Venezuela: Prospects fading for truly revolutionary change

If Chavez was serious about the “revolutionary change”, he would have devised a plan to “dismantle the petro state”.

Since Chavez originally came to power, the number of co-operatives in Venezuela has skyrocketed [EPA]

Even if Hugo Chavez survives a serious bout of cancer or his preferred successor Nicolas Maduro comes to power, the possibility of promoting truly revolutionary change in Venezuela is now dimming. Indeed, from the very outset of his populist rule Chavez has pursued a very heterodox political revolution, if one can even call it that. While at times the government has allowed for so-called “participatory democracy”, such measures have more often than not been cancelled out by centralising tendencies at the top and the perils of charismatic leadership.  

If Chavez or Foreign Minister Maduro were serious about carrying out authentic revolutionary change, they would have devised a drastic plan to dismantle the petro state with its bloated patronage networks and bureaucracy and handover true power to the people. Unfortunately, Chavez has only gone so far with his “Bolivarian Revolution”, choosing instead to limit the scope of reform lest he lose coveted political control.  

To be sure, during the last presidential election Chavez campaigned on a platform of socialist change. To his credit, the firebrand Venezuelan leader allowed for public debate on his 2013-2019 Plan, which, in the words of the President, is designed to “make the revolution irreversible”. Under the programme, Venezuela will ostensibly undertake profound and systemic change intended to replace the trappings of bourgeois democracy with the communal state.  

On the surface at least, the plan sounds progressive as it will transfer a great degree of power and resources from state governors and mayors to so-called communes or communal councils.   

Communal councils: A true devolution of power?           

Chavez authorities’ experimentation with the communal councils dates back to 2006, when the government empowered communities to oversee their own local neighbourhood affairs and economic development. Councils handle everything from gas and water distribution to road paving projects to the construction of local drainage systems and sports fields. Over the years, communal councils have steadily grown in number and today there are more than 40,000 stretching all across Venezuela. Moreover, in the next four years, Chavez authorities plan to organise an additional 8 million people within some 20,000 new communes.

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Communal councils have empowered the marginalised and women and allowed people to circumvent oftentimes corrupt municipal governments. On the other hand, one must consider that communes are in turn directed and funded by the Chavez authorities so the new system could easily wind up replicating age old clientelistic networks and cronyism, only this time without the usual middlemen. Moreover, it’s by no means clear that the councils will be less corrupt over the long-term than other forms of local government, and indeed some communes have been plagued by mismanagement.  

Leftist Z Magazine no less has documented other problems, including charges that the “government is exploiting volunteer labour, ignoring political disagreements, promoting local democracy at the expense of broader interests and consolidating central control”. Speaking to Z Magazine, one anti-Chavez bureaucrat mocked the authorities, noting that the government conducted so-called “pinata parties” or “spectacular public events” in which officials doled out money. “These high profile events attract media attention and generate public interest,” notes Z, but “also fuel some disillusionment, since skeptics associate them with clientelism and narrow self-interest.” 

Whatever their internal problems, however, communal councils could radically alter the fabric of Venezuelan political life. Officially, the communes are to be granted the prerogatives of budgeting, state planning and even taxation. The question, however, is whether the Chavez regime is truly committed to radical change. Apparently, Chavez has been having second thoughts: recently, the President remarked that councils will not cancel out or weaken the power of local and municipal governments. Such backtracking statements muddy the waters and cast doubt on Chavez’s pledge to establish true “participatory democracy”. 

Are novel co-operatives the way forward? 

Yet another means of challenging the hierarchical capitalist state is to encourage the growth of economic co-operatives. According to an article in the leftist journal Affinities, “Venezuela is presently home to the most vibrant co-operative movement in the world.”  “Instead of workers renting their labour to an owner in exchange for a wage,” notes the journal, “Venezuelan workers are increasingly acquiring economic enfranchisement – a direct say in the direction and organisation of their firm, and thereby an increasing capacity to control their own lives.” 

Since Chavez originally came to power, the number of co-operatives in Venezuela has skyrocketed. In 1998, only about 20,000 workers laboured in the co-operative sector yet several years later that number had increased to a whopping 1.5 million. Spurred on by free business and self-management training provided by the government, co-operatives have continued to flourish and today the authorities plan to establish tens of thousands of new communal enterprises. In some cases, officials have even laboured to secure worker ownership of shuttered factories.  

Perhaps more crucially, the government has also exempted co-operative businesses from taxes while subsidising the purchase of equipment and physical installations with low interest loans. What is more, Chavez authorities have transferred much needed credit to banks which are owned by the aforementioned communal councils. Thousands of community banks will in turn direct resources toward new communal enterprises. Indeed, there’s been a kind of synergy between local communities and the worker movement, as the councils move to create social enterprises like neighbourhood markets, bakeries, pharmacies and even radio stations. 

A difficult bureaucratic milieu 

Despite these advances, co-operatives face many obstacles. Most glaringly, there’s been a decent amount of fraud within the co-op movement. Indeed, some groups have registered as “phantom” co-ops and later walk off with desperately needed money. Government enforcement and oversight over such sleight of hand, meanwhile, has been a somewhat haphazard affair. Some members of Venezuela’s traditional co-operative movement, which predates Chavez’s initial assumption of power, argue that new co-ops may be doomed to failure as they lack key management and administrative skills.  

