Latin America – Radical Notes

President Chavez and the FARC: State and Revolution

July 4, 2008 by Radical Notes 1 Comment

James Petras

When President Hugo Chavez of Venezuela called on the FARC, the Revolutionary Armed Forces of Colombia, to end their armed struggle and declared the ‘guerrilla war is history’, he was following a path taken by many revolutionary leaders in the past.

As far back as the early 1920’s, Lenin urged the nascent Turkish communist to sacrifice their revolutionary independence and to support Attaturk; his successor, Joseph Stalin encouraged the Chinese communists to subordinate their revolutionary movement to the nationalist party led by Chiang Kai Chek. Mao Tse Tung prioritized coalitions in which the Communist Party of Indonesia submitted to the leadership of the nationalist leader General Sukarno.

During the French-Indochinese Peace Agreements in Geneva in 1954, Ho Chi Minh agreed to the division of the country and urged the South Vietnamese communists to end the guerrilla war and work to re-unify the country through electoral means. During the new millennium Fidel Castro stated that ‘armed struggle’ was a thing of the past and that, under present conditions, new forms of political struggle were at the top of the agenda.

Hugo Chavez frequently urged Brazilians leftists to support the social-liberal regime of President Lula da Silva despite his embrace of free market economics at the World Social Forum of 2002. He also called on Latin American social movements to support a number of pro-capitalist regimes in Latin America, despite their defense of foreign investment, bankers and agro-mineral exporters.

These experiences of revolutionary governments calling on their radical co-thinkers to collaborate with non-revolutionary regimes and to submit to their political constraints have generally had disastrous consequences: The Kuo Ming Tang of Chiang Kai Shek turned on the Communist Party and massacred the majority of its workers and drove it into the mountains of the interior. The aboveground, legal Indonesian Communists and their supporters and family members suffered anywhere from 500,000 to 1 million deaths when Sukarno was overthrown in a CIA coup. The South Vietnamese communists who attempted to participate in electoral politics were assassinated or jailed and eventually, their survivors were forced to revert to underground guerrilla struggle.

The reformist electoral regimes which came to power in Latin America have rescued capitalism from the crises of the 1990’s, demobilized the Left and opened the door for the resurgence of the hard right throughout most of the continent.

In the case of Colombia, Venezuela’s President Chavez apparently chose to ignore the FARC’s earlier experience in attempting to shift from armed struggle to electoral politics. Between 1984-89 thousands of FARC guerrillas disarmed and embraced the electoral struggle. They ran candidates, elected congressmen and women and were decimated by the death squads of the Colombian military, paramilitary and private armies of the oligarchy. Over 5,000 militants and leaders were murdered. What is especially striking is that Chavez urgings to join the electoral process takes place under Colombia’s bloodiest and most brutal violator of human rights in recent history.

Why then do radical leaders who themselves led armed struggles, once in office, call on their revolutionary counterparts to abandon guerrilla warfare and engage in electoral processes which have such dubious prospects?

Several kinds of explanations have been put forth at different times to explain what appears to be a political ‘U-turn’.

The Moral Explanation

Some critics of the ‘U-turn’ explain the shift to a ‘moral degeneration’ – the leaders become autocratic, bureaucratic and seek only to consolidate their rule in their own country. This is the common position adopted by the Left Opposition to Stalin’s policies with regard to Russian policy toward the Chinese revolution. Defenders of the ‘U-turn’ in China claimed it resulted from a recognition of ‘changing times’ and ‘objective opportunities’ on a world scale, arguing that the emergence of the ‘world-wide anti-colonial revolution in the aftermath of World War II created a symmetry of purpose between nationalists and communists, which would evolve over time to a non-capitalist state.

That these alliances were fragile, led to regime breakdown and to the emergence of right-wing ‘strong men’ regimes suggests that this line of argument was itself of limited duration. There were and still are numerous variations on these explanation for the political ‘U-turns’ but any structural-historical explanation must come to terms with the difference between a revolutionary movement in the process of coming to power and a revolutionary leadership holding state power.

In the latter case, the revolutionary state must deal with a generally hostile environment, military pressures and interventions, economic boycotts and diplomatic isolation from imperial states and their clients. In this context the revolutionary or radical regime has a continuum of policy choices to enhance its international position, ranging from outright support of overseas radical or opposition movements to attempts to demonstrate moderation, conciliation and accommodation to imperial concerns. Several factors influence the foreign policies of the revolutionary regime. They are likely to pursue a revolutionary policy if:

1. Revolutionary movements are on the upswing and show promise of early success, in either toppling pro-imperial clients or putting in place a progressive or sympathetic government.
2. The revolutionary regime has recently come to power and confronts an imminent military threat to its consolidation, facing an all or nothing situation.
3.The revolutionary regime faces a solid bloc of intransigent opposition led by imperial powers, which show no willingness to negotiate a modus vivendi and are not eager to make any compromises.

In contrast, revolutionary regimes are more likely to downplay or renounce links to revolutionary movements overseas if:

1.There are definite opportunities to pursue diplomatic relations, market, trade and investment agreements with capitalist regimes;
2.The radical movements are on a downslide, losing support or being eclipsed by electoral parties, which promise recognition and improved relations.
3.Internal socio-economic changes within the revolutionary regime evolve toward an accommodation with emerging local or foreign private investors whose future growth is dependent on associating with overseas business elites and dissociation from radical anti-capitalist forces.
In practice, at different time and places, the two polar positions are combined, according to a series of attenuating circumstances. For example, the revolutionary regime may pursue an accommodating position with a large, potentially economically important capitalist regime, while continuing to support revolutionary movements in a smaller, less significant capitalist country.

In other cases, the revolutionary regime may dissociate itself from revolutionary movements, in order to diversify its markets and trade and, at the same time, continue to adopt ‘revolutionary rhetoric’ for domestic consumption and to maintain the allegiance of overseas reformist movements.

Foreign policy, revolutionary or not, is the prerogative of the diplomatic corps, which tends to contain many professionals who have no revolutionary standing and who are holdovers from pre-revolutionary times. Their understanding of foreign policy is to draw on previous ties and relations with their counterparts in the capitalist countries and with the past business elites of their country. Hence, by and large, they are constantly in a ‘negotiating mode’, immune to the internal revolutionary dynamics and look to maximize the greatest number of diplomatic ties and minimize overseas linkages to revolutionary movements which compromise their day-to-day relations with their foreign counterparts.

Government and Party : Solidarity and ‘Interests of State’

It is conceivable to envision a situation in which a revolutionary government pursues a moderate policy of accommodation, while the revolutionary party or parties/movements supporting the government expresses solidarity with overseas revolutionary parties and movements. This presumes that the state and party are mutually supportive but politically and organizationally independent. This dual approach is possible if the political party decides its policies through its own deliberative forums, in consultation with its membership and is not a ‘transmission belt’ of the state and its executive branch.

Unfortunately in the overwhelming number of cases, the party-state tend to merge, leaders of the party and mass social movements take positions in the government and the movements lose their autonomy and become mechanisms to implement state policy. Henceforth the diplomatic maneuvers of the Foreign Office, override the party/movement’s principles of revolutionary solidarity, reducing the latter to inconsequential abstract rhetoric.

While the post-revolutionary state has the responsibility of ensuring the day-to-day security, employment and provision of necessities to its people and therefore must find ways of dealing with existing regimes as they find them, the revolutionary parties and movements have as one of their prime goals the deepening and extension of the revolutionary changes embedded in their programs.

In other words, there is an inevitable tension between ‘reasons of state’ and the ‘revolutionary program’ of the mass movements. With the consolidation of the post-revolutionary state, the dominant tendency of the governing class is to stabilize external relations. This involves two related processes: to limit the revolutionary party to moral support of their overseas counterparts and to dissociate or disown any ties to overseas revolutionary movements. International radical and revolutionary rhetoric remains ritualized for anniversaries of historic victories, heroic revolutionary personalities, denunciations of immediate imperial aggressors; while on a day-to-day basis, all sorts of agreements with capitalist regimes are pursued. To the degree that capitalist countries reach diplomatic, economic and political agreements with revolutionary regimes, the latter recasts their new partners as ‘progressive’, part of a new wave of ‘anti-imperialist’ governments, or as adopting an ‘independent’ position. What is noteworthy of these new re-definitions of capitalist diplomatic/economic partners is that they are not based on any internal structural, class, property changes, nor even any break in relations with imperial countries. The change in political labeling occurs almost exclusively as a result of the country’s foreign relations with the revolutionary regime.
Venezuela: The Paradox of Revolutionary Changes and Conservative Foreign Policy

The Chavez government follows a policy practiced by the great majority of previous revolutionary or radical leaders faced with hostile imperial powers – adopting radical socio-economic policies to weaken internal allies of empire while seeking diplomatic allies externally among reformist and even conservative capitalist regimes. Chavez has backed the neo-liberal Lula regime in Brazil (and urged the popular social movements to do likewise) even as the ex-trade union boss slashed public employee pensions, imposed an IMF stability pact and favored agro-mineral exporters over landless rural workers. Likewise Chavez financially backed the Kirchner regime in Argentina via the purchase of state bonds even as it refused to challenge the illicit privatization of the 1990’s, maintained the socio-economic inequalities of the past, refused to grant legal recognition to the independent trade union confederation CTA. For Chavez, the key issue was Argentina’s opposition to US intervention against Venezuela and opposition to US-promoted integration via ALCA.

