Critical Times

In the orientation session Gregory Wilpert, Editor of the Venezuela Analysis website, was the second speaker to address the brigade members.

He spoke around the topic, “Socialism for the 21st Century”.

Venezuela’s population doubled in the previous 40 years and oil prices slumped to $10 a barrel, causing huge economic, social and political crises in Venezuela. Overcoming Venezuela’s old elite radicalised Chavez. Prior to his recent upheavals with them he considered himself a social democrat, pro both Blair and Clinton, seeking the ‘Third Way’. However by 2005 he started calling for “Socialism for the 21st Century”, something in the mould of libertarian/humanist socialism. In examining what “Socialism for the 21st Century” means some definitions are required of both capitalism and socialism.

Firstly, capitalism requires the private ownership of the means of production, for example land, factories, and other forms of capital where the production of sellable goods and services is carried out.

Secondly, capitalism, involves competitive markets where distribution and exchange are determined. Competitive markets not only determine distribution under capitalism, but also prices therefore deciding what things are or are not produced. All capitalists must aim to maximize profits to ensure that they do not lose their investment to competitors, who also try to maximize their profit and reinvest this profit into their businesses. Therefore private ownership of production together with competitive markets has the sole purpose of achieving profit maximization.

Thirdly, capitalism needs a state that ensures that contracts between individuals, upon which exchanges are based, are settled in cases where conflicts occur and also to mediate the frequent social conflicts, which arise between owners and non-owners. The state is significantly influenced by the owners of capital who have the capacity to lobby, finance political campaigns and mobilize the mass media. Therefore they wield much more power than any other group in the capitalist social system.

How is Venezuela moving away from capitalism to Socialism? After the defeats of the coup attempt (2002), oil lockout (2003) and referendum (2004) Chavez’s opposition has been silenced to the point where the old elite lost complete legitimacy. Since the National Assembly Election victory (2005) pro-Chavez supporters have had a free hand to declare socialism.

Changing Ownership of the Means of Production

Much of Venezuela’s productive capacity is still privately owned. The government has concentrated on expanding public forms of ownership and control, via cooperatives, co-management (worker and state management), and expanded state management/ownership. Under Chavez the number of cooperatives in Venezuela has increased over a 100 fold in seven years; from about 800 in 1998 to over 100,000 in 2005. About 10% of the country’s adult population is now involved in cooperatives, which represents over 1.5 million Venezuelans. Through credit, preferential purchasing, and training programs, the government has been actively supporting the creation of cooperatives in all sectors.

The government has been experimenting with co-management in several state-owned enterprises, such as the electricity company CADAFE and the aluminum production plant ALCASA. More state-owned enterprises are being considered for co-management. Because the government believes these enterprises are too important for Venezuela to be run only by the people that work there, they will not be totally under worker control. In line with the principle of ‘serving to assist’, society, through its representatives in the state, should also have a say in how these important enterprises are run, for they have a significant impact on the rest of society.

Expropriation of idle factories has been another method for changing the ownership and control over the means of production. Four production plants, which produce paper, valves, and agricultural products, have currently been expropriated and turned over to co-management. The government in conjunction with the national union federation UNT, is evaluating 700 other idle private production facilities that could also be expropriated and turned over to former workers to run these plants under co-management. The Chavez government has increased public/state management by creating several new state-owned enterprises, in the areas of telecommunications, air travel, and petrochemicals.
The once autonomous state oil company PDVSA has been brought under direct government control, with the objective of valuing ‘solidarity, cooperation, complementarity, reciprocity, equity, and sustainability’, ahead of profitability.

It is projected that from 2007 to 2013 that there will be an increase of co-management of enterprises to the same level as private ownership. With more Enterprises for Social Production (EPS) being established and their values being institutionalized, Venezuela is starting on the road to moving away from capitalism and towards “Socialism for the 21st Century”.

The Market

This is the most problematic for any state or government to implement change. The capitalist market is the mechanism that sets prices and distribution. During the Chavez presidency the state has been very active in redistributing wealth, by way of its rural and urban land reform program, its oil revenue-funded social programs for free health care, education, and subsidized food markets, and through the assistance of subsidies for sectors such as cooperatives. Chavez doesn’t only want central planning and promotes the goal of creating communities of production and consumption. Here consumers and producers get together to decide how they are will go about producing and consuming. Enterprises for Social Production (EPS), which are cooperatives and state enterprises, whose central purpose is to become involved in their communities and usually provide them with 10% of their production.

However the decisive challenge for Chavez and Venezuela in achieving socialism is to overcome the exchange of unequal values that occurs through the pricing mechanism of capitalism. Under socialism the regulating principle of the economy, value, meaning the labour time required for the creation of a product would replace the capitalism’s regulating principle of the economy, price. Injustice exists when a product “A” is exchanged for a product “B,” and their values (the labour time necessary to produce each one of them) are not equal, in other words, when equivalents are not exchanged, which is then expressed through price.

The principal of getting away from market-based distribution in international trade has also been a goal for Venezuela. The Chavez government stridently opposes free trade agreements the U.S. pushes, and it is involved in many trade deals that are based on principles of solidarity as opposed to competition. The Petrocaribe agreement is a good example of solidarity, where there is discounted financing of Venezuelan oil for Caribbean nations and allows them to pay for oil with in-kind payments. Cuba provides Venezuela with 20,000 doctors and medical assistants in exchange for Venezuelan oil shipments is another outstanding case. Similar agreements exist with Argentina, Uruguay, and Ecuador.

The State

During 1999 Chavez toured OPEC countries promoting oil price rises. In October 2000, OPEC met in Caracas and agreed to abide by oil production quotas and implement price increases, thanks to Chavez’s campaigning. The country (Venezuela) and the state became independent of private capital due to this important factor. Oil is a huge source of revenue for the Chavez Government and has given it the opportunity to break free from the sway of the capitalist economy. Venezuela’s oil revenues have more than tripled from 1998 to 2005, giving the Chavez government a tremendous amount of freedom from private capital’s ability to threaten investment. A state has now been created that is independent of capitalism that still exists in the country.

Another factor that has transformed the state has been through participatory democracy. Examples of this can be found in: citizens recalling parliamentary representatives; initiate referendums; demand transparency and access to financial books of the state; and can have a voice in appointments of the judiciary. The planning of local councils has become one of the most important forms of citizen participation. The communal council law was launched in 2006 which bases councils on units of 200 to 400 families. These allow citizens to practice direct democracy in their communities, allocate financial resources and create local by-laws.

The successfully created “missions,” which provide education, health care, subsidized food, social services, land reform, and environmental protection in Venezuelan have been organized on the basis of citizen participation. These missions, in the form of health committees, land committees, and educational task forces are largely directed by the citizens in any given community, rather than being just imposed from above.

However there is still the old state bureaucracy, which in the main is in league with the old former governing parties, big business, local police forces and private mass media and attempts either to slow or thwart the goal of 21st century socialism. However Chavez plans to dissolve this ‘state of affairs’ in his new term of office.

Advances in creating 21st century socialism in Venezuela are quite likely; however there are obstacles, such as the cultures of patronage and personalism that negate the cause. To surmount these obstacles, requires a re-building of the state, in order to overcome patronage structures, and the creation of an effective political movement that does not just depend on Chavez, in order to overcome personalism, are formidable challenges for 21st century socialism in Venezuela.