the oil.64

At the same time, however, Venezuela joined Mercosur, the South American trade bloc dominated by Brazil and Argentina. “Although Mercosur has recently taken on a more social focus with the addition of Venezuela, the recent economic accords signed with Cuba, and Castro’s offer to share the Cuban social and educational experiences with the rest of the countries, the trading bloc is still essentially economic and built on the neo-liberal tendencies on which is was founded,” writes journalist Michael Fox. “Nor does Venezuela’s entry in to the 15-year-old bloc appear to be based on the ALBA tenets of cooperation and solidarity, but rather the complete elimination of tariffs on all imported and exported goods, including ‘sensitive products’ by 2014.”65 In other words, Chávez is attempting to derail the FTAA by collaborating in a free-trade area for South America independently of the United States. (The U.S., meanwhile, has had to lower its expectations and seek individual free-trade deals with Colombia, Peru, and Panama).66

Oil diplomacy has opened doors for Venezuela even where the U.S. has far greater influence—for example, in Chile under moderate socialist Michelle Bachelet, whose government has continued neoliberal policies and lined up behind Washington. Shortly after Venezuela nationalized the foreign oil company holdings in the Orinoco region, the government signed a deal with Chile’s state oil company to allow it a stake in operations there.67

Seeking alternatives to trade with the U.S.—to which Venezuela exports 60 percent of its oil—is another key element of Chávez’s policy. A $335 million gas pipeline will link Colombia’s natural gas fields to Venezuela’s refineries, to the consternation of Washington. Beyond Latin America, Venezuela in 2006 exported 150,000 barrels of oil per day to China, a tenfold increase since 2004, and China has a $2 billion investment in oilfield development and another $9 billion in infrastructure. Iran and Venezuela are developing oil refineries in Indonesia, Syria, and Venezuela. India plans to purchase two million barrels per month from Venezuela.68 This integration among Latin American economies and “South-South” economic agreements is a departure for the region.

Chávez’s economic initiatives with potentially the greatest impact are efforts to influence hydrocarbon politics in Bolivia and Ecuador, where left-wing parties won office after years of popular mobilizations against a succession of neoliberal governments. The objective is an alliance of South American energy producers that could offer discounts and barter deals to its neighbors while maximizing revenues from exports to the U.S. and Europe.69

To finance this integration and new economic development, Venezuela is working with Argentina, Brazil, Bolivia, Ecuador, and Paraguay to launch the Bank of the South. Already, Chávez is “squeezing the International Monetary Fund out of Latin America, the region that once accounted for most of its business,” Bloomberg reported. IMF lending in the region has fallen to 1 percent of its portfolio, compared to 80 percent in 2005, while Venezuela had, by March 2007, loaned or offered $4.5 billion to Argentina, Bolivia, and Ecuador, and had $34 billion in reserves.70

Chávez has also called for debt forgiveness by the IMF to reduce pressure on Third World countries. In fact, Venezuela had already tapped oil revenue to pay off its own debt of $3.3 billion to the IMF and the World Bank five years early on loans taken by previous corrupt governments.71 The payout to the IMF has been criticized by the Venezuelan Left, and is a sign that Chávez’s policies are often far more moderate than his revolutionary rhetoric would suggest. What’s more, the Venezuela-Argentina joint proposal for the Bank of the South is “shocking” and “completely compatible with the neoliberal vision, the vision of the World Bank, the vision of the dominant economic thinking [and] the vision of the capitalist class regarding the reasons behind Latin America’s limitations,” argues Eric Toussaint, an anti-debt campaigner and author who served as a consultant to Ecuador’s government during negotiations to create the bank. “The general prescriptions specify the need to promote the formation of multinational corporations with regional capital, without specifying that they must be public.”72

Taken together, Venezuela’s international economic policy and its focus on Latin American integration point not toward international socialism, but the goal of the New International Economic Order proposed by the Argentine economist Raúl Prebisch in the early 1970s.73 Among the key elements of this “developmentalist” economics was the creation of cartels of basic commodity producers to avoid the wild price swings that played out in boom-slump patterns in the developing world. It’s precisely this that Chávez has in mind in shoring up OPEC, creating a gas producers’ cartel, nationalizing key industries, creating a regional economic bloc, and expanding trade among countries of the Third World. The difference is that today’s attempts to alter the terms of world trade and finance take place after nearly thirty years of neoliberalism. While large sections of Latin American capital have suffered under the pressures of an opening to the world market and the loan sharks of the IMF and Western banks, their horizons are limited to trying to make neoliberalism work for them, rather than disproportionately suffer its consequences. The Argentine Marxist economist Claudio Katz calls this trend “neo-developmentalism.” “The turn is ‘neo’ and not fully developmentalist because it preserves restrictive monetary policy, fiscal adjustments, a priority on exports and the concentration of income,” he writes. “It seeks only to increase state subsidies to industry in order to reverse the consequences of extreme free trade.”74

It is on this point that Venezuela (as well as Bolivia and Ecuador) aspire to be different—to go beyond neo-developmentalism toward genuine social transformation by spreading the benefits of economic growth to the mass of the population. At issue is whether this will be successful, and whether it can build socialism of the twenty-first century.

Confronting capital?