Chavez’ foreign policy toward Colombia, the principle US political and military ally in the region has alternated between ‘reconciliation’ and ‘rejection’ depending on the immediate threats to its sovereignty. The points of conflict revolve around several Colombian blatant interventions into Venezuela: In 2006, the Colombian military kidnapped a Venezuelan citizen of Colombian origin who was a FARC foreign affairs representative in downtown Caracas. Prior to that the Venezuelan military captured 130 Colombian armed paramilitary forces in Venezuela less than 100 kilometers from the capital. Following the kidnapping, Venezuela briefly suspended economic relations, but they were renewed shortly after a meeting following an amicable diplomatic meeting between Colombia’s death squad President Uribe and Chavez. Subsequently in 2008, when Chavez attempted to broker a prisoner release and open peace negotiations between the FARC and the Uribe regime, the latter launched a murderous military attack on the FARC’s lead negotiator operating out of Ecuador’s frontier. In the face of Uribe’s defense of his violation of Ecuadorian sovereignty in pursuit of the guerrillas, Chavez was forced to denounce Uribe and mobilize the Venezuelan armed forces and to raise the matter before the Organization of American States. Uribe launched a diplomatic offensive claiming a guerrilla computer, captured in the raid, contained evidence of Chavez ties to the FARC. Subsequently Uribe and Chavez negotiated a temporary settlement on the basis of a half-hearted understanding that Uribe would refrain from future cross-border military attacks. In this context of high military threats and diplomatic tensions, Chavez chose to publicly denounce the FARC, put distance between his government and the revolutionary left and call for its unilateral disarmament to gain diplomatic favor from Colombia, Europe and North America. Clearly Chavez believed that appeasing Uribe would lessen threats to Venezuela’s borders and lessen the chances that Colombia would grant the US use of its border territory as a launching base for an invasion.

Chavez’ decision was deeply influence by the military and political weakening of the FARC over the previous 5 years, the advance of the Colombian military and the calculation that the effectiveness of the FARC as a counter-weight to Uribe was in decline. In this context, Chavez probably considered an immediate diplomatic détente with US-backed Colombia more important that any past solidarity or future tactical recovery of the FARC. In general terms, when revolutionary governments perceive or confront a situation of weakening or defeated revolutionary movements abroad and increasing political threats by imperial powers and their satellites, they are more likely to build diplomatic bridges to centrists or rightist regimes. In order to pursue diplomatic support, the most likely confidence-building measure is to sacrifice any identification with the radical left, including public repudiation of any extra-parliamentary initiatives.

Since the 1990’s economic crises, Cuba has pursued close diplomatic and economic relations with all Latin American states (including Colombia) and has opposed all guerrilla movements and refrained from criticizing center-right regimes, except those which publicly attack Cuba, as happened with US clients such as ex-President Fox of Mexico and his former Foreign Minister, George Castaneda, a notorious mouthpiece of the CIA and Cuban exiles in Miami.

Conclusion

The dilemmas of revolutionary governments revolves around the problem of managing the state, which involves maximizing international economic and diplomatic relations to develop the economy and defending its security in an imperial world order, while living up to its revolutionary ideology and solidarity with popular movements in the capitalist world. The risks of solidarity are lessened when new leftist regimes come to power or popular movements are in the ascent. The risks are greater when the resurgent right is in ascendancy. The dilemma is especially acute because the revolutionary state and the revolutionary party are tightly integrated – and identified as such: The party is led by the President of the State and there is overlap at all levels between government office holders and the party and the latter’s activities reflect the priorities of the government. In the case where there is no independent space between Party and State, diplomatic moves, necessary for everyday policy, undermine the possibility that the Party based in its internal deliberations and principles could act independently in support of their international counterparts. In contrast, the existence of an independent revolutionary party – supportive of the state but with its own internal life – could resolve the dilemma by making overseas class solidarity central to its ‘foreign policy’. By rejecting the role of being a government foreign policy transmission belt, the revolutionary party would operate parallel to the state, conveying their opposition to imperialism and internal class enemies but independent in choosing overseas allies and tactics. Given the different composition of the foreign affairs bureaucracy and diplomatic corps and the radical mass base of a revolutionary party, such a separation of state and movements would reflect the class-political differences inherent between a diplomatic corps developed under previous reactionary regimes and accustomed to conventional modes of operation and newly radicalized popular activists, tested in class struggle and accustomed to exchanging ideas in international forums with overseas revolutionaries.

The risks of diplomatic dependence on unreliable capitalist allies and even riskier fragile temporary accommodations need to be balanced with the gains from solidarity and support from reliable, principled class-based opposition mass parties and movements engaged in extra-parliamentary politics.

Filed Under: DIARIES Tagged With: Latin America

Venezuelan Referendum: A Post-Mortem and its Aftermath

December 5, 2007 by Radical Notes 1 Comment

James Petras

Venezuela’s constitutional reforms supporting President Chavez’s socialist project were defeated by the narrowest of margins: 1.4% of 9 million voters. The result however was severely compromised by the fact that 45% of the electorate abstained, meaning that only 28% of the electorate voted against the progressive changes proposed by President Chavez.

While the vote was a blow to Venezuela’s attempt to extricate itself from oil dependence and capitalist control over strategic financial and productive sectors, it does no change the 80% majority in the legislature nor does it weaken the prerogatives of the Executive branch. Nevertheless, the Right’s marginal win does provide a semblance of power, influence and momentum to their efforts to derail President Chavez’ socio-economic reforms and to oust his government and/or force him to reconcile with the old elite power brokers.

Internal deliberations and debates have already begun within the Chavista movement and among the disparate oppositional groups. One fact certain to be subject to debate is why the over 3 million voters who cast their ballots for Chavez in the 2006 election (where he won 63% of the vote) did not vote in the referendum. The Right only increased their voters by 300,000 votes; even assuming that these votes were from disgruntled Chavez voters and not from activated right-wing middle class voters that leaves out over 2.7 million Chavez voters who abstained.

Diagnosis of the Defeat

Whenever the issue of a socialist transformation is put at the top of a governmental agenda, as Chavez did in these constitutional changes, all the forces of right-wing reaction and their (‘progressive’) middle class followers unite forces and forget their usual partisan bickering. Chavez’ popular supporters and organizers faced a vast array of adversaries each with powerful levers of power. They included: 1) numerous agencies of the US government (CIA, AID, NED and the Embassy’s political officers), their subcontracted ‘assets’ (NGO’s, student recruitment and indoctrinations programs, newspaper editors and mass media advertisers), the US multi-nationals and the Chamber of Commerce (paying for anti-referendum ads, propaganda and street action); 2) the major Venezuelan business associations FEDECAMARAS, Chambers of Commerce and wholesale/retailers who poured millions of dollars into the campaign, encouraged capital flight and promoted hoarding, black market activity to bring about shortages of basic food-stuffs in popular retail markets; 3) over 90% of the private mass media engaged in a non-stop virulent propaganda campaign made up of the most blatant lies – including stories that the government would seize children from their families and confine them to state-controlled schools (the US mass media repeated the most scandalous vicious lies – without any exceptions); 4) The entire Catholic hierarchy from the Cardinals to the local parish priests used their bully platforms and homilies to propagandize against the constitutional reforms – more important, several bishops turned over their churches as organizing centers to violent far right-wing resulting, in one case, in the killing of a pro-Chavez oil worker who defied their street barricades. The leaders of the counter-reform quartet were able to buy-out and attract small sectors of the ‘liberal’ wing of the Chavez Congressional delegation and a couple of Governors and mayors, as well as several ex-leftists (some of whom were committed guerrillas 40 years ago), ex-Maoists from the ‘Red Flag’ group and several Trotskyists trade union leaders and sects. A substantial number of social democratic academics (Edgar Lander, Heinz Dietrich) found paltry excuses for opposing the egalitarian reforms, providing an intellectual gloss to the rabid elite propaganda about Chavez ‘dictatorial’ or ‘Bonapartist’ tendencies.

This disparate coalition headed by the Venezuelan elite and the US government relied basically on pounding the same general message: The re-election amendment, the power to temporarily suspend certain constitutional provisions in times of national emergency (like the military coup and lockouts of 2002 to 2003), the executive nomination of regional administrators and the transition to democratic socialism were part of a plot to impost ‘Cuban communism’. Right-wing and liberal propagandists turned unlimited re-election reform (a parliamentary practice throughout the world) into a ‘power grab’ by an ‘authoritarian’ / ’totalitarian’ / ’power-hungry’ tyrant according to all Venezuelan private media and their US counterparts at CBC, NBC, ABC, NPR, New York and Los Angeles Times, Washington Post. The amendment granting the President emergency powers was de-contextualized from the actual US-backed civilian elite-military coup and lockout of 2002-2003, the elite recruitment and infiltration of scores of Colombian paramilitary death squads (2005), the kidnapping of a Venezuelan-Colombian citizen by Colombian secret police (2004) in the center of Caracas and open calls for a military coup by the ex-Defense Minister Baduel.

Each sector of the right-wing led counter-reform coalition focused on distinct and overlapping groups with different appeals. The US focused on recruiting and training student street fighters channeling hundreds of thousands of dollars via AID and NED for training in ‘civil society organization’ and ‘conflict resolution’ (a touch of dark humor?) in the same fashion as the Yugoslav/Ukrainian/Georgian experiences. The US also spread funds to their long-term clients – the nearly defunct ‘social democratic’ trade union confederation – the CTV, the mass media and other elite allies. FEDECAMARAS focused on the small and big business sectors, well-paid professionals and middle class consumers. The right-wing students were the detonators of street violence and confronted left-wing students in and off the campuses. The mass media and the Catholic Church engaged in fear mongering to the mass audience. The social democratic academics preached ‘NO’ or abstention to their progressive colleagues and leftist students. The Trotskyists split up sectors of the trade unions with their pseudo-Marxist chatter about “Chavez the Bonapartist’ with his ‘capitalist’ and ‘imperialist’ proclivities, incited US trained students and shared the ‘NO’ platform with CIA funded CTV trade union bosses. Such were the unholy alliances in the run-up to the vote.

In the post-election period this unstable coalition exhibited internal differences. The center-right led by Zulia Governor Rosales calls for a new ‘encounter’ and ‘dialogue’ with the ‘moderate’ Chavista ministers. The hard right embodied in ex-General Baduel (darling of sectors of the pseudo-left) demands pushing their advantage further toward ousting President-elect Chavez and the Congress because he claimed “they still have the power to legislate reforms”! Such, such are our democrats! The leftists sects will go back to citing the texts of Lenin and Trotsky (rolling over in their graves), organizing strikes for wage increases…in the new context of rising right-wing power to which they contributed.

Campaign and Structural Weakness of the Constitutional Reformers

The Right-wing was able to gain their slim majority because of serious errors in the Chavista electoral campaign as well as deep structural weaknesses.

