Socialist Party - CWI - Hugo Chávez and Socialism - October 2007

Here is an extensive document by Tony Saunois, as a part of the debate internationally on develoments in Venezuela. In order to block any allegations that Tony is misquoting other groups position, I've added the main document he refers to, by Jorge Martin, to the end. Readers can study both positions. Belfast 1st November 2007

Hugo Chávez and Socialism

A contribution to the international debate

Tony Saunois, CWI, London, Tuesday 30 October 2007.

Venezuela, Bolivia, and more recently, Ecuador, are today at the epicenter of the continental revolt by the workers, peasants, youth and others exploited by capitalism, which is sweeping Latin America. Mexico, Peru, Guatemala, Argentina, Brazil, and other countries have all been shaken by political turmoil and social upheaval as the masses throughout the continent have been drawn into struggle against privatizations, unemployment and neo-liberal policies.

The devastating consequences of neo-liberalism in Latin America are shown during the last 26 years. In the years 1980-2006, Gross Domestic Product (GDP) in the region grew by a mere 15% compared with 82% in the twenty years from 1960 to 1980.

It is in the Andean countries of Venezuela and Bolivia where the class struggle and conflict between revolution and counter revolution are currently being fought in the sharpest way. If Latin America is in the front line of workers struggles, Venezuela and Bolivia are its advanced guard.

Crucial issues are now posed for socialists and the working class in these countries if the continued threat of counter revolution is to be defeated and a successful socialist revolution carried through. The issues posed in these movements are crucial not only for the workers and peasants of those countries. They are also rich in important lessons for the international working class and socialists. International capitalism is poised to enter a new period of turbulence and social and political upheavals as a consequence of the qualitative changes and crisis now unfolding on the world financial markets. Many of the issues now facing the Venezuelan working class will face workers in other countries in the future.

The coming to power of Hugo Chávez, in 1998, opened a new chapter in the class struggle in Latin America and internationally. His election victory was a by-product of a mass rejection of neo-liberalism and a demand for an end of the corrupt two party oligarchies which had ruled Venezuela for decades. From an international perspective, as the Committee for a Workers’ International (CWI) noted at the time, the election of Chávez was also extremely significant. From the 1990s, it was the first government to come to power, that was not prepared to tamely bend the knee to the demands of US imperialism and apply to neo-liberal policies.

Initially, Chávez spoke of a ‘Bolivarian revolution’ a ‘third way’ a system that was more ‘humane’ and ‘democratic’. At the time he did not speak of socialism. Yet nine years later, as a consequence of a series of clashes between the revolution and counter revolution, in the form of the attempted coup in 2002, the bosses lock out in 2002/3, a recall referendum campaign in 2003 and numerous elections and struggles the issue of socialism has been put back on the political agenda. Venezuela is now declared a ‘Bolivarian Socialist Republic’ and the building ‘Socialism in the 21st century” is the stated objective of Chávez and his regime.

Government reforms

The government has introduced a series of significant reforms to help the most oppressed and down trodden. These have been paid for by the bonanza in revenue which the state has procured from the rising price of oil. The most profound reform has been made in the provision of health care. In 1998, there were 1,628 primary care physicians for a population 23.4 million. Today, there are 19,571 for a population of 27 million. In 1998 there were 417 emergency rooms, 74 rehabilitation centres and 1,628 primary care centres. Today, there are 721 emergency rooms, 445 rehabilitation centres and 8,621 primary care centres, including 6,500 ‘check up points’, usually in poorer areas. Since 2004, four hundred thousand people had eye operations that restored their vision. These were often carried out by Cuban doctors. In 1999, only 335 HIV patients received antiretroviral treatment. In 2006, this figure had increased to 18,538.

The government also provided access to subsidised food items. Reportedly, 15,726 food stores selling subsidized food have been established. Overall the central government’s central spending has massively increased from 8.2% of GDP in 1998 to 13.6% in 2006. If the social spending by the state oil company, PVDSA, is included, the figure increases to 20% of GDP. In other words, social spending per person has increased by 170% between 1998- 2006. These important reforms are undoubtedly welcomed by the people and have boosted the popularity of Chávez.

They are in marked contrast to the neo-liberal, pro-capitalist policies implemented by governments internationally, in the same period. According to government figures, as a result of these reforms, and the growth in the economy, overall poverty has been reduced from its peak of 55.1% in 2003 to 30.4% at the end of 2006. They indicate that since Chávez came to power poverty rates have declined by 30.4%.

These tremendously positive developments have represented an important step forward for the masses in Venezuela and the international working class. The re-emergence of the idea of socialism as an alternative to neo-liberalism, capitalism and imperialism refutes the claims of the capitalists and their quislings in the former workers’ parties like Brown, Zapatero, Bachellet and Papandreou who think that socialism has been put in the basement of the history museum. They think that capitalism and the market is the only viable system.

International debate and discussion

The stormy events in Venezuela have aroused tremendous interest amongst socialists and workers internationally. All socialists have a responsibility to express in words and deeds solidarity with the Venezuelan workers and youth especially when they are threatened with attacks by imperialism and counter revolution. But genuine internationalism also includes an exchange of ideas and experiences of the workers struggle in different countries. Through such an interchange of experiences it will be possible to assist the Venezuelan workers find the right road to defeat capitalism and counter revolution. This does not mean those outside Venezuela arrogantly giving lectures about what is necessary. The CWI has never adopted this approach. Genuine dialogue with Venezuelan workers and socialists can also look at international struggles of the working class. A genuine interchange of ideas and experiences between Venezuelan and international socialists can assist workers in all countries reach the right conclusions regarding the programme, tasks, methods and actions necessary to carry through a successful socialist revolution.

While putting the idea of socialism back on the political agenda in Venezuela represents a very important positive development, it is not the same as actually achieving it. The crucial question is how to take the struggles in Venezuela forward to a successful socialist revolution.

Marxists welcome every positive step forward in the struggle and every advance conquered by the working class and masses. At the same time, especially when dealing with crucial issues of revolution and counter revolution, it is necessary to recognize deficiencies and weakness in the programme and methods that are put forward by the leaders. These can become obstacles for the socialist revolution. If this is not done, then such weakness can, and have in other situations, open the way for set backs, defeats and the victory of the counter revolution. More favorable conditions than those which currently exist in Venezuela and Bolivia have been lost because of a failure to resolve such weaknesses.

The magnificent Spanish revolution between 1931-7 – during which the working class and peasants controlled four fifths of Spain – was lost to the fascist forces of Franco. This was not due to the lack of determination or heroism by the Spanish workers who displayed enough courage and initiative to make ten revolutions. It was lost because crucial questions of programme, organization and the building of a mass revolutionary party were not resolved.

Marxists enthusiastically support every step forward taken by the working class and are optimistic about the struggle for socialism. Marxists also need a realistic and accurate analysis and assessment of each stage of the struggle. It is therefore not the job of Marxists to act merely as cheer leaders for the movement or as a left cover for its leaders. It is necessary to propose what concrete steps are needed in programme, method and action to take the revolution forward.

Events in Venezuela have provoked debate and discussion amongst socialists internationally about how to engage with this movement, how to relate to the Chávez regime, and what programme is necessary to defeat capitalism. The CWI has enthusiastically participated and contributed to this debate and commented on the analysis and method used by some other organisations on the left. For example, the CWI produced ‘Revolutionary Socialists and the Venezuelan revolution’, in June 2004, as a contribution to this discussion. Unfortunately, some who subscribe to Marxism, for example, the comrades of the International Marxist Tendency, (whose ideas we commented on in ‘Revolutionary Socialists and the Venezuelan revolution’) and others, regard such criticism as “carping sectarianism from the side lines”. Trotsky was also criticized in a similar vein for his warnings, comments and analysis during the Spanish Civil war.

It is wrong, for Marxists, to regard such a discussion as “sectarian” or portray it as “carping criticism”. Readers are invited to re-read the analysis put forward by the CWI of events in Venezuela since Chávez came to power. They will find a consistent method and analysis of events, at each stage. Marxism is the science of perspectives and, therefore, helps to prepare the working class for the struggles it will have to face against the ruling class. Has the IMT fulfilled this role in the analysis they have put forward? It has not done this. In some countries the IMT’s activity has focused on solidarity for Venezuela but, while praising Chávez, which it is necessary to do when he has taken a positive step in the interests of the working class, the IMT have failed to put forward sufficient warnings and criticism of his political mistakes and deficiencies. Since ‘Revolutionary socialists and the Venezuelan Revolution’ was produced in 2004 events have developed further. The IMT has produced other material in which they have given a different emphasis to their previous approach and revealed a lack of consistency in their method of analysis. However, the attempts they have made to amend their previous position have only compounded the contradictions in their approach which are commented on in this document.

This, along with other important issues, is commented on in this document as a means of trying to clarify the new stage of the struggle which has developed in Venezuela.

Chávez’s election victory 2006

The election victory of Hugo Chávez on December 3 2006 undoubtedly represented an important victory and another defeat for the counter revolution. Following this election, Chávez has increasingly spoken about the need for socialism and declared his support for Trotsky’s ‘Permanent Revolution’ and the ‘Transitional Programme’. He has also proposed a series of new measures. These have included changes to the constitution to allow him to stand for re-election indefinitely, giving him temporary enabling powers to rule by decree and, refuse the renewal of the broadcasting license for the private media broadcasting network RCTV.

He promised that “Everything that had been privatized would be re-nationalised” and took into public ownership the telecommunications company CANTV, and EDC, the electricity company. Hugo Chávez has also launched a new party the – Partido Socialista Unido Venezuelano (PSUV).

For Chávez to win with 63% of the vote in 2006 was a result that most capitalist politicians can only envy. It clearly reflects the support he enjoys and the opposition that exists towards the right and the threat of counter revolution. It is, however, an exaggeration to claim, as Jorge Martin of the International Marxist Tendency, wrote in a recent article, ‘The challenges facing the Venezuelan Revolution’ (05/9/07): “There is no real precedent for such a massive electoral support for a revolutionary movement anywhere”. During the Portuguese revolution the parties and organizations which proclaimed the idea of socialism were endorsed by over 66% on elections to the Constituent Assembly in April 1975.

The CWI explained that during the course of the 2006 election campaign there was a decisive change which occurred as the masses became aroused in opposition to Manuel Rosales and the right-wing. Jorge Martin also correctly comments on this development in the campaign. During this election, the right-wing counter revolution was able to present its most united face since the re-call referendum in August 2004. During the election campaign the largest anti-Chávez protest, of over 300,000 people, took place. Despite resurgence in support for Chávez, the right-wing candidate Manuel Rosales was able to win over 30% of the vote. In Caracas, the capital city, the vote was almost evenly split. This is a warning of the threat from the right, which still exists. The question is why has the counter revolution been able to begin to regroup and increase its support?

In the early stages of the 2006 election campaign, the level of activists participating in it was considerably lower than in previous elections. Chávez limited himself to speaking about “peace” and “love” and the right-wing seemed to be gathering increasing support. It was only when it appeared that the threat from reaction was very real that the masses rallied to vote for Chávez. This was similar to what had taken place during the attempted coup in 2002 and the employers lock-out in 2002/3. Faced with the threat of counter revolution, the masses spontaneously mobilized from below to defeat it. At the same time, Chávez then began to speak about socialism and turned further to the left.

Jorge Martin points out in his article that amongst the masses a “mood of impatience” was developing, a feeling that “we have been talking about revolution for a long time, but nothing decisive seems to have changed”. This is undoubtedly true and poses the question of what processes have been at work in Venezuela, and how far the revolution has yet encroached on capitalism.

This belated recognition of some complications and contradictions in the Venezuelan revolution is in contrast to what the International Marxist Tendency previously told us. In ‘Encounters with Hugo Chávez’, by Alan Woods, in April 2004, the IMT argued: “Chávez has grasped the fact that the revolution needs to make this qualitative leap”. We are still waiting for this to happen! Alan Woods continued, “There are many things that indicate that Chávez is preparing a sharp turn to the left”. He also argued, in 2004 (‘Theses on revolution and counter revolution in Venezuela’): “The Venezuelan revolution following the excellent example of the American Revolution (1776) will likewise not hesitate to take measures to eliminate the economic power of the counter revolutionary minority”.

Aside from the fact that the American Revolution did not carry through a social revolution, in Venezuela the regime has hesitated to eliminate the economic power of the “counter revolutionary minority”. It is for that reason that many of the contradictions and obstacles now exist.

If it was possible through a series of progressive reforms to permanently eliminate poverty then this would of course be a good thing. But under capitalism it is not possible to achieve this. By the time of the elections at the end of 2006 these expectations had not been fulfilled. The counter revolution, feeding on accumulating discontent, was in the process of beginning to regroup its forces. This was possible precisely because, up until now, capitalism has not been defeated. Despite the reforms, there is widespread poverty and increasing anger against a state bureaucracy, which is growing. This point is not lost on John Pilger, as can be seen in his recent film, ‘War on Democracy’. In an interview with Hugo Chávez, the filmmaker challenges the Venezuelan leader about the widespread poverty which is still very evident in Venezuela and seen in the massive slums any visitor to the country will pass when traveling from the airport to Caracas.

Poverty and economic growth

Against the background of vicious attacks on the working class by governments through-out Latin America and internationally, it is understandable that Chávez, and now Morales, have won enormous sympathy from workers’ and youth, internationally. Together with Cuba, and now possibly Ecuador, they are seen as the only governments that are seen to stand up to US imperialism and offer a left, radical alternative to neo-liberalism.

However, at the same time, massive poverty remains in Venezuela – over 30% of the population according to official figures. Yet, while health, education and food subsidies have helped millions, there is a massive crisis in infrastructure. The mass of the population in Caracas remain trapped in squalid housing conditions in the ‘barrios’ on hill tops overlooking the city. While 90,000 new homes were constructed in a year, the massive housing deficit of 1.5 million still remains to be solved.

Unemployment has fallen – from 15% in 1999 – but it still remains relatively high at 8.3%. This is despite the economy having grown by 76%, since 2003.

The economic growth has been fuelled by an economy awash with revenue from oil that has led to a bonanza for sections of the middle class and the private sector. While it is true that the growth was driven by massive public sector investments, it is not true, as Jorge Martin argues, that the “private sector stagnates”. Since 2004, most of the economic growth has been in those sectors of the economy outside the oil industry. Manufacturing has grown 91% in the last eight years and construction by 144%, trade and repair services by 127.5% and communications by 99.5%. During this period, oil production has not risen at all. As Alan Greenspan points out in his recent autobiography, ‘The Age of Turbulence- Adventures in a new world’, Venezuelan crude oil output dropped from an average of 3.2 million barrels, a day, in 2000, to 2.4 million barrels, a day, during the spring of 2007.

As the economy expanded, the banks, which remain untouched, got some of the best deals in the international financial markets. Profits in the banking sector were up 33% in 2006. This was led by a 100% increase in credit card loans and a 143% jump in loans to the middle classes to buy new cars. The Venezuelan banking system is now the envy of the capitalist banking world, with returns on equity of 33% of the norm, and amongst the biggest banks up to 40%. As Román Mayoraga, the Venezuelan representative of the Inter-Development Bank put it in December 2005: “The banks have been making loads of money”.

