Chavismo is more than a pact with a dead man

On Saturday I wrote about how Venezuela under Chavez has emerged as the only place in the world where it would be almost impossible to impose austerity. In light of President Chavez’s passing, I’d like to say a little more.

As Venezuelans poured onto the streets to begin days of mourning, corporate news outlets have predictably taken the opportunity to again cast the Venezuelan President as a divisive egomaniac on the edge of an inevitable economic collapse. But even Simon Romero, the New York Times’s laziest foreign correspondent, had to admit “[t]hough he met opposition at home, he enjoyed broad support, in part by going into the slums to establish health clinics staffed by Cuban doctors and state-run stores selling subsidized food. These and other social welfare programs could be corrupt and inefficient, but they made the poor feel included in a society that had long ignored them.”

It’s simply a matter of fact that President Chavez’s policies have slashed poverty and inequality rates and introduced decentralized, participatory government at the local level (all while maintaining steady productivity growth and low foreign public debt. The Bolivarian Revolution in Venezuela and Latin America is ongoing, but under Chavez’s leadership much of the region has already united under the banner of democratic reforms and regional solidarity – often in defiance of the Washington Consensus and neoliberal institutions like the IMF and World Bank. What’s so sinister about the mainstream obsession with Chavez’s personality is that it obscures a far more serious question: What will become of Chavismo without him? Compared to the gains at stake, whether or not one “liked” Chavez is, to put it politely, trivial. Everyone in the world who wants to see progressive change and a more democratic economy has a horse in this race.

Because Venezuela has the world’s largest crude oil reserves, Chavez was able to finance a 60.6% increase in social spending, and take a leading role on the regional stage, in large part by “re-nationalizing” Venezuela’s oil production. From 1999-2003, the Chavez administration attempted to regain control of the state-owned oil company, PDVSA, sparking a conflict with the oil industry that came to a head in 2002 with a US-backed coup attempt and subsequent oil strike. Stripping foreign multinationals like Exxon Mobil and ConocoPhillips of assets in 2007, the Chavez administration mandated the state oil company PDVSA hold no less than a 60% share of the industry. Domestically, Chavismo has used oil revenues to fund the “Bolivarian missions”, federal anti-poverty and social justice programs tasked with giving millions of Venezuelans access to housing, food, education, health care, pensions, and other services. While the US budget raised taxes on most Americans, at the same time shelling out billions in corporate subsidiesVenezuelan tax credits for cooperatives have increased workplace democracy a thousandfold.

Venezuela also spends billions annually to build infrastructure and reduce poverty in its Latin American neighbors, particularly other ALBA countries like Bolivia, Nicaragua, and Cuba. In Nicaragua, the government of Daniel Ortega receives over half a billion annually in gifts, loans and cheap oil from Venezuela. The oil-for-doctors program between Cuba and Venezuela has benefitted both countries immensely, with Cuba providing 31,000 doctors and training 40,000 Venezuelan medical professionals as part of Mission Barrio Adentro, Chavez’s comprehensive, universal health care program.

It’s common for neoliberal economists to claim that Venezuela’s growth has been over-reliant on a commodity boom and is therefore “unsustainable”. But while oil makes up the vast majority of Venezuela’s exports, exports are only around 20% of the economy. The reality is that a great many “analysts” have spent the last 14 years gleefully predicting the economy’s imminent collapse. During Venezuela’s recovery from the 2002-03 post-oil strike recession, the IMF repeatedly underestimated economic growth by gigantic margins of 10.6, 6.8, and 5.8 percentage points in 2004, ’05 and ’06, respectively. As Mark Weisbrot (who has been doing superb work on Latin American economic policies) writes in a report for the Center for Economic and Policy Research, “Even if oil prices were to crash temporarily, as they did in 2008-2009, Venezuela has room to borrow and pursue a stimulus program. The current program to ease the country’s housing shortage produced 147,000 new homes last year. This is comparable to building 1.6 million homes in the United States, and has served as a stimulus to Venezuela’s economic recovery.”

Venezuela can borrow comfortably in the event of a crisis, due in large part to its low foreign public debt (in 2012, only 1% of GDP) as well the willingness of global allies like China, Brazil, and Russia to lend billions to a key strategic partner. Opponents of Chavismo might object that this sort of social spending and public investment is inflationary. High inflation can indeed hinder economic growth. But the economy has steadily expanded, and with it Venezuela’s poor, middle class, and rich have all increased their wealth. The Chavez administration has limited the negative impact of inflation on the vast majority of people through nationalization, price and capital controls, and raising the minimum wage. And inflation under Chavez has been less than half what it was when there was far, far less social spending (averaging 45% per year from 1989-93 and 55% from 1993-98).