Referendum Campaign: 1) The referendum campaign suffered several flaws. President Chavez, the leader of the constitutional reform movement was out of the country for several weeks in the last two months of the campaign – in Chile, Bolivia, Colombia, France, Saudi Arabia, Spain and Iran) depriving the campaign of its most dynamic spokesperson. 2) President Chavez got drawn into issues which had no relevance to his mass supporters and may have provided ammunition to the Right. His attempt to mediate in the Colombian prisoner-exchange absorbed an enormous amount of wasted time and led, predictably, nowhere, as Colombia’s death squad President Uribe abruptly ended his mediation with provocative insults and calumnies, leading to a serious diplomatic rupture. Likewise, during the Ibero-American summit and its aftermath, Chavez engaged in verbal exchange with Spain’s tin-horn monarch, distracting him from facing domestic problems like inflation and elite-instigated hoarding of basic food stuffs.

Many Chavista activists failed to elaborate and explain the proposed positive effects of the reforms, or carry house-to-house discussions countering the monstrous propaganda (‘stealing children from their mothers’) propagated by parish priests and the mass media. They too facilely assumed that the fear-mongering lies were self-evident and all that was needed was to denounce them. Worst of all, several ‘Chavista’ leaders failed to organize any support because they opposed the amendments, which strengthened local councils at the expense of majors and governors.

The campaign failed to intervene and demand equal time and space in all the private media in order to create a level playing field. Too much emphasis was placed on mass demonstrations ‘downtown’ and not on short-term impact programs in the poor neighborhoods –solving immediate problems, like the disappearance of milk from store shelves, which irritated their natural supporters.
Structural weaknesses

There were two basic problems which deeply influenced the electoral abstention of the Chavez mass supporters: The prolonged scarcity of basic foodstuffs and household necessities, and the rampant and seemingly uncontrolled inflation (18%) during the latter half of 2007 which was neither ameliorated nor compensated by wage and salary increases especially among the 40% of self-employed workers in the informal sector.

Basic foodstuffs like powdered milk, meat, sugar, beans and many other items disappeared from both the private and even the public stores. Agro-businessmen refused to produce and the retail bosses refused to sell because state price controls (designed to control inflation) lessened their exorbitant profits. Unwilling to ‘intervene’ the Government purchased and imported hundreds of millions of dollars of foodstuffs – much of which did not reach popular consumers, at least not at fixed prices.

Partially because of lower profits and in large part as a key element in the anti-reform campaign, wholesalers and retailers either hoarded or sold a substantial part of the imports to black marketers, or channeled it to upper income supermarkets.

Inflation was a result of the rising incomes of all classes and the resultant higher demand for goods and services in the context of a massive drop in productivity, investment and production. The capitalist class engaged in disinvestment, capital flight, luxury imports and speculation in the intermediate bond and real estate market (some of whom were justly burned by the recent collapse of the Miami real estate bubble).

The Government’s half-way measures of state intervention and radical rhetoric were strong enough to provoke big business resistance and more capital flight, while being too weak to develop alternative productive and distributive institutions. In other words, the burgeoning crises of inflation, scarcities and capital flight, put into question the existing Bolivarian practice of a mixed economy, based on public-private partnership financing an extensive social welfare state. Big Capital has acted first economically by boycotting and breaking its implicit ‘social pact’ with the Chavez Government. Implicit in the social pact was a trade off: Big Profits and high rates of investment to increase employment and popular consumption. With powerful backing and intervention from its US partners, Venezuelan big business has moved politically to take advantage of the popular discontent to derail the proposed constitutional reforms. It’s next step is to reverse the halting momentum of socio-economic reform by a combination of pacts with social democratic ministers in the Chavez Cabinet and threats of a new offensive, deepening the economic crisis and playing for a coup.

Policy Alternatives

The Chavez Government absolutely has to move immediately to rectify some basic domestic and local problems, which led to discontent, and abstention and is undermining its mass base. For example, poor neighborhoods inundated by floods and mudslides are still without homes after 2 years of broken promises and totally inept government agencies.

The Government, under popular control, must immediately and directly intervene in taking control of the entire food distribution program, enlisting dock, transport and retail workers, neighborhood councils to insure imported food fills the shelves and not the big pockets of counter-reform wholesalers, big retail owners and small-scale black marketers. What the Government has failed to secure from big farmers and cattle barons in the way of production of food, it must secure via large-scale expropriation, investment and co-ops to overcome business ‘production’ and supply strikes. Voluntary compliance has been demonstrated NOT TO WORK. ‘Mixed economy’ dogma, which appeals to ‘rational economic calculus’, does not work when high stake political interests are in play.

To finance structural changes in production and distribution, the Government is obligated to control and take over the private banks deeply implicated in laundering money, facilitating capital flight and encouraging speculative investments instead of production of essential goods for the domestic market.

The Constitutional reforms were a step toward providing a legal framework for structural reform, at least of moving beyond a capitalist controlled mixed economy. The excess ‘legalism’ of the Chavez Government in pursuing a new referendum underestimated the existing legal basis for structural reforms available to the government to deal with the burgeoning demands of the two-thirds of the population, which elected Chavez in 2006.

In the post-referendum period the internal debate within the Chavez movement is deepening. The mass base of poor workers, trade unionists and public employees demand pay increases to keep up with inflation, an end to the rising prices and scarcities of commodities. They abstained for lack of effective government action – not because of rightist or liberal propaganda. They are not rightists or socialist but can become supportive of socialists if they solve the triple scourge of scarcity, inflation and declining purchasing power.

Inflation is a particular nemesis to the poorest workers largely in the informal sector because their income is neither indexed to inflation as is the case for unionized workers in the formal sector nor can they easily raise their income through collective bargaining as most of them are not tied to any contract with buyers or employers. As a result in Venezuela (as elsewhere) price inflation is the worst disaster for the poor and the reason for the greatest discontent. Regimes, even rightist and neo-liberal ones, which stabilize prices or sharply reduce inflation usually secure at least temporary support from the popular classes. Nevertheless anti-inflationary policies have rarely played a role in leftist politics (much to their grief) and Venezuela is no exception.

At the cabinet, party and social movement leadership level there are many positions but they can be simplified into two polar opposites. On the one side, the pro-referendum dominant position put forth by the finance, economy and planning ministries seek cooperation with private foreign and domestic investors, bankers and agro-businessmen, to increase production, investment and living standards of the poor. They rely on appeals to voluntary co-operation, guarantees to property ownership, tax rebates, access to foreign exchange on favorable terms and other incentives plus some controls on capital flight and prices but not on profits. The pro-socialist sector argues that this policy of partnership has not worked and is the source of the current political impasse and social problems. Within this sector some propose a greater role for state ownership and control, in order to direct investments and increase production and to break the boycott and stranglehold on distribution. Another group argues for worker self-management councils to organize the economy and push for a new ‘revolutionary state’. A third group argues for a mixed state with public and self-managed ownership, rural co-operatives and middle and small-scale private ownership in a highly regulated market.

The future ascendance of the mixed economy group may lead to agreements with the ‘soft liberal’ opposition – but failing to deal with scarcities and inflation will only exacerbate the current crisis. The ascendance of the more radical groups will depend on the end of their fragmentation and sectarianism and their ability to fashion a joint program with the most popular political leader in the country, President Hugo Chavez.

The referendum and its outcome (while important today) is merely an episode in the struggle between authoritarian imperial centered capitalism and democratic workers centered socialism.

Filed Under: DIARIES Tagged With: Latin America

PSUV: “The Struggle to Defend the Revolution and take it Forward”

November 2, 2007 by Radical Notes Leave a Comment

Interview with Francisco Rivero, Spokesperson for the ‘Armando Reveron’ Battalion of the United Socialist Party of Venezuela (PSUV)

By El Militante – venezuela.elmilitante.org Wednesday, 31 October 2007 and Marxist.com

El Militante: How is the process of creating the structures of the PSUV and the election of spokespeople, committee members and delegates developing in the run-up to the founding congress?

Francisco Rivero: In my area, Carabelleda, in Vargas, as in the rest of the country, the structures of the Battalions began to take shape on Saturday 28th July. We held an all-day meeting. Although in the initial sessions there was a degree of disorganisation, and failure in certain aspects of preparation and orientation, from the third session onwards the Battalions began functioning efficiently. In my district, the average attendance at meetings has swung a little towards the middle class. Battalions in the poor areas have an average attendance of some 80 comrades; in the middle class areas the average is 25 to 30 comrades.

A noticeable thing is the composition of the Battalions. It is striking that the vast majority of the men, women and youth who are active had no previous membership of other parties. The majority were not even members of Venezuelan Revolutionary Movement (RMV – the previous Bolivarian party). These are people who had despaired of politics during this revolutionary process, who support President Chavez and call themselves revolutionaries, Bolivarians, anti-imperialists and socialists. The only ideological education the majority have received is their own experiences during these ten years of revolution, and from the President’s speeches. Among these sections of the population there is vision, a motivation to participate in politics, huge enthusiasm and revolutionary will.

Over August and September, various issues relating to the agenda proposed by the National Policy Office which is presided over by Comrade Jorge Rodriguez, Vice-President of the Government, began to be discussed. In each Battalion, various commissions were organised:

Politics and ideology
Organisation
Propaganda and mobilisation
Social issues
Civil defence

Due to the fact the political situation become more acute as a result of the hysterical reaction of the right-wing to the proposed changes to the Constitution, which aim to move the revolution forward and promote popular power, President Chavez proposed speeding up the timetable for the party’s Founding Congress. The date for elections of spokespeople and committee members was brought forward, and these took place on October 8th. Over the past few weeks the political debate has centred around discussion of the proposed constitutional reforms.

EM: How were the elections conducted?

FR: During weekly meetings of the Battalions throughout August and September, the members of each battalion had the opportunity to get to know each other, debate politically, listen to every comrade’s views, hear what their proposals for political action were, and judge their capability, the steadfastness of their ideology and their revolutionary conviction. In my Battalion I put forward, from the start, a Marxist method and programme.
I think that the clarity of Marxist methods allowed me to gain the respect of the group, which elected me its spokesman in bringing about the socialist federation of the different constituencies.