Despite all the protests by the right-wing and imperialism about growing state control of the economy, the opposite has been the case. As a result of the growth of the private sector and stagnation of the oil industry, by 2006, the private sector’s total value was 63% of GDP – up from 59% when Chávez came to power in 1998/9! Central government spending in Venezuela accounts for 30% of GDP. Yet, it remains far below European capitalist countries, such as France (49%) and Sweden (52%) (‘The Venezuelan Economy in the Chávez Years’, July 2007, Centre for Economic and Policy Research).

When coupled with inflation, which is running at nearly 20%, the failure to resolve the massive social problems has inevitably led to a frustration and even anger amongst significant sections of workers and the urban poor. This has been re-enforced by a massive growth in bureaucracy, corruption and cronyism within the public sector. Even the Missiones, which administer the reforms in health and education, are infected by this sickness. Although Chávez remains popular and enjoys massive support, reflected in the 2006 December elections, the frustration and anger about the failure to resolve these social problems for millions can serve to undermine his support.

However, it is not possible to resolve these massive social problems, which still remain, despite the reform programme, within the confines of capitalism. The reforms have been mainly financed by the massive growth in government revenue that has resulted from the high price of oil. The US State Department estimates that oil accounts for 15% of GDP – although some estimates put the figure as high as 30%. In 2006, government revenue from oil was US$28.9 billion. Half of government revenue now comes from oil. This means that Venezuela is still held in the economic straight-jacket, like most economies in the neo-colonial world, of being dependent on a limited commodity to export. Under capitalism, it is not possible to fully develop these economies to over come this limitation because of the grip of imperialism and dominance of the world market. In the case of Venezuela, while it holds vast oil reserves, it lacks the technology and development to refine, it making it dependent on the more industrialized imperialist powers.

Oil dependency

The dependence on oil poses the question what would be the consequence of a change in world economic situation which triggered a fall in the price of oil?

A fall in oil prices as a result of a world economic recession would have potentially devastating effects in Venezuela. The economic recession which hit Venezuela in the 1970’s followed a period of high oil prices, which resulted in a windfall for the government, allowing increased state expenditure on social reforms. This was all rolled back and dismantled following the collapse in oil prices, as a result of the world economic downturn. This is a warning for Venezuela, today, if capitalism and landlordism are not ended. The crucial question is how and which class is to achieve this in Venezuela.

In addition to these threats to the reforms that have been introduced, are the constant attempts at sabotage of the economy by the capitalist class as a means of trying to undermine support for Chávez. There are regular shortages of beef, sugar, corn, eggs, oil, chicken and sometimes coffee.

Despite the economic growth it is clear that widespread poverty remains, along with all the other social problems, like social alienation, found in capitalist society. This is reflected in the high levels of crime and violence in Caracas and the other major cities. Jorge Martin writes that economic growth is “exacerbating all its contradictions rather than solving them”. But the main reason for this is the continuation of capitalism and the failure, so far, to defeat it. The popular reforms Chávez introduced, and his other radical policies, have brought him into collision with the interests of capitalism. Here is the classic contradiction of reformism. The crucial question is what programme and organization is necessary to resolve this clash of class interests.

Chávez’s contradictions

Jorge Martin, like many other commentators on Venezuela, now goes some way in recognizing some of the contradictions now emerging in Venezuela under Chávez. In relation to the food industry, Jorge Martin criticizes the government for not “confronting the issue head on” by “ownership of the land and food distribution chain” and setting up a parallel structure to compete with the private sector. (Mercal – the state run subsidised super markets). This is a very vague programmatic formulation. It is not sufficient only to speak of ‘ownership’ but to raise the clear demand for nationalization. Marxists need to be precise in the programme and slogans they put forward, especially in a struggle between revolution and counter-revolution. The demand for nationalization under democratic workers’ control and management is what is needed.

Jorge Martin also argues, “Chávez clearly reflected this [the contradictions in the economy] when he threatened nationalization of the banks and the Argentine owned SIDOR steel works.” Jorge Martin continues by quoting Chávez as saying, “we cannot have a situation where the state is the only one lending money to national producers to develop production”.

Chávez may have reflected the contradiction which exists when he threatened nationalization of the banks. Yet this was not carried out and Chávez continues to preside over what is still fundamentally a capitalist economy despite his proclamations supporting socialism.

Marxists always adopt a positive attitude and welcome progressive steps forward taken by the working class which advance its interests. But the role of Marxists is not to provide a left cover for the wrong policies, deficiencies and prevarications of the leadership of the movement. It is to help workers and youth involved in the struggle to find a way forward for the revolution and break through contradictions and obstacles that exist. Above all, it is necessary to assist workers to build their own independent organizations, with a programme to achieve a successful revolution. This is not the approach of the International Marxist Tendency. Rather, the IMT tries to act as benevolent advisers to the Chávez leadership, neglecting the reality of what happens on the ground.

In his document, Jorge Martin, when dealing with the ‘nationalisations’ that Chávez has undertaken, argues: “Some people have argued that these are not real nationalizations because they have been carried out with compensation.” Jorge Martin continues: “However, if we want to understand the real meaning of these nationalizations, we have to look at how the workers and the capitalists have reacted to them”. He then explains that the workers’ welcomed them, set up a ‘Socialist Batallion’ of the newly formed PSUV and demanded workers’ control.

This positive reaction by the workers concerned is very significant. The enthusiastic response from the workers, however, reflects more what they thought they were getting rather than what was actually on offer.

The capitalists reacted by reducing foreign direct investment by US$1050 million in the first quarter of 2007 compared to the first quarter of 2006. Undoubtedly this reflected the fear of imperialism of the processes unfolding in Venezuela. Yet, however significant the reaction of the workers and capitalists are, they do not explain the limitations of what Chávez has actually done and what is taking place in the Venezuelan economy.

The question of nationalization

Marxists support nationalization of the major companies. The imperialists and big national capitalists who have robbed and plundered Venezuela at the expense of the mass of the population do not need or deserve compensation. At the same time, if there are small share holders, sections of the middle class who have some savings, the working class has no interest in punishing them. Democratic committees, representing the workers in the companies, the poor and the population, as a whole, including small business people and the middle class, should be elected to investigate all claims for compensation, which should be paid on the basis of proven need. One of the tasks facing the workers’ movement is to reach out and try and win the support of the radicalized sections of the middle class who are also exploited by capitalism and, thereby, undermine the potential base of the right-wing.

With a genuine revolutionary socialist programme, the workers’ movement needs to take all the necessary steps to try and split the middle class, and not drive it into the arms of the counter revolution. The middle class, who are also exploited by capitalism, are not the real enemy of the working class. The real enemies are the big share holders, capitalists and imperialists, who have robbed and plundered the country’s resources for their own interests.

However, the question posed with the ‘nationalizations’ in Venezuela is that the major monopolies and banks have not been touched and there is no democratically planned nationalized economy. Jorge Martin again invokes Chávez, when Chávez declared “all privatized companies should be nationalized”. In other words, those privatized by the former governments representing the oligarchs who rule Venezuela. This, of course, is supported by Marxists but it is not enough to take control of the economy from the capitalist class.

At the same time, it is necessary to clearly raise the question of how nationalized industries should be run and managed democratically, by and in the interests of the working class. The demand for workers control in the industries concerned has been an important discussion in Venezuela. The need for elected committees in the workplaces, to be responsible for the day-to-day functioning of factories, is an urgent task. These committees need to be elected by the workers themselves, receive no special privileges and with the delegates to them subject to immediate recall. This is distinct from the government and union appointed bodies which have been set up in Venezuela.

There needs to be a system of democratic workers’ management in the nationalized companies. The boards of such companies should be comprised of elected representatives of the workers in the industry, the wider population, and representatives of a workers’ and peasants government to integrate the industry into the overall planning of the economy. Such a system of democratic workers’ management is distinct from workers’ control. This applies to the day-to-day running of workplaces, and can also be fought for in private companies, to act as a school to prepare workers to manage the industry and economy, as a whole, when capitalism has been defeated.

It is necessary to distinguish between phrases and deeds. What Chávez has done is to re-nationalise CANTV and EDC (the telecommunications and some electricity generating companies). While this is a welcome step, it is not enough. As the Washington-based Center for Economic and Policy Research (CEPR) points out in its report, ‘The Venezuelan Economy in the Chávez Years’ (July 2007), which is very sympathetic to Chávez: “Theses moves [nationalization of CANTV, EDC and government intervention in oil industry in the Orinoco basin] generally have been portrayed as very negative not only for Venezuela’s investment and for its economic future. However, it is important to keep some perspective in these changes. The telecommunications sector was nationally owned and then privatized in the early 1990’s. The recent nationalized companies were compensated fully for their assets…” It then goes on to quote the AES Chief Executive, Paul Hanrahan, “I think this deal is a fair one and has respected the rights of investors.”

The CEPR also point out that 80% the electricity generating companies nationalized were already, in fact, owned by the state.

In the Orinoco oil basin, the government increased the amount of tax revenue paid by the private sector. In essence, it has re-negotiated joint ventures which have limited the amount of assets foreign companies can hold, giving the state a majority holding. In the first round of negotiations, 31 out of 33 contracts were agreed with only Total and ENI rejecting the new contracts. In subsequent negotiations, Exxon-Mobile also pulled out.

However, although the new contracts increased government tax revenue they have done nothing exceptional compared with other oil producing countries in the neo-colonial world. Venezuela is one of the only major oil producing countries in the developing world that allows foreign investment in oil production! Even US allies such as Mexico and Saudi Arabia, for example, do not!

It is clearly very positive that Chávez speaks about socialism but the decisive question is how to achieve it and defeat capitalism. The programme that has, so far, been introduced by Chávez has many of the features of Keynesian reformism that were introduced in many countries during the 1950s, 1960s and early 1970s. As a friend of the Chávez regime, Tariq Ali explained in his book, ‘Pirates of the Caribbean – Axis of Hope’: “New Bolivarianism combines continental nationalism and social-democratic reforms fuelled by oil revenues.” In other words, a Latin American version of ‘Old Labour’ in Britain or of other social democratic reformist governments in other European countries.

Keynesianism and reformism

In these cases, through an increase in state expenditure and state intervention in the economy, a series of reforms were introduced which benefited the working class. This was used to justify the ideas of a reformist road to socialism – of incremental steps encroaching on capitalism until it was eventually replaced by socialism.

These ideas have never allowed a successful socialist transformation of society to take place. The capitalist class have never permitted such a development without directly intervening to defend its interests and its system. During periods when its interests are decisively threatened, the ruling class will attempt the bloody crushing of the working class through a military coup, like it in Chile, in 1973. During the 1930s, in a different historical period, the bosses looked to fascism to save their system, as they did in Hitler’s Germany and in Franco’s Spain, for example.

While Marxists defended all of the reforms won through the introduction of Keynesian policies, it is not possible for them to be sustained on a lasting basis within capitalism. For this reason, the reforms conquered by the working class during the period of capitalist upswing are being destroyed and rolled back in the most brutal way in Europe, Latin America, Asia and Africa.

Venezuela is in a somewhat unique situation, in that very few left radical regimes which have come to power in the neo-colonial world have had such an oil bonanza to pay for reforms. This has given Chávez a certain room to maneuver and to maintain his base of support. Without the oil, if he had not defeated capitalism and established a nationalized planned economy, it is unlikely his regime would have been able to maintain itself in power as long as it has. This point has not been lost on Alan Greenspan, who warned in his autobiography: “He [Chávez] needs ever-higher prices [of oil] to prevail. Fortune may not smile on him forever”.

The impending onset of a downturn or recession in the world economy is likely to trigger a fall in the price of oil, as demand falls. Some have argued that Venezuela could weather such a storm. The Washington-based, CEPR, argues that because Venezuela has budgeted conservatively the price of oil (at US$29 per barrel – 52% lower than the average price in 2006), it has accumulated a large international reserve of US$25.2 billion. This which means, they argue, when taken together with other funds it holds, it could, according to the CEPR, absorb a 20% fall in oil prices. However, what if the price falls further and does not rapidly recover? Even the optimistic scenario put forward by the CEPR points out; “Thus, while a fall in oil prices will not cause a budgetary crisis [sic], it could lead to reduced government spending. This could slow the economy from its present very rapid pace...”

Such developments have happened before in Venezuela. The left of centre nationalist populist Carlos Andrés Perez government was able to introduce some significant social reforms between 1974-79 using revenue from oil. By 1979, oil had reached $US80 per barrel. However, all of these social reforms were brutally destroyed and reversed in the 1980’s, as a major economic recession gripped Venezuela. This followed a crash in oil prices to US$38 per barrel. A fall of nearly 50%!

This had devastating consequences and plunged Venezuela into an economic decline which last more than two decades. Between 1979 and 1999, per capita GDP fell by a staggering 27%. Those living below the poverty line rocketed from 17% in 1980 to 65% in 1996. This is a warning for Chávez and the Venezuelan masses.

Even if, and it is a big ‘if’, the more optimistic scenario of the CEPR proves to be correct, it would mean cutting back on the reforms and a slow down in the economy. This is certain to mean a rise in unemployment.

The frustration and anger amongst some sections of the workers, urban poor and peasants today, during a period of economic growth, would be greatly re-enforced in such a situation. Chávez, having already been in power for nine years, in that situation, could see deep disappointment affecting large layers of the masses which could undermine his support.

These developments would be an even more fertile ground for reaction to re-group its forces and prepare to make a comeback. This could possibly take place in a similar way to how the Sandinista FSLN was voted out of office when the pro-imperialist right won elections in 1989, following frustration, disappointment and exhaustion at the failure of the revolution in Nicaragua to go forward and overthrow capitalism. Now Ortega has been returned to power having made his peace with capitalism and the former right-wing Contras and Catholic Church, and scandalously agreed to abortion being completely illegal.

Despite Chávez’s election victory in 2006, the threat of a creeping counter-revolution remains very real. This was seen during the early stages of the election campaign. This was despite Chávez’s verbal swing to left and embracing of socialism, which he made during and after the 2006 election campaign.

Chávez, Trotsky and populist trends

The latest speeches of Chávez, supporting socialism, and referring to Trotsky, represent a very important change and a welcome step forward; but it also important for Marxists to distinguish between words and deeds. Chávez is not the first leader to defend Trotsky in words but then fail to apply his method and ideas in practice. In Spain in the 1930s, Andrés Nin adhered to Trotskyism, for a period, but later broke with Trotsky when he helped found the POUM (Workers’ Party of Marxist Unification) in 1935. Nevertheless Nin and his party were still dubbed ‘Trotskyist’ but, against Trotsky’s advice, they joined the pro-capitalist Popular Front Government in Catalonia in 1936.

More recently Miguel Rossetto, in 2003, a member of the United Secretariat of the Fourth International at the time, which subscribes to Trotskyism, joined the Lula’s neo-liberal Brazilan government as Minister of Land Reform. When Chavez came to power he had many of the features of a radical, populist nationalist. Now he is defending, in very radical speeches a more classic version of reformist socialism.

The left radical, nationalist populist trend which Chávez reflected has a strong tradition in Latin America, although it can also be seen in other continents, as well. Populism, by its nature has many features and can be of both a left and right variety. An element of right-wing populism has been used by Sarkozy in France and in Britain in the recent ‘left’ turn by Cameron, the leader of the Conservative Party. However, the radical left populist forces which have emerged in Latin America represent a cry of the masses against the poverty and exploitation they suffer. This has generally developed where the independent organizations of the working class that defend socialist ideas are weaker. The leaders of these movements reflect the anguish of the masses but limit the programme to reforms within capitalism, including greater state intervention, and can zig- zag in the policies and methods they use.