It is oil, of course, that gives a country of just under twenty-seven million people an outsized importance in the world economy, especially to the United States. Venezuela is the fifth-largest oil exporter in the world, and ranks in the top ten in reserves. Oil accounts for 80 percent of revenue from exports and around one-third of GDP.75 The oil boom boosted GDP from $117.1 billion in 2000 to $140.2 billion in 2005.76 This oil wealth made it imperative for U.S. imperialism to use Venezuela as a counterweight to assertive nationalist governments in Mexico in the 1930s and Cuba in the 1960s. Little wonder that Nelson Rockefeller of Standard Oil formally ran U.S. policy in Venezuela during the Second World War and made Venezuela his second home.77 Any leader pressing for significant progressive change in Venezuela is therefore bound to step on Uncle Sam’s toes, and Chávez has done so repeatedly. But the heavy-handed U.S. response to Chávez has imparted an image of radicalism to his government that isn’t always warranted.

For example, Venezuela’s high-profile nationalizations of the telecommunications company and foreign oil holdings seem to echo the classic Third World development strategy of import-substitution industrialization—promoting state-owned companies and high trade barriers to stimulate domestic production. In fact, Chávez hasn’t pursued nationalization in nearly so radical manner, or on as wide a scale, as anti-imperialist governments in the developing world had pursued in the mid-twentieth century—for example, Egypt under Nasser.78 Compensation paid for nationalized companies has been at more or less market rates, totaling $1.6 billion for Verizon’s share of CANTV.79

In fact, the private sector in Venezuela has benefited handsomely from the country’s oil-driven boom. “GDP growth of 17 percent in 2004, 11 percent in 2005 and 10 percent in 2006 speaks for itself,” observes one financial journalist.

Away from Chávez, his mouth and his oil, the Caracas financial community has been making serious money.… Venezuelan banks’ results that are the envy of the banking world, with returns on equity (RoE) of 33 percent the norm and 40 percent-plus RoE posted by pack leaders. International concerns are welcome to the party, too: Spain’s Banco Santander, which enjoys 15 percent of total market share, is a shining example.80

Business, aside from hydrocarbons and mining, isn’t particularly squeezed by high taxes. The highest corporate taxes are 34 percent, a typical figure internationally, except for income from petroleum-related companies, which pay 50 percent, and royalties for mining at 60 percent. The top income tax rate is 34 percent, about the same as the U.S. but without the additional charges the wealthy pay in the States.81 Thus for all the talk of building socialism, the enormous wealth of Venezuela’s oligarchy remains essentially untouched. “Currently, the richest 20 percent of Venezuelans receives 53 percent of all income, while the poorest 20 percent accounts for only a 3 percent share of the country’s total income,” the World Bank reports.82 At the top of the heap is media mogul Gustavo Cisneros, worth an estimated $4 billion.83

In June, Chávez made it clear that the Bolivarian Revolution could exist with Venezuela’s elites. At a rally of hundreds of thousands in defense of his decision not to renew RCTV’s license, Chávez proclaimed, “We have no plan to eliminate the oligarchy, Venezuela’s bourgeoisie. We have demonstrated this sufficiently in our eight years.”84

Any serious attempt to make Venezuelan society more egalitarian—let alone socialist—would begin with a radically progressive tax system aimed at redistributing wealth. Yet after eight years in office, Chávez has only made his first moves in that direction, cutting the regressive value-added tax from 14 to 11 percent in March.85 Following reelection, Chávez also spoke of a luxury tax on second homes, expensive cars, and art collections that would fund communal councils, but as of mid–2007 the plan had not been formalized.86

What’s more, the Venezuelan government has been unable to stop capital flight by the wealthy. According to one estimate, $66 billion was transferred out of the country between 1999 and 2005, compared to an inflation-adjusted $112 billion between 1950 and 1999.87 Some of this takes place through legal loopholes; some is a tax dodge. One of the benefits of the CANTV nationalization is that it prevents Venezuelans from buying up shares of the company in the local currency, the bolívar, and selling them for dollars on Wall Street. However, currency traders continue to dump the bolívar in the markets, despite Venezuela’s rapid growth and large dollar reserves. This is a reflection of both the inflationary dynamic of the oil boom and capitalists’ fear of being expropriated.

There are grounds for such fears. Venezuela’s land reform program aims to draw urban slum dwellers into the countryside to till what is potentially some of the world’s most productive land. To achieve this the government is handing over state-owned holdings but also compelling absentee landlords and cattle farmers to sell for what they say are below-market prices. The result has been some of Venezuela’s sharpest class conflicts, with settlers and squatters meeting repression from landowners and their hired thugs and assassins.88 The leading radical farmers’ group estimates that fifty Chavista activists in the land reform struggle were assassinated in the 2002–03 period.89

As intense as the struggle on the land has become, the Venezuelan government has shied away from a direct confrontation with big capital and the foreign multinationals. This has constrained the government’s ability to boost living standards of workers and the poor. The constant injection of oil revenue into the economy has fueled inflation to 20 percent officially, often higher in reality. This has encouraged speculators to hoard staple food items like sugar and chicken in anticipation of inevitable price increases. Since the government’s Mercal subsidized markets rely on private suppliers who sell at fixed low prices to distributors, they are themselves faced with shortages. They are often forced to buy items from street vendors that should be on the Mercal shelves, but at much higher prices.90

Added to this economic pressure on workers and the poor is an epidemic of murders and violent crime. Venezuela’s murder rate is five times that of the U.S., and is the third highest in Latin America after El Salvador and Colombia, two countries that have seen prolonged civil wars and institutionalized political violence. There were 9,402 homicides reported in 2005; in April of the following year a high profile kidnapping and murder of three boys and their driver in Caracas made the issue into a political debate. The Right seized upon the killings as an example of Chávez’s failure to guarantee law and order, and the opposition took to the streets in protests. Several police were implicated in the murders “confirming public distrust of police forces widely seen as corrupt, ineffective, and at times complicit in crime.”91 To be sure, much of this crime is rooted in Venezuela’s rapid and prolonged economic decline in the 1980s and 1990s. But it also underscores the fact that even a red-hot economy and wide-ranging social reforms cannot substitute for the self-organization and shifts in consciousness that have curbed or reduced crime during revolutionary movements of the past.