The procedure for electing spokespeople, committee members and delegates was as follows: each Battalion elected one spokesperson and five committee members – one for each committee. The committee members were not elected by the committees themselves but the by Battalion as a whole. All elections were by secret ballot. The spokespeople and committee members of 10 Battalions in a given district come together to form a socialist federation. Weekly meetings take place in which they debate their positions and get to know each other, and one delegate from each federation is then elected to the Founding Congress, which is on 2nd November.

EM: What have been the main issues and concerns during the debates in the Battalions and socialist federations?

FR: The discussion over constitutional reform, which has raised very interesting views and proposals that reflect the aspirations of the revolutionary rank and file, and also concerns about particular mistakes and failures. There were also very strong criticisms over certain local and regional authorities (governors, mayors, councils). There were many speeches against the bureaucracy and concerns over ethical and ideological deviance – corruption and so on – that we are seeing among some public officials.

There was huge concern about the need for local councils to conform to revolutionary policies. We discussed how the PSUV and, specifically our Battalion, would run the local councils and develop popular power in our region.

EM: Some ultra-left sects who call themselves revolutionary, and even Marxist, say the the PSUV is not a revolutionary party, that it is ‘bourgeois’, ‘multi-class’. They offer as proof the fact that bureaucrats and even entrepreneurs have joined the party. As a PSUV activist, what is your reply to them?

FR: The wide popular participation in the formation of the PSUV, with more than 5 million waiting to join in support of the President’s proposals and a current membership of 1,500,000 activists, has been a blow against the bureaucratic elements. These controlled the MRV (Venezuelan Revolutionary Movement) and other parliamentary parties through the methods of cunning and cliqueism, using manoeuvres on quotas and eligibility in elections.

Now these bureaucratic and reformist elements, the counter-revolutionaries who infest the revolutionary movement disguised in red clothing, have reacted virulently to the clear evidence that they have lost control over the revolutionary organisation. These elements are doing, and will continue to do, all they can to try to prevent the participation of the rank and file, and try to control the Battalions and federations. But the results remain to be seen and will depend on the development of the class struggle and the revolutionary process. The important thing is that revolutionaries should work shoulder-to-shoulder with the masses in this struggle, and to win it. For now the bureaucratic elements are facing many problems, and their manoeuvres are being repudiated by large sections of the rank and file.

EM: How is the struggle between the reformist, the bureaucratic and the revolutionary factions within the revolutionary movement developing within the PSUV?

FR: One example of the fear of democratic debate and the participation of the rank and file, following the President’s proposal to create the PSUV from below, can be seen in the declarations of member of parliament Francisco Ameliach. Ameliach is a leading national protagonist of these reformist and bureaucratic factions. He went so far as to declare publicly that it was not timely to continue developing the PSUV and even gathered signatures from MPs calling for a return to the old structures of the MRV, at least until after the reform referendum. These proposals met with general rejection and were strongly criticised by President Chavez himself.

These elements, and their attempts to prevent debate and the participation of the rank and file in decision-making, have made their appearance in my Battalion. To cite one example, on the day of the election of spokespeople and committee members, various Vargas local government officials, who had scarcely attended a single meeting of the Battalion in the previous months, turned up to vote. This caused huge indignation among the other comrades in the Battalion, who reacted strongly, accusing them of political immorality and lack of revolutionary ethics. This, such as it is, is the situation in other Battalions.

Unfortunately, a last-minute manoeuvre succeeded in the National Policy Office changing its original position, which was that only those who had attended at least 50% of all meeting could vote or stand as candidates, to one which allowed those who had attended two meetings, including that on the day of the election, to vote.

In addition, and this is a sad observation, these bureaucratic and pro-capitalist elements are using their positions of power in relation to election of delegates to the Founding Congress in the federations to try to prevent the true reflection of the will of the rank and file. Spokespeople and committee members in some Battalions have been subjected to pressure. Some who work in public administration have even been threatened with the sack by some bureaucrats.

There have been campaigns to discredit some individuals and others have been offered bribes in the form of cushy jobs. In some Battalions where spokespeople who are not under the influence of the bureaucracy have been elected, the bureaucrats have challenged the results and in some cases have organised violent provocations. For instance, in another Battalion in my own district, Comrade Oduber (known as ‘Professor Oduber’), a well-known local social activist and fighter, who was elected spokesman for his Battalion, was even arbitrarily detained by the Chief of Police for denouncing these bureaucratic activities.

However, the most significant factor is the widespread and apposite response to the bureaucracy’s desperate actions in the overwhelming majority of Battalions. An example: in my federation during a political debate among the spokespeople and committee members elected by the different Battalions, a known representative of the regional bureaucracy – who demonstrated during his intervention a complete lack of understanding of revolutionary politics – in desperation at seeing he was in a minority, recommended that there be no election of delegates (‘because it would be divisive’) but rather an ‘entente cordiale’ between those in the federation with the most ‘political experience’. The spokespeople and committee members insisted that we were not interested in agreements between groups and cliques, but wanted democratic discussion, accountability and right of recall of delegates.

EM: What ideas, methods and programme do you, a Marxist elected as spokesman and candidate, and delegate for your Battalion to the Founding Congress, think the PSUV should defend?

FR: There is a strong yearning among the rank and file for the political programme of the PSUV to serve the interests of the people, that the PSUV become a genuine socialist, revolutionary party and that it not be under the control of hierarchies and cliques. As Marxists we have a responsibility to defend these wishes. We must participate in the process and through our ideas and methods strive to ensure the political programme of the PSUV is infused with the ideas of scientific socialism, the permanent revolution, and the central role of the working class in the revolutionary process; that we help bring about the expropriation of the oligarchs and replace the exploitation and barbarism of capitalism with a democratic, planned, socialist economy under workers’ control.

Equally, Marxists must openly support President Chavez’s proposal to press forward with the workers’, community and youth councils. At the same time, we call for the unification of these councils, that they be accountable and subject to recall at any time, at local, regional and national level, in order that they form the basis of a genuine revolutionary state to replace the capitalist state apparatus that remains in existence.

EM: What is your general overview to date on the establishment of the PSUV, and how do you think the party can develop in the future?

FR: If we draw a balance sheet, we can say with all certainly that the establishment of 15,000 Socialist Battalions throughout the country, that are discussing socialism, the constitutional reform and how to use it to overthrow capitalism, and so on, represents a revolution in the history of political parties in Venezuela. It is a crushing blow against the traditional way of doing politics in Venezuela, where previously everything was decided bureaucratically from above.

There is complete freedom of discussion and analysis within the debates we are conducting in the PSUV Battalions. There are no demarcation lines, there is complete freedom to implement changes, and everyone has equal right to participate. It remains for the Founding Congress, and thereafter, to fight to ensure it continues this way, and to enable the millions of Venezuelans involved in the PSUV to fight for socialism and a genuine revolutionary, Marxist, socialist programme – a democratic organisation with a leadership under right of recall that expresses the will of the rank and file, responds to it and is under its control.

The most significant element in all this is that for the first time a political organisation is being created from below, with the participation of workers, housewives, youth, peasants, professionals, etc., united in their neighbourhoods and districts or, in many cases (also very important) in their workplaces.

In this sense, I think it’s particularly important and significant that the workers in the abandoned factories taken over by the workers are running them under workers’ control. Inveval has formed its own Battalion and the vast majority of the workers in the factory are members of it. This is the way forward. The revolutionary union leaders must build PSUV Battalions in every factory so that the working class can play its appropriate role in the revolution.

Regardless of the balance of forces between the reformist and revolutionary factions, which will be reflected in the elections of delegates to the Founding Congress, we must be clear that the process towards the establishment of a mass revolutionary party in Venezuela has only just begun. It is a dialectical process that will be subjected to changes produced by the different junctures that will occur during the class struggle. The most important thing, over and above the concrete results the workers achieve in the election of spokespeople, committee members and delegates to the Founding Congress, is the existence of the 15,000 Battalions where there will be continued debate and revolutionary watchfulness, and where the struggle to defend the revolution and take it forward to its final victory will deepen in the coming period.

Filed Under: DIARIES Tagged With: Latin America, Venezuela

Without Workers Management There Can Be No Socialism

October 31, 2007 by Radical Notes Leave a Comment

Kiraz Janicke
Venezuelanalysis.com

Over the weekend of October 26 to 27, several hundred people attended a two day conference on Worker’s Management: Theory and Practice, as part of a program, “Human Development and Transformative Praxis,” run by Canadian Marxist academic Michael Lebowitz at the International Miranda Center in Caracas. The first day addressed the theory and historical experience of worker’s control and attempts to build socialism, with presentations by Pablo Levin, the Director of the Center for Planning and Development at the University of Buenos Aires, British Marxist economist Patrick Devine (the author of Democracy and Economic Planning), Michael Lebowitz, and sociologist Carlos Lanz Rodriguez, a former guerrilla and now president of CVG-ALCASA the state owned co-managed aluminum factory. The second day of the conference focused on the various practical experiences of worker occupied factories in Latin America. Speakers included, Carlos Quininir (Zanon) and Jose Abelli (FACTA), from the recovered factory movement in Argentina, Serge Goulart from the Occupied Factory Movement in Brazil, as well as spokespeople from various examples of state owned companies under workers control or workers co-management and worker run cooperatives in Venezuela, including the Tachira Textile Cooperative, Inveval – an expropriated valve manufacturing company under workers control, ALCASA, and Cemento Andino in Trujillo, one of the most recent examples of workers control in Venezuela.

During his opening presentation Lebowitz said, “On May Day 2005 I marched with workers in Caracas and the slogan workers were chanting at the time was, ‘Without co-management there is no revolution!'”

“Indeed, the main slogan of that march organized by the UNT [National Union of Workers] was “Co-management is revolution and Venezuelan workers are building Bolivarian socialism.”

From its beginning, the UNT, which came together in December 2002 when the old corrupt Confederation of Venezuelan Workers (CTV) supported the bosses lockout and sabotage of the oil industry and has functioned essentially as an alliance of trade unions and union leaders and is characterized by internal divisions.