In the case of Latin America such leaders reflect the impasse in capitalist society but do not show a way out of it. The leaders of these forces generally have not emerged from the independent organizations or parties of the working class but from the military or radical left petty bourgeois parties. Significantly this was commented on by Alan Greenspan in his latest autobiography. In relation to Chávez he observes: “I see economic populism as a response by an impoverished populace to a failing society, one characterized by an economic elite who are perceived as oppressors...” he continues “Economic populism seeks reform, not revolution.” In other words it does not directly threaten capitalism but seeks to reform it. Since Chávez came to power on a radical nationalist populist basis he has verbally gone further to the left and defended the idea of socialism and more classic ideas of reformist socialism.

There are many other leaders of the workers’ movement in the past have also made very left, revolutionary sounding speeches and declarations. But, it is also a question of deeds and programme to achieve it, which are the ultimate test.

Salvador Allende and his Socialist Party proclaimed support for Marxism. The left-wing General Secretary of the Chilean Socialist Party Altamirano in words supported the arming of the working class. In Greece, Andreas Papandreou, who founded PASOK in 1974, argued in 1975; “If by the word Marxist we mean the method of analysis which we inherited from Marx, which talks of class struggles, of the structure of power, are to Marxist …we are obliged as a socialist movement to say YES”. Mario Soares, the leader of the Portuguese Socialist Party following the revolution in 1974, proclaimed the party to be Marxist and offered to show anybody the door who did not accept this, although he later turned to the right.

When in government many of these leaders went a lot further in encroaching on the interests of capitalism than Hugo Chávez has so far done. In Chile Allende nationalized 40% of the economy. During the Portuguese revolution approximately 70% of the country’s economy was in state hands.

Like, Chávez, all these leaders at a certain stage were immensely popular with the masses and played a crucial role. Yet as the class struggle sharpened and reached crucial conjunctures in the last analysis it was not the left, revolutionary sounding speeches or popularity which proved decisive. It was the programme, policies, methods and actions which were the ultimate test. None of these ‘left’ leaders defended a programme in action and deeds that was sufficient to defeat capitalism and allow the working class to take over the running of society.

Allende heroically died during the course of the military coup in 1973. Papandreou, who had hidden, arms in hand, as the military seized power in Greece in 1967, became reconciled with capitalism and moved to the right. Mario Soares and the Socialist Party became the vehicle through which capitalism was able to re-establish its rule in Portugal.

In 1930’s Spain, Largo Caballero, who had served in the right-wing dictatorial government of Primo de Rivera in the 1920’s, was dramatically radicalized and emerged as the leader of the left of the Socialist Party (PSOE). He studied Lenin in prison and emerged a supporter of “Bolshevism” and “Leninism”. In the elections in 1933, Largo Caballero urged that in the event of a right-wing victory the working class should take up arms. His newspaper, ‘El Socialista’, carried a headline in 1934: “Harmony? No! Class War! Hatred of the Criminal Bourgeois until death!” Before his death, in 1946, Largo Caballero was to suffer the horrors of the fascist concentration camps in Germany following the defeat of the Spanish civil war. However, Largo Caballero wrongly joined the ‘popular front’ government of Republican, Socialists and Communists; a coalition, which included what Trotsky referred to as the “shadow” of the capitalist class. The overwhelming majority of the ruling class had gone over to the fascists. The policy of popular fronts was applied under the tutelage of Stalin and flowed from the so-called ‘two stage theory’ of the revolution. It supported the idea of forming a coalition with the “democratic” “progressive” capitalist class. The socialist revolution was to be delayed until fascism was defeated. Only following a period of capitalist development would the revolution “grow” over into socialism.

Through the application of this policy, the workers’ struggles and the peasants’ attempts to redistribute land, and other mass actions, were held in check. It was a fatal break on the magnificent movement of the Spanish masses, who were drowned in Franco’s blood bath, after fighting a heroic revolution. The ‘stages policy’ never resulted in a victory for the working class, wherever it was applied and very often ended in bloody disaster.

History never repeats itself in exactly the same way but there are fundamental laws of the process of revolution and counter revolution, which need to be drawn on and applied to the situation in Venezuela, today.

A parallel economy

What Chávez is attempting to do is to try and construct a ‘parallel’ economy and state, alongside the existing capitalist monopolies and state machine. Under certain conditions, for example, where a situation of ‘dual power’ exists, it may be possible for such a ‘parallel’ economy to temporarily develop and make some advances. ‘Dual power’ is the term given by Marxists to a situation where the ruling capitalist class is not fully in control of the economy or state because it is being challenged by a revolutionary movement of the working class which has developed to such a degree that the ruling class cannot govern society. However in this situation, although it has challenged the rule of the capitalism, the movement has not yet taken power completely into its hands and defeated the ruling class. Such a situation cannot last indefinitely and will either result in the working class taking power and defeating the ruling class or the capitalists will reassert their rule and control over the economy and the state machine. However, this is not yet the situation which exists in Venezuela, today.

Despite his verbal threats to nationalize the banks and some other industries, Chávez has not done this. For example, the subsidized state supermarkets (Mercal) run in tandem to the private food chains. Chávez is also trying to strengthen his support within the armed forces to use it as instrument in the “service of the people.”

The capitalist class will fight to the bitter end to try and prevent the state sector becoming gradually strengthened, until it ‘overtakes’ and replaces the economic and state levers of capitalist power. Where necessary, the ruling class will resort to brutal military dictatorships. In the 1930’s, when the social basis existed for it, the ruling class turned to fascism in Spain, Italy and Germany. During the Spanish civil war, when the working class, for a period, controlled four fifths of Spain, the capitalist state and economy disintegrated and the ruling class temporarily lost control of the situation. However, because the working class did not finally overthrow capitalism and take power into its hands and establish workers’ and peasants' democracy, capitalism was able to reconstitute itself, and via the fascists, regained power and control of society. In Nicaragua, the Somoza state collapsed and the Sandinista FSLN took power. However, because capitalism and landlordism were not overthrown, and new democratic workers’ state was not established, capitalism and landlordism were able to regain control of society and to re-establish their full power.

Chávez has said that he supports the ideas of Trotsky’s Theory of the Permanent Revolution. Jorge Martin writes: “The process in Venezuela is a clear example of the Permanent revolution”. Well, yes, in that it illustrates the tasks of the revolution which are posed. But surely not, as yet, in what is the policy and programme that is actually being carried out by Chávez and the leadership of the workers’ movement.

Permanent Revolution

The Theory of the Permanent Revolution explains that historically the tasks of the bourgeois revolution – the solution of the land question, development of industry, a solution to the national question, securing of national independence and establishing a parliamentary democracy – were carried through by the national bourgeoisie. This was accomplished during the bourgeois revolutions, mainly in the 17th and 18th centuries, in Europe, which swept away feudalism. However, in the modern epoch of imperialism, in the neo-colonial countries where the tasks of the bourgeois revolutions remain to be completed, they cannot be accomplished by the national capitalist class. They are too weak and corrupt, and remain shackled to imperialism.

The experience of the 1917 Russian Revolution showed that the resolution of these tasks falls to the working class in the neo-colonial countries, with the support of the poor peasants, radical sections of the middle class and others exploited by capitalism and landlordism.

However, having taken power, the working class immediately comes into collision with capitalism and landlordism. Overthrowing capitalism and landlordism, and establishing a nationalized and democratically planned economy, is the only way to develop the productive forces. To achieve this, and to begin the task of developing the resources necessary to begin to build socialism, becomes wholly interlinked with spreading the socialist revolution internationally, including to the industrialized imperialist countries.

However, the idea of the ‘permanent revolution’ can also be wrongly used and totally distorted to justify a policy of incremental steps being taken – one at a time, little by little, until eventually capitalism disappears and “grows” over to socialism. In that sense, it is claimed the revolution is “permanent”. During the Spanish civil war, the Stalinists counter posed to the ideas of the permanent revolution the ‘stages theory’ of first defeating the fascists, then developing capitalism, and only when these tasks had been achieved could the socialist revolution be posed.

It is extremely positive that Chávez has put the idea of the permanent revolution on the political agenda in Venezuela. The crucial question is how it is understood and applied.

Jorge Martin favorably quotes Chavez, when he invited the ruling class to participate in developing the national economy. If they refuse Chávez warned: “We will take away the levers of power that they have, one by one”. [My emphasis – TS].

Jorge Martin concedes that the Venezuelan state is still “in the main, a capitalist state apparatus” and if “it remains untouched it will become a tool for smashing the revolution”. But it is already being used to attack workers who have been involved in struggle. More than 5,000 petrol workers at Anzoátegui have been involved in strike action, during September, this year. These workers continued to work during the bosses lock-out in 2002/3. At one demonstration, the police were turned on the marches and opened fire with live ammunition, wounding three workers. Health workers who occupied the Ministry of Labour were subject to a vicious attack and locked in the government building by thugs and denied food and water for days. These, and other attacks on workers involved in struggle, reflect a section of the state machine that still support the right-wing reaction and also a layer of Chávez’s regime who are opposed to the working class undertaking any struggles to defend their class interests.

Is Jorge Martin arguing that capitalism can be overthrown by taking away the levers of power the capitalists have “one by one”? The experience of Venezuela has already shown that the capitalists would seriously fight such an attempt at carrying through a revolution by incremental steps. The history of the international workers’ movements is tragically littered with failed attempts to achieve socialism in this way.

An animal is at its most dangerous when it is wounded. Any attempt to defeat capitalism in this way is akin to trying to disarm a tiger by removing one claw at a time. It will strike back and savage anybody attempting to do so. The same is true for the capitalist ruling class.

Lessons of the Portuguese Revolution

The developments in the Venezuelan state machine, and especially the army, are of crucial importance. Jorge Martin makes some very revealing comments about the splits which exist within it. He quotes a retired army general, Alberto Rojas, commenting on how the army is split: “There is a left wing, a right wing and within the left wing a section which calls itself socialist but are not and then there are those of us [Rojas] who are real socialists but who have always been in a minority”.

This raises important issues about the balance of forces in the army. It has increasingly been incorporated into government and the running of society. Of the 61 ministers that have served in the Chávez government between 1999 and 2004, 16 (or 26%) were military officers. Following the 2004 regional elections, of the country’s 24 governors, 22 were supporters of Chávez. Of these, 41% come from a military background. Chávez has an important base of support in the army but these forces are not homogeneous. Despite the radicalized layer which exists amongst the junior officers, the process of radicalization has not gone anywhere like as far as it did in Portugal from 1974/75.

Following the April 1974 overthrow of the Caetano dictatorship in Portugal by the junior army officers, the masses began to move into struggle and a revolutionary process began to unfold. Reaction made repeated efforts to halt this and on 11th March 1975 a group of reactionary army officers then attempted a coup. This provoked a massive social explosion and revolutionary ferment. In response, the workers took to the streets and factories and banks were occupied. The coup collapsed and not a single regiment could be found to act for the counter revolution.

By then the MFA (Armed Forces Movement), a radical organization of army officers that had led the April 1974 uprising, issued a declaration saying the revolution is a “transition to socialism”. Later, a wing proposed a plan “towards a socialist society” and called for neighborhood and workers’ councils”. Seventy per cent of the economy was nationalized. The London ‘Times’ carried an article with the headline: “Capitalism is dead in Portugal”. It almost was. However, because it was not snuffed out, capitalism was able to regroup and make a come back. This was done through the agency of the Socialist Party which had begun to turn to the right and was being advised by the German Social Democratic Party, which, in turn, was acting as a conduit for the American CIA.

There were different wings in the MFA and it was more radicalized than the army in Venezuela is at this stage. The MFA rightwing in Portugal, around Melo Antunes, collaborated with the Socialist Party in initiating the rolling back of the revolution. However, the ‘left-wing’, which included many officers who genuinely regarded themselves as revolutionary socialists, made important mistakes. In particular, because they lacked a rounded-out, clear understanding of the role of the working class, and what a real workers’ democracy entailed, they tried to impose their ideas from above, without an organized base amongst the working class. This allowed the Socialist Party and others to present themselves as the ‘defenders’ of democracy against the ‘undemocratic army officers’ and the Stalinist led Communist Party. This has important lessons for Venezuela.

Jorge Martin’s document is revealing about the assessment of the International Marxist Tendency (IMT) of the situation in Venezuela. Martin correctly warns about the different elements in the army and state. He even points out that Chávez “reflects even within himself all the contradictions of the revolution in Venezuela”. This is not what the IMT told us only a few years ago. Then the IMT leader Alan Woods argued: “Chávez has grasped the fact that the revolution needs to make a qualitative leap.” And in relation to Portugal and the 11 March 1975 coup attempt, we were told, “the same would apply exactly to Venezuela two years ago” [at the time of the coup in 2002]. This was clearly not the case. Events following the coup in Venezuela did not develop as they did in Portugal. In part, this was due to the role played by Chávez following the defeat of the coup. He wrongly adopted a policy of “national reconciliation” and urged people to return home.

The Cuban revolution

Jorge Martin then goes on to ponder what type of regime would be established if Chávez were to go all the way and overthrow capitalism and landlordism. “It would be wrong to think” Jorge Martin says, “that the abolition of capitalism in this way [Chavez taking away the capitalist levers of power one by one] would lead to the creation of a Stalinist regime like the ones that existed in the Soviet Union or East Germany”.

The overthrow of capitalism would undoubtedly represent a huge step forward. But how it was done and by which class would be important in determining the character of the regime that would emerge and the attitude Marxists and the working class would need to adopt towards it.

Significantly, Jorge Martin makes a list of countries where planned economies did exist but omits to mention Cuba. While sidestepping any direct comment on Cuba Martin inserts an insurance policy and correctly continues: “Clearly socialism is not a system that can be degreed from above. It requires the conscious participation of the workers in the democratic planning of the economy and in bringing about such a state of affairs…the expropriation of capitalism, even if implemented from above, would open up a situation of enormous revolutionary ferment, mass participation, the creation of workers’ committees, which would last for a period of time.”

Jorge Martin correctly argues that there is a strong anti-bureaucratic mood amongst the rank and file in Venezuela. But then goes on to argue that any attempt to impose a bureaucratic structure would not be easy and only arise from the isolation of the revolution, imperialist pressure and “demoralization of the masses over a long period of time”.

This raises one of the most important questions in the struggles that have taken place in Venezuela since Chávez came to power. The question of the conscious and independent organization of the working class, and its ability to put itself at the leadership of the socialist revolution. It is the working class, because of its collective consciousness and role in production, which can play the leading role in overthrowing capitalism and to lay the foundations to build socialism through the establishment of a democratic workers’ state. Without this collective, democratic check, even genuine forces coming from radicalized sectors of the army, or guerilla organizations adopt a top down approach. They often want the support of the masses but do not want the working class leading the movement.

This outlook has been clearly expressed by Hugo Chávez in the past. The British writer Richard Gott (who is very supported of Chávez) in his book, ‘In the Shadow of the liberator’, gives a revealing account of a meeting which took place involving Chávez prior to the failed coup he led in 1992. The question of involving civilians and calling a general strike in the attempt to remove the old right-wing corrupt government was discussed. Chávez, according to one participant, intervened bluntly, stating: “Civilians get in the way”.

The experience of the Cuban revolution (omitted by Jorge Martin) is very important in this respect and has important lessons for Venezuela. The abolition of capitalism and landlordism in Cuba represented an enormous step forward. The gains of the revolution, in the form of the planned economy, a free health care system, abolition of illiteracy and other social gains, are defended and supported by all socialists and the CWI.