The revolutionary process is inhibited by the state bureaucracy itself, as Chávez himself often says. Leftist militants speak of a “Bolivarian bourgeoisie” clustered around PDVSA, the heads of government ministries, state governors, mayors, and “pro-revolutionary” business types. The recent sale of PDVSA bonds gives some idea of how this stratum consolidates itself in class terms. An anti-Chávez business analyst claims that a recent $7.5 billion PDVSA bond issue attracted bids worth $15 billion. This, he claimed, allowed a relatively small number of people close to the government to purchase the bonds at list price through a limited number of institutions, and then quickly resell the bonds for a much higher price, netting $780 million, a figure that is 20 percent higher than Venezuela’s total financial profits for the 2004–06 period.92 Even if these estimates are inflated by opposition figures, there’s no doubt that the enormous amounts of money flowing in and out of PDVSA inevitably binds company management and sections of the government closely to capital, however hostile individual capitalists may be to the Bolivarian project.

Even Hugo Chávez speaks of the dangers of bureaucracy and calls for “deepening the revolutionary process” towards socialism. What is not clear, however, is what role the Venezuelan working class will have in the “Bolivarian revolutionary process.”

State and revolution in Venezuela

The classical revolutionary Marxist approach to state and revolution is based on a theoretical analysis of the capitalist state and historical experience of workers’ power in successive epochs. In the Communist Manifesto, Marx and Engels stated that “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie,”93 that is, the final arbiter of differences within the ruling class and a collective defender of the interests of capital, through what Lenin called “special bodies of armed men” who stand above society as a whole.94 The brief seizure of power by workers in the Paris Commune of 1871 prompted Marx and Engels to clarify their views on the state and social revolution: “One thing especially was proved by the Commune, viz., that ‘the working class cannot simply lay hold of ready-made state machinery, and wield it for its own purposes.’”95

In the Russian Revolution of 1917, Lenin generalized Marx’s theory. Lenin’s book State and Revolution pointed out that workers’ self-organization in the form of councils, or soviets, constituted an embryonic workers’ state. In order to reorganize society on a socialist basis, however, workers must smash the old state machine and, by wielding power directly, abolish the old state as a separate apparatus that guarantees the rule of a minority of exploiters. Writes Lenin: “It is no longer a state in the proper sense of the word; for the suppression of the minority of exploiters by the majority of the wage slaves of yesterday is comparatively so easy, simple and natural a task that it will entail far less bloodshed than the suppression of the risings of slaves, serfs or wage-laborers, and it will cost mankind far less.”96

How does this theoretical and practical framework apply in Chávez’s Venezuela, which seeks to create a revolutionary state?

The Chavista case can be summarized as follows: Chávez’s success in wresting control of PDVSA and nationalizing key companies has deprived the old state machine of its economic lifeblood. At the same time, the “explosion of popular power” in communal councils will dismantle the state bit by bit from below. Coops, land reforms, and co-management in workers’ councils are democratizing the economy. Thus the transition to socialism has begun via a prolonged revolutionary process. The phrase “revolutionary process” is borrowed from Castro’s Cuba, where, it is claimed, a revolutionary process is still underway half a century after the old regime was overthrown.

When used in this way, the term “revolutionary process” reflects a misunderstanding both in the nature of the capitalist state and the politics of social classes. The Russian revolutionary leader Leon Trotsky, whom Chávez has become fond of citing, pointed out that even the hostility of the bourgeoisie toward the reformist Popular Front government of Spain during the Civil War of 1930s didn’t change the class nature of the state; further, he argued that the struggle against the fascist army of General Francisco Franco had to be combined with the struggle against bourgeois rule itself:

It is necessary to think out the problem of the revolution to the end, to its ultimate concrete conclusions. It is necessary to adjust policy to the basic laws of the revolution, i.e., to the movement of the embattled classes and not the prejudices or fears of the superficial petty-bourgeois groups who call themselves “Popular” Fronts and every other kind of front. During revolution the line of least resistance is the line of greatest disaster.97

What is more, the question of revolutionary insurrection can’t simply be subsumed into a never-ending revolutionary process. While it is certainly true that working-class revolutions are the culmination of a long process of struggle and building organization, there must also be a decisive change in state power and class relations if the term “revolution” is to have any meaning.

The question of state power remains before the Venezuelan working class. The core of the capitalist state is the “separate body of armed men” that Marx described. The military is the most rigid and hierarchical of all capitalist institutions, reflecting the class divisions in their most concentrated form. However estranged the bourgeoisie may be from Chávez’s government, the top military brass remains socially intertwined with the oligarchy and shares its class interests. Reshuffling top officers, as Chávez did after the failed 2002 coup, can’t erase the class divisions in the military. Civilian reformers may be parachuted into key ministerial posts to carry out progressive government policies, but the military is by its nature relatively impermeable, with top officers climbing the ranks only after years of service.