Despite the million strong May Day march in 2005, the UNT was unable to organize a united May Day demonstration in 2006 and at its second congress shortly thereafter, in the context of simmering factional divisions, fractured over the question of whether to hold elections or wait until after the presidential elections in 2006 in order to focus on supporting Hugo Chavez’s campaign for presidency.

Since then the UNT has remained divided and although union leaders Orlando Chirino from the Current for Revolutionary Class Unity and Autonomy (C-CURA), and Marcela Maspero, of the Collective of Workers in Revolution (CRT), the two principal currents involved in the split, agreed in July to organize elections within the UNT before the end of this year, this has still not occurred. Although the UNT continues to organize on a regional level, it does not function as a united union federation and at the national level, it could be argued, its existence is nominal only.

Problems of Worker Management

As Lebowitz pointed out, we don’t hear much talk of co-management or workers control coming from the UNT anymore. “We don’t have masses of workers saying, ‘without worker management there is no socialism’ or ‘that you cannot build socialism without worker management.'” Nevertheless, Lebowitz argued, “I think we have to recognize the essential truth of this proposition”

Framing the discussion, Lebowitz said it is useful to look at the different dimensions of what President Chavez has called “the elementary triangle of socialism,” – units of social property, social production organized by workers, and production for the needs of communities. “You can’t separate these in socialism” he argued. Capitalism is based on a different triangle he said; private property, exploitation of labor, and production for profit.

Lebowitz then drew on the lessons of the experience of worker self-management in the former Yugoslavia. He pointed out that although the enterprises were state owned and were viewed as social property, they functioned in the market and were driven by one thing, self interest of the workers in an individual enterprise; there was no concept of solidarity, that is, production for the needs of communities.

In order to maximize the income of workers in each individual enterprise, they invested in automation to increase production, rather than take on new workers. By 1971 there was 7% unemployment in Yugoslavia, plus 20% of the workforce worked outside the country as guest workers in Western Europe.

“Legally these enterprises were social property, but social property means that everyone in society has equal access to the means of production and benefits from it, the unemployed though, had no access to the means of production.”

“In fact, what happened in the context of the market,” Lebowitz said, was “a new productive relation had emerged in these enterprises, group ownership, group property.”

“Of course” Lebowitz continued, “all members weren’t really equal – it was the managers and technical experts that had the knowledge about marketing products investments, banking, and establishing links with other enterprises, creating mergers.”

There was no sustained effort in the workplace to truly educate workers on how to run the enterprises, he added, “the result was that the distinction between thinking and doing remained.”

Workers became dependent on the managers and technical experts “and in the end it was the managers who emerged as the capitalists, leaving the workers as wage laborers.”

According to Lebowitz, the Yugoslav case “demonstrates that the existence of workers councils, even with the legal power to make decisions, is not the same as worker management.”

Additionally, “It demonstrates that the focus upon the self-interest of the workers in an individual enterprise is not the same as focusing on the interest of the working class as a whole.”

Lebowitz then came back to the elementary triangle of socialism; “Of course it can’t all be put into place once there is a long process of struggle to develop each side of that triangle, but if we are not actively building each side we inevitably infect the whole process. How can you build socialism without real workers management? How can you create real developed human beings, without protagonistic democracy in the workplace and the community?”

In his introductory presentation Devine said that the question of how to organize production had been the subject of fierce debate since the time of Marx and the two principal ways of achieving this had been either through the market or the system of central planning adopted in the Soviet Union, where there was no democracy and workers had no power to make decisions.

Devine agreed with Lebowitz that worker managed enterprises, which are truly autonomous, function as a form of “group private property” and he said by seeking to maximize income, “they set up pressures against the participation of workers”

In order to develop socially oriented production he argued that production decisions cannot be made solely by workers in an individual enterprise, but must be made with the participation of all the social owners of an enterprise, that is all the social groups affected by the activities of an enterprise, including suppliers, consumers, and environmental groups and so on, to determine what counts as social production.

In small-scale enterprises, Devine contended, it is fairly easy to determine what counts as social production. However, in much more complex and large-scale industries that involve production and distribution on a national or even international level and do not correspond to a single community, it is therefore more difficult to ascertain what can be determined as production in the social interest.

Therefore Devine suggested, “A model of bottom-up planning involving part of the social owners at each level through a process of coordinated negotiation, applied up to the national level and at an international level a coordinated set of activities that meet social needs at that level.”

“This is neither the anarchy of market forces, or top down planning, but participatory democratic planning from below, initially directly, then indirectly through elected and recallable representatives”

In this context, key debates in the discussion of how to build workers democracy and socialism, throughout the conference, included; not only the question of state owned enterprises under workers control vs. worker owned cooperatives and how to overcome the social division between intellectual and manual labor, but also how to build links with communities and the role of the trade unions in relation to the different experiences of workers’ participation. Different perspectives on these issues were reflected through the various examples from Argentina, Brazil and Venezuela.

Experiences of Worker Management in Latin America

Jose Abelli from FACTA, a network of independent workers cooperatives, explained that the recovered factory movement in Argentina, which is composed primarily of independent worker cooperatives with few ties to the traditional trade unions, developed as a defensive mechanism, “as a form of resistance to harsh neoliberalism” and was born directly out of the need to defend employment in the context of the economic crisis of 2000.

Abelli said that the 220 recovered and self managed factories in Argentina have generated 300 million dollars in the Argentine economy this year and generated 2,000 jobs since the economic crisis.

What the recovered factory movement in Argentina shows, Abelli argued, is that not only can workers manage factories, but also the economy and that, “we can administrate society in a manner more just than private capital.” “We have demonstrated that economy is not the property of a few powerful, important men,” he added.

However, for Abelli, it is important that the worker cooperatives in Argentina “are independent of political parties and the state.” This reflects a different political context. “We obviously don’t have a government like here in Venezuela,” he said.

Abelli also pointed out that the Venezuelan government was supporting the worker’s cooperatives in Argentina and had recently signed an agreement with FACTA for the purchase of 2,000 tractors.

Serge Goulart, a spokesperson for the Occupied Factories Movement in Brazil, which works closely with the unions and is part of the CUT (Central Union of Workers) said the Bolivarian revolution, is the “oxygen” of the workers movement in Brazil. He explained to the conference how the Venezuelan government is helping out the Flasko plastics factory in Sao Paulo, closed in 2003 and subsequently occupied by workers, by supplying raw materials in exchange for technology to produce plastic housing in Venezuela.

For Goulart, in contrast to Abelli, it is important for workers to demand 100% state ownership under workers control, because, “We don’t want to become small capitalists.”

However, Goulart explained that unlike many cooperatives in Argentina or the example of Inveval in Venezuela, where all workers are paid exactly the same, the occupied factories in Brazil had a policy of paying workers on the basis of award rates for different types of work, this is because, he explained, if skilled workers are not paid a higher rate they would look for work elsewhere and not stay with the occupied factories.

Goulart also warned of threats to workers management, not only by the governments and capitalists in Argentina and Brazil, but also from the state bureaucracy in Venezuela. He referred to the example of Sanatarios Maracay, where although the Venezuelan National Assembly has approved its expropriation, sections of the state bureaucracy have sided with a parallel union supported by the boss to remove occupying workers from the main installations of the factory.

A spokesperson from Inveval, Nelson Rodriguez, explained to the conference how the workers council functioned there. He said the highest decision making body is the general assembly of workers in the factory but also there are a number of elected permanent commissions, including finances, social and political formation, a technical commission, administration, discipline, security and control and services. However, to ensure democratic accountability within the factory, Rodriguez said any person elected to a commission could be recalled at any time through a general assembly of the workers council.

In order to overcome the division between intellectual or administrative labor and manual labor, they also rotate different types of work within the factory, combined with political discussion within the workers council, education for collective development, and technical training.

On the question of cooperatives vs. state ownership with workers’ control, Rodriguez told Venezuelanalysis.com that factories should be 100% state owned under worker control, because, “Cooperatives have a capitalist structure in reality.”

Also key to the experience at Inveval are the links between the workers council and the local community. Not only does the factory provide a space for health and education missions, but the workers council also participates in the local communal council.

Rodriguez presented to the conference an explanation of a delegate system developed by workers at Inveval based on their own experience, where workers councils send delegates to communal councils and vice versa, but which could be applied on a much broader scale to federations of workers councils and communal councils in order to construct structures of popular power.

A battalion of the new United Socialist Party of Venezuela (PSUV) also functions out of Inveval. Rodriguez told Venezuelanalysis.com, “The PSUV is a huge political school, to drive forward the revolution, and together with the construction of popular power proposed in the constitutional reform – through workers, students, campesino and communal councils, the aim is to create a socialist state, because the state is not socialist.”

“We participate in the battalion as workers, not as citizens, but from the point of view of workers.”

Significantly, Rodriguez explained that the workers council at Inveval developed largely outside the framework of the organized trade union movement in Venezuela. And in February 2006, the workers in Inveval initiated the Revolutionary Front of Workers in Occupied and Co-managed Factories (FRETECO), because, “We saw that here in Venezuela the unions were not supporting the struggle for occupying and taking over factories through the UNT.”

According to Rodriguez, the leaders of the UNT were more interested in factional struggles and winning elections, rather than putting forward a strategy that corresponded to the political reality of Venezuela.

“Therefore we saw the necessity to organize a way that we could support workers in taking over factories and support factories in the same situation,” he said

FRETECO held its first congress in October 2006 with workers from 15 occupied factories participating. However, it is open to all groups of workers involved in conflicts over occupied factories and is now comprised of approximately 20 factories, with workers from newly occupied factories regularly coming to them for advice and support.

The conference also heard from Alcides Rivero a spokesperson from ALCASA, arguably the most important experiment of workers co-management in Venezuela. In 2005, at the behest of President Chavez, a process of worker’s co-management was initiated in ALCASA, a company that had been owned by the state for 38 years, but had been run down by previous governments in order to prepare it for privatization.

