The current financial crisis reveals the first symptoms of a major, perhaps revolutionary, socio-economic change in world affairs. Much has been said how, after the collapse of the Berlin Wall, capitalism overshadowed socialism and “the end of history” was decree in much of the intellectual world. Not surprisingly, less has been mentioned that while socialism was dying in Europe, it was also blossoming in ອາເມລິກາລາຕິນ. In 1989, events knows as “El Caracazo” were referred to major protests in Venezuelan against neoliberalism and Washington Consensus directives aimed at the usual reduction of the State into the economy and privatizations. The election of Hugo Chavez in 1998 was a reaction not only to people’s dislike and failure of neoliberalism but also the strong repression that fallowed these protests.
Today most people watch with close attention how the biggest economy on Earth is on the verge of a major crisis; however, it is not yet known what the impact will be for the American people or, more importantly, for the rest of the world. Certainly, many questions remain unanswered – not only for those in line with the Bush administration, but especially for the ສະຫະລັດ ຫ້ອງຮຽນເຮັດວຽກ. It is this section of the American society who pays the price for the crisis at hand, via house foreclosures and job lay-offs (which, for many, translates into losing necessary health insurance). Also, they will carry the burden of the so-called “bail-out” package that the Bush administration has proposed in hopes of preventing a major economic collapse. This package fails to acknowledge that while the US working class carries the burden, they will get nothing in return.
Of course it is a different story for the speculators, corporate managers and major shareholders. These privileged and exclusive segments of the American society will benefit from the money of tax-payers, earned by their long working hours, declining wages and worsening labor conditions– reaching an astronomical $700 billion. This amount of money the Bush administration plans to insert into the ສະຫະລັດ economy is surprising. Just to give an idea of what it amounts to: the sum of the entire economic activity for an entire year (Gross Domestic Product) of Venezuela, Colombia ແລະ ຄິວບາ added together. The GDP of the whole African continent for the year 2007 reached $2.150 billions.[1] This means, that the Bush administration bail-out plan represents roughly one third of the entire African continent’s GDP.
A particular aspect of this economic crisis is the context in which it occurs (just a few weeks before the presidential election in the ສະຫະລັດ). The Bush administration’s decline in approval ratings is likely to affect its party’s presidential nominee, John McCain. Despite huge efforts, this candidate has tried to distance himself from Bush, but the current administration’s colossal failure to guarantee peace in the Middle East along its stubborn attitude towards multilateralism and global warming leave many people wondering if McCain will follow in the footsteps of George W. Bush. On the other hand, Democratic candidate Barack Obama may use the present economic crisis to his advantage, in hopes of increasing his support among the working class and nostalgia for the Clinton years – a reminder of better economic times.
Apart from the two candidates’ political rhetoric, the truth is that both political parties bear a huge responsibility for the current deteriorating economic condition. Both parties have been promoters of neoliberal economic policies, privatizations and free trade agreements. In addition to that, both parties have always sought the usage of public funds for the benefit of their rich campaign contributors and the interests of lobbyists in ວໍຊິງຕັນ DC This is why Bush’s proposed bail-out plan should only surprise people by its absurd amount – not because it contradicts the recurrent invisible-hand speech, which has remained consistent in the praxis of current capitalist history. The root of the problem regarding the current economic crisis is not the slight difference (if any) between Democrats and Republicans; rather, it is the nature by which the economic system sustains itself.
Recently, during the 63rd session of the United Nations General Assembly, president of ອາເຈນຕິນາ, Cristina Fernandez, made a very interesting comment regarding the Bush administration’s proposed bail-out plan. According to her, “the most formidable state intervention that there’s memory of comes precisely from the place that had told us that the state wasn’t necessary, in the context, moreover, of a fiscal and commercial deficit.” [2]. Most likely, she was referring not only to the bail-out plan to revive the US economy, but also to US Federal Government’s purchase of lending companies that have declared bankruptcy as a result of the current economic crisis. Once again, the hard working money of the working class and collected by the Federal Government by the payments of taxes are used by the Bush administrations against the interest of the people and for the protection of the wealthiest.