The regime which took power, with Fidel Castro at its head, was tremendously popular and enjoyed mass support. During and following the revolution, there was an explosion of revolutionary ferment. The government established popular committees, Committees for the Defence of the Revolution – CDR’s. In these, large numbers of workers initially participated. There were even elements of workers’ control in the factories in relation to the day to day functioning of the managers and production.

At the same time, there were also important weaknesses. While the masses enthusiastically supported the revolution, it had not been led by a politically conscious movement of the working class. Because of a combination of factors, it was the guerrilla movement, under the leadership of Castro’s ‘July 26th Movement’, which led the revolution. The working class played an auxiliary role and only moved into struggle, in an unorganized way, once the guerrilla war was won.

This was to have crucial consequences for the character of the regime which was established. It was enormously popular but it was not a regime of workers’ democracy. From the beginning, it was a bureaucratic regime which ruled from the top down. The CDRs, in effect, became transition belts for the decisions of the regime. The crucial element of democratic workers’ democracy was absent and deprived the planned economy of the crucial oxygen it needs to fully develop.

It did not take the same horrific form of the grotesque dictatorships that developed in the former Soviet Union or were imposed in Eastern Europe. But a bureaucratic caste came to power and there was not real workers’ democracy. At times it also took repressive measures against its opponents. Some Trotskyists (who did make political mistakes) and others, were imprisoned, which indicated the bureaucratic character of the new Cuban regime.

Should Chávez eventually move to overthrow capitalism, without the conscious leadership and organization of the working class and the establishment of a workers’ democracy, a bureaucratic regime would inevitably be the result. This is a crucial element in the process now unfolding in Venezuela.

Jorge Martin writes that the re-negotiated contracts and joint ventures in the Orinoco basin in Venezuela have “strong resemblances to the way the Cuban revolution proceeded in the first two or three years”. This is an overestimation of both the rhythm and stage of development of the struggle in Venezuela. The Cuban revolution developed much more rapidly when Castro took power in December 1959-January 1960. This followed a US decision to slash sugar imports in response to the land reform being enacted in Cuba and the nationalization of foreign petrol companies in June 1960. Oil had been imported from Russia but the US companies in Cuba refused to refine it. The Cuban government appointed administrators to all refineries owned by Texaco, Esso and Shell and then nationalized them. When sugar imports were cut by the US, Castro immediately nationalized all foreign assets. In October 383 large Cuban industries were nationalized, along with the banks, and capitalism was stuffed out in less than a year.

In Venezuela, the processes are drawn out over a much more protracted time scale and have not yet gone as far. Unlike Cuba, trade between Venezuela and the US continues and has even grown. The US remains Venezuela’s leading trading partner. In 2006, the US exported US$8.2 billion in goods to Venezuela, making it the 22nd largest market for the US. Venezuelan exports amount to US$34.4 billion in goods to the US making it the 9th largest source of US imported goods. The US State Department, in July 2007, reported that 500 US companies still had representatives in Venezuela.

As explained earlier, only a handful of companies have actually been nationalized in Venezuela. Chávez has now been in power for just under a decade, and despite the protests of the ruling class and US imperialism, the incursions into capitalist interests are much less than in the Spanish, Chilean, Nicaraguan, and Portuguese revolutions.

It is true that the Spanish revolution unfolded between 1931-1937, and in Nicaragua it took the counter revolution ten years to reassert its control of the situation. Yet, during these events, the revolution took much bigger steps forward before being defeated as a consequence of the wrong policies adopted by the leadership of the movement.

Although capitalism has not been overthrown in Venezuela, there is already the emergence of strong bureaucratic elements within the Bolivarian movement and the state machine. This is a reflection of the ‘top down’ methods which have been deployed by the leaders of the movement at each stage. This is also a reflection of an important weakness which still remains in the movement. The absence of a strong, conscious, independent, organised movement of the working class and the lack of a genuine mass revolutionary socialist party and leadership.

Independent organization of the working class

If the socialist revolution is to be carried through in Venezuela, and a genuine workers’ and peasants’ democracy established, these obstacles need to be over come. These complications arise from two important factors, both international and national.

Firstly, they reflect the setback of political consciousness and organisation of workers’ movement internationally, following the collapse of the bureaucratic dictatorships in 1989/92. The regimes in Eastern Europe and the former Soviet Union were based on a nationalized planned economy, which despite the monstrous nature of the regimes that ruled in the name of ‘socialism’, strengthened the idea that a socialist alternative to capitalism is possible. The collapse of these regimes provided the opportunity for the ruling class internationally to launch an ideological offensive against the idea of socialism and class struggle. The leaders of the old workers’ parties embraced capitalism and were transformed into openly capitalist political parties. The lack of a powerful socialist alternative to combat these ideas allowed the political consciousness and organization of the working class to be thrown back. The new wave of struggle in Latin America represents the first important steps of a new generation of workers and youth to overcome these set backs.

Secondly, the question of the traditions of the working class in each country is also very important. In Latin America, there are broadly two main traditions in the workers’ movement. In countries like Chile, Bolivia, and Brazil, the workers’ movement succeeded in building its own independent political organizations.

These usually arose due to the existence of a powerful section of industrial workers and the impact of the 1917 Russian Revolution, leading to the establishment of strong communist parties. This reflected the immense appeal of the Russian revolution and the attempts of workers internationally to follow its example. While the communist parties were often started by very small forces, they rapidly grew and establish a powerful base of support. Despite the wrong policies later adopted by the leaders of these organisations they left a powerful tradition of independent workers’ organization and struggle. In the countries where they existed, this still partly shapes the political consciousness and outlook of the working class.

Alternatively, there is a tradition of left, radical, populist nationalist movements, led by sections of the bourgeoisie or petty bourgeoisie, often from a military tradition. These were particularly powerful in countries like Peru, Argentina, and also Venezuela.

This can often result in the mass movement looking towards ‘the leader’, the ‘caudillo’, to introduce social and economic reforms from above rather than through the organizing of a conscious movement from below. Historically, there is, undoubtedly, a strong element of this present in the movement in Venezuela.

Mass movement from below

Revolution, for Marxists, means that the masses enter into the arena of struggle, and, for the first time, begin to take their destiny into their hands and shape their future.

In Venezuela, the masses at specific conjunctures have entered the arena of struggle – in a spontaneous way from below, when the threat of counter revolution was posed. For example, at the time of the coup in 2002, the bosses lock out 2002/3, the attempt to remove Chávez through the re-call referendum in 2004. More recently, in the Presidential election, in 2006, when in the first stages it seemed there was a serious threat from the right wing. Following each movement, which were spontaneous and from below, and not as a result of the leadership, a political radicalization took place. Once the Chávez regime was stabilised there was a stepping back from active involvement and participation by the masses.

The events surrounding the attempted coup and the spontaneous movement from below are well depicted in the excellent film documentary, ‘Chávez – Inside the coup’ by Kim Barley and Donncha O’Brian. The masses poured onto the streets following the coup, demanding that Chávez be re-instated as president. They marched chanting: “The cream at the top – the thieves of the old regime have returned”. Significantly, the Spanish daily, El País, reported (15th April 2002) what had taken place on Ochila Island, where Chávez was imprisoned. The new regime announced, falsely, that Chávez resigned. A young rank and file soldier waited with Chávez while officers left the holding room. The soldier asked Chávez, “look, my Commandante, clarify one thing for me. Is it true that you have resigned?” Chávez replied: “No son, I have not resigned and I will not resign.” The soldier said: “But this is what is being said throughout the country. They say you have resigned and left the country”. The soldier then asked Chávez to leave a note in the rubbish bin and he would return and get it later. The soldier did so and faxed the statement to Caracas where it was distributed in thousands to the demonstrators. The mass movement to defend Chávez exploded from below and was not prepared or planned by the leadership.

All revolutions have there own rhythm and tempo passing through different ebbs and flows. The 1917 Russian Revolution passed through the February revolution, the period of reaction during the July days, and other important phases, before the working class took power, in October 1917. This was possible because of correct and accurate assessment of the mood and consciousness of the working class and masses at each stage by the Bolshevik party and, in particular, the crucial role played by Lenin and Trotsky. In the Spanish revolution, there were also many ebbs and flows, as the struggle unfolded between 1931-37.

However, in Venezuela, the process is unfolding over an extremely protracted period of time, with far fewer incursions, so far, being made into capitalism. This has been due to the combination of Chávez being able to finance reforms from oil revenue and weaknesses in the political conscious, leadership and level of organization of the masses.

Support for the reforms exists and a fear of the masses of the threat of counter revolution. At the same time, there is not a rounded-out, conscious political understanding and independent organization of the masses about how to take the revolution forward. There is an absence of independent workers parties and organizations – built through struggle and shaped through the accumulated experience of the activists.

The UNT and PSUV

The building of independent organizations of the working class – political parties and combative trade unions, democratically controlled by the working class, and democratic committees of struggle and defense, is one of the crucial tasks now facing the Venezuelan working class.

Chávez and the leadership of the movement launched trade unions from above, through the establishment of the UNT (National Union of Workers). More recently, they launched a new party, the PSUV, and called for an “explosion of communal power”. Workers Councils, Communal Councils and other organizations have been decreed by Chávez. Government propaganda has now called for the “progressive transfer of all power, political, social, economic and administrative to the communal power” to do away with “the old structures of the bourgeois capitalist state which only serve to stop the revolutionary impulse of the masses”.

The launching of the PSUV could be a welcomed step. But if it is to become a genuine, independent instrument of struggle for the working class it cannot simply be built as the result of a decree from above. Any organization formed in this way, unless seized hold of and transformed by the working class, will inevitably be bureaucratic, top-down, and not an instrument of struggle for the working class.

The formation of the UNT, which unionises about 12% of the workforce, while representing a step forward, at the same time, is heavily bureaucratized. The leadership remains un-elected and has not yet developed into a real instrument of struggle for the working class. It was formed, in part, reflecting the demands of workers, for a new union confederation, as opposed to corrupt, pro-capitalist CTV (Venezuelan Workers' Confederation), and also the need for Chávez to establish a union base after the bosses’ lock out, which was supported by the CTV.

According to many reports, the PSUV, which Chávez claimed was launched to fight bureaucracy, has a large affiliation .Yet there are warnings and dangers in how it is being built by the leadership. Chávez appointed a committee to organize the new party, included two former army generals. All the parties in the governing coalition, like the MVR (Chavez’s Movement for the Fifth Republic), the social democratic PPT (Fartherland for All) and PODEMOS (We Can), were told to dissolve into the new party. Many of the governing coalition parties did this without even an internal party discussion and debate. All those political groups who support Chávez are told they should now join the PSUV. The PCV (Communist Party) has refused to accept this, at this stage. If the PSUV is run in this way, and merely becomes an amalgamation of the existing parties, which lack, in the main, an active rank and file amongst the working class, it will not develop into an a genuine independent mass party of the working class.

The leadership has approached the formation of this party as establishing ‘the only revolutionary force’. As Chávez put it: “We need one party, not an alphabet soup with which we would be falling over each other in lies and cheating the people” (Report by Gregory Wilpert – Venezuelanalysis.com 18/12/06). A genuine revolutionary socialist party would not be based on those who “lie and cheat the people”. But is the insistence of forming one party a genuine means of unifying the movement on a democratic basis or an attempt to control, from above, opposing views on the left?

Of course, it is better if there is a unified and democratic party of the working class in which debates, struggles and discussions can be organized and take place. In some European countries, like Britain and Belgium, this was the tradition for a period of time. The British Labour Party, based on the trade unions, despite its pro-capitalist reformist leadership acted for many years as the political point of reference, discussion and struggle for the working class. In it a struggle took place between the left and right reformists, and also those who fought for Marxist policies and ideas, the Militant Tendency, the forerunner of the Socialist Party in Britain today. These debates were, ultimately, about which policy, programme and tasks needed to be adopted by the workers’ movement. But this came to an end as the Labour Party, like other social democratic parties, fully embraced capitalism in the 1980's and 1990's, and this means that the building of new broad parties of the working class is posed in many countries today. Such broad, democratic parties could unify the working class in action while providing the arena in which the socialist alternative to capitalism could be debated by all tendencies and groupings within the workers' movement.

However, the establishment of one party for the working class cannot be decreed from above. Other parties of the left and workers may yet still emerge, and the Communist Party remains outside of the PSUV. Orlando Chirino, one of the left leaders of the UNT, opposed joining the PSUV, and called for the creation of another independent party. If this take place, it would be wrong to insist that all these forces dissolve into the PSUV. Marxists, in such a situation, would argue for the methods of a united front to be adopted. For all those parties that oppose the right and counter revolution, that support socialism, to fight together on common issues and against the threat of the counter revolution. During such struggles, open democratic debate about the policy and programme necessary to carry through a socialist revolution would be possible.

There has been some publicity about the massive inscription onto the party membership lists. Jorge Martin echoes Chávez’s claim that 5.6 million people registered to join the PSUV – two thirds of the number who voted for Chávez’s, in the 2006 election! This, Jorge Martin argues, shows the “enormous reserve of support and enthusiasm for the revolution among the masses”.

However, it is necessary to ask what this process really represents. What is the real level of participation amongst the working class in the PSUV? Jorge Martin claims its activist base is 1.5 million. According to reports by Marxists in Venezuela, in one of the largest workers’ districts of Caracas, 3,300 signed up to join the PSUV. According to the guide lines laid down by the Presidential Commission, this should mean the formation of 10 party branches with 300 members, in each. Yet, at the branch meeting, according to some activists in the area, the attendance has been approximately 5% of this figure. Many of the branches are, in reality, controlled and run by old councillors from the former MVR and other parties.

A layer of workers undoubtedly joined the PSUV looking for a means of taking the revolution forward. How many others found their names transferred from the electoral lists or joined – as in the tradition in Venezuela – as a means of securing their employment in the public sector - needs to clarified.

This does not mean that members of the CWI do not join the PSUV. However, if it is to become a genuine independent instrument of struggle for the working class it will be necessary to fight for it to become fully democratic, with an active rank and file and a revolutionary socialist programme. It will need to include the right of tendencies and political platforms to be organized and to be open for genuine debate and discussion and not be simply run by officials from the old parties. Above all, it will need a revolutionary socialist programme to overthrow capitalism. Unfortunately, the International Marxist Tendency (IMT) has not commented on how the PSUV was formed or what structure, programme and type of party it needs.

The decreeing of Workers Councils by the Chávez government is not the same as the building of committees of struggle by the working class. In Chile, between 1970-1973, the working class formed the Cordones Industriales. These were committees of struggle formed by the working class in the factories. Delegates were elected and subject to recall by the workers. In Santiago and Concepción, these committee began to link up on a district and even a city wide basis.

They were, in embryo, a similar type of organization to those the working class established in the Russian revolutions of 1905 and 1917 – the Soviets. Although initially proposed by the Menshevik wing of the Russian Social Democratic Labour Party in the 1905 revolution, the soviets became mass, multi-party organizations of the working class and peasants through which the struggles and revolutions were conducted. They were the basis of the workers and peasants’ government, which was established in October 1917. One of the weaknesses of the Spanish revolution was that such organizations were not built.

The Workers Councils and Community Councils that the Venezuelan government has set up are not based on the election of delegates elected in the work places or communities, which are subject to recall. These councils are not linked together on a district or city wide basis. As yet, they have a quite limited level of participation. They have more in common with the CDRs, which were set up after the Cuban revolution and which became the transmission belt for the government’s decisions, from the top down. However, the CDRs had a much higher level of participation than is currently the case with the councils in Venezuela. In Cuba, the CDRs were not the basis for a regime of workers’ democracy, where the working class and poor peasants for the basis of government and management of society.