The 2002 coup showed that Chávez’s own career in the armed forces and the presence of other former military figures in government was insufficient to prevent a coup. This isn’t a prediction of a new military coup. Rather, it is to point out that the core of the capitalist state remains entrenched despite the revolutionary process and therefore will ultimately, and necessarily, reflect the interests of capital. The armed forces will not simply convert themselves into democratic workers’ militias. It is telling that the so-called revolutionary state of Chávez’s Venezuela has not proposed soldiers’ councils—a key development in the Russian Revolution of 1917—still less the election of officers or co-management between the general staff and new recruits. The “federation of communal councils” that Chávez envisions will coexist with the military, in which the rank and file must unquestioningly follow officers’ orders or face severe consequences. Changing the official greeting in the military to “socialism, fatherland or death”—a variation on Castro’s slogan—doesn’t alter that fact. Those who aim to “deepen” the Venezuelan revolution must confront the reality of a military threat. Failure to do so runs the risk of a replay of the coup in Chile of 1973, when a military that was assumed to respect civilian control launched a campaign of savage repression.

Such a coup need not come in the form of a nakedly pro-imperialist power grab of the 2002 coup attempt. A military ouster of Chávez could instead be promoted as a means to maintain “order” in the wake of right-wing violence or mass strikes, or even as the best way to advance the revolution—Chavismo without Chávez. That in fact was the fate of General Velasco in Peru in 1975, who was ousted by officers who declared that they would “deepen and consolidate the process” of the revolution before turning decisively to the right.98 While Venezuela spends only 1 percent of GDP on the armed forces, the rapid growth of the country’s economy has funded big spending increases—including $3 billion to modernize its forces with twenty-four fighter jets, fifty-three helicopters, and 100,000 AK-47 rifles from Russia.99 Such spending is seen as necessary in view of the threat from Washington, but it also builds up the military as an institution separate from the revolutionary state. Indeed while the 100,000 rifles are intended to provide a mass defense against a U.S. intervention, the guns are not distributed to workers and the poor, but remain under control of the armed forces.

While the Venezuelan capitalist state remains intact, it is also the case that Chávez continues to have enormous room to maneuver politically. The crisis of legitimacy of the old order, the debacle of U.S. imperialism in Iraq, sustained oil price increases, and pressure from the working class and the poor has propelled the most significant wave of reforms yet seen in the neoliberal era. Chávez remains the arbiter of Venezuelan politics, renewing his support in successive elections and forcing local and international capital to make concessions. To workers and the poor, Chávez appears as a bulwark against reaction, as seen in the failed coup and the oil lockout. To the bourgeoisie, Chávez is a contemptible upstart who should be overthrown at the first available opportunity—but is also someone who has so far diverted social struggles way from an all-out attack on capitalist private property. To the capitalist class, a Chávez government is a lesser evil than a mass uprising of the sort provoked by the 2002 coup. Thus, the opposition is biding its time, using periodic provocations to test Chávez’s level of support.

The Venezuelan president, however, is adept at turning the Right’s interventions into opportunities to ratify his leadership before a mass base, from the 2002 coup and oil lockout to the rioting in May 2007 by middle-class youths over the revocation of RCTV’s broadcast license. What’s more, the frequency of elections and periodic massive mobilizations in Caracas impart a kind of plebiscitary character to Chávez’s leadership, constantly posing the question: Are you with me or against me? In addition to local, regional, and National Assembly victories by his supporters, Chávez has won the 1998 presidential election, reelection under a new constitution in 2000, defeated a recall election in 2004, and he prevailed in the presidential reelection campaign of 2006. In this last contest, the outcome was never in doubt, so the race became about reaching a self-imposed goal of obtaining ten million votes to demonstrate Chávez’s mass support.100

While the Right couldn’t muster a credible electoral challenge, Chávez threw down another gauntlet that the opposition couldn’t refuse to pick up: the non-renewal of RCTV’s broadcast license. The Right, reeling from defeat at the ballot box, suddenly could play on its own turf, posing as brave defenders of the free press against an increasingly authoritarian military caudillo. When the Right inevitably stirred up violence by middle-class youth, Chávez seized the opportunity to call for a mobilization of two million to protest against the “destabilization campaign.”

To make this point is not to downplay the threat from the Venezuelan Right and U.S. imperialism. The threat of plots, coups, assassinations, and sabotage are all too real when a government defies Washington, especially one smack in the middle of the “backyard” of the United States. The issue here is the way in which Chávez repeatedly casts himself as the political arbiter by posing the for-me-or-against-me question. And with the PSUV, the question is now being posed within the revolutionary process itself. The proposal was justified by his supporters as a means to force the hand of opportunistic parties that had won National Assembly seats and government posts by tying themselves to Chávez’s coattails. But when Ramón Martínez, the governor of the state of Sucre, a member of the center-left Podemos Party—a coalition partner of Chávez’s MVR—criticized the proposal, Chávez called him a “counterrevolutionary” and a “coward,” adding, “Find your place, I don’t consider you with us, I consider you against us!” He made the same threat to the governor of the state of Aragaua, Didalco Bolívar.101 Certainly Podemos is hated by many on the left—Didalco Bolívar ordered a police attack on workers at Sanitarios Maracay. But by adopting such a harsh tone, Chávez seemed to be sending an all-or-nothing message to his supporters generally: be with me 100 percent or join the opposition.

These problems don’t negate the role Chávez has played in initiating far-reaching social reforms and standing up to Washington. But it must be said that his all-or-nothing demand for support undermines both efforts—and certainly does not bode well for the attempt to build socialism in the twenty-first century.

