The Limits of Social Spending, the Need for Structural Change in Venezuela

Last August Hugo Chávez roundly defeated a referendum on his mandate as President of Venezuela. A historic level participation gave Chávez 60% to the opposition’s 40%—a powerful victory that gave Chávez’ government significant momentum going into regional elections on October 31st. While voter-participation was certainly less than historic in the regional elections, candidates allied to Chávez came away with a near-sweep, resulting in what is now being to referred to as the ‘red map’ of Venezuela. [1]

In the context of these two powerful votes of confidence, Chávez has called for a new stage in the Bolívarian revolution (his process of social and political changes concentrated on the 70% of the country living under the poverty line). This new stage, “the revolution within the revolution,” has so far been characterized by introspection and self-criticism on the part of the government, and stunned silence, with one tragic exception, on the part of the opposition. That silence has been punctuated only once, by the most radical and reactionary wing of the anti-Chavists, with the assassination of state prosecutor Danilo Anderson.

The ‘In Defense of Humanity’ conference aims on the one hand to foster discussion, debate, and the promotion of concrete strategies to oppose the ‘new world order’ across the global ‘south’. But an obviously hoped for byproduct is a similar paring of debate and concrete proposals specifically related to Venezuela. In the context of ‘deepening the Bolívarian revolution’, and of the intellectual conference, Petras elaborates on what he sees as the limits of the Venezuelan revolution.

- In ‘Myths and Realities’ you draw a parallel between former-President of the United States Franklin D. Roosevelt and President Hugo Chávez. Specifically you refer to Chávez’ ‘Bolívarian revolution’ as a set of ‘New Deal’ social-democratic reforms. Is there no revolutionary content to Chávez’ movement?

- There is a difference, Chávez is very active in terms of stimulating organization, but Roosevelt legalized trade unions, he recognized the right to collective negotiation. So there are differences, Chávez is oriented towards the urban poor more so than towards already organized, unionized sectors. I also think that Chávez looks for policies that stimulate nationalist, anti-imperialist sentiment, while Roosevelt was on a specifically anti-Fascist wavelength. So there is a parallel, I’m not saying they coincide in every respect, but they share a form of denouncing the oligarchy without transforming property relations...

I say Roosevelt in the sense of promoting social changes without changing the structures of capitalism. I don’t think Chávez has any intention of changing the relations between capitalism and the state-including foreign capital. On the contrary, I think he’s forging more links will different capitalists in different countries. And he continues to pay the foreign debt, which is not a model for any government, whether they’re reformist or revolutionary...I respect Chávez’ social programs that are raising the living standards of Venezuela’s poor. But I think we must recognize the limits that define this politics...

During the opposition oil strike in 2002-03 many companies acted as political agents, rather than economic ones. workers took over some factories that had closed in support of the strike. And the workers began occupying factories, or at least protesting-optimal conditions for intervention [by the government], and to transform them into self-managed, public enterprises, etc... But [Chávez] didn’t do it. Because it’s not in his concept of how an economy should be. He believes in a mixed economy. The big difference with Chávez is with social spending. He thinks [corporations, the wealthy] should pay taxes, and he should provide social services. But in my opinion the question is: how can this be?

Given that the majority of the population works in the informal sector [2], after 6 years in government they have not made the necessary large-scale public investments to create new employment. They depend on the private sector to make those investments and generate employment. Venezuela is mired in unemployment and sub-employment, when they should invest the immense resources to generate employment through public works, instead of waiting for the private sector to do it for credits and incentives. Because [the private sector] is not doing it, they are not disposed to make the large-scale long-term investments necessary. Along with great advances [in Venezuela] in health, housing, education the problem of employment remains very grave. Ultimately, this cannot be solved by social spending, it requires large-scale public investment.....If workers continue working in precarious conditions, with low salaries, the families of these workers live poorly. They live with better services, but they live poorly nonetheless. Social services are essential, but I think we must address the root of the problem, we must provide well-paying, stable jobs, so that social services improve people’s lives, rather than being substitutes for the structural changes necessary for them to have a decent life....

I think the left, like the right, exaggerates [Chávez’] degree of radicalism for two reasons. First, in the face of what Latin America represents today, with Lula, Mesa, Guttierez [Presidents of Brazil, Bolivia, and Ecuador, respectively] obviously [Chávez] is a person who is passing legislation beneficial to the popular sectors. He has launched a land-reform, while in Brazil they’re stimulating agro-business. And also in external politics is where I think we could say that Chávez has consistently taken relatively radical positions. Radical in the sense that they reject the aggressive policies of the US, criticizes and opposes the FTAA [Free Trade Area of the Americas], he is against the invasion of Haiti, and is looking to form some kind of alliance with other recalcitrant governments of Latin America.