Marxists do not have a fetish about organizational forms. In Cuba, the CDRs initially involved large participation of the masses. In this situation, Marxists would have fought to transform them into genuine democratic councils of struggle, as a basis to establish a genuine workers’ and peasants’ democracy. If the proposed councils in Venezuela assume widespread participation, and become a point of reference for the masses, Marxists would also fight for them to be transformed into real instruments of struggle.

It is not possible to successfully complete and develop the socialist revolution in one country. This is especially the case in the neo-colonial world although it applies to all countries. The domination of the world economy, the need to develop the national economy and the material base for socialism, as well as resisting the threat of the imperialist powers to defeat a workers’ and peasants’ government, means the revolution needs to be spread internationally. In the recent period, Chávez pursued an international policy that increasingly brought his regime into conflict with US imperialism. Through the use of the enormous oil reserves, this policy has been based on two elements. On the one hand, providing material aid to some countries, such as Bolivia and Nicaragua, and also to Cuba, while, on the other hand, Chávez has sought to establish bilateral trade agreements with a series of countries including China, Russia and, more recently, Iran.

International socialist policy

The role of international policy for a socialist government is of crucial importance. The globalization and integration of the world economy, and inevitable attempts by imperialism to sabotage and overthrow a workers’ and peasants’ democracy, mean that socialism cannot be built in isolation in a single country. As the experience of the Russian revolution also demonstrated, to develop the material base and productive forces necessary to begin to build a socialist society, the revolution would need to be spread internationally, to the industrialized and economically developed countries.

This also applies to a socialist revolution in Venezuela. Despite the vast oil supplies, Venezuela’s economy is not self sufficient, especially in agriculture. Venezuela imports about two thirds of its food requirement.

A workers and peasants’ democracy, with a revolutionary socialist programme, would need a clear perspective of spreading the revolution –beginning with the other Latin American countries. The idea of establishing a Democratic Socialist Federation of Venezuela, Bolivia and Cuba, would offer the prospect of integrating these three economies, based on a democratic, state plan of production and workers’ democracy, and spreading the revolution to the rest of the continent. This, together with an appeal to the working class in the US for solidarity and support, is the way to defeat imperialism and to develop the international base of a socialist revolution.

Unfortunately, this has not formed the basis of the international policy of the Chávez regime. Rather Chávez sought to form trade agreements with a series of pro-capitalist, viciously anti-working class regimes, in Russia, China and Iran, in an attempt to create an anti-US alliance – irrespective of in whose interests these regimes rule. Chávez signed agreements with Iran since 2001, worth an estimated £10 billion in potential investments.

Scandalously, this led Chávez to heap praise on Putin, the Chinese regime, and more recently, the Iranian president, Mahmoud Ahmadinejad. During a visit to Venezuela by the Iranian president, in September 2007, Chávez praised Ahmadinejad as, “one of the greatest anti-imperialist fighters”. Referring to a visit made by Ahmadinejad to the US, Chávez’s commented: “An imperialist spokesperson tried to disrespect you calling you a cruel little tyrant. You responded with the greatness of a revolutionary. We felt like you were our representative.” This same Ahmadinejad has brutally repressed striking bus workers in Tehran and others fighting for their rights.

A workers’ and peasants’ government with a correct policy may find itself isolated for a limited period of time and could be compelled to seek temporary trade agreements with various capitalist governments. This situation confronted the Bolsheviks following the Russian revolution. However, while it may be necessary to hold formal state relations, this does mean it is correct to heap praise on so-called “revolutionaries” like the reactionary leaders Ahmadinejad and Putin.

For a revolutionary socialist government, any formal relations would also need to be coupled with open, direct appeals and acts of solidarity from the trade unions and revolutionary party in a socialist country to the workers and masses in Iran, Russia and other countries.

But the approach Chávez adopts towards these regimes gives a further weapon to imperialism to attack Venezuela. It also damages the Chávez regime in the eyes of workers, internationally, not least amongst workers and youth in Iran and Russia, who struggle in opposition against Putin and Ahmadinejad.

The need for a genuine socialist internationalist policy, with the perspective of spreading the revolution to other countries, beginning in Latin America, combined with an appeal to the Latino masses in the US and the working class, as a whole, is an essential part of the programme, policy and action needed to win a successful socialist revolution in Venezuela. Such a policy is the only effective way to defeat the threat of imperialism and counter revolution.

The stormy events that are taking place in Venezuela, Bolivia, Ecuador and other countries in Latin America, raise crucial questions about how to achieve a socialist transformation of society. This document is presented as a contribution to that discussion, with the aim of helping to clarify how this is to be achieved. Through a combination of experience in the struggles unfolding, and an exchange of opinions which draw on the lessons of the historical international experiences of the working class, the Committee for a Workers’ International (CWI) is confident the Venezuelan working class will find the way to building the organizations, and programme necessary to carry through a successful revolution, as an integral step towards the establishment of a Democratic Socialist Federation of Latin America. This, in turn, can be a step towards defeating imperialism and capitalism, and to building a socialist world.




The challenges facing the Venezuelan Revolution

By Jorge Martin, 05 September 2007

The overwhelming victory of Chávez in the presidential elections last December marked a new shift to the left in the Venezuelan revolution, followed by the setting up of the PSUV, nationalisations, workers' control, enabling power. In a speech at the summer school of the International Marxist Tendency, Jorge Martin analysed the stage the revolution is at, the dangers it faces and outlined the way forward.

The Venezuelan revolution is the most advanced point in the world revolution. The International Marxist Tendency recognised this early on and we have analysed its development, tried to intervene and organise solidarity for it. Now, nine years later, everybody is writing about Venezuela. The problem is that if you try to impose ready-made schemas into living processes, taking this or that detail, this or that statement by Chávez or someone else, you will not be able to understand anything. What is needed is an analysis of the process as a whole, an analysis of the class forces that are involved in this struggle, the direction in which they are going and the international context in order to understand the most likely course of events.

What we have done is to apply the Marxist dialectical method of analysis to the situation in Venezuela. The Venezuelan revolution has a lot of peculiarities and elements that are specific to the way it has developed, and it could not be otherwise. Every real social process has characteristics that are rooted in the history of the country, the particular development of its economy, the historical experience of the different classes involved in the struggle. This is what needs to be analysed in order to understand the Venezuelan revolution. In order to do so, historical parallels with the experience of revolutions in other countries and of previous movements in Venezuela, are certainly very useful so long as we are aware of the limitations of any historical analogies. In the case of Venezuela, a little knowledge of magic realism is also very useful! Marxism starts from the real situation as it is, then draws general conclusions from this and then always returns to the real situation on the ground.

Massive Bolivarian demo before the election in December

The December 3rd elections marked a new turning point in the revolution and one which meant a new sharp turn to the left in the situation. One year ago, the conference of the IMT passed a statement on the Venezuelan elections[1]. One important thing that we said at the time is that a mood of impatience was developing amongst the revolutionary masses, a mood of "we have been talking about revolution for a long time, but nothing decisive seems to have changed". And we said that this mood was going to be an important factor after the elections, in which the masses would vote decisively to defend the revolution but would then expect and demand a fundamental break with the past.

The election campaign started quite flat and the main line of Chavez's speeches and electoral slogans was based around the themes of "peace" and "love". In elections, reformists always insist, you have to moderate your language in order to win over the middle ground. However, as we had explained, this was not a normal electoral contest but a decisive battle between revolution and counter-revolution.

The opposition also presented their nice "democratic" face, gathering round Manuel Rosales who promised to give lots of money to the poor.

The "democratic" credentials of Manuel Rosales include having supported the coup in 2002, which shows the real character of the opposition. Their plan was clearly to either withdraw from the elections before December 3rd, or to create chaos on election day in order to de-legitimise the electoral process. In this context, two weeks before the elections, the opposition managed to organise a large rally in Caracas. This was the largest demonstration that the opposition had managed to organise for a very long time, with maybe 200,000 or 300,000 people present. It was at this point that the masses understood that there was a serious threat from counter-revolution and that a decisive response was needed.

Plan Oligarcas Temblad

If you look at the history of the Venezuelan revolution, this is a feature that has repeated itself over and over again. The reformists try to conciliate and to negotiate with the opposition, this encourages the counter-revolution to move forward, and it is down to the revolutionary masses to mobilise and defeat the counter-revolution, pushing the whole process forward again. After the Rosales rally the whole character of the election campaign changed. The rank and file Bolivarian organisations set up what was called the "Plan Oligarcas Temblad" ("Tremble Oligarchs Plan")[2]. On the Sunday before the elections there was yet another mass demonstration of strength of the revolutionary forces on the streets of Caracas. It is difficult to know how many were there, but it could be up to 2 million people, in what was one of the largest demonstrations in the history of the revolution since 1998.

On the day of the elections itself, the revolutionary masses came out and occupied the streets in order to prevent any counter-revolutionary adventure. From 2 or 3 o'clock in the morning hundreds of thousands, millions of people, came out on the streets, queued outside the polling stations and did not go back home until the victory had been announced. And this was the only thing that prevented the counter-revolution from implementing its plan to sabotage the elections. They feared that any counter-revolutionary event would further enrage the revolutionary masses and they would be swept from the scene.

The size of the election result is a faithful reflection of the enormous reserve of support for the Bolivarian revolution. While in 1998 Chávez received 3.6 million votes, on December 3rd he won 7.3 million (63%). He won in every single state of the country including Rosales' home state of Zulia. The states with the highest votes for Chavez were: Delta Amacuro (77.9 %), Amazonas (77.8 %), Portuguesa (77 %), Sucre (73.7 %) and Cojedes (73.3 %). In fact in 8 states the vote for was higher than 70%, and in another 11 states the vote was between 60 and 70%. Chavez won in 92% of the councils, and in 90% of parishes (administrative units into which every council is subdivided). In nearly half of all polling stations Chavez received more than 70% of the votes (while the opposition only went over 70% of the votes in 3% of the polling stations).

There is no real precedent for such a massive electoral support for a revolutionary movement anywhere[3] and this is a testimony to the process of growing political awareness of the masses that has taken place in Venezuela over the last nine years. In fact, the more radical the message of Chávez and the revolution has become, the wider the popular support for it.

Celebrating election victory

Immediately after the election, as was to be expected, the reformists started their offensive to try to water down the meaning of the election results. The main line of argumentation was "now for the first time we have a nice democratic opposition because they have recognised the election results", and "we should therefore negotiate with them", "we should include them in the national assembly" (which they had boycotted in December 2005), "we should have a bi-partisan commission for constitutional reform".

But the mood of the masses was completely against this and Chavez himself from day one gave the reformists a clear answer by moving directly in the opposite direction of the proposed conciliatory line. On election night itself he said "this is a victory for socialism, this is a victory for socialist revolution". Then in the space of two or three weeks he made a series of announcements that indicated a clear shift to the left. He said "there is no question of including the opposition in the national assembly; if they want they can stand in the next elections in 2008." He announced the setting up of the United Socialist Party of Venezuela and he did so as a way of fighting against bureaucracy and corruption within the leadership of the revolution. And in that speech he also said to the leaders of the parties in government, "you have to remember that the people have voted for socialism, the people have voted for Chavez, not for any of these parties," which is true of course.

He also made some changes in the composition of the government which indicated a shift to the left. He replaced the vice-president Jose Vicente Rangel, who was seen as a reformist, with Jorge Rodriguez who is seen as a hard liner and a left-winger. For the first time in Venezuelan history a member of the Communist Party and a self-confessed Trotskyist were included in the government. Regardless of the actual politics of David Velasquez[4] and Ramon Rivero[5], the way Chavez announced their political affiliation in such a public way sent out a clear message that "we are moving to the left" and "there is no problem with Communism, no problem with Trotskyism."

He also announced that he wanted to be given enabling powers for a period of time in a whole series of areas of policy. As was to be expected, not only the opposition, but also sectarians and reformists in Venezuela and abroad criticised this move, arguing that it was a dangerous move towards authoritarianism. However, the revolutionary masses in Venezuela understood this very clearly as a move to settle decisively a whole number of issues, and also as an indication of mistrust in the ability of the National Assembly to carry out those tasks[6]. This is also related to the way in which many of the most important reforms of the revolution were introduced in December 2001 by means of 49 enabling laws, a move which provoked the revolt of the oligarchy and led directly to the coup in April 2002.

"Five engines for socialism"

In the economic field he announced that "everything that had been privatised would be re-nationalised" and immediately moved to take into public ownership CANTV and EDC, the telecommunications and electricity companies.

These announcements (the PSUV, the new government and its programme, based around the "five engines for socialism") set the tone for the new stage in the Venezuelan revolution which opened up after the presidential election victory.

In order to understand the current situation in Venezuela it is worth looking at three different aspects, three main contradictions, that we pointed out in the IMT statement on the elections a year ago: a) the question of the state, b) the question of the economy and c) the question of revolutionary organisation and leadership.

The class character of the state

In relation to the question of the character of the state we can say that the Venezuelan state is still, in the main, a capitalist state apparatus. However, this state apparatus operates in conditions of revolution and is therefore riddled with all sorts of contradictions and has been weakened as a tool of the ruling class. And at this particular moment in time it is not under the direct control of the capitalist class, in the sense that the ruling class cannot, for now, use this capitalist state in order to impose its class rule. However, this does not mean that the state apparatus even now has ceased to be a source of sabotage and blocking of the revolutionary initiative of the masses; and if it remains untouched it will eventually become a tool for smashing the revolution. It is clear that there is certain understanding of this problem among the rank and file masses of the Bolivarian revolution and even among some layers in the leadership, but unfortunately there certainly is no clear idea of how to solve this problem.

Chavez in his speeches in January announced the "five engines towards socialism", a clear indication of the general direction the masses want to take, and one of them is the question of the state. He said there should be an "explosion of communal power", that is, that power should be transferred to the communal councils that only now are being set up. And in this leaflet explaining the five engines, which was printed in hundreds of thousands of copies by the Ministry of Popular Power for Communication and Information, it says "we, the currently existing power, must progressively transfer all power, political, social, economic and administrative power, to the Communal Power... so that we do away with the old structures of the bourgeois capitalist state which only serve to stop the revolutionary impulse of the masses". This is the first time that Chavez has spoken openly about the "capitalist state" and this is something that the reformists in the leadership of the Bolivarian movement do not like and do not agree with.

This shows that a wing of the movement sees the problem posed by the capitalist state and is attempting to come up with a solution[7]. The communal councils already exist in many places around the country, but in some areas they have been infiltrated by bureaucrats, career politicians, local mayors and councillors, who use them to build a power base for themselves. As with many other revolutionary initiatives, unless they are part of a conscious and organised plan to smash the capitalist state and replace it with a revolutionary state, based on the workers' councils and the communal councils, they will probably be left mid-way. They can only survive and be effective as part of a national network of elected and recallable representatives, closely linked to the workers' councils in the factories, which would constitute the basis of a new revolutionary state.