Chávez has become a symbol of opposition to U.S. imperialism and the rebellion against neoliberal capitalism in Latin America. Because of this he has justifiably won the support of the great majority of workers and the poor as well as the Left. He has further periodically called on the Left to mobilize against corruption and inefficiency in government. Now matters have become less clear-cut. If the PSUV becomes an attempt to corral and contain the social movements and the Left, then the Left will be compelled to develop a much more critical stance. If proposed workers’ councils turn into instruments of state control over the working class and/or a replacement for the unions, organized labor will have to mobilize against it. If the government continues to leave capitalist property and wealth largely intact, workers and the poor will need to carry out the struggle themselves. The heart of the matter is whether deepening the revolution means democratizing political structures as an end in itself, or infusing it with a much greater social content than it has had so far.

How then to take the struggle forward? One could do worse than to take Chávez’s advice and read Trotsky’s “transitional program” for socialist revolution. Although written in 1938 for a context that no longer applies—victorious fascism and looming world war—Trotsky’s formulations are apropos in view of Venezuela’s stated aim of giving workers greater control over production. “No office-holder of the bourgeois state is in a position to carry out this work, no matter how great the authority one would wish to bestow on him…” Trotsky wrote. “To break the resistance of the exploiters, the mass pressure of the proletariat is necessary. Only factory committees can bring about real control of production, calling in—as consultants but not as ‘technocrats’—specialists sincerely devoted to the people.”102

Trotsky further argued that as a transitional demand toward the expropriation of the capitalist class, workers should call for the “expropriation of several key branches of industry vital for national existence or of the most parasitic group of the bourgeoisie.”

The difference between these demands and the muddleheaded reformist slogan of “nationalization” lies in the following: (1) We reject indemnification; (2) we warn the masses against demagogues of the People’s Front who, giving lip service to nationalization, remain in reality agents of capital; (3) we call upon the masses to rely only upon their own revolutionary strength; (4) we link up the question of expropriation with that of seizure of power by the workers and farmers.103

Trotsky’s method is clear enough: Start with the promises and programs of liberal and social-democratic governments, and impart to them a working-class content aimed at raising the level of class-consciousness, organization, and struggle.
To be sure, Chávez’s anti-imperialist politics play a progressive role on the world stage, compared to the reformist Popular Front governments in 1930s Europe that derailed the revolutionary possibilities. Nevertheless, Trotsky’s approach provides a useful framework: Stand with Chávez against the oligarchy and U.S. imperialism, but be willing to go beyond the limits set by government policy and confront capital; defend Chávez’s reforms, but refuse to compromise the political independence of the working class.
The months and years ahead in Venezuela and the rest of Latin America promise to be stormy—but also hold out the possibility for rebuilding the revolutionary Left internationally. The struggle for socialism in Venezuela has already broadened the horizons and raised the aspirations of the Left internationally. The future of that struggle will shape the debates and perspectives for the Left for a long time to come. It’s crucial for socialists internationally—especially in the U.S.—to engage with the revolutionary movement in Venezuela and offer our fullest solidarity.
This article appeared in the July, 2007 issue of the International Socialist Review (ISR) published by the Center for Economic Research and Social Change, based in Chicago, USA.

Lee Sustar is labor editor for the Socialist Worker newspaper and a frequent contributor to the International Socialist Review (ISR)

1 These figures are based on Venezuelan government statistics compiled in a PowerPoint presentation by the Venezuelan embassy in the United States, prepared on May 10, 2007. Copy in possession of the author.

2 Guillermo Parra-Bernal, “Chávez boosts wages 20 percent, highest in Latin America,” Bloomberg, April 30, 2007.

3 José de Córdoba, “Farms are latest target in Venezuelan upheaval,” Wall Street Journal, May 17, 2007.

4 “Sunacoop cierra con balance positivo,” Venezuelan National Cooperative Superintendence (SUNACOOP),; Michael Fox, “Venezuelan coop regulatory body turns 40, announces ‘new institutionality,’” September 21, 2006,

5 Raúl Zibechi, “Hacia una nueva agenda continental,”, May 20, 2007.

6 Gregory Wilpert, “The opposition’s historical concession and the road ahead for Venezuela,”, December 10, 2006,

7 Humberto Márquez, “La vía chavista al partido único,”, Dec. 25, 2006,

8 Chris Carlson, “Venezuelan civil society groups accuse U.S. of fomenting destabilization,”, May 31, 2007,

9 Daniel C. Hellinger, Venezuela: Tarnished Democracy (Boulder, Colo.: Westview Press, 1991), 83–119.

10 Lee Sustar, “Revolution and counterrevolution in Venezuela: Assessing the role of the AFL-CIO,” New Labor Forum (Fall 2005),

11 Hellinger, Tarnished Democracy, 117–19.

12 Ibid., 107–14.

13 Steve Ellner, Venezuela’s Movimiento al Socialismo: From Guerilla Defeat to Innovative Politics (Durham, N.C.: Duke University Press, 1988), 43–63.

14 Ellner, Organized Labor in Venezuela, 1958–1991 (Wilmington, DE: SR Books, 1993), 150–63.

15 Ellner, “The Venezuelan petroleum corporation and the debate over government policy in basic industry, 1960–1976,” Institute of Latin American Studies Occasional Papers, 1987, 25–38.

16 Edward J. Amadeo and José Márcio Camargo, “Brazil: Economic crisis, organized labor and the transition to democracy,” in Dharam Ghai (ed.), The IMF and the South: The Social Impact of Crisis and Adjustment (London and New Jersey, 1991), 75.

