VENEZUELA‘S “BOLIVARIAN Revolution” is moving ahead fast. President Hugo Chávez’s government, which began in 1999 with an attempt to implement Tony Blair’s “third way,” now aims to build “socialism for the twenty-first century.” Revenues from the state oil company, PDVSA, have funded vast increases in social spending. Targeted outreach to the poor via government “missions” have largely bypassed the old state structures and have achieved spectacular results.

These include a reduction of poverty from 55 percent of the population to 34 percent as the share of gross domestic product (GDP) on social spending has increased from 7.83 percent to 14.69 percent; the achievement of literacy for 1.5 million adults; the virtual elimination of hunger through subsidized grocery stores that service 13 million people; medical care provided by Cuban doctors via free clinics in slums, reaching 18 million people, nearly 70 percent of the population; access to higher education for the poor and working class; and special affirmative action programs for indigenous people.1 The minimum wage is now the highest in Latin America at $286 per month, and the workweek is to be shortened from forty to thirty-six hours by 2010.2 Land reform has shifted 8.8 million acres to impoverished families, more than half of that from private owners.3 Government seed money has increased the number of cooperative enterprises from fewer than 800 to 181,000 to try and provide more stable employment for the approximately half of Venezuelan workers who toil in the informal sector of the economy.4

 

All this is being achieved despite the implacable hostility of Venezuelan capital and of U.S. imperialism, which supported the failed 2002 coup against Chávez, and the subsequent oil industry employers’ lockout that did enormous economic damage. If the 2002 coup government—immediately recognized by George W. Bush’s administration—had been successful, Hugo Chávez would have been just another in a long list of reformist Latin American leaders who were overthrown by the U.S. or its local operatives in a roster of interventions that stretches from the Mexican War of 1846 to the Contra war against the Nicaraguan revolution in the 1980s. Instead, Chávez looms ever larger on the world stage, having turned Venezuela from one of the most compliant states in Washington’s “backyard” into the cutting edge of the revolt against neoliberalism and a laboratory for socialism in the twenty-first century—all with oil money earned from exports to the United States. Oil prices are high, of course, owing to the Iraq War, which has also severely constrained the ability of the U.S. to contain Chávez, let alone overthrow him.

 

As a consequence, millions of workers in Latin America and beyond see Venezuela as evidence that reforms are possible despite corporate globalization and imperialism—and they’re discussing the possibility of a socialist future as well. Chávez’s Venezuela challenges Margaret Thatcher’s famous dictum, adopted by neoliberal policymakers everywhere: “There is no alternative”—TINA. Venezuela is increasingly seen as proof that TINA, if not dead, is certainly suffering from a crisis of legitimacy. Not only has Venezuela begun to reverse decades of what is known in Latin America as “social exclusion,” but the oil boom has facilitated regional economic integration and anti-U.S. diplomatic initiatives that are giving shape to Chávez’s aim of achieving pan-Latin American, anti-neoliberal unity.5 Latin America has seen other populist leaders with a base among the working class and the poor, but rarely with such an immediate international impact.

 

These changes powered Chávez’s reelection in December 2006 over conservative Manuel Rosales, a state governor notorious for having signed the coup decree of April 2002.6 The opposition’s lackluster campaign ensured that Chávez’s victory would be the biggest yet, with 60 percent of the vote. Afterward, Chávez declared a new phase in what Venezuelans call the “revolutionary process”—the nationalization of sectors of the oil industry that were still in the hands of foreign investors. This move followed the re-nationalization of the telephone company, CANTV, and other companies. Parallel to these nationalizations—carried out by presidential decree following authorization by the National Assembly—are far-reaching efforts to create new political structures, including communal councils and workers’ councils that are presented as cornerstones of the “protagonist” democracy that Chávez has long championed. Earlier, Chávez had marked his reelection with a call to create a United Socialist Party of Venezuela (PSUV), and later denounced parties previously part of his electoral and government coalition for refusing or hesitating to dissolve within it.7

 