Armed bodies of men

Diosdado Cabello, on the Bolivarian right wing. The most important part of a capitalist state is the army and the police, the "armed bodies of men in defence of private property". And the question of the army has come to the fore in the last few weeks. Also in this field there has already been an attempt to deal with the problem. Proposals have been made to first increase of the size of the Reserve Force to two million people, and then to create a Territorial Guard. There is a general idea of moving towards a situation of arming the people, and Chávez has repeatedly said that this is the only guarantee against imperialist intervention. But once again these proposals for the Reserve Force and the Territorial Guard have not been fully implemented. Although initially everybody insisted on the peaceful character of the revolution, there is now a widespread recognition and acceptance of the fact that the revolution has to be armed against the dangers of external and internal counter-revolution, but the instruments for arming the people have not been put in place.

In the last couple of weeks there has been an open and public debate about the question of the Army. This started with the question of whether military officers should be allowed to join the PSUV or not. A top ranking military officer, retired General Alberto Müller Rojas, was appointed as part of the organising committee of the party and he said that military officers should be allowed into the party and that there were already secret lists of officers who wanted to join. This created a big conflict since the Constitution says that military officers cannot be part of any party.

Alberto Müller Rojas

Then the discussion moved to the question of the character of the Army, because Muller Rojas defended "the people in arms" as opposed to a professional army, while other officers defended a small core professional army backed by a militia. Once the debate opened up a whole number of other issues were raised in the discussion. Müller Rojas admitted that the army is divided and that military officers are divided along political lines. There is a right wing and there is a left wing, and within the left wing there are those who call themselves socialists but are not and "then there are those of us who are real socialists who have always been in a minority." And he added that this could not be otherwise because military officers do not come from Mars, they come from within society and reflect the political divisions in society. He also said that it was a contradiction for Chavez to say that military officers cannot join the PSUV and at the same time change the official oath in the Army to Fatherland, Socialism or Death[8].

Regardless of the way in which Müller Rojas conducted the public polemic, which was perhaps not the most tactful, and his confused political views on many aspects, this revealed something that had been denied until that point. The official line had been that the army is loyal to Chavez, united and at the service of the people. It is clear that the most reactionary military officers purged themselves out of the Army in 2002 by participating in the coup in April and the attempted coup in December (when they declared themselves "in rebellion" at the Altamira Square). Of those who remained the majority are probably loyal to Chavez in one way or another, but the reasons why they are loyal to Chavez are varied. Some of them are loyal simply because Chavez represents the official government of the day, others reflect the corrupt nature of the bourgeois state and plead loyalty simply because they are making a lot of money through legal and illegal businesses they have access to by being in the Army, and many of them probably feel uneasy about all this talk about socialism. It is clear that if the situation came to a decisive turning point of taking over the means of production and destroying the capitalist state most of them would be on the side of reaction.

Müller Rojas in his polemics also attacked General Raul Isaias Baduel, who played a key role in the defeat of the coup in April 2002. Müller Rojas said that since Baduel became the Minister of Defence he had prevented members of the Presidential General Staff (basically the president's political advisors on military affairs) from attending the meetings of the Superior Junta of the Armed Forces, in a move to keep politics out of the army. Then Baduel, who had just been removed as a Minister of Defence, also came into the debate in his departing speech. While he dressed his speech in socialist phraseology, what he said is very clear[9]. For instance, he declared that, "socialism is about distributing wealth, but before you can distribute wealth you have to create wealth" which is a typical argument of reformists everywhere against socialism and nationalisation. He added that "a regime of socialist production is not incompatible with a political system which is profoundly democratic with counter-balances and divisions of power," adding that "we must move away from Marxist orthodoxy which says that democracy with division of powers is just an instrument of bourgeois domination". He said, "yes, we must go towards socialism, but this must be done without chaos and disorganisation". And using a very strange analogy with Lenin's New Economic Policy he said, "we cannot allow our system to become a type of State Capitalism, where the state is the only owner of the means of production". And added "war communism in the Soviet Union taught us that you cannot implement sharp changes in the economic system... the wholesale abolition of private property and the brutal socialisation of the means of production always have a negative effect in the production of goods and services and provoke general discontent amongst the population". It is quite clear what he is saying. While using examples about War Communism and the NEP in Russia, what he is really saying is: "we should not go towards nationalisation of the economy".[10]

It is not by chance that Baduel wrote the prologue and publicly presented the new edition of Heinz Dieterich's book "Socialism of the 21st Century". Dieterich's ideas which amount to saying that the question of property of the means of production does not matter under socialism, have become very popular amongst the reformists in Venezuela, because they allow them to continue talking about "socialism", while distancing themselves from what socialism really means: the nationalisation and planning of the economy under democratic workers' control.

As I said before the Venezuelan revolution has an element of "magic realism", so he ended his speech by quoting the "seven principles of the samurai warrior" and made an appeal to "Yahve, the elohim of all armies, supreme maker of all things to bless and keep forever the Bolivarian Republic of Venezuela". But leaving aside the peculiar philosophical views of Baduel, what is clear is that he deliberately did not use the "Fatherland, Socialism or Death" slogan which has become the norm in the Venezuelan army.

The position of Chavez in this conflict was also contradictory because although he said that military officers should not be part of the PSUV and that the army should not be "party-political", he also appointed a new Minister of Defence who is seen as a left-winger. In any case, Chavez reflects even within himself all the contradictions of the revolution in Venezuela. The pressure of opposing class forces has a reflection on his speeches and actions. You can maybe get a glimpse of what Chavez's policy is regarding the army from one thing that Müller Rojas said, "one condition that I put to the president when he asked me to return. I said that I could not retire from political activity. He said to me ‘do it, but with discretion'." Chavez obviously realises that the army is crucial and does not want to create a conflict inside it unnecessarily or openly or too early, but by trying to prevent the open expression of a conflict that already exists, he may end up with an even more virulent crisis erupting in the future.

Alcasa workers train as part of the Army Reserve.

The policy that the CMR advocates in Venezuela is for open political discussion within the army, for cells of the PSUV to be organised openly inside the army involving rank and file soldiers mainly, but also revolutionary officers; there should be control over the officers on the part of the revolutionary soldiers; the proposal of the territorial guard should be taken up by revolutionary and working class organisations to set up workers' militias which is perfectly possible and would also be "legal"[11], so that the structure of the capitalist army can be smashed.

But the question of the state goes beyond the army. There is constant bureaucratic sabotage of the revolutionary initiative of the masses and of many of the proposals of Chavez himself. In an interview in Panorama Digital, Chávez described it in this way: "The main threat is within. There is a constant bureaucratic counter-revolution. I am an enemy on a daily basis. I have to walk around with a whip, because I am being attacked from all sides by this enemy, the old bureaucracy and a new one which resists change. So much so that I have to be constantly on guard when I give any instruction, and follow it up so that it is not stopped, or diverted, or minimised by this bureaucratic counter-revolution which exists within the state."[12]

More recently, the removal of William Mantilla as vice-minister of Peoples' Power for Participation (the Ministry run by Communist Party member David Velasquez) has highlighted the issue of bureaucracy even in a Ministry which had been created anew. Mantilla is a well-known revolutionary activist from the Bloque Popular de la Vega and the Coordinadora Popular de Caracas. He was asked to be vice-minister precisely in order to promote the communal councils. In his letter of resignation he describes how his work was constantly "blocked in order to prevent the development of our activities according to proposals presented during my mandate (a clear example of this was that I was never given access to the data regarding communal councils, not even given access to the access code for [communal councils national database] Sicom)". So, here was, according to all accounts, an honest hard working revolutionary who tried to use a position within a Ministry in order to promote the development of communal councils (a directive that comes from the President) and was removed precisely for doing so, and replaced by a grey functionary, a bureaucrat.

The problem is clear, as Marx explained after the experience of the Paris Commune, "the working class cannot simply lay hold of the ready-made state machinery, and wield it for its own purposes."[13] The experience of the Venezuelan revolution in the last few years provides many examples that confirm this. One cannot simply put honest revolutionaries within structures that replicate the capitalist state and expect these to work better. The whole of the old state machinery has to be done away with and replaced with a new one, based on democratic elections with the right of recall and accountability of all functionaries, in which no functionary receives a wage higher than that of a skilled worker, and in which there is no standing army separate from the people, but the people in arms.

The economy

The second question we should look at is that of the economy. Official figures show that the Venezuelan economy has been growing very fast, for 15 consecutive quarters at an annual average rate of 12.4%. This would make Venezuela the fastest growing economy in the Americas and probably the second fastest growing economy in the world after China. Unemployment has gone down from 15% in 1999 to 8.3% in June 2007 and the poverty rate has been reduced from 55.1% at the lowest point of the recession caused by the sabotage of the economy and bosses lock-out in 2003, to 30.4% at the end of 2006. However, these figures do not tell us the full story.

In a nutshell, what we have in Venezuela is an economy fuelled by massive public investment while the private sector stagnates. At the same time the government has introduced a whole series of checks and controls over the economy, and as we have seen in many examples throughout history with reformist governments, the introduction of checks and constraints over the normal workings of a capitalist economy create a situation of chaos because the market economy is not allowed to work normally but at the same time it has not been replaced by a democratic plan of the economy either.

Since the sabotage of the economy in 2002, the government has introduced a whole series of economic controls. The prices of basic foodstuffs has been fixed; there is a law banning employers from sacking their workers (although this is not necessarily implemented); there are foreign exchange controls; there is control over access to hard currency that companies can use to trade with the outside world; there are now even controls over what companies import and they have to prove that what they want to import cannot be produced in the country; rents have also been frozen; there are controls over interest rates; there are control over the amount that banks have to lend to different sectors of the economy, ...[14]

And what is the effect of all these controls? Sabotage and disorganisation of the economy on the part of capitalists! Partly this is deliberately for political reasons, sabotage of the economy in order to undermine the base of support for the government and the revolution. Partly it flows from the basic economic facts of capitalist economics, where producers are saying we cannot sell at these prices, it is not profitable.

The key economic feature in Venezuela now is that this economic growth is sustained solely through massive public investment, which in turn is sustained by very high oil prices on the world market. And this is one of the factors, though not the only one, which has allowed this revolution to be so prolonged in time (7 or 8 years now). Public sector expenditure represented 25% of GDP in 1998, 32% in 2004, and 39.4% in 2006. The increase in investment from the state in the economy was 50.2% in 2005 and another 50.8% in 2006[15].

Last year the Venezuelan government spent billions of US dollars in massive infrastructure and public works projects: a new bridge over the Orinoco river at the cost of US$1.2bn, underground systems in three different cities, railway lines... This also serves to underline the extremely parasitical nature of capitalism in Venezuela, where for 100 years it was unable to build any of these basic infrastructures. Venezuela has never had a railway system to speak of. Although the development of a railway network would have helped integrate the country, make the distribution of population more even and promoted an internal market, this was never done because in order to export oil there was no need for railways. The discovery of oil about 100 years ago completely distorted the development of the Venezuelan economy, destroying agriculture and preventing the development of a domestic manufacturing industry. In fact, any industrial development that has taken place in Venezuela has been carried out by the state using oil revenues (for instance during the first Carlos Andrés Perez government).

Even the implementation of these public works projects reveals the glaring contradictions of the Venezuelan economy. Since no Venezuelan companies are able to carry out these public works, most contracts go to a Brazilian multinational called Odebrecht. Production of cement in Venezuela is monopolised by three main companies, the largest of them being Mexico's CEMEX, which belongs to Carlos Slim, who has now just became the world's wealthiest individual overtaking Bill Gates. The Venezuelan government has just carried out the nationalisation of Cemento Andino (a cement company controlled by Colombian capital) and has threatened to nationalise other cement producers, which Chavez has accused of selling most of their local production on the foreign market where they can get higher profits.

Yes, the Venezuelan economy is growing, but its growth exacerbates all its contradictions rather than solving them. Chavez clearly reflected this when he threatened the nationalisation of the banks and of the Argentinean-owned SIDOR steel works. He said to the banks: "we cannot have a situation where the state is the only one lending money to national producers to develop production". And he added: "we cannot accept the position of SIDOR. It gets cheap raw materials, electricity and fuel from the state; it then produces steel which it sells on the world market, at world market prices, which is then transformed into manufactured goods and machinery by other countries (including China), which are then sold back to Venezuela at world market prices". It certainly does not make sense, but that is the way capitalism works.

The process in Venezuela is a clear example of the Permanent Revolution. One of the premises of the Permanent Revolution is that the national bourgeoisie of backward capitalist countries in the epoch of imperialism is unable to develop the productive forces in a progressive way. It is precisely the contradiction between the need to develop the country's economy and infrastructure (which Chavez has championed) and the inability of capitalism and imperialism to do so that has set Chavez on a collision course with capitalism itself.

Even in the current economic boom in Venezuela, the capitalists are reluctant to invest in expanding productive capacity (though they are obviously willing to make as much profit as they can in the short term). If you take 1997 as 100, sales in Venezuela reached 155 in 2006 (a 55% increase). However, industrial production reached only 99 in 2006. In the same period, according to figures from business organisation Conindustria, the number of manufacturing enterprises went down from 11,000 to 6,000. An increase in sales with no increase in production or investment leads directly to a situation of inflation and scarcity of basic products. At present there is scarcity of 26% of basic food products and inflation has reached 20%. This in turn forces the government to engage in massive imports of food products from the world market which they have to pay for at world market prices with hard currency.

If you take the example of black beans, one of the main staples in Venezuela, you see that Venezuelan production was 31,000 tonnes in 1988, it went down to 18,000 in 1999 and today Venezuela imports 56,000 tonnes every year.

The sabotage of the economy and consequent scarcity has affected particularly the food distribution chain. Capitalist producers, processors and distributors of food products engage in hoarding and speculation, sell their products on the black market, deliberately sabotage harvesting, prevent the processing of crops at sugar mills, slaughterhouses and dairy plants, create panic buying through scare-mongering campaigns in the media, and so on.

The Economist Intelligence Unit describes it in the following euphemistic terms: "The prices of many regulated goods have become misaligned and will have to be adjusted at some stage; and there is a lack of sufficient capacity in a variety of sectors as a result of inadequate investment. This is only partly offset by rising imports, producing shortages, supply bottlenecks and the sale of regulated goods above the official price"[16].

The food industry is a highly monopolised sector of the Venezuelan economy, controlled by a handful of companies (such as Polar) owned by prominent figures of the counter-revolution that have used and are using their control over this vital sector to undermine the democratically elected government. The case for expropriation could not be clearer.

The government, like in many other fields, instead of tackling the problem head on (i.e. the ownership of the land and the food distribution chain) has tried to set up a parallel structure through the creation of Mercal, a national network of popular markets which sells basic food products at subsidised prices[17]. But that in itself does not solve the problem. Very often Mercal has to import products from abroad at a very high cost. Since the Mercal network is not under any sort of democratic control or accountability, there is corruption and stealing of products at all levels, which has been denounced by the United Bolivarian Union of Mercal Workers (SUNTRABMERCAL), which has demanded workers' control of Mercal and the setting up of consumers' and providers' organisations to work with them in the control and management of the network[18]. The only solution to this problem would be the wholesale nationalisation of the big landed estates and the nationalisation of the food processing and distribution industries, under the democratic control of the workers, consumers and peasant producers organised in cooperatives[19].

FNCEZ takes over FEDECAMARAS headquarters

A couple of months ago there was a demonstration in Caracas over this question of scarcity and sabotage, organised by the Ezequiel Zamora National Peasant Front and other revolutionary organisations during which they occupied the building of Fedecamaras, the main business confederation, under the slogan "if you take away our food, we will take away your factories". It is quite significant that the FNCEZ sent two representatives to the congress of the CMR, the section of the IMT in Venezuela. It is the largest and most revolutionary peasant organisation in Venezuela. They said they wanted to participate in the political discussions, but also, they wanted political and practical advice from the Revolutionary Front of Occupied Factories (Freteco) in order to know how to occupy and take over factories in the food distribution chain (meat-packing plants, dairy production plants, sugar mills...).