17 Kenneth Roberts, “Social polarization and the populist resurgence,” in Ellner and Hellinger (eds.), Venezuelan Politics in the Chávez Era (Boulder, Colo.: Lynn Reinner, 2003), 165.

18 Michael Shifter, “In search of Hugo Chávez,” Foreign Affairs, May/June 2006, michael-shifter/in-search-of-hugo-ch-vez.html?mode=print.

19 Michael McCaughan, The Battle of Venezuela (New York: Seven Stories Press, 2005), 64–66. See also, “Anniversary of the Caracazo,” February 22, 2007,

20 “Bolivarian Republic of Venezuela: Investing in human capital for growth, prosperity and poverty reduction,” World Bank, March 30, 2001,


21 Julia Buxton, “Economic policy and the rise of Hugo Chávez,” in Ellner and Hellinger, 118.

22 Hellinger, Tarnished Democracy, 156–57.

23 Hellinger, “Political overview,” in Ellner and Hellinger, 33-37.

24 Chávez was offered support from a civilian sector, Causa Radical. But Causa Radical leaders Andres Velasquez and Pablo Medina withdrew at the last minute and did not send their militants to grab the weapons reserved for them. See Raul Bosque, “La conspiración de mamma santísima,”


25 Harold A. Trinkaus, “The crisis in Venezuelan civil-military relations: From Punto Fijo to the Fifth Republic,” Latin American Research Review (vol. 37 no.1, 2002), 45–46.

26 Trinkaus, 52.

27 Judith Ewell, Venezuela and the United States: From Monroe’s Hemisphere to Petroleum’s Empire (Athens, Ga., and London: University of Georgia Press, 1996), 98–108.

28 Ibid., 130–36.

29 Winfield J. Burggraaff, The Venezuelan Armed Forces in Politics, 1935–1959 (Columbia, Mo.: University of Missouri Press, 1972), 59.

30 Richard Gott, Hugo Chávez and the Bolivarian Revolution (London and New York: Verso, 2005), 128–29.

31 Dirk Kruijt, Revolution By Decree: Peru 1968-75 (Amsterdam: Thela, 1994), 113–30.

32 Medófilo Medina, El elegido Hugo Chávez, un nuevo sistema politico (Bogotá, Ediciones Aurora, 2001), 21. Velasco’s speeches could interchange with Chávez’s own. An example from an Independence Day address in 1969: “Today Peru is experiencing a magnificent transformation. History will say that in these years, an entire nation and their armed forces set the course for their final liberation, established the basis for genuine development, took away the power of a colonial and egotistical oligarchy, recovered their authentic sovereignty against foreign pressures, and began the great task of carrying out social justice in Peru.” Juan Velasco Alvarado, La revolución peruana (Buenos Aires: Editorial Universitaria de Buenos Aires, 1973), 21–22.

33 “Más de 4 millones de venezolanos dijeron sí al PSUV,” Prensa Web RNV/Prensa Presidencial, June 3, 2007,

34 Gott, 122–24; 277–85.

35 Buxton, “Economic policy,” 119–23.

36 Hellinger, “Political overview,” 42.

37 Buxton, 128.

38 Buxton, 129.

39 Deborah L. Norden, “Democracy in uniform: Chávez and the Venezuelan armed forces,” in Ellner and Hellinger, 104–06.

40 “Venezuela’s Chavez plays ball with U.S. financiers, baseball stars,” AFP, June 11, 1999.

41 Bernard Mommer, “Subversive oil,” in Ellner and Hellinger, 132–35.

42 Hellinger, “Political overview.”

43 Eva Golinger, The Chávez Code: Cracking U.S. Intervention in Venezuela (Havana: Editorial José Martí, 2005), 82–83.

44 Juan Forero, “Documents show C.I.A. knew of a coup plot in Venezuela,” New York Times, December 3, 2004.

45 McCaughan, 132-133.

46 Cristóbal Valencia Ramírez, “Venezuela’s Bolivarian Revolution: Who are the Chavistas?” in Steve Ellner and Michael Tinker Salas (eds.), Venezuela: Hugo Chávez and the Decline of an “Exceptional Democracy” (Lanham, Md.: Rowman & Littlefield, 2007), 126.

47 Interviews with the author from 2004.

48 José Bodas, Richard Gallardo, and José Joaquín Barreto, “Folleto: Control obrero, cogestión y cooperativas,” Opción de Izquierda Revolucionaria OIR, April 2005,

49 Jonah Gindin, “Reorganizing Venezuelan labor,”, October 18, 2004,

50 Ellner, “Venezuela: Defying globalization’s logic,” in Vijay Prashad and Teo Ballvé (eds.), Dispatches from Latin America: On the Frontlines Against Neoliberalism (Cambridge, Mass.: South End Press, 2006), 102.

51 Sujatha Fernandes, “Political parties and social change,” ZNet, March 19, 2007,

52 Margarita López Maya, “Consejos comunales y rumbos de la revolución bolivariana,”, May 2, 2007, option=content&task=view&id=623&Itemid=67.

53 Prashad and Ballvé, 199.

54 Wilpert, “Venezuelan legislature allows president to pass laws by decree for 18 months,”, January 31, 2007,

55 Stuart Piper, “Venezuela: The challenge of socialism in the 21st century,” International Viewpoint, May 2007,

56 Frederick Engels, Socialism: Utopian and Scientific, 1880,

57 Opción Clasista de los Trabajadores-Anzoátegui, “José Bodas: ‘Tambalean acuerdos entre el Ministerio del Trabajo y la burocracia sindical petrolera,’” April 27, 2007,

58 Samuel Farber, The Origins of the Cuban Revolution Reconsidered (Chapel Hill, NC: University of North Carolina Press, 2006), 105.