Here, precisely, is where difference can be drawn between intervention of the economy by the Bush administration (Capitalist State intervention) and the past announcements by Latin-American governments such as Venezuela, Ecuador and Bolivia of nationalizations and strengthening of publicly owed companies (Socialist State intervention). It’s not so much that capitalists are against the intervention of the State; they just want that the intervention translates into strengthening the wealth and power of the richest people, this time by amount of $700 billion dollars. As Noam Chomsky correctly mentioned in April 13, 1996, regarding the contradictions of speech and reality about the free-market:
[T]he principle of really existing free market theory is: free markets are fine for you, but not for me. That’s, again, near a universal. So you — whoever you may be — you have to learn responsibility, and be subjected to market discipline, it’s good for your character, it’s tough love…. But me, I need the nanny State, to protect me from market discipline, so that I’ll be able to rant and rave about the marvels of the free market, while I’m getting properly subsidized and defended by everyone else, through the nanny State. And also, this has to be risk-free. So I’m perfectly willing to make profits, but I don’t want to take risks. If anything goes wrong, you bail me out. So, if ໂລກທີສາມ debt gets out of control, you socialize it. It’s not the problem of the banks that made the money. When the S&Ls collapse, you know, same thing. The public bails them out. When American investment firms get into trouble because the Mexican bubble bursts, you bail out Goldman Sachs. [3]
ໃນທາງກົງກັນຂ້າມ, ໄດ້ ສັງຄົມນິຍົມ State intervention prioritizes the most basic needs of people. This is the type of controlled and planned interventions that have been carried out by Hugo Chavez in Venezuela, while at the same time maximizing democracy, political consciousness and participation of people in their own affairs. The enterprises that have been nationalized in Venezuela, such as the main communications company (CANTV), iron and steel industry (SIDOR) and one of the principal banks of Venezuela (Bank of Venezuela), are highly profitable enterprises. In the case of CANTV, its nationalization cost the ເວເນຊູເອລາ State roughly $1.6 billions; however, after a full year of operations this company earned nearly $400 in net profits. At this pace, the ເວເນຊູເອລາ State will recover its initial investment is just three years of operations. These resources that before went to the pockets of rich people or became capital flight, are now being used by the government of Hugo Chavez to finance public heath care projects that are highly beneficial to the neediest people.
ມັນຄຸ້ມຄ່າທີ່ຈະຈື່ສິ່ງນັ້ນ at the peak of neoliberalism in Latin-America during the 90’s, highly profitable publicly owed corporations were handed-over to the private sector. One close example was Venezuela’s national oil company (PDVSA). Although this company was never fully privatized, previous governments before Chavez welcomed transnational oil companies into signing “Conjuncture Agreements” with PDVSA that would allow them to extract oil by giving a small portion back to the Venezuelan State, 16% at the most. Thanks to a new Hydrocarbons Law drafted by the government of Hugo Chavez, these “Conjuncture Agreements” were replaced by Mixed Ventures where PDVSA will have the majority of the shares. Long before that, President Chavez was widely criticized by the Clinton administration for a trip made to OPEC countries in an effort to recover the price of oil, which used to be at $8 a barrel by the time.
Thanks to the Chavez government, PDVSA has been strengthen and its revenues has allowed the Venezuelan State to finance an infinite amount of social projects that include: primary medical care access for the entire population, along with secondary and third level medical care facilities free of access, the complete eradication of illiteracy, infrastructural projects that run from the building of new schools, hospitals, bridges, roads, the enhancement of public transportation and the development of a huge train transportation system across the whole country. At the same time, the health of the economy has reached probably its best shape ever with international reserves and economic growth at its greatest level and the lowest unemployment rate in the history of Venezuela.
ແນ່ນອນວ່າ the recent hike in the price of oil has factored favorably for the Venezuelan economy. Nevertheless, this increment in the price of oil has been accompanied by the greatest weakening of the US dollar, which is real terms becomes a similar case to the oil price hikes of 1981. However, back then the ເວເນຊູເອລາ State was in the hand of capitalist corrupt politicians and PDVSA was managed as a transnational corporation, rather than as a vital institution for the development and growth of the economy. As previously mentioned, today PDVSA has a greater participation in the production and exportation of Venezuelan oil than ever before, and operational royalties’ increments for transnational corporations have allowed the Venezuela State to collect a greater portion of profits more than ever. Additionally, according to the Central Bank of Venezuela, the Venezuelan economy has grown not only in the oil sector but also in the communications, construction and service sector.
Clearly, how the two countries allocate public funds differs greatly. While the US government has abandoned the interest of its own people with its careless health care policies, dwindling education funds, increased military spending, and lowered taxes for the highest income bracket, the Venezuelan government has sought the careful use of public funds for developing an inclusive society, eradicating poverty, enhancing education and heath care facilities, and fostering the growth of a productive economy. All of which has been carried out by fomenting greater democracy and the participation of the people in all aspects of politics. So then, can the question be made whether the ສະຫະລັດ is on the verge of a major social-economic collapse? Perhaps the answer to this question is not possible to be drawn just yet; however, it should not surprise anyone that for the apologist of the Capitalist model of development it is, nonetheless, a serious question. These worries, rather than distancing the two US major political parties, drive them closer together as two factions of one and only party: the imperialist party.
Martin Saatdjian is Third Secretary at the Ministry of Foreign Affairs of the ໂບລິວາຣຽນ ສາທາລະນະລັດ of Venezuela.
[1] Figures gathered at: https://www.cia.gov/library/publications/the-world-factbook/
[2] Entire speech available at: http://www.un.org/ga/63/generaldebate/pdf/argentina_es.pdf
[3] Chomsky (1996). Obtained from: http://www.un.org/ga/63/generaldebate/pdf/argentina_es.pdf
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