Finally, earlier this year, the government was forced to pass a "Law against Hoarding, Speculation, Boycott and any other behaviour which affects the consumption of food and other products subjected to price controls", which allows for the expropriation of companies which engage in such practices. Already on June 21, the government used this law to expropriate two slaughterhouses that had been left idle by their owners, Fricapeca and Fribarsa in Zulia and Barinas, each with the capacity to process 800 head of cattle a day.

Cooperatives

There has been a lot of talk about the role of cooperatives in the Venezuelan revolution. In some cases, reformists have promoted them in opposition to what they see as the "bureaucratic nature of state ownership". This is the case not only in Venezuela, but also in many other countries. Venezuela, however, is a country where there has been state promotion, funding and help for the development of the cooperative sector of the economy, where these ideas have actually been put to the test.

According to official figures the number of cooperatives has shot up from barely 900 in 2001, to more than 215,000 that are now registered. However, only about 70,000 of these are active (meaning that almost 70% of all registered cooperatives have failed), and indication of the problems in developing cooperatives.

In many cases, cooperatives have become an excuse for outsourcing of the labour force. This is the case for instance with the cleaning contracts for the Caracas Metro system and in many PDVSA installations. In the past all these jobs were done in-house as part of the workforce of the company. They were later outsourced to private companies. Now in some cases cooperatives have preference when bidding for the contracts. All this means is that it is the workers who have to get organised, put the capital up-front and put in a bid competing with other groups of workers and risk losing all their capital if they lose the contract. Trade unionists in PDVSA have demanded that these jobs (cleaning, catering, maintenance, security, etc) be brought back into the workforce with the same conditions and benefits as the rest of the workers of PDVSA. Even Chávez himself has talked of "socialist cooperatives and capitalist cooperatives".

In other cases cooperatives have been established but have failed to compete in a capitalist market, for lack of access to raw materials, finance, and markets for their products. Cooperatives can certainly play a role within a planned economy, particularly in the agricultural sector, but they cannot survive as islands of socialism within a sea of capitalism.

Nationalisations

There has also been a lot of discussion about the nationalisation of CANTV, the telecom company, EDC, the electricity company and the oil multinationals operating in the Orinoco Basin. Some people have argued that these are not real nationalisations because they have been carried out with compensation. Firstly, this ignores the fact that when Chavez announced the nationalisation of CANTV and EDC the value of their shares collapsed on the stock exchange, so that the price finally paid was much lower. Furthermore, the question of compensation is not in itself a principled issue. Marx explained on a number of occasions that if it were possible to buy out the ruling class in exchange for a peaceful transfer of power, then this should be done. What we, the Marxists, would advocate in a situation like this would be to open the books and ask how much did these multinationals pay for these companies in the first place, how much have they invested since, and how much profit have they made? These figures would clearly show that there is no case for compensation.

However, if we want to understand the real meaning of these nationalisations, we have to look at how the workers and the capitalists have reacted to them. As soon as the nationalisations were announced, workers and former workers of CANTV decided to hold a mass meeting to create a Socialist Battalion. The demand they put forward was for workers' control of CANTV in order to prevent any attempt at sabotage by the managers and the directors before the company was handed over to state control. The workers at SIDOR, the massive steel works in Bolivar, which were not mentioned directly by Chavez in his speech, but only by implication when he said that "all privatised companies should be nationalised", held a number of mass meetings, organised road blocks and demonstrations, raised the Venezuelan flag over the factory and demanded nationalisation under workers' control[20].

What was the reaction of capitalists? According to official figures of the Venezuelan Central Bank, in the first quarter of 2007 foreign direct investment in Venezuela compared to the same period in 2006 went down by US$1050 million, a fall of 92%. The flight of capital from Venezuela in 2006 was US$2100 million. It is quite clear. The Venezuelan capitalists are not investing and neither are the multinationals. The reason for this is very clear: in Venezuela a revolution is taking place. They are not sure what is going to happen the day after they invest. They do not know whether the workers will occupy their factories and demand nationalisation under workers' control, or if the government will decree the nationalisation of their companies. The July 2007 "Country Risk Report" produced by The Economist Intelligence Unit makes this point very clearly. Commenting on what they describe as "mixed signals" regarding the protection of private property rights in the forthcoming constitutional reform proposals, they say:

"Apparently, then, the aim is to stop short of the elimination of all private property. However in the past Mr Chávez has provided assurances of this nature only to proceed towards greater state interventionism. There is therefore no guarantee that the process will come to a halt after the latest measures".

And then add:

"Whether or not further nationalisation actually takes place, or is instead used as a bargaining tool to extract concessions from the companies concerned, the threat of nationalisation means that contract rights will remain weak".

And elsewhere in the same report, they add:

"Private investment in the non-oil sector is increasingly unlikely to thrive in the light of threats to property and contract rights, and in particular the threat of nationalisation and expropriation of assets as the drive towards state-led development progresses".

Regarding the nationalisation of the Orinoco Basin oil companies, some of the multinationals, reluctantly, accepted the terms, because there is still a lot of money to be made, but some others from the US refused. There is now a conflict over the level and the amount of compensation that they should receive. This is being frantically discussed in Houston, Texas, by oil industry analysts, lawyers and others. This is what one firm of lawyers said about the issue: "the government of Venezuela owns significant assets in the US, through CITGO (which is a subsidiary of PDVSA in the US), as well as significant resources that move through the US financial system, and these could be subject to an arbitration award[21]". This is a clear threat that if these companies are not given "fair and just" compensation, the US government will expropriate Venezuelan property in the US.

Such a situation has strong resemblances to the way in which the Cuban revolution proceeded in the first two or three years. A step taken by the revolution, a provocation by the US, further steps forward by the revolution and so on. The same thing could happen in Venezuela. You can just imagine what would be the reaction of the Venezuelan government and president Chávez himself if the US authorities were to expropriate CITGO. In fact, already, faced with the threats of these two US oil companies, the Minister of Oil declared that if they didn't accept the terms of the revised contracts, they would be denied any compensation at all.

There is another field where we have seen the same dynamic of provocations and counter-provocations, in relation to Venezuela joining Mercosur. Mercosur is a failed attempt at uniting the stronger Latin American economies and Venezuela applied to join and was accepted. But over the issue of the non-renewal of the RCTV broadcasting licence, a conflict erupted between Chavez and the Brazilian Senate. Some Brazilian senators said that this was a demonstration of the authoritarian character of Chavez and that RCTV should remain open. Chavez replied using some strong language against these Brazilian senators, who now have demanded an apology from Chavez otherwise they will not vote the ratification of Venezuela's entry into Mercosur. And Chávez, who has never been very keen on apologies, replied that if this is what Mercosur is, then Mercosur is a reactionary institution and that Venezuela should not be part of it.

Obviously, the question of the apology is just an accident, but what this conflict reveals is the opposing class forces that are at play in Venezuela and throughout Latin America and how they express themselves over these issues.

The main contradiction that is at the bottom of the economic question is this: the inability of the Venezuelan ruling class, the Venezuelan oligarchy, the Venezuelan capitalists, and even less of imperialism, to develop the economy. The attempt by Chavez to develop the national economy puts him on a collision course with capitalism. This is the main motor-force of the Venezuelan revolution, and this is why Chávez started talking about socialism and denouncing capitalism. This is also the reason why you cannot take an isolated incident or a single quote from Chavez and build a political theory around it. It is not ruled out, though is not the only possible outcome, that this process could lead at a certain point to the wholesale nationalisation of the means of production and the abolition of capitalism in Venezuela. During one of the demonstrations over RCTV, Chavez said that the ruling class was welcome to participate in this attempt to develop the national economy, but that if they did not change their ways "we will take away the levers of power that they have, one by one".

It would be wrong to think that the abolition of capitalism in this way in Venezuela would lead to the creation of a Stalinist regime like the ones that existed in the Soviet Union or East Germany. Some so-called Marxists are playing with the idea that a number of steps taken by Chavez (such as the enabling laws, the constitution of the PSUV, the Constitutional reforms and other measures) will lead directly to a Stalinist kind of regime (disgracefully echoing from the left the hypocritical cries of the imperialists in relation to the "autocratic" and "authoritarian" turn of Chavez). This is a completely false approach.

Clearly socialism is not a system that can be decreed from above. It requires the conscious participation of the workers in the democratic planning of the economy and in bringing about such a state of affairs. One of the main characteristics of the Venezuelan revolution over the last 8 years has been a strong anti-bureaucratic mood of the Bolivarian rank and file. For a whole period of time the situation would therefore be very open. The working masses in Venezuela in the last few years have also increased their level of understanding of the need for workers' democracy and direct control. The expropriation of capitalism, even if implemented from above, would open up a situation of enormous revolutionary ferment, mass participation, the creation of workers' committees, which would last for a period of time.

The bureaucracy would try to impose a bureaucratic structure but this would not be an easy task. The condition for bureaucratic rule would be that the revolution would finally be hijacked and defeated by the bureaucracy because of isolation, imperialist pressure and demoralisation of the masses over a long period of time.

Revolutionary organisation and leadership

What we are fighting for in Venezuela is a genuine regime of workers' democracy and democratic planning of the economy and for this to be a first step towards the internationalisation of the struggle for socialism. The main obstacle for this to happen is the weakness of the revolutionary leadership, in two different ways. One is the absence of a Marxist leadership of the workers' movement, but also the absence of a national democratic structure through which the revolutionary movement can express itself and within which a Marxist tendency can fight for the leadership.

Joining the PSUV

In this respect, the discussion around the setting up of the United Socialist Party could prove to be crucial. When Chávez announced the setting up of the PSUV, he made it clear that this was to be a tool of struggle against bureaucracy and a genuine revolutionary democratic organisation. But once again, this does not in itself guarantees that it will be implemented in this way. It depends above all on the ability of working people to carry this out in practice.

What is important to see is the enormous enthusiasm that this proposal has generated amongst the revolutionary masses. In 2001/02 when the Bolivarian Circles were first organised, they managed to gather around 1.5 million people. In August 2004, at the time of the presidential recall referendum, when the Electoral Battle Units and Platoons were created, 2 million people joined them. At that time we saw a massive clash between the revolutionary rank and file and the bureaucracy, which tried to impose itself over these organisations. For instance in the "23 de Enero" neighbourhood in Caracas, there was a mass meeting to discuss the parish level leadership of this organisation. The main leaders of the Bolivarian movement in Caracas, who at that time were well regarded by the rank and file, went to this mass assembly to try to impose their slate for the parish level leadership. This lead to a conflict with the 1,500 people present, who had an alternative slate. The discussion lasted until 2am and finally the rank and file imposed its proposal. Similar clashes took place in other places, such as the El Valle neighbourhood, where the assembly of the local UBEs accepted the parish level committee being proposed from above, but elected double the number of delegates from the rank and file to sit on the same committee[22].

Eventually the bureaucracy won, and at the higher levels of the organisation of the UBEs they imposed their people and after the referendum these organisations were disbanded.

PSUV promoters take socialist oath

When Chavez proposed the setting up of the PSUV, he said that the aim was to organise 3 million people, which in itself would be more than in any of the previous organisations. During an 8-week period people queued to register for the new party and the final result was that more than 5.6 million registered to join! This represents more than 2/3 of the actual number who voted for Chavez in the presidential elections. What this shows is the enormous reserve of support and enthusiasm for the revolution among the masses.

In some areas, such as the Alto Apure, a peasant region organised by the FNCEZ, more people registered to join the party than had actually voted for Chávez in December! The reason for this was a conscious campaign on the part of the FNCEZ appealing to every man, woman and child in the area to join the PSUV. The leaders of the FNCEZ commented: "in 1998 we also joined the MVR, but we were not organised and the bureaucracy took control, now we are joining the PSUV and we are organised to prevent that".

The national organising committee gave a detailed breakdown of the composition of the party. There are 1.4 million unskilled workers, 500,000 skilled workers, 750,000 service sector workers, 180,000 administrative and office workers, adding up to a total of 3 million workers who have registered for the PSUV. Also registered are 1.2 million housewives, which makes the PSUV the largest women's organisation in Venezuela and probably the largest in the world. This is unprecedented.

Now the party is to have a 3-month long congress period starting this month (September). The first meetings of the Battalions (there are about 18,000 of them) have already taken place with the participation of about 1.5 million people. This is normal. One cannot expect 5.6 million people to become active members of the party; that figure reflects the organised support for the PSUV; the figure of 1.5 million represents the activist layer.

There have been questions as to what is the class nature of the PSUV. The class character of any party or movement is determined by a number of different factors: its class composition, its relationship with the organisations of different classes, the composition and politics of its leadership, its programme, etc. In the case of the PSUV, most of these issues are not yet decided.

However, it is clear that in the next few months the PSUV will be the battleground in which the bureaucracy will try to impose its hold over the party, while the revolutionary rank and file will try to keep it a democratic organisation under their control. The outcome of this struggle is not decided yet. What you could see at the mass rallies of the promotores (the first organisers of the party) was the profoundly working class and plebeian character of the masses that are joining the party. The expression on their faces when they were taking an oath to struggle for socialism was an indication of their unbreakable will to struggle to transform society. After the experience of 8 years of revolution they will fight tooth and nail to prevent the right wing of the movement from taking over their new party.

The task of revolutionary Marxists is to throw themselves completely in this fight and participate alongside the masses in the creation of the PSUV. Any other policy would be utter sectarianism and would only contribute to isolating them from the real existing revolutionary movement. In this respect, the policy adopted by a section of C-CURA (the left wing current within the UNT) of refusing to join the PSUV and attempting to set up a so-called "Independent Workers' Party" is a criminal mistake which can only lead to the isolation of some advanced worker activists from the mass revolutionary movement.

The creation of the PSUV has lead to a sharp split with a section of the right wing of the Bolivarian movement. PODEMOS, which is the most right wing social democratic party of the government coalition, has decided not to join the PSUV. They said, "we are in favour of socialism, but we want democratic socialism", to which Chavez replied, "the problem is that you are social democrats and social-traitors, and we are revolutionary socialists". PODEMOS has now replaced the old Acción Democrática party as the Venezuelan affiliate to the Socialist International[23].

But it is clear that another, more intelligent, section of the bureaucracy and reformists have rushed to join the new party, trying from the very beginning to establish themselves in positions of power and influence. We have even seen the creation of an organisation of "Socialist Businessmen" who have joined the PSUV.

Interestingly the Communist Party has split over this issue, one wing joining, the other staying outside, and both maintaining a wrong, two-stage approach to the Venezuelan revolution[24].

The National Workers' Union

But if we are talking about revolutionary leadership, the weakest point is that of the leadership of the workers' movement, the leadership of the UNT. The UNT has been divided at the very least into 5 different factions since the congress one year ago. And this split was on the basis of issues that have nothing to do with the main key challenges facing the Venezuelan workers' movement today. They are involved in a power struggle for who controls the apparatus of the UNT, and this is all they seem to be concerned about. None of these different wings has taken questions such as workers' control or factory occupations seriously.