59 Paul D’Amato, “Cuba: Image and reality,” International Socialist Review 51, January–February 2007,

60 Hampden Macbeth, “The not so odd couple: Venezuela’s Hugo Chávez and Cuba’s Fidel Castro,” Council on Hemispheric Affairs, June 21, 2005, 05.62_The_Not_So_Odd_Couple_Venezulas_Hugo_Chavez_and_Cubas_Fidel_Castro.htm.

61 Ibid.

62 “Hugo Chávez moves into banking,” Economist, May 12, 2007: “Brazilian multinationals are investing heavily. Odebrecht, a construction company, has built a new metro line in Caracas and a bridge over the Orinoco, and is building a $2.5 billion hydroelectric dam. Braskem, Odebrecht’s petrochemicals arm, has a $3 billion partnership with state-owned Pequiven, which includes building two plants to produce plastic resins. Companhia Vale do Rio Doce is eyeing Venezuela’s mineral riches.”

63 Mark Weisbrot, “Political and economic changes in Latin America likely to continue,” ZNet, March 20, 2007,

64 Kaia Lai, “Chávez’s venturesome solution to the Caribbean oil crisis and Trinidad’s Patrick Manning and Barbados’ Owen Arthur’s ungracious riposte,” Council On Hemispheric Affairs, January 31, 2006, New_Press_Releases_2006/06.09_PetroCaribe_Manning.html.

65 Fox, “Defining the Bolivarian alternative for the Americas,”, August 4, 2006,

66 Doug Palmer, “U.S. Congress weighs future of Andean trade scheme,” Reuters, May 30, 2007.

67 Chris Carlson, “Chile and Venezuela strengthen unity,”, April 19, 2007,

68 César J. Álvarez, “Venezuela’s oil-based economy,” Council on Foreign Relations, November 27, 2006,

69 Carlson, “Venezuela proposes organization of gas exporting countries,”, April 9, 2007,

70 Chrisopher Swann, “Chávez exploits oil to lend in Latin America, Pushing IMF Aside,” Bloomberg, March 10, 2007.

71 “Venezuela pays early debt to IMF, WB, cuts relations,” Latin America News Digest, April 16, 2007.

72 Eric Toussaint, “Turning back to the stakes on the Bank of the South,” May 20, 2007,

73 Vijay Prashad, The Darker Nations: A People’s History of the Third World (New York: New Press, 2007), 62–74.

74 Claudio Katz, “Socialismo o neodesarrollismo,” Corriente Praxis, February 27, 2007,

75 Álvarez.

76 “Venezuela, RB data profile,” World Bank, as of June 3, 2007, CPProfile.asp?SelectedCountry=VEN&CCODE=VEN &CNAME=Venezuela%2C+RB&PTYPE=CP.

77 Ewell, 184–85.

78 Peter Mansfield, Nasser’s Egypt (London: Penguin, 1969), 155–64. After taking power in a populist military coup, Gamel Abdul Nasser went on to nationalize the Suez Canal Company and British and French banks in 1957, and, in 1961, the rest of the banking industry, “300 industrial and trading establishments,” and took control of the purchase of imports and the sale of most exports.

79 “Estado asume control principal telefónica que será ‘una empresa socialista,’”, May 20, 2007, empresas/noticias/noticia.asp?idDoc=1750809&idtel=rv011Telefon&span=&idNoticia=1750809.

80 Mark Turner, “Banks thriving despite Chávez bravado,” The Banker, March 10, 2007.

81 “Venezuela,” Federation of International Trade Associations,, as of June 3, 2007.

82 “Venezuela country brief,” World Bank,, as of June 3, 2007.

83 Gott, “Venezuela’s Murdoch,” New Left Review, May–June 2006,

84 Wilpert, “Chávez dismisses international disapproval of Venezuela’s media policy,”, June 4, 2007.

85 Carlson, “Venezuela’s monthly inflation drops to lowest level in 19 years,”, April 3, 2007,

86 Natalie Obiko Pearson, “The challenge of protecting wealth in Chávez’s Venezuela,” Associated Press, January 23, 2007.

87 Ibid.

88 Simon Romero, “Clash of hope and fear as Venezuela seizes land,” New York Times, May 17, 2007.

89 Valencia Ramírez, 126.

90 Humberto Márquez, “Shortages, speculation amid rising consumption in Venezuela,” IPS, February 9, 2007,

91 Ian James, “Rampant violence plagues Venezuela,” Mail & Guardian (South Africa), April 26, 2006.

92 “The PDVSA bond,” Latin American Economic and Business Report, May 3, 2007.

93 Karl Marx and Frederick Engels, Manifesto of the Communist Party, in Phil Gasper, ed., The Communist Manifesto: A Road Map to History’s Most Important Political Document (Chicago: Haymarket Books, 2005), 43.

94 V.I. Lenin, The State and Revolution, in Collected Works, Vol. 25 (Moscow: Progress Publishers, 1980), 393; also available online at

95 Marx, “The civil war in France,” Marx and Engels on the Paris Commune (Moscow: Progress Publishers, 1976), 68; also available online at


96 Lenin, State and Revolution, 468.

97 Leon Trotsky, “The lessons of Spain: The last warning,” The Spanish Revolution (1931–39) (New York: Pathfinder Press, 1981), 325.