The standard neoliberal prognosis is that the Venezuelan economy will collapse in a spiral of inflation and devaluation: As the government officially lowers the value of the overvalued bolivar relative to the dollar, speculators will rush to exchange their domestic currency for dollars. A “balance of payments crisis” occurs when a government runs out of foreign exchange reserves. But in Venezuela, productivity is growing, inflation is not at 60% but rather 22.18%, and Venezuela can always borrow from allies with trillions and hundreds of billions in foreign exchange reserves. Weisbrot pointed out in his Guardian column that the difference between devaluation and less inflationary money creation is that devaluation makes imports more expensive: “Although more expensive imports add to inflation, they also help domestic production that competes with imports. And, perhaps more importantly, devaluation makes dollars more expensive, and therefore increases the cost of capital flight. This helps the government keep more dollars in the country.”

While the United Socialist Party or PSUV bureaucracy has become riddled with corruption and has been known to clash with unions and opposition from its left, the core of influential figures has shown a commitment to Chavismo’s project that will outlive Chavez. Vice President Nicolas Maduro, now serving as Interim President until the election in a month’s time, may in fact be to the former Lieutenant Colonel’s left on some issues. Maduro is likely to win, and the PSUV is likely to maintain a majority of support in Venezuela for years to come. But right-wing governors, like Maduro’s probable opponent Henrique Capriles, have made gains in recent years. Given the opportunity, a barely-disguised free-marketeer like Capriles would waste little time dismantling the welfare state and realigning foreign policy to conform to US and multinational interests.

Chavismo’s reforms have institutionalized the missions and participatory democracy and cemented a broad base of support that won’t be eroded so easily. But it also can’t be discounted that Chavez himself, defying the expectations of the international right, left, and center, never sold out. That the Bolivarian Revolution has been a model for progressively more radical change is due in no small part to Chavez’s own initiative and creativity after a popular uprising overturned the elite’s 2002 coup against him. Still, I tend to agree with Slavoj Žižek: Whether Chavismo is “socialism” or “capitalism”, it has already altered the shape of Venezuelan society, taking the disenfranchised of liberal democracy as its base and reorganizing politics around their needs. At a time when even the Nordic social democracies, long admired by US progressives, have undergone neoliberal reforms in order to remain “competitive” globally, Chavismo’s expanding welfare state is backed by the decentralized power of communities setting their own priorities.

The future of the region is less clear. As disappointing as some of Chavez’s global alliances were, his political and economic leadership in Latin America has inspired not only the Bolivarian countries, but other governments like Brazil, Argentina, Uruguay, Chile, and even Colombia as well to embrace the basic model of democratic reform and greater regional integration. It’s not a sure thing that a Maduro administration would share all of Chavez’s foreign policy goals or, for that matter, his ability to unite and push his neighbors in the direction of autonomy and social justice. There are also good reasons to be skeptical that another Bolivarian leader – I’m thinking particularly of Rafael Correa in Ecuador and Evo Morales in Bolivia – can wield the same influence in the hemisphere that Chavez did.

If the Bolivarian Revolution continues beyond Chavez, beyond Venezuela and beyond Latin America, it will be because there’s more to Chavismo than wealth redistribution and the cult of personality. Elected as a center-left reformer, President Chavez’s record is one of cautiously empowering a grassroots movement to make serious demands of capitalism – and institutionalize them. Though much has been made of Chavez’s close relationship with Cuban President Fidel Castro, Chavez was in this regard closer to Salvador Allende, another Marxist democrat, who was ousted and killed in a CIA-backed military coup in Chile on September 11, 1973. The lesson Chavez learned from Allende’s undoing and Pinochet’s reign of terror shows he was painfully aware that principle and pragmatism are meaningless without each other: “Like Allende, we’re pacifists and democrats. Unlike Allende, we’re armed.”

Whatever its flaws and limitations, the ongoing Bolivarian Revolution lets us glimpse a substantially different way to organize political and economic life. What remains of Chavismo is more than just a pact with a dead man. That probably won’t change soon. But, as the filmmaker Alexander Kluge wrote, pacts with the dead are particularly binding.


4 thoughts on “Chavismo is more than a pact with a dead man

  1. Pingback: Shameful national chauvinism | The Red Fury

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  4. Pingback: Venezuela: The counterrevolution will be televised | The Red Fury

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