With this turn, certain contradictions in the revolutionary process have surfaced. Are the proposed workers’ councils a step towards workers’ control, or are they an effort to extend state control over organized labor, as some critics in the left wing of the pro-Chávez National Union of Workers (UNT) have argued? Is the PSUV a means to bind Chávez more directly to the mass of workers and the poor, and bypass unresponsive and/or corrupt bureaucrats, as its promoters claim, or is it a move to co-opt and bureaucratize the social movements themselves, as some leading movement activists have argued? Will the companies that have been nationalized—through compensation to capital worth billions of dollars—be democratically run by workers or by the same managers? Is a government that has paid off $3.3 billion in loans to the International Monetary Fund (IMF) and World Bank—the odious debt of previous, corrupt regimes—prepared to carry out a consistent opposition to imperialism in all its forms? What will be the response of Chávez to attempts by unions and social movement activists to advance the “revolution within the revolution,” as the Venezuelan Left has long advocated? Or the response to strikes in state-owned companies? Class polarization is leading to sharper class conflict and political crises, for example, over inflation and the hoarding of staple foods. Will the government attempt to mediate such conflict or support workers and the poor against employers and speculators? Are Chávez’s exhortations to study revolutionary leaders of the past—most recently, Leon Trotsky—the harbinger of more radical policies? Can a government elected within the framework of a capitalist, bourgeois democratic state initiate a socialist transformation of society? Can the prestige of Chávez among workers and the poor in Latin America and beyond contribute to the revival of radical and socialist politics?

 

These questions are not entirely new. But until recently, the broad Chávista camp was bound together by pressure from the Venezuela Right and imperialism. Tensions, for example, had bubbled up among government supporters over the highhanded way government officials ran Chávez’s campaign in the recall election of 2004.8 But positions didn’t crystallize, given the perceived threat of an electoral victory by the Right or another coup. Moreover, rapid economic growth—more than 10 percent annually since 2003, has nearly cut in half what had been a 20 percent unemployment rate, ameliorating conditions for workers but simultaneously aggravating class polarization. Consequently, sharp political debates in Venezuela are emerging within the Left itself in response to Chávez’s new initiatives. The Right remains a threat, however, as evidenced by the violent protests (which are ongoing as the ISR goes to press) after the government failed to renew the broadcast license of an opposition television station that had allowed active military generals to broadcast calls for the government to be overthrown during the coup attempt.

 

Where is Venezuela going? This article seeks to provide a framework for answering that question. It will (1) analyze the rise of Chávez within the context of Venezuelan history and politics; (2) examine the government’s economic, social, and political policies; (3) evaluate the Venezuelan revolutionary process from the standpoint of classical Marxist theory; and (4) outline a strategic approach towards the Chávez phenomenon for those committed to anti-imperialist and revolutionary socialist politics.

 

From the “Venezuelan dream” to economic catastrophe

Venezuela was long considered perhaps the least likely country in Latin America to become an international reference point for revolutionary and socialist politics. The fall of the military dictatorship of General Pérez Jiménez in 1958 was followed by a political power-sharing deal between the nominally center-left Democratic Action party (AD) and the conservative Christian Democratic party (COPEI). Known as the “Punto Fijo” system, named after the house of then-presidential candidate Rafael Caldera where the pact was brokered, the agreement created a duopoly that excluded the Communist Party (PCV), then dominant in organized labor.9 The communists were also expelled from the Confederation of Venezuelan Labor (CTV), which was soon dominated by the AD and became a vehicle for U.S. imperialism to subvert organized labor across Latin America.10

 

For decades, the CTV and the puntofijismo political duopoly seemed impervious to challenge from the Left. Since voting for the National Assembly was done by party slate rather than individual candidates, and state governors were appointed, it was almost impossible for individuals or parties outside AD and COPEI to win elections. When threats did emerge, outright fraud ensured that the two parties would retain their grip on power.11 “Acta mata voto”—the tally sheet kills the vote—became the duopoly’s unofficial slogan.

 

Locked out of elected office and influence in the unions, the Left struggled to make an impact. Unions tied to the PCV formed a separate labor federation that remained small and had only limited influence. A generation of young militants influenced by the Cuban Revolution—mostly young, middle-class radicals—broke away from the PCV and took up armed struggle in the 1960s, but made little headway. The guerrilla actions were used as a pretext for state repression against student radicals and labor militants.12 By the 1970s, however, the Left had partially recovered. A breakaway from the PCV, the Movement Toward Socialism (MAS) reoriented from guerrilla struggle to an electoral strategy.13 In the center of heavy industry in the Bolívar state, a radical union movement led by ex-communists gave rise to the Radical Cause party (La Causa Radical).14 Elements of both would later break away to join Chávez’s electoral coalition.

 

The 1976 nationalization of the oil industry by the AD government of President Carlos Andrés Pérez was the high watermark of puntofijismo and nationalist economic development, as the U.S. defeat in Vietnam forced Washington to give Caracas a longer leash.15 Venezuela seemed poised to reach a qualitatively higher stage of development than its neighbors.