Rivero outlined the first stage of co-management in ALCASA, “the construction of the political viability of co-management,” which was characterized by the initiation of open workers assemblies and discussion of an 18-point plan to re-launch the company and a process of electing a new management through secret ballot. Of the 2700 workers in ALCASA 95% participated in these elections. The workers also elected 36 spokespeople to work together with the management in making decisions.

“This revolutionary proposal of Chavez,” Rivero pointed out, “was an extraordinary experience, never before had workers been able to participate in making decisions.”

However, Rivero contended, there are obstacles. One of the obstacles is the culture within ALCASA, and “Every workplace has its own culture. In ALCASA there was a culture where workers only worked to get money, and didn’t have a vision of creating a new society.”

Related to this question of culture was the sharp polarization between different unions within ALCASA, principally the conflict between union leaders Trino Silva and Jose Gil. “The confrontation within the Chavista political movement within ALCASA is amazing,” Rivero said. According to Rivero, the unions in ALCASA, “have a monetarist view,” and “are concerned with power. They view the elected spokespeople as a threat.”

“This is a culture from the fourth republic,” Rivero argued. In order to overcome these cultural problems, Rivero said that political formation is essential; for this reason the Negro Primero Centre for Political and Social Formation was set up in ALCASA in 2005. However, not only is political formation necessary he said, but also technical training and education. “Together with workers from PDVSA we have created the Bolivarian University of Workers. I study there.”

Rivero also spoke of the challenges posed by the technocracy of the CVG industrial complex for co-management, “because the CVG is a monster.” “ALCASA is the only section of the CVG industrial complex that has co-management, there is also Venalum, Carbonorte Feromineria, but there is no line to push forward with co-management in these other sections,” he said.

Despite these challenges the process of workers co-management in ALCASA has resulted in significant achievements, including increased production, improved working conditions, and, according to a report on May 8 2007, “Balance and Perspectives on Co-management in CVG ALCASA” by Carlos Lanz Rodriguez, is now entering the “third stage of co-management” (the second stage being a focus on developing co-management and a new strategy for the company), which involves a debate and discussion on the humanization of labor, including the reduction of the working day, the democratization of knowledge to reduce the social division of labor within the factory and the decentralization of decision making through the construction of workers councils.

Another question for the development of workers democracy and socialism in Venezuela is the issue of worker’s management in strategic industries. During a report back session from a series of workshops on how to move forward with the struggle for workers management and socialism, workers asked, “Why can’t we have workers management in PDVSA?”

They pointed to the example of the guide committees, organic workers organizations that sprang up within PDVSA during the bosses lockout and sabotage of the oil industry in December 2002 to January 2003, saying these showed that workers could run strategic industries.

Not only is it necessary for the means of production to be socially owned, but that it is necessary for workers to be able to participate and make decisions in strategic industries, not just small factories, “if we are truly to advance to socialism” they asserted. In addition to making decisions in the factories, they argued, workers also need to make decisions within the institutions of the state, which are also very vertical.

The key task, they determined, is to build on and strengthen the existing examples of workers control, workers cooperatives, and workers organizations, and in particular to strengthen political consciousness of workers to deepen the struggle for socialism.

“The political formation of the workers is essential, but not only political formation, also ideological and technical formation and training are necessary for workers to run factories and society,” one woman said.

In his closing presentation Lebowitz questioned the lack of confidence in workers to manage strategic industries such as PDVSA, saying “the same logic that say’s there’s no place for co-management in strategic industries would also extend to the position that there’s no place for workers’ strikes in those sectors.”

Lebowitz also pointed out that while cooperatives don’t fundamentally break with private property, they could act as an “important school for socialism” showing that workers do not need bosses. “This is obvious when we hear the workers here and see the sense of pride and dignity that they have.”

Similarly, he said that the example of Yugoslavia showed that state owned enterprises under workers control in and of themselves were insufficient to create socialism, but could be viewed as Lenin described them as a “threshold” on the path to socialism.

What is necessary, Lebowitz argued, is to shift the focus from the self-interest of workers in an individual state enterprise or workers cooperative to the general interest of society as a whole. “This cannot be achieved by a distant state telling the workers ‘you must serve society'” he continued, but conversely, what is needed is a strong community voice. Lebowitz then pointed to the example of the communal councils in Venezuela as an essential tool, together with the workers cooperatives and state enterprises under workers control or co-management, to push forward the struggle for socialism.

A key weakness in the struggle for workers management and socialism in Venezuela, Lebowitz pointed out, is the lack of a political strategy and the economism of the trade unions. “Their whole orientation towards higher wages and their tendency to act like a labor aristocracy in a society where so many people are poor.” This is not just a case of bad policy Lebowitz argued, “There are in fact structural reasons for the way they behave.”

What is happening to the UNT he said “is the reproduction of the privileges of the trade unions in the Fourth Republic.” Therefore, Lebowitz concluded, “Not only do you need a revolutionary state, you also need new revolutionary trade unions.”

Summing up, Devine argued that the logic for state owned enterprises under workers control as opposed to worker owned cooperatives is compelling because it, “at least formally, represents the society as a whole” where as cooperatives represent a form of “group private property.”

But, he said, that depends on two things; firstly, “the nature of the state, the extent to which it remains a capitalist state, the extent to which it is a socialist state, the extent to which it is a state in transition.” In Venezuela, Devine contended, there is “a state in transition.” “If it is the case that Venezuela is in a transitional phase, then of course you either go forward or you go back.”

Devine suggested, that “One way of thinking about the way forward in Venezuela is to think of transforming state property into social property, to create a structured system of democratic participatory planning, which is built up from below, but results in an integrated plan that has been created by the localities and the enterprises themselves.”

“The immediate task facing revolution,” he added, “is the development of participatory worker councils and communal councils. Without these, together with education programs and the human transformation they enable, nothing else is possible, this is an immense task and will take place over a long period.”

“One thing that is clear from historical experience is that, without active participation of workers, the community and other groups in civil society there can be no socialism.” However, Devine concluded, “I am inspired by the enthusiasm, the knowledge, the commitment of the people here, and I have great confidence that you will succeed in moving things forward, but it will obviously not be easy.”

Source URL: http://www.venezuelanalysis.com/analysis/2784

Filed Under: DIARIES Tagged With: Latin America, Working Class

James Petras’ critique of “progressive regimes”

March 26, 2007 by Radical Notes Leave a Comment

Pratyush Chandra

James Petras has been criticised for his “ultra-leftism”. Petras doesn’t need my defence, if any at all. But since some comrades have raised concerns about ultra-leftism of the leftist critique of the sarkari left in India, I thought it pertinent to use my defence of Petras as a personal exercise in understanding this ultraleftophobia gripping these genuine comrades.

In criticising Petras, what is generally put forward is a list of few statements that he made while critiquing some of the progressive regimes in Latin America, which were ‘apparently’ proven wrong. His oft-quoted statement is about Chavez in his post-2004 referendum note, where he indicated at “the internal contradictions of the political process in Venezuela”, while simultaneously asserting that Chavez’s support “was based on class/race divisions”. Petras showed the flipside of the contradictions – while considering Chavez’s referendum win as a defeat of imperialism, he asserted,

“But a defeat of imperialism does not necessarily mean or lead to a revolutionary transformation, as post-Chavez post-election appeals to Washington and big business demonstrate…The euphoria of the left prevents them from observing the pendulum shifts in Chavez discourse and the heterodox social welfare–neo-liberal economic politics he has consistently practiced.”

He also stated that referendum results showed “that elections can be won despite mass media opposition if previous mass struggle and organization created mass social consciousness.” Differentiating Chavez from other national-populist leaders in Latin America, Petras said,

“In effect there is a bloc of neo-liberal regimes arrayed against Chavez’s anti-imperialist policies and mass social movements. To the extent that Chavez continues his independent foreign policy his principle allies are the mass social movements and Cuba.”

In his apparently pessimistic assessments about Lula, post-referendum Venezuela and now about Morales, Petras’ main focus has always been to critique the euphoric assessment of these regimes and put forward a political economic perspective of the developments. Retrospectively, one might assert that his pessimism with regard to Venezuela was not well-founded, but the fact that something did not happen is not a sufficient critique of the prognostication of what could have happened.

Petras’ pessimistic judgement and his optimistic ground engagement with various revolutionary movements in Latin America and throughout the world are two sides of the same “radical” coin – “pessimism of the intellect, optimism of the will”. His optimism allows him to see revolutionary potential within a particular situation, while his pessimism forces him to deconstruct the situation into various tendencies, class forces, class balance etc that may enhance or scuttle the realisation of that potential. For him as for other Marxists, history is not linear – at any given moment of time, there are various tendencies, countertendencies and social variables operating that synthetically determine the future – there is no single cause, and there is no single effect. Isn’t it a normal Marxist exercise – to identify this synthetic dynamics, while indicating possible “futures”? Isn’t it better to see the danger, which eventually may or may not realise into any mishap, and guard oneself against it, rather than not seeing any, and lead oneself willingly and with all enthusiasm to a dead-end? Another scholar-activist involved in Latin American transformation who never tires to talk about ‘contradictions along the path’ is Michael Lebowitz, when others are rolling drunkenly in optimist euphoria:

“The problem of the Venezuelan revolution is from within. It’s whether it will be deformed by people around Chavez.”

Lebowitz and Petras differ in their discursive tenor because of the differences in the loci of their political engagement, but they come from the great tradition of Marxists who have utilised Marxism to understand the day-to-day developments in global class struggle, without slipping into journalistic tinkering with appearances.

It would have been a different matter, if Petras had stopped short of presenting the revolutionary direction and started talking like radical fatalists and sectists. For them it is enough whether a leader or organisation has decried Stalin or not, whether s/he reads Trotsky or not, how many times s/he utters the word “imperialism” etc. For some of these people, allegiances to a particular sect, ideology is enough – a bible in one hand, and cross in another, drives away all counter-revolutionary devils around. What else are these convictions, if not “cabinets of fossils”! On the other hand, “metropolitan” leftists – Western (including many Non-Resident Third Worldists (NRTs)), Eastern, Southern…- who suffer from the guilt of unable to do anything concrete at the place of their being, celebrate every tokenism that fits into their utopia of progress, justice, democracy… In good faith (with a tinge of self-hatred and superiority complex), they think it’s their duty to “patronise” the Other, in most of their forms, of course only if these fit into their educated (non)sense.

