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A L L I A N C E ! A
Revolutionary Communist Quarterly
2004: Volume 2: Issue 4
We have written on Chavez before (Chavez,
Hugo,
National bourgeois at: Alliance
January 2003.) However the topic
of
Chavez’s class affiliation is controversial and his rise to power
uncovered two
diverging viewpoints in today’s left movement:
Firstly a skepticism that in the 21st
century, there can be any “true” revolutionary national democratic
bourgeoisie;
And Secondly that Hugo Chavez is a
socialist as
distinct from a national revolutionary bourgeoisie.
The first viewpoint consists of rejecting
any view of
Chavez as being in any way progressive; while the second states that
Chavez is
a socialist revolutionary.
Unfortunately, at least in the view of
Alliance -
both are wrong.
The first is ultra-leftist while the
second confuses
reformism with revolutionary positions. This article will focus
on what
we believe, is an ultra-leftist view – that there can be no gains from
the
bourgeoisie, in the 21st century.
The Ultra-Left
Position
This was summarized in a recent exchange
on the e-list ‘rebel youth’,
as follows:
“Dear Friends, How could any national
democratic
bourgeoisie be revolutionary in this century and truly struggle against
imperialism -especially USA?”
(SB).
In this instance the revulsion
inspired by a most
vicious imperialism – the USA – is turned into a sense that the USA
does indeed
control all that happens in the developing world. We will argue that
this is
quite wrong.
If not, how can SB explain the
repeated attempts
of USA imperialism to unseat Chavez? These events cannot be questioned.
Just
recently for instance, the CIA was plotting to blow Chavez up in the
air. And
it is otherwise strange that the Prosecutor (Danilo
Anderson) who was investigating the attempted anti-Chavez
coup of
April 2002 was killed in terrorist car-bomb attack on November 19 2004.
http://www.marxist.com/Latinam/vnz_prosecutor_killed.htm
And in the referendum against Chavez, it
was the USA
who sponsored the resistance:
”Súmate is one of the main organizations behind
the August
15 recall referendum against President Chavez. They organized the
logistics of
collecting the 2.4 million required signatures, audited the voter
registry for
this purpose, and handled many of the legal issues that arose around
the recall
referendum. According to recently obtained documents, Súmate received
$54,000 from the National Endowment for Democracy (NED) and another
$85,000
from the US Agency for International Development (USAID) for this work.
According
to Súmate and its U.S. government funders, this was supposed to be non-
partisan democracy-building work. To anyone in Venezuela, though, it is
obvious
that Súmate is part of the opposition that is dedicated
to
removing Chávez from office.”
Gregory Wilpert -
Venezuelanalysis.com: “Venezuela's "Bolivarian Revolution" Continues,
Despite U.S. Resistance”; Jan 01, 2005
http://www.venezuelanalysis.com/articles.php?artno=1344
For the time being, Chavez victory at the Referendum will ensure no immediate further USA attacks will come. But this is largely a matter of time:
” While both sides have
said that they hope that relations will improve, it is likely that Bush
will
continue to covertly support Chavez's opposition, while at the same
time take a
more pragmatic approach of overtly engaging the country that is one of
the
U.S.'s largest oil suppliers with the largest oil reserves in the
Western
Hemisphere. This strategy has recently become public, as documents
obtained through the Freedom of
Information Act
(available at http://www.venezuelafoia.info/)
prove that the U.S. government, via the National
Endowment
for Democracy and USAID,
has
been funding Venezuelan opposition organizations to the tune of $5
million per year.
Also, the recent discovery of CIA documents that show that the CIA knew
of the
planning for the April 2002 coup, even while the Bush administration
pretended
that it was no coup, demonstrate a clear pattern of U.S. intervention
in
Venezuelan affairs.”
Gregory Wilpert -
Venezuelanalysis.com: “Venezuela's "Bolivarian Revolution" Continues,
Despite U.S. Resistance”; Jan 01, 2005
http://www.venezuelanalysis.com/articles.php?artno=1344
To really see Chavez class role, we must
situate him
within the history of his country.
We will argue that the agenda of Chavez is the same as that of his
Venezuelan
predecessors who tried to limit USA imperialism exploitation of
Venezuela’s
resources, in particular of oil.
We will define national
capitalists as those (particularly those involved in
industry) whose
interests and advancement are frustrated by the dominating foreign
power and
who therefore have an objective interest in ending foreign domination.
We will define comprador
capitalists as: those capitalists (involved particularly in
finance
and commerce) who are dependent upon the dominating foreign power and
have an
objective interest in supporting it.
The viewpoint that national capitalists
pose no
effective challenge today to imperialists actually has a long history
in the
communist movement.
But no doubt it has become ‘re-vitalized’ by the so-called ‘globalization of capital’.
Whether knowingly or un-knowingly, the
erroneous view
embodied in the first error, takes as its theoretical background the
view
offered by Nicos Poulantzas.
Poulantzas argued that the national
bourgeoisies is
so tied into ‘dependency’ that it is no longer truly a ‘national’
capitalist
class, although it is not fully a ‘comprador’ class.
Poulantzas defines the national capitalist class as:
”That fraction of the indigenous bourgeoisie which, on the basis of
a
certain type and degree of contradictions with
foreign imperialist capital, occupies a relatively autonomous place in
the
ideological and political structure, and exhibits
in this way a characteristic unity… I do not mean that the economic
contradictions between foreign capital and indigenous
capital do not play a determining role in defining the national
bourgeoisie,
simply that this in itself is not enough.”
p. 70-71;
and the comprador class as:
“that fraction of the bourgeoisie which
does not have
its own base for capital accumulation, which acts in some way or
other as a simple intermediary of foreign imperialist capital... which
is thus
triply subordinated – economically, politically,
and ideologically – to foreign capital”;
Ibid p. 71
For Poulantzas, because of the increased
flow of
capital in the ‘globalized’ era, the national bourgeoisie is ‘less of a
national bourgeoisie’
than before. He coined the term “internal
bourgeoisie”:
“The imperialist stage ever since its
origins have
been marked by a tendency towards an international interpenetration
of
capital…
What is necessary then, is to introduce a new concept enabling us to
analyze
the concrete situation,
at least that of the bourgeoisie of the imperialist metropolises
in their
relationship with American capital.
Provisionally... I shall use the term ‘internal bourgeoisie’. This
bourgeoisie
which exists alongside sectors that are
genuinely ‘comprador’, no longer possess the structural
characteristics
of a national bourgeoisies, though the extent
of this... varies from one imperialist formation to another. As a
result of the
reproduction of American capital actually
within these formations, it is firstly, implicated by multiple ties of
dependence in the international division of labour and
in the international concentration of capital under the domination of
American
capital, and this can so far as to take the
form of a transfer of part of the surplus-value it produces to the
profit of
the latter; secondly what is more, is affected, as
a result of the induced reproduction of the political and ideological
conditions of this dependence, by dissolution effects
on its political and ideological autonomy vis-à-vis American capital.”
Poulantzas N, Classes in Contemporary
Capitalism;
London 1976; p. 70; 72.
We will not here undertake a detailed
critique of
Poulantzas’ views. On other aspects of his class analysis of modern
society, we
already have published critiques [See Definitions of Class at http://www.allianceml.com/AllianceIssues/ALLIