Lessons from the Socialist Revolution in Venezuela

Alfred Müller, 17.2.19 Venezuela was for many leftists the hope for a better society. The country stood for the socialist path and was to show an alternative to capitalism. Unfortunately this hope was not fulfilled. Especially the Maduro government did not create a quality of life for the broad population and no increase in political participation. On the contrary, the economy shrank, inflation exploded, poverty and hunger spread and the powerful secured their privileges. What went wrong and what lessons can we as leftists learn? When Hugo Chaves came to power in 1999, Venezuela’s economy was very one-sided. Most of the income came from oil production. In agriculture the big landowners dominated and in the rest of the economy the capital owners. The contribution of the agricultural sector to food security was small. Most of the food had to be imported. More than 80% of the population lived in the cities. They worked primarily in the service sector and in the informal sector. Poverty, hunger, unemployment and the gap between rich and poor were enormous. Abroad, the country was heavily indebted. Few people controlled the economy and the state. They exploited the wage earners and enriched themselves with their business values. Hugo Chavez wanted to eliminate the problems through a Bolivarian revolution. The political, economic and social living conditions of the broad population were to be improved through the socialization of productive wealth and grassroots democratically built communities and drives, the reduction of poverty, social inequality and unemployment, the promotion of rural development, the redistribution of land, the stimulation of agricultural production, the creation of food security and free education and health care. He called his social alternative the socialism of the 21st century. The Chavez government nationalized several companies, created new jobs, expanded co-determination, promoted the development of economic cooperatives and introduced foreign exchange management, agrarian reform1), free education and health care, and food subsidies to ensure food security for the poor. Thanks to good oil revenues and initial enthusiasm, the economy flourished during his tenure. The economy grew, incomes rose, poverty and unemployment sank2), the poor had enough to eat, and the free education and health care introduced ensured enormous progress in education and health. What the Chavez government did not tackle, however, despite these notable successes, was the restructuring of the economy, the complete direct democratization of society, and the establishment of a democratic planned economy. There was no transfer of power to the population. The Chavez government kept parliamentarism and capitalism alive. Large parts of the economy remained in private hands. Companies, whether private, state or cooperative, continued to be subject to market dictatorship and the pressure to make a profit. Thus, despite the planned socialism, the capitalist system continued to determine important developments in the country. The remaining capital owners tried to save their privileges, transferred their money abroad, slowed down investment and organized one economic boycott and one coup after another. Chavez tightened the reins and brought the party cadres and the military to power. In many state enterprises, it was not the workers who ruled, as intended, but the party elite and the party that controlled broad sections of society within the framework of capitalist structures. Chavez died of cancer in 2013. When Maduro followed, he tried to continue Chavez’s new party-oriented course. The Maduro government froze the agrarian reform and ended the process of grassroots democratization. At the same time, it consolidated the party dictatorship and increasingly based its power on the military. Oil prices collapsed, the exchange rate fell, economic output, oil and grain production halved3) , inflation reached record levels4) and, with foreign exchange reserves shrinking, there was a lack of money for the necessary food and industrial imports. Added to this were the economic sanctions imposed by the USA and Europe, which additionally drove the country into a shortage economy. The people who suffer most from the economy of scarcity are those who have no possessions. Unemployment, misery, disease and hunger are exploding again in Venezuela. In contrast, the noble restaurants are still well filled every evening. Unrest On the other hand, the noble restaurants are still well filled every evening. Dissatisfaction and indignation are spreading. The capital owners, who had plundered the country for decades, wait for the defectors, hope for the pressure from abroad, for gains in the elections, an overflow of the military and fight for a restoration of the old conditions. At present, the country is on the brink of ruin and international capital is rejoicing over the failure of socialism. This development is primarily home-made. If socialist policies had been consistently forward-looking, the current serious political and economic crisis would not have had to occur. Prerequisites for the success of a socialist revolution are a good supply of the population, a stable economy, the overcoming of the capitalist system, the comprehensive direct democratization and a socialism support of the broad population. First of all, food security is the basis of a satisfied population. Venezuela has far fewer inhabitants, but more than twice as much agricultural land as Germany.5) In Venezuela, land ownership is highly concentrated. The latifundia bring hardly any income. With comprehensive land collectivization, appropriate motivation and expert knowledge on the part of farmers, cost-covering producer prices and a secure supply of necessary inputs, it is possible to secure Venezuela’s self-sufficiency and abolish hunger. So far, Venezuela has neither developed sustainable agriculture nor overcome unequal ownership. The unproductive large landowners continue to block agricultural production and lead the country into dependence on food imports. To boost the economy as a whole, extensive government investment and promotion programs are needed to create incentives for capacity utilization and production expansion. These investment programmes are to be used primarily to expand the