Petras’ understanding of the Bolivian and Brazilian developments is from the point of view of the self-organisation and assertion of the working classes – urban and rural. The issue for Petras, even in his past assessment of Chavez, has been whether the political-parliamentary impact of the movements (accommodation of sections of their leadership in state formation) is enhancing and channelling the class capacity of the working class or it is simply institutionalising these movements and transforming them into representative lobbies, reducing class struggle to clashes of interest groups. The peculiarity of the new situations in Latin America, which also underlines their contradictions, to some extent derives from the statist component. The fact that the progressive governments are being constituted within the frame of bourgeois democracy poses new challenges for the popular movements and their relationship with the State. This situation makes it all the more urgent to recognise that, “We now have a state [which is not even formally workers-peasants state, like the Soviet] under which it is the business of the massively organised proletariat to protect itself, while we, for our part, must use these workers’ organisations to protect the workers from their state, and to get them to protect our state” (Lenin), while simultaneously heading towards a fundamental transformation of the state’s character. In this scenario, it becomes a primary task of the intellectuals organically linked to the working class to be extra vigilant and identify the various contradictions and tendencies affecting its movements, while delineating the possible directions that these movements can take in a perpetual ideological class struggle within. Petras in his critiques does exactly this.

Reading Petras in West Bengal

Petras in his recent article on Morales enumerates the implications of development strategies that “progressive” governments follow to “stabilize the economy, overcome the ‘crisis’, reconstruct the productive structure”, instead of recognising the fact that they are empowered “because of the crisis of the economic system” and their task should be “to change the economic structures in order to consolidate power while the capitalist class is still discredited, disorganized and in crisis.” Interestingly what is happening in West Bengal today is precisely this, where the Left Front government is indulging in reconstruction of the productive structure the way the Indian ruling class wants. However, definitely the internalisation of the hegemonic bourgeois needs within the Left Front (LF) is completer because of its 30 years rule in comparison to the newly elected governments in Latin America. Further, the Indian LF’s political cost for not following the neoliberal policies could have been far less, as it could have lost power in a fragment of the Indian state, where it does not have any sovereignty, while gaining political leverage throughout the country.

According to Petras, the stabilization strategy “allows the capitalist class time to regroup and recover from their political defeat, discredit and disarray”, while the working class is left on the receiving end to suffer the “costs of reconstruction and crisis management”. Also, “[b]y holding back on social spending and imposing restraints on labor demands and mobilization, the regime allows the capitalists to recover their rates of profit and to consolidate their class hegemony” Clearly, the left front’s repression of the trade union and peasant self-organisation especially since the 1990s have consolidated the capitalist class hegemony – material and ideological, while demobilising the exploited classes.

The industrialisation policies of the West Bengal government have weakened its popular social base”, strengthening “the recovery of its class opponents”, and thus are creating “major obstacles to any subsequent effort at structural change”. Its “policy revives a powerful economic power configuration within the political institutional structure which precludes any future changes. It is impossible to engage in serious structural changes once the popular classes have been demobilized, the capitalist class has overcome its crisis and the new political class is integrated into consolidated economic system. Stabilization strategy does not temporarily postpone change; it structurally precludes it for the future”.

Further, to think that if a progressive “regime ‘adapts’ to the regrouped capitalist class” it can be stabilised is just an illusion, “because the capitalist class prefers its own political leaders and instruments and rejects any party or movement whose mass base can still exercise pressure.” Aren’t these some basic lessons that we must learn – in Bolivia, West Bengal and everywhere?

Filed Under: DIARIES Tagged With: Economy, India, Latin America, Politics

Global Ruling Class: Billionaires and How They “Made It”

March 25, 2007 by Radical Notes Leave a Comment

James Petras

While the number of the world’s billionaires grew from 793 in 2006 to 946 this year, major mass uprisings became commonplace occurrences in China and India. In India, which has the highest number of billionaires (36) in Asia with total wealth of $191 billion USD, Prime Minister Singh declared that the greatest single threat to ‘India’s security’ were the Maoist led guerrilla armies and mass movements in the poorest parts of the country. In China, with 20 billionaires with $29.4 billion USD net worth, the new rulers, confronting nearly a hundred thousand reported riots and protests, have increased the number of armed special anti-riot militia a hundred fold, and increased spending for the rural poor by $10 billion USD in the hopes of lessening the monstrous class inequalities and heading off a mass upheaval.

The total wealth of this global ruling class grew 35% year to year topping $3.5 trillion USD, while income levels for the lower 55% of the world’s 6-billion-strong population declined or stagnated. Put another way, one hundred millionth of the world’s population (1/100,000,000) owns more than over 3 billion people. Over half of the current billionaires (523) came from just 3 countries: the US (415), Germany (55) and Russia (53). The 35% increase in wealth mostly came from speculation on equity markets, real estate and commodity trading, rather than from technical innovations, investments in job-creating industries or social services.

Among the newest, youngest and fastest-growing group of billionaires, the Russian oligarchy stands out for its most rapacious beginnings. Over two-thirds (67%) of the current Russian billionaire oligarchs began their concentration of wealth in their mid to early twenties. During the infamous decade of the 1990’s under the quasi-dictatorial rule of Boris Yeltsin and his US-directed economic advisers, Anatoly Chubais and Yegor Gaidar the entire Russian economy was put up for sale for a ‘political price’, which was far below its real value. Without exception, the transfers of property were achieved through gangster tactics – assassinations, massive theft, and seizure of state resources, illicit stock manipulation and buyouts. The future billionaires stripped the Russian state of over a trillion dollars worth of factories, transport, oil, gas, iron, coal and other formerly state-owned resources.

Contrary to European and US publicists, on the Right and Left, very few of the top former Communist leaders are found among the current Russian billionaire oligarchy. Secondly, contrary to the spin-masters’ claims of ‘communist inefficiencies’, the former Soviet Union developed mines, factories, energy enterprises were profitable and competitive, before they were taken over by the new oligarchs. This is evident in the massive private wealth that was accumulated in less than a decade by these gangster-businessmen.

Virtually all the billionaires’ initial sources of wealth had nothing to do with building, innovating or developing new efficient enterprises. Wealth was not transferred to high Communist Party Commissars (lateral transfers) but was seized by armed private mafias run by recent university graduates who quickly capitalized on corrupting, intimidating or assassinating senior officials in the state and benefiting from Boris Yeltsin’s mindless contracting of ‘free market’ Western consultants.

Forbes Magazine puts out a yearly list of the richest individuals and families in the world. What is most amusing about the famous Forbes Magazine’s background biographical notes on the Russian oligarchs is the constant reference to their source of wealth as ‘self-made’ as if stealing state property created by and defended for over 70 years by the sweat and blood of the Russian people was the result of the entrepreneurial skills of thugs in their twenties. Of the top eight Russian billionaire oligarchs, all got their start from strong-arming their rivals, setting up ‘paper banks’ and taking over aluminum, oil, gas, nickel and steel production and the export of bauxite, iron and other minerals. Every sector of the former Communist economy was pillaged by the new billionaires: Construction, telecommunications, chemicals, real estate, agriculture, vodka, foods, land, media, automobiles, airlines etc..

With rare exceptions, following the Yeltsin privatizations all of the oligarchs quickly rose to the top or near the top, literally murdering or intimidating any opponents within the former Soviet apparatus and competitors from rival predator gangs.

The key ‘policy’ measures, which facilitated the initial pillage and takeovers by the future billionaires, were the massive and immediate privatizations of almost all public enterprises by the Gaidar/Chubais team. This ‘Shock Treatment’ was encouraged by a Harvard team of economic advisers and especially by US President Clinton in order to make the capitalist transformation irreversible. Massive privatization led to the capitalist gang wars and the disarticulation of the Russian economy. As a result there was an 80% decline in living standards, a massive devaluation of the Ruble and the sell-off of invaluable oil, gas and other strategic resources at bargain prices to the rising class of predator billionaires and US-European oil and gas multinational corporations. Over a hundred billion dollars a year was laundered by the mafia oligarchs in the principle banks of New York, London, Switzerland, Israel and elsewhere – funds which would later be recycled in the purchase of expensive real estate in the US, England, Spain, France as well as investments in British football teams, Israeli banks and joint ventures in minerals.

The winners of the gang wars during the Yeltsin reign followed up by expanding operations to a variety of new economic sectors, investments in the expansion of existing facilities (especially in real estate, extractive and consumer industries) and overseas. Under President Putin, the gangster-oligarchs consolidated and expanded – from multi-millionaires to billionaires, to multi-billionaires and growing. From young swaggering thugs and local swindlers, they became the ‘respectable’ partners of American and European multinational corporations, according to their Western PR agents. The new Russian oligarchs had ‘arrived’ on the world financial scene, according to the financial press.

Yet as President Putin recently pointed out, the new billionaires have failed to invest, innovate and create competitive enterprises, despite optimal conditions. Outside of raw material exports, benefiting from high international prices, few of the oligarch-owned manufacturers are earning foreign exchange, because few can compete in international markets. The reason is that the oligarchs have ‘diversified’ into stock speculation (Suleiman Kerimov $14.4 billion USD), prostitution (Mikhail Prokhorov $13.5 billion USD), banking (Fridman $12.6 billion USD) and buyouts of mines and mineral processing plants.

The Western media has focused on the falling out between a handful of Yeltsin-era oligarchs and President Vladimir Putin and the increase in wealth of a number of Putin-era billionaires. However, the biographical evidence demonstrates that there is no rupture between the rise of the billionaires under Yeltsin and their consolidation and expansion under Putin. The decline in mutual murder and the shift to state-regulated competition is as much a product of the consolidation of the great fortunes as it is the ‘new rules of the game’ imposed by President Putin. In the mid 19th century, Honore Balzac, surveying the rise of the respectable bourgeois in France, pointed out their dubious origins: “Behind every great fortune is a great crime.” The swindles begetting the decades-long ascent of the 19th century French bourgeoisie pale in comparison to the massive pillage and bloodletting that created Russia’s 21st century billionaires.