 

The Latin American debt crisis of 1982–83 and a dramatic fall in world oil prices shattered the Venezuelan dream. The debt used to finance Pérez’s nationalist development plans couldn’t be repaid. In 1970, Venezuela’s long-term debt had been only 8.7 percent of GDP. By 1985, it was 46.1 percent.16 Subsequent governments turned to the IMF for emergency loans, contingent, as usual, on “structural adjustment” and austerity. The heady days of high growth and expansive plans for economic development suddenly gave way to endless crisis. Debt—and the succeeding IMF loans—strangled many Latin American economies during what became known as the “lost decade” of the 1980s. The income share of the poorest 40 percent of the population dropped from 19.1 percent in 1981 to 14.7 percent in 1997, while the wealthiest 10 percent increased their share of the national income from 21.8 to 32.8 percent.17 “During the 1980s and 1990s, no South American country deteriorated more than Venezuela; its GDP fell some 40 percent.”18

 

The social explosion, known as the Caracazo, finally came on February 27, 1989, when riots erupted in Caracas against a dramatic increase in bus fares, driven by fuel costs, and by the massive hoarding by supermarkets in anticipation that the government would authorize price increases in regulated food items. The AD government of Carlos Andrés Pérez—who had been returned to office on a populist platform, only to embrace new IMF “adjustments”—ordered the military to clear the streets. Thousands were killed by the repression.19 A state that had been held up as the model for Latin American democracy turned out to be as vicious as any.

 

Neoliberal policies, combined with low oil prices, took a terrible toll on the Venezuelan working class. Real wages dropped 23 percent during the 1990s, and 60 percent of the population was forced to turn to the informal sector of the economy to survive.20 Poverty rates skyrocketed, reaching, according to one estimate, 66.5 percent in 1989.21

 

The duopoly responded to rising social polarization by trying to let off steam in the political arena. A series of reforms under an AD government allowed a vote for individuals to the National Assembly and in 1989, the first direct elections for governor in Venezuelan history.22

 

The Left, it seemed, finally had an opening to consolidate its influence. Thus in 1989, when the first-ever direct elections for governor were held, Causa Radical won the post in the industrial state of Guyana, and MAS made gains in the National Assembly.23 Yet opportunity coincided with crisis: 1989 was the year not only of the Caracazo and electoral reform, but also the year the Berlin Wall was torn down. The collapse of Stalinism in Eastern Europe and in Russia disoriented not only pro-USSR parties like the PCV but also Maoist and Trotskyist groups. Thus the Left, seemingly poised to exploit political reforms and intervene in social struggles in the aftermath of the Caracazo, fragmented instead. Indeed, the rise of Chávez must be seen in part as a consequence of the weakness of the Venezuelan Left.

 

Enter Chávez

Lieutenant Colonel Hugo Chávez burst onto the scene on February 4, 1992, in a failed coup against Pérez. His plan called for seizing key government and military installations and radio transmitters, through which his group would call for a national uprising. The plan echoed the 1945 coup and AD-military junta that overthrew the military dictatorship of Isaías Medina Angarita. But unlike the AD party of that time, Chávez’s conspirators had almost no contact with social movements, organized labor, or the Left.24 The apparent hope was a repeat of the Caracazo uprising, this time with the military on the side of the people.

 

Betrayed by spies, the coup failed. Chávez went on television to urge his forces to surrender—”for now”—and was sent to a military prison. Large numbers of Venezuelans saw Chávez not as a would-be dictator but as a hero—a point made by former president Rafael Caldera on the floor of the Senate. Caldera adapted to the Chávez phenomenon by breaking from his COPEI party to win reelection as an independent on a populist platform in 1993. Once in office, he pardoned Chávez, reprising a move he made in his first term in 1969 when he pardoned former guerrilla fighters. But like Carlos Andrés Pérez, Caldera soon abandoned his populist rhetoric and implemented IMF-approved economic policies. It was in this context that Chávez turned towards the electoral road to power. AD and COPEI were discredited as corrupt accomplices of the IMF, while political reform had made the strategy of seeking office viable.