It is clear that the leadership of the FSBT wing (Socialist Bolivarian Workers' Front) of the UNT is against any idea of workers' control. In fact, a representative of this current, Jacobo Torres, went as far as saying in a meeting in Britain organised by the TUC that in Venezuela there was no workers' control. An example of this is the position taken by the Ministry of Labour, most of whose team comes from the FSBT, regarding the struggle of the workers at Sanitarios Maracay for expropriation under workers' control. The Minister refused to nationalise the factory even after the National Assembly had recommended it, and pushed the workers towards a settlement regarding the payment of back wages with the former owner, the counter-revolutionary Alvaro Pocaterra.

The leadership of the left wing, the C-CURA, around Orlando Chirino, makes a lot of noise about the issue of trade union autonomy, but what they really mean is not the independence of the unions from the state and the capitalists, but their sectarian proposal that workers should not join the PSUV. If the workers' movement in Venezuela had half the leadership of the peasants' movement around the FNCEZ, the situation would be much more advanced now.

It is clear that the workers' organisations, both trade union and political, must remain completely independent (never mind "autonomous"). But independence does not mean abstention from the actual struggle within the Bolivarian movement, the only revolutionary movement that exists in Venezuela. On the contrary, the bureaucrats and reformists would love nothing better than that revolutionaries stay away from the PSUV. This is particularly criminal when Orlando Chirino is prepared to speak on the question of "trade union autonomy" on the same platform as the counter-revolutionary CTV[25] and on a platform organised by the Friederich Ebert Foundation (the agency of German Social Democracy set up specifically to derail revolutions)[26]. What kind of "autonomy" is this? "Autonomy" from whom and for what purpose?

A genuine revolutionary current within the UNT would pursue a policy of full support for the Bolivarian revolution, of full participation in the PSUV on the basis of the struggle against capitalism, the reformists and bureaucrats, while at the same time actively promoting, encouraging and organising factory occupations, the setting up of workers' councils and the coordination of these with the communal councils.

Such a policy would immediately win a majority amongst the rank and file of all the different wings of the UNT, and is the only one which would be able to unite the UNT on the basis of a revolutionary policy. The conditions could not be more favourable. There is a mood of confidence among the workers. They feel part of the Bolivarian revolution and while looking towards many government officials with suspicion they regard Chávez as their main leader and are encouraged by his talk about socialism, the role of the working class in the revolution and his tirades against imperialism. Even the smallest day-to-day bread and butter conflicts over health and safety, wages, conditions, etc., tend to escalate and acquire a political character. The example of Sanitarios Maracay is a case in point. One of the most advanced experiences of workers' control in Venezuela started over a conflict about health and safety and trade union recognition. The political character of the struggle was determined by the fact that the boss, Alvaro Pocaterra is a known counter-revolutionary who actively participated in the attempted coups and sabotage of the economy in 2002. A serious campaign of factory occupations linked to the defence of the revolution against sabotage would spread like wildfire.

At the same time the Ministry of Labour has proposed the setting up of Workers' Councils in the factories. Here again we see the mistake of the sectarians. What was their reaction to this announcement? "Here is another example of the attempt of the government to control the labour movement and destroy trade union autonomy and the UNT". There is no doubt that at least a section of the leadership of the FSBT and functionaries in the Ministry of Labour would like to see the end of a UNT they cannot control. In fact, FSBT leader Oswaldo Vera, has said so openly[27]. However, surely, if there is a proposal for the setting up of Workers' Councils what any serious revolutionary tendency within the workers' movement must do is to take up the challenge with both hands and organise a national campaign to create them in the factories and workplaces!

It is in these conditions that the comrades of the Revolutionary Marxist Current, starting with modest forces, have played a key role in the setting up of Freteco, the Revolutionary Front of Occupied and Co-managed Factories. The initiative for the setting up of Freteco was taken by the workers at Inveval, the valve-making factory in Los Teques, Miranda. Inveval itself demonstrates all the problems and contradictions of the Venezuelan revolution. The workers took over Inveval and are running it under workers' control. It was nationalised by Chávez, against the opinion of the sectarians who at the time said, "Chavez's is a bourgeois nationalist government and will never nationalise anything". But now the workers at Inveval are facing two powerful enemies: one is the fact that they still operate within the framework of a capitalist market economy, and second that they have to face the deliberate sabotage of the state bureaucracy and the reformists who do not want to see a successful experience of workers' control for fear of this serving as an example to other workers[28].

The Venezuelan revolution has developed over a long period of time, nearly 9 years now. This is the result of a combination of different factors. One is the enormously favourable balance of forces in favour of the revolution, which has smashed any attempts of the counter-revolution to raise its head. The revolutionary masses are strong but they do not have a Marxist leadership that can settle matters once and for all. The counter-revolution has attempted to put an end to the revolution on a number of occasions and the movement of the masses has defeated them. Venezuela is an oil producing country and this also plays a role; the government has been able to introduce a massive programme of social plans and investment which has in a limited but real way improved the living conditions of the masses and given the government certain room for manoeuvre. This situation of impasse, of equilibrium between the classes cannot last indefinitely. It is either resolved through a victorious socialist revolution or a bloody counter-revolution.

The stakes have been raised, the ruling class has been frightened, a whole number of challenges have been posed, but there is no clear idea of how to solve them. This is dangerous. It can lead to a situation in which the masses will become tired of the speeches and the counter-revolution will go on the offensive because they do have clear ideas on how to smash the revolution.

In these conditions, all sort of reformist ideas have flourished in the upper echelons of the state, with all sorts of "advisors" and clever "intellectuals". A key representative of this layer is Heinz Dieterich, but there are also others. In a recent interview in El Nacional, Juan Carlos Monedero, a Chavez advisor in charge of Ideological Education at the Centro International Miranda, developed his views about "socialism of the 21st century": "One of [the mistakes of 20th century socialism] was to think that the nationalisation of the means of production allows the satisfaction of the needs directly. That is why today we say that we do not care about private property, we have understood that it is not the enemy". He adds that the problem with private property comes only when it prevents the "equality of capacity of other people", but that this can be "solved with imagination, through several means. For instance social democratic Europe did it through a socialist tax system, where the ones who have more pay more". He says that the current stage Venezuela is at is one where "state capitalism coexists with redistribution of wealth and market socialism" in which there are "elements of socialism" going in the direction of "wrestling away bits from the capitalist system"[29].

Despite the deliberately confusing terminology he uses, what he says is clear: no nationalisation of the means of production, large scale state sector and certain controls (taxation) of private capitalists and then, bit by bit, we will end up with socialism. In other words, going back to classical reformist ideas, from the time when reformists did actually carry out reforms.

An almost identical line is defended by Haiman El Troudi, one of the directors of the Centro Internacional Miranda, in a text called "Questions and answers about socialism of the 21st century". He explains that the "challenge in the transition is to mediate consensus. Let us remind ourselves that the Bolivarian revolution is peaceful, and to transform Venezuela in peace means a dialogue between different sources of knowledge and respect for plurality of thought. What would happen in the country if suddenly it were decided to nationalise all private companies? This is not on the cards. On the road towards socialism private initiative can, without any difficulties, develop, as long as it accepts the new rules of the game".

El Troudi lists what he calls strategic sectors that in his opinion should be in state hands, but his list curiously, includes only sectors that are already in state hands! So, again, he is against nationalisation of the means of production. In fact, he adds, that, "banking, despite being one of the strategic means of production, in my opinion should not be nationalised, unless private banks go against the law and threaten national interests".

One again, it seems that El Troudi's "socialism of the 21st century" looks very much like "socialdemocracy of the 20th century". In the debate about workers' control and workers' management, after having argued that "nationalisation does not necessarily mean control by the people" as an argument against nationalisation, Haiman sides firmly with those who oppose any form of workers' control in the strategic industries.

He asks: "Is it possible to run the oil industry under the co-management model?", and answers himself: "Not for now. We will have to practise our co-managerial culture before we can adopt this format in the main industry and source of national income". So as to avoid any confusion, he adds that he is in favour of the workers having shares in the companies; what he opposes is "workers participating in the management of the company, the practice of democracy in the selection of the authorities including accountability, where the black accounts of the administrative affairs are opened, where mandates and functionaries are subject to recall."[30]

In a situation where the ruling class is temporarly unable to launch an open assault against the revolution with any guarantee of success, a great part of their strategy is based on a "third way", that is, basing themselves on bureaucrats and reformists in order to keep the revolution under control and prevent it from effectively breaking with capitalism, while in the meantime building up their forces and points of support for when they are able to strike a decisive blow.

The Economist Intelligence Unit explains it in this way:

"A combination of popular discontent and a cohesive opposition leadership is not currently in sight... The opposotion political class has found it difficult to shed its poor reputation... Moreover ... it has no direct influence on policy. Given these limitations, it appears likely that a third force will eventually emerge to lead the opposition. This might include what Venezuelans call "Chavistas light", Chavez supporters who are uncomfortable with some of the more radical elements of the president's programme. It might also include some pro-Chavez groups that are unhappy with a recent drive towards centralisation of power."[31]

Haiman El Troudi describes the strategy of the counter-revolution, which he calls "chavismo without socialism" in in this way: "it means putting a break on the structural transformation of society, to smooth over iniquity, to maintain intact the privileges of the capitalist class... the main proponents of this counter-revolutionary tendency are mercenaries infiltrated within the revolutionary process who web their conspicuous conspiracy with the threads of corruption, political control, the denial of peoples' participation in public affairs. Their main aspiration: to install a new oligarchy and take power at the expense of treacherous plans against the Bolivarian Revolution".[32]

We should therefore guard against a position of mindless enthusiasm that the revolution will go forward smoothly until its successful socialist conclusion. In fact as the contradictions become sharper, the dangers grow. The only real solution for all these contradictions is for the working class to take the leadership of the revolution, and for the Marxist tendency to win over the leadership of the working class. It is for this reason that the work of Freteco is so important, and also why the role of reformists and sectarians alike is so criminal. An offensive of the working class on the question of factory occupations and workers' control could offer a clear way forward to solve the problems of the economy and the state. It would show what socialism means in practice and pose the challenge openly.

The revolution in Venezuela has already had an important impact amongst the masses in Latin America and beyond. A successful socialist revolution in Venezuela would be the beginning of a wave of revolutions in the whole of the continent. The condition for that is the building of the CMR and the building of the International Marxist Tendency so that we can give this extraordinary movement of the Venezuelan revolutionary masses a clear Marxist leadership which is the only way to victory.

September 5, 2007




Notes to CMI article

[1] Venezuelan presidential elections: vote for Chavez, carry the revolution out to the end August 2006.

[2] Amongst the members of "Oligarcas Temblad" was the National Peasant Front Ezequiel Zamora, the Coordinadora Simón Bolivar, Lina Ron's UPV, the Revolutionary Front of Workers in Factories Occupied and Co-Managed - FRETECO, the National Association of Free, Community and Alternative Media, the Movimiento de Bases Popular, the Revolutionary Marxist Current - CMR and the "Alexis Vive" and "Doloritas Rebelde" Collective.

[3] In the first elections after the victory of the revolution in Nicaragua, the Sandinistas received 67% of the vote, but there the main candidate of the opposition had pulled out of the electoral race.

[4] David Velasquez, former general secretary of the Communist Youth, just a few months before Chavez announced that the Venezuelan revolution could not stay within the confines of capitalism, insisted that the question of socialism was not posed in Venezuela, but merely that of "anti-imperialism".

[5] As we said at the time, he would be judged by what he did at the head of the Ministry. Though he has taken several progressive measures, his role during the Sanitarios Maracay struggle has been a criminal one (see Sanitarios Maracay, a first balance-sheet of an heroic struggle, Jorge Martin, 22 August 2007)

[6] This mood was very well captured by Michael Lebowitz in a very perceptive article called "Why Aren't You in a Hurry, Comrade?"

[7] Already the setting up of the Misiones in order to carry out the social programmes of the government since 2003 was an attempt to circumvent the problem of the capitalist state by creating parallel structures.

[8] The full text of the interview in which Müller Rojas made his views public can be read in English here: http://venezuelanalysis.com/articles.php?artno=2091

[9] Baduel's departing speech can be read in full here: http://venezuelanalysis.com/articles.php?artno=2103

[10] It is the enormous pressure to the left that is coming from the rank and file, which is encouraged by Chavez's speeches, which forces even conservative elements to dress up their ideas in left-wing, socialist sounding and even Marxist phraseology.

[11] An example of what is possible is the initiative taken by trade unionists in the basic heavy industries in Guyana where they asked for volunteers amongst the workforce to join the Reserve of the Army. Also at a meeting of revolutionary activists in Carabobo to discuss the issue of the Territorial Guard, a UNT leader asked the Rear-Admiral who was there representing the Territorial Guard what would happen if the workers at the nearby Firestone factory wanted to join the Territorial Guard, but as a whole workplace. The Rear-Admiral said he had never thought about it but that it sounded like a very good idea, and asked whether he could get a list of all the workers interested and someone to coordinate them so that it could be implemented!

[12] Panorama Digital, September 10, 2006, reproduced in Aporrea: http://www.aporrea.org/actualidad/n83403.html)

[13] Karl Marx, The Civil War in France

[14] Most of these measures were introduced in order to try to defend the living standards of the masses, particularly at the time of the bosses' lock out and sabotage of the economy in December 2002-January 2003.

[15] Figures from the Venezuelan Central Bank (http://www.bcv.org.ve/Upload/Publicaciones/infoeco2006.pdf)

[16] Economist Intelligence Unit, Country Risk Service July 2007

[17] In 2006 there were more than 15,000 Mercal shops around the country reaching about 43% of the population.

[18] Numerous statements in this direction can be found on their website: http://usuarios.lycos.es/suntrabmercal/

[19] A detailed analysis of the current crisis of scarcity and hoarding can be found in Venezuela: Price regulation, food scarcity, speculation and socialism by Erik Demeester.

[20] In the last few days an agreement has been reached between the Venezuelan government and the Argentinean owners Techint, which includes a guarantee of no-nationalisation. However, such an agreement is likely to break down in the face of labour conflict, more demands on the part of the government, etc.

[21] Statement by Jose Valera, a partner with King & Spalding in Houston quoted in the Houston Chronicle article "Citgo assets may be at risk in arbitration", June 27, 2007

[22] See for instance: http://www.marxist.com/Latinam/venez_maisanta0604.html

[23] It is interesting to note that it was Didalco Bolivar, the PODEMOS governor of Aragua who sent the police against the Sanitarios Maracay workers who were on their way to a Freteco demonstration in Caracas.

[24] The party's Central Committee split 9 to 13, with the 9 joining the PSUV and being expelled from the PCV.

[25] "A national crusade for trade union autonomy" El Universal, May 26, 2007. http://www.eluniversal.com/2007/04/26/pol_art_proponen-cruzada-nac_264996.shtml

[26] "Seminario Hacia una Asamblea Constituyente Sindical" http://www.ildis.org.ve/website/p_index.php?ids=7&tipo=A&vermas=55

[27] ""La UNT actual no representa a los trabajadores", July 31, 2007

[28] A detailed description of the current situation at Inveval can be found in Venezuela's Co-Managed Inveval: Surviving in a Sea of Capitalism by Kiraz Janicke

[29] Interview in El Nacional, August 27, 2007

[30] Preguntas y respuestas acerca del Socialismo del Siglo XXI, http://centrointernacionalmiranda.gob.ve/personal/docs/debate3.pdf

[31] Economist Intelligence Unit, Country Risk Service July 2007

[32] To be a capitalist is bad business, Haiman El Troudi ( http://www.haiman.com.ve/)



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