In addition to these logistical and administrative issues, serious questions remain about Chavez’s true commitment to transforming society through co-ops. “The co-operative movement in Venezuela,” notes Affinities journal, “is one part of a haphazard agenda of social reform. Not haphazard in the sense of being random or irrational, but in the sense that one can clearly detect divergent, and even contradictory, tendencies within the ‘Bolivarian Revolution’.”  

On the one hand, there are democratic socialist or even anarchist tendencies within the Chavez movement, but on the other a kind of anachronistic “top-down, state directed and authoritarian” political wing which could centralise and jeopardise the future of independent co-ops. Indeed, Affinities adds, “the degree to which Chavez envisions Venezuelan socialism as distinct from, say, Cuban socialism, remains largely unclear.” 

If co-operatives are to be sustainable, they must be incorporated into a larger context of economic democracy. Right now, co-ops exhibit many of the same vices as capitalist firms. For example, co-ops react to supply and demand in order to maximise profit and, over time, some firms might become richer than others. 

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If that is the case, then larger co-operatives might feel an incentive to lie and exploit the community, just like capitalist companies. In order for worker-owned firms to make a truly revolutionary impact, Affinities remarks, Venezuela must do its utmost to democratise the market through active state intervention; democratise workplaces through the labour movement and further democratise finance through creation of public financial services.  

Lack of political will? 

Whether Chavez, Maduro, or other possible Bolivarian successors have the political will to truly transform the economy is open to question. Nervous lest he offend foreign capital, Chavez has compensated capitalists for expropriations. Hardly impressed, the radical wing of the labour movement has criticised the government and charges that authorities have not moved rapidly enough when it comes to turning shuttered factories over to worker control.  

Andres Ruggeri, an anthropologist at the University of Buenos Aires and an expert on worker-owned factories in Latin America, is somewhat skeptical about changes afoot in Venezuela. In an e-mail, he remarked that “the workers are hoping for more from the state… which tends to have a managerial vision.”  

Another article appearing on the progressive blog DailyKos echoes such sentiments. The website notes that one of the key challenges facing co-ops “is the resistance of the capitalist sector in Venezuela which still controls much of the state and local government apparatus. In spite of the legal support for co-operatives at the national level, bureaucratic state and local authorities can hold up various licences that co-operatives need to survive and grow, sometimes due to political differences with the Bolivarian government, sometimes as part of a residual culture which will not provide the required licence unless a bribe (unaffordable to the poorest co-ops) is offered.” 

When it comes to foreign policy and promoting revolutionary ideas at the international level, Chavez is similarly muddled. Given that Venezuela is one of the most forward-looking countries on co-operatives, one might expect the authorities to tout their accomplishments in this regard. According to recent surveys, co-ops are growing faster than standard capitalist firms all across the world, and the renewed interest has even given rise to international summits. Last year, Venezuela pushed for increased funding for co-ops within South American trade bloc Mercosur.  

Overall, however, Chavez has been oddly muted when it comes to promoting a full-throated co-op agenda, and Foreign Minister Maduro’s failure to capitalise on the co-operative moment is particularly puzzling. Since 2008 and the onset of the world financial crisis, workers have been looking for alternatives to standard capitalist-owned firms. Yet Maduro has failed to articulate an innovative foreign policy, preferring instead to pursue a backward and anachronistic strategy which has discredited Venezuela in the eyes of many. Moreover, Chavez’s failure to capitalise on Occupy Wall Street has constituted a tactical blunder. 

Alternative currency fails to take off 

In yet other respects, Chavez’s most innovative foreign policy initiatives seem haphazard or fail to achieve their full potential. Take for example the concept of alternative monetary currencies. In the wake of the global financial crisis, many Greeks and Spaniards have adopted local currencies, while the English city of Bristol has launched its own Bristol Pound. By adopting local currencies, communities may complement national currencies which fail to meet people’s social needs. Other alternative schemes range from local exchange trading systems to time banks. 

In 2009, Chavez launched the so-called Sucre, a common currency amongst left-leaning ALBA nations of Latin America. Since its inception, the idea of the Sucre has confronted many structural challenges at the political and economic level. In theory, however, the notion of launching a common currency designed to counteract the “dictatorship” of the US dollar is a good idea. Unfortunately, however, the Sucre is just an electronic currency used by ALBA nations to carry out commercial exchanges in local currency.  

More recently, Chavez has urged ALBA to transform the Sucre into a real currency, though such calls have failed to gain much traction within the bloc, let alone amongst more economically powerful countries such as Brazil. In the event that right-wing governments take over in ALBA nations, the Sucre could be placed in jeopardy or the Chavez bloc itself might even dissolve. 

Now that Chavez’s health has come under strain, many may wonder whether the Bolivarian “model”, such as it is, will continue to resonate domestically or within the wider region. Even if Chavez should survive or a successor comes to power, however, it is by no means certain that the more revolutionary or participatory tendencies within the Chavez movement will prevail against other backward and centralising forces. If Chavez falters, we may see increasing political fissures within the Bolivarian Revolution as rival wings vie for control.

Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left.

Follow him on Twitter: @NikolasKozloff