 

Chávez’s only organization had been his once-secret circle of military conspirators, the Revolutionary Bolivarian Movement-200 (MBR-200, the number signifying the bicentenary of Simón Bolivar’s birth), founded in 1983. The MBR-200 took root among a generation of officers who had no experience of counterinsurgency measures against the left-wing guerrillas of the 1960s. Rather, they were the beneficiaries of a new, university-level training system created at the height of the 1970s oil boom and salaries that were the highest for officers in the Western Hemisphere, after the U.S. and Canada. The training “reinforced nationalist patriotic sentiments among officer cadets after 1974,” writes one researcher. “Some developed an almost mystical attachment to the teachings of Simón Bolivar, and many shared a populist, egalitarian and ultimately utilitarian attitude toward democracy.”25

 

These young officers considered themselves superior to the less educated high-ranking officers, who were enmeshed in AD-COPEI corruption. The economic shocks of the 1980s, however, shattered the Venezuelan military officers’ world, cutting their living standard from that of the upper middle class to the working class. Many looked askance at Pérez, whose “sale of state industries and the national telecommunications company to foreign investors, were viewed as damaging to national sovereignty by many officers still influenced by a belief system that equated security with state control of ‘strategic industrial sectors.’” On top of all this was revulsion at the military’s role in shooting down poor rioters in the Caracazo.26

 

Less discussed is the extent to which Chávez’s politics draw upon nationalist traditions within the Venezuelan military itself. As in many Latin American countries in the nineteenth century, Venezuela was divided by civil wars between urban bourgeois liberals and rural conservative landowners. In Venezuela, the conflicts escalated to the point where there was barely a functional central state. Chávez is sometimes compared to the populist figures from this era, such as Ezequiel Zamora, the liberal caudillo “horror of the oligarchy” assassinated in 1860.

 

Chávez’s politics, in fact, echo broader nationalist—and not particularly left-wing—traditions of the Venezuelan military, for example, that of General Cipriano Castro, an admirer of Bolívar, who seized power in 1899 and formed an assertively nationalist government. U.S. President Theodore Roosevelt called the dark-skinned Castro “an unspeakably villainous little monkey” and plotted a possible invasion. An intervention did take place, but privately: the U.S. asphalt trust financed an invasion by a rival general. Castro prevailed, and survived gunboat diplomacy when Italy, Britain, and Germany sent naval ships to the Venezuelan coast in 1902, with Germans opening fire. Ultimately Castro accepted the U.S. as a broker for the repayment of the debt.27

 

The subsequent dictatorship of Juan Vicente Gómez—who ousted Castro—paid off the debt by 1930 and collaborated with U.S. oil companies to boost Venezuelan oil production, mainly as a counterweight to Mexican President Lázaro Cardenas’s nationalization of his country’s oil industry.28 But in a development that presaged Chávez’s MBR-200 military conspiracy, a section of more nationalist-minded junior officers led by Major Marcos Pérez Jiménez allied with the AD party in a populist junta that ousted General Isaías Medina Anagrita to initiate the democratic trienno of 1945–48. Anticipating the MBR-200, Pérez Jiménez’s circle considered itself “a movement of political and military renovation” that sought not military rule but to serve “as a mere instrument to bring into being a new government comprised of patriotic, able, and honest men who were backed by popular opinion.”29 Pérez Jiménez turned on his civilian allies three years later and installed himself as dictator-president for a decade. Yet while a reliable guarantor of U.S. oil interests, Pérez Jiménez carried out a planned, nationalist economic development program—laying the basis for state-owned steel and aluminum industries, for example—a program Chávez would later seek to revive and democratize.30

 

There is another strong military influence on Chávez as well: the populist government of General Juan Velasco Alvarado in Peru, who took power in a military coup in 1968 and held the post of president until 1975. In a process described by one author as “revolution by decree,” Velasco took advantage of a commodities boom to nationalize key Peruvian industries, including mining, transportation, communications, electrical power, and more. An aggressive land reform policy handed out small parcels to poor peasants, breaking up the great latifundia landholdings with minimal compensation to the owners. Velasco’s quasi-governmental National System for Social Mobilization and state-initiated organizations of workers and peasants prefigured Venezuela’s social missions of today. This attempt at revolution from above—including “social property” and “workers’ self-management,” unraveled amid the 1974–75 world recession. The prices of Peruvian exports plunged, leading to social discontent, a revolt by police, and splits in the junta, which forced Velasco from power.31

 

Yet to the young Hugo Chávez, sent to Peru as part of a military-diplomatic mission, the Velasco experience showed the potential for a military alliance with “the people,” in contrast to the right-wing dictatorships in Chile, Argentina, and Brazil that slaughtered leftists and union militants. Chávez was able to meet Velasco, who gave the young Venezuelan officer a copy of his small book on his “Peruvian

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