98 Kruijt, 159–63.

99 Álvarez.

100 Luis Villafaña, “Por 10 millones de rezones,”, June 26, 2006,

101 Carlson, “Formation of the United Socialist Party of Venezuela moves forward,”, April 21, 2007,

102 Trotsky, “The death agony of capitalism and the tasks of the Fourth International,” The Transitional Program for Socialist Revolution (New York: Pathfinder Press, 1974), 81.

103 Ibid., 82–83.

Original source / relevant link:
International Socialist Review

Latin America’s answer to the World Bank and IMF

July 17, 2007

Latin America’s answer to the World Bank and IMF

Thursday, Jul 12, 2007 Print format
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By: Sara Miller Llana and Matthew Clark – Christian Science Monitor

Mexico City and Quito, Ecuador–It is one thing when Venezuelan President Hugo Chávez dubs the World Bank and International Monetary Fund (IMF) “tools of US imperialism” and threatens to sever ties.

But it’s not just Mr. Chavez who is shunning the global lending organizations.

In April Ecuador’s President Rafael Correa declared the World Bank representative in his country “persona non grata.”

Now, a group of Latin American countries is looking to form a regional alternative in the form of Banco del Sur (Bank of the South), a Chavez-conceived development bank that would be run by Latin Americans for Latin America.

The moves against the IMF and World Bank represent a popular rejection of the “Washington consensus” that rich-country aid should be tied to forced privatization programs, which have failed to make much of a dent in poverty rates.

Leftist presidential candidates have tapped into this sentiment to win recent elections and are increasingly looking for ways that Latin America can solve its own problems. And as the region readies itself for further financial and political integration – made possible by a healthy world economy plump on high commodity prices and Chávez’s oil largesse – analysts say the World Bank and IMF are seeing the need to adapt.

“Banco del Sur is the answer to the deterioration of the IMF and World Bank,” says Luis Maldonado Lince, a presidential representative to Ecuador’s junta bancaria, a government body that helps regulate the country’s banking sector. “Latin America has been impoverished and harassed long enough that we have no other choice [but to] start Banco del Sur.”

The bank’s founding members would include Venezuela, Ecuador, Argentina, Brazil, Bolivia, and Paraguay. Uruguay said last month that it would join as well. It’s still unclear exactly how the bank, expected to begin operations in 2008, would function – how economies would be converged, and whether political integration would follow. But whatever the form, left-leaning analysts say Banco del Sur will be a vast improvement to the Western-dominated financial institutions, which they say have lost credibility in the region.

Mark Weisbrot, codirector of the Center for Economic and Policy Research in Washington, says the move to create Banco del Sur is one of many signs of a new independence from international institutions such as the IMF, whose influence first began to wane a decade ago with the Asian financial crisis in the late 1990s when the IMF imposed strict, unwanted austerity measures.

At the beginning of this decade, skepticism in Latin America was sealed when Argentina disregarded IMF advice by defaulting on its debt and then experienced robust economic recovery. “[Latin American countries] don’t have to care anymore what the US thinks, and that is mainly because of the collapse of IMF influence,” Mr. Weisbrot says.

Viable lender or political tool?

Still, many critics doubt Banco del Sur will alone be able to replace the international financial institutions, and see it as a vehicle for Chávez and like-minded leaders to expand their political clout. “[Banco del Sur] is another example of visceral thinking,” says Ecuador-based financial analyst Ramiro Crespo of Analytica Securities. “I doubt it will be more qualified than the World Bank.”

But many Latin American nations are nevertheless turning to private capital or other institutions such as the Andean Development Corporation (CAF) to secure loans for development projects, because the economy is flush with money and the loans are easier to access.

IMF’s commitment in the region, for example, has fallen to less than $3 billion from $50 billion five years ago.

Anoop Singh, Latin America’s top IMF official, says the changing relationship shows that the region has internalized the message of macroeconomic stability. “This period when the Fund is not lending anywhere near what it did five years ago is actually a good development,” he says.

IMF looks to adjust its approach

In fact, say observers, the new competition may help the global institutions sharpen their missions.

“I’m not concerned about countries in Latin America running away from the [IMF],” says Liliana Rojas-Suarez, a former IMF official who is now a senior fellow at Washington’s Center for Global Development. “I’m more concerned about what the IMF exactly should be doing, and where it should be focusing…. It’s only now starting to recognize a number of policies that could be different.”

“There is the perception that the IMF has one recipe for everybody.” she adds. “They are trying to improve that.”

Another example of change, Singh says, could be working with countries to redefine how energy subsidies are distributed, so more money goes to the poor. “We do believe that there is room in the region for macroeconomic policies to be reoriented toward poverty reduction,” he says.

On July 1 the Inter-American Development Bank put into operation a new mandate to help countries gain greater access to alternative sources of financing, to respond to the particular needs of each country, and to reduce the vulnerabilities of the region to sudden changes in the world economy.

It is this type of competition from other development banks that could ultimately serve the entire region, even as it has put the World Bank on edge.

“The World Bank never thought of what would happen if countries didn’t really need the money; they didn’t plan any exit strategy,” says the consultant, who was not authorized by the World Bank to speak on the record. “[They] have to compete right now, because countries don’t need the money.”

“Like Chávez’s other regional initiatives, this one too depends a lot on the extent to which the oil bonanza continues,” says Michael Shifter, vice president of the InterAmerican Dialogue, a Washington think tank. “It is doubtful that Chavez’s grandiose vision on this idea will be fully realized.”

Original source / relevant link:
Christian Science Monitor