Latin America

If blood and guns were the instruments for the rise of the Russian billionaire oligarchs, in other regions the Market, or better still, the US-IMF-World Bank orchestrated Washington Consensus was the driving force behind the rise of the Latin American billionaires. The two countries with the greatest concentration of wealth and the greatest number of billionaires in Latin America are Mexico and Brazil (77%), which are the two countries, which privatized the most lucrative, efficient and largest public monopolies. Of the total $157.2 billion USD owned by the 38 Latin American billionaires, 30 are Brazilians or Mexicans with $120.3 billion USD. The wealth of 38 families and individuals exceeds that of 250 million Latin Americans; 0.000001% of the population exceeds that of the lowest 50%. In Mexico, the income of 0.000001% of the population exceeds the combined income of 40 million Mexicans. The rise of Latin American billionaires coincides with the real fall in minimum wages, public expenditures in social services, labor legislation and a rise in state repression, weakening labor and peasant organization and collective bargaining. The implementation of regressive taxes burdening the workers and peasants and tax exemptions and subsidies for the agro-mineral exporters contributed to the making of the billionaires. The result has been downward mobility for public employees and workers, the displacement of urban labor into the informal sector, the massive bankruptcy of small farmers, peasants and rural labor and the out-migration from the countryside to the urban slums and emigration abroad.

The principal cause of poverty in Latin American is the very conditions that facilitate the growth of billionaires. In the case of Mexico, the privatization of the telecommunication sector at rock bottom prices, resulted in the quadrupling of wealth for Carlos Slim Helu, the third richest man in the world (just behind Bill Gates and Warren Buffet) with a net worth of $49 billion USD. Two fellow Mexican billionaires, Alfredo Harp Helu and Roberto Hernandez Ramirez benefited from the privatization of banks and their subsequent de-nationalization, selling Banamex to Citicorp.

Privatization, financial de-regulation and de-nationalization were the key operating principles of US foreign economic policies implemented in Latin America by the IMF and the World Bank. These principles dictated the fundamental conditions shaping any loans or debt re-negotiations in Latin America.

The billionaires-in-the-making, came from old and new money. Some began to raise their fortunes by securing government contracts during the earlier state-led development model (1930’s to 1970’s) and others through inherited wealth. Half of Mexican billionaires inherited their original multi-million dollar fortunes on their way up to the top. The other half benefited from political ties and the subsequent big payola from buying public enterprises cheap and then selling them off to US multi-nationals at great profit. The great bulk of the 12 million Mexican immigrants who crossed the border into the US have fled from the onerous conditions, which allowed Mexico’s traditional and nouveaux riche millionaires to join the global billionaires’ club.

Brazil has the largest number of billionaires (20) of any country in Latin America with a net worth of $46.2 billion USD, which is greater than the new worth of 80 million urban and rural impoverished Brazilians. Approximately 40% of Brazilian billionaires started with great fortunes – and simply added on – through acquisitions and mergers. The so-called ‘self-made’ billionaires benefited from the privatization of the lucrative financial sector (the Safra family with $8.9 billion USD) and the iron and steel complexes.

How to Become a Billionaire

While some knowledge, technical and ‘entrepreneurial skills’ and market savvy played a small role in the making of the billionaires in Russia and Latin America, far more important was the interface of politics and economics at every stage of wealth accumulation.

In most cases there were three stages:

1.During the early ‘statist’ model of development, the current billionaires successfully ‘lobbied’ and bribed officials for government contracts, tax exemptions, subsidies and protection from foreign competitors. State handouts were the beachhead or take-off point to billionaire status during the subsequent neo-liberal phase.

2.The neo-liberal period provided the greatest opportunity for seizing lucrative public assets far below their market value and earning capacity. The privatization, although described as ‘market transactions’, were in reality political sales in four senses: in price, in selection of buyers, in kickbacks to the sellers and in furthering an ideological agenda. Wealth accumulation resulted from the sell-off of banks, minerals, energy resources, telecommunications, power plants and transport and the assumption by the state of private debt. This was the take-off phase from millionaire toward billionaire status. This was consummated in Latin America via corruption and in Russia via assassination and gang warfare.

3.During the third phase (the present) the billionaires have consolidated and expanded their empires through mergers, acquisitions, further privatizations and overseas expansion. Private monopolies of mobile phones, telecoms and other ‘public’ utilities, plus high commodity prices have added billions to the initial concentrations. Some millionaires became billionaires by selling their recently acquired, lucrative privatized enterprises to foreign capital.

In both Latin America and Russia, the billionaires grabbed lucrative state assets under the aegis of orthodox neo-liberal regimes (Salinas-Zedillo regimes in Mexico, Collor-Cardoso in Brazil, Yeltsin in Russia) and consolidated and expanded under the rule of supposedly ‘reformist’ regimes (Putin in Russia, Lula in Brazil and Fox in Mexico). In the rest of Latin America (Chile, Colombia and Argentina) the making of the billionaires resulted from the bloody military coups and regimes, which destroyed the socio-political movements and started the privatization process. This process was then even more energetically promoted by the subsequent electoral regimes of the right and ‘center-left’.

What is repeatedly demonstrated in both Russia and Latin America is that the key factor leading to the quantum leap in wealth – from millionaires to billionaires – was the vast privatization and subsequent de-nationalization of lucrative public enterprises.

If we add to the concentration of $157 billion in the hands of an infinitesimal fraction of the elite, the $990 billion USD taken out by the foreign banks in debt payments and the $1 trillion USD (one thousand billion) taken out by way of profits, royalties, rents and laundered money over the past decade and a half, we have an adequate framework for understanding why Latin America continues to have over two-thirds of its population with inadequate living standards and stagnant economies.

The responsibility of the US for the growth of Latin American billionaires and mass poverty is several-fold and involves a wide gamut of political institutions, business elites, and academic and media moguls. First and foremost the US backed the military dictators and neo-liberal politicians who set up the billionaire-oriented economic models. It was ex-President Clinton, the CIA and his economic advisers, in alliance with the Russian oligarchs, who provided the political intelligence and material support to put Yeltsin in power and back his destruction of the Russian Parliament (Duma) in 1993 and the rigged elections of 1996. And it was Washington, which allowed hundreds of billions of dollars to be laundered in US banks throughout the 1990’s as the US Congressional Sub-Committee on Banking (1998) revealed.

It was Nixon, Kissinger and later Carter and Brzezinski, Reagan and Bush, Clinton and Albright i who backed the privatizations pushed by Latin American military dictators and civilian reactionaries in the 1970’s, 1980’s and 1990’s . Their instructions to the US representatives in the IMF and the World Bank were writ large: Privatize, de-regulate and de-nationalize (PDD) before any loans should be negotiated.

It was US academics and ideologues working hand in glove with the so-called multi-lateral agencies, as contracted economic consultants, who trained, designed and pushed the PDD agenda among their former Ivy League students-turned-economic and finance ministers and Central Bankers in Latin America and Russia.

It was US and EU multi-national corporations and banks which bought out or went into joint ventures with the emerging Latin American billionaires and who reaped the trillion dollar payouts on the debts incurred by the corrupt military and civilian regimes. The billionaires are as much a product and/or by-product of US anti-nationalist, anti-communist policies as they are a product of their own grandiose theft of public enterprises.

Conclusion

Given the enormous class and income disparities in Russia, Latin America and China (20 Chinese billionaires have a net worth of $29.4 billion USD in less than ten years), it is more accurate to describe these countries as ‘surging billionaires’ rather than ’emerging markets’ because it is not the ‘free market’ but the political power of the billionaires that dictates policy.

Countries of ‘surging billionaires’ produce burgeoning poverty, submerging living standards. The making of billionaires means the unmaking of civil society – the weakening of social solidarity, protective social legislation, pensions, vacations, public health programs and education. While politics is central, past political labels mean nothing. Ex-Marxist Brazilian ex-President Cardoso and ex-trade union leader President Lula Da Silva privatized public enterprises and promoted policies that spawn billionaires. Ex-Communist Putin cultivates certain billionaire oligarchs and offers incentives to others to shape up and invest.

The period of greatest decline in living standards in Latin America and Russia coincide with the dismantling of the nationalist populist and communist economies. Between 1980-2004, Latin America – more precisely Brazil, Argentina and Mexico – stagnated at 0% to 1% per capita growth. Russia saw a 50% decline in GNP between 1990-1996 and living standards dropped 80% for everyone except the predators and their gangster entourage.

Recent growth (2003-2007), where it occurs, has more to do with the extraordinary rise in international prices (of energy resources, metals and agro-exports) than any positive developments from the billionaire-dominated economies. The growth of billionaires is hardly a sign of ‘general prosperity’ resulting from the ‘free market’ as the editors of Forbes Magazine claim. In fact it is the product of the illicit seizure of lucrative public resources, built up by the work and struggle of millions of workers, in Russia and China under Communism and in Latin America during populist-nationalist and democratic-socialist governments. Many billionaires have inherited wealth and used their political ties to expand and extend their empires – it has little to do with entrepreneurial skills.

The billionaires’ and the White House’s anger and hostility toward President Hugo Chavez of Venezuela is precisely because he is reversing the policies which create billionaires and mass poverty: He is re-nationalizing energy resources, public utilities and expropriating some large landed estates. Chavez is not only challenging US hegemony in Latin America but also the entire PDD edifice that built the economic empires of the billionaires in Latin America, Russia, China and elsewhere.

Note: The primary data for this essay is drawn from Forbes Magazine’s “List of the World’s Billionaires” published March 8, 2007.

Filed Under: DIARIES Tagged With: Economic Notes, Economy, Latin America

President Chavez and the FARC: State and Revolution

Venezuelan Referendum: A Post-Mortem and its Aftermath

PSUV: “The Struggle to Defend the Revolution and take it Forward”

Without Workers Management There Can Be No Socialism

James Petras’ critique of “progressive regimes”

Global Ruling Class: Billionaires and How They “Made It”

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