economic structure. A sustainable economic development requires a versatile production orientation within the framework of a capitalistic environment. The existing one-sided oil orientation makes the country extremely dependent on price fluctuations on the world market and the blackmailing of international capital. Since Venezuela’s economic situation is currently determined by the oil industry, low oil prices in dollars should be accompanied by rising exchange rates (bolivar to dollar) to increase revenues in domestic currency. Rising oil revenues in local currency will lead to profitability, increase oil production and allow the state to advance the economy and the social sector. Venezuela’s hyperinflation alone is causing a collapse of the economy and a dramatic undersupply of the population. It damages above all the dependent employees, the unemployed and the poor. Real wages and real social benefits fall into the bottomless pit, savings become worthless, less is produced and invested, food disappears from the market and the dispossessed can no longer meet their daily needs for food and medicines. Whoever wants to carry out a socialist revolution under these conditions must first eliminate the galloping inflation. In Venezuela, hyperinflation was caused by an unchecked expenditure of money by the central bank and, as already practised in Germany, can be abolished by a currency reform. When the main source of income from oil exports ceased to exist, the Maduro government attempted to close the gap with the money press and boosted the inflationary money creation. The measures proposed so far could be successful in the short term. However, they do not protect against the exploitation, unemployment and misery of the dispossessed, since they stabilize the capitalist system and the capitalist destructive forces constantly generate new power hierarchies, unequal distribution ratios, layoffs, crises and catastrophes. In the long run, therefore, the overcoming of capitalism is indispensable for the construction of a better society. Crucial to the dissolution of capitalism is the deprivation of power of capital through a comprehensive direct democratization of society. Comprehensive direct democratisation encompasses not only the economic but also the social, municipal and political spheres. Through the process of comprehensive direct democratization, decision-making powers are transferred from the power elite to the general population and the economy can develop according to the needs of the population.6) The Bolivarian Revolution planned this change of power, but it remained in its infancy. A prerequisite for a transformation of the profit economy into a need economy is the simultaneous suppression of the market by a democratic planned economy, because within the market economy competitive pressure forces the enterprises to profit orientation and in this system also self-governing enterprises have to behave capitalistically. Market socialists believe they can link democratically organized enterprises with the market. In this system, the state should remedy the shortcomings of the market and ensure general welfare. Market socialists replace the market faith of the neoclassics with the state faith of the Keynesians. Their great misconception is that the state has the capacity to eliminate the chaotic characteristics of the market. Any attempt to introduce market socialism therefore ends up in market capitalism. Capitalism can only be overcome by a broad direct-democratic movement. It creates the necessary democratic capacities, bundles the forces for a system change and prevents the return to a new ruling elite. Any parliamentarism and any party socialism only secures the privileges of a small cadre elite and does nothing to change the misery of the socially excluded. Instead of switching to the camp of capital owners, the current lack of peace and indignation of the broad population in Venezuela could become the breeding ground for a new process of socialist transformation. This process may be spontaneous. But without the support of a communist party, this process will lack the combined strength and staying power. What is at stake in Venezuela is not the continuity of the Maduro government, but the construction of a society based on solidarity, justice, peace and respect for the environment. In Venezuela, capital will continue to defend itself by all means against its deprivation of power, to promote the overthrow of the Maduro government and to work for the restoration of capitalist structures. With the overthrow of the Maduro government, however, the socialism of the 21st century would not have died in Venezuela. The victory of capitalism will only be short-lived if the workers‘ and collective movements gain the will and strength to continue the Bolivarian revolution and take the economy into their own hands. 1) Individual measures of agrarian reform should be: Promotion of employment, improvement of the infrastructure, provision of primary products, loans, further training measures and technical assistance, elimination of large estates and the abusive use of land, conversion of land into agricultural use, promotion and protection of cooperative agricultural enterprises. 2) During Chavez’s term of office (1999 – 2013), gross domestic product (GDP) grew on average by 4%, unemployment fell from 18% to 13% and the poverty rate from 49% to below 30%. 3) GDP fell by 60 percent between 2013 and 2018. Venezuela’s oil production fell from 3 million to 1.5 million barrels per day between 2013 and 2017, grain production from 3.5 to 1.5 million tons. Prices double more than once a month. Unemployment rose to 28% (2018). 4) Under Maduro, annual inflation in Venezuela rose from 44% (2013) to 1088% (2017). In 2018 inflation is said to have been 2.5 million percent (Handelsblatt 5.2.18, p. 25). 5) Population: Venezuela = 32 million, Germany = 82 million Land area: Venezuela = 91.2 million ha, Germany = 35.7 million ha Agricultural area: Venezuela = 30 million ha, Germany = 16.7 million ha 6) I describe in detail the direct-democratic path to communism in my book „Der Kapitalismus hat keine Zukunft“ (Capitalism has no future), which I expect to be published in May 2019

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24. Juli 2019 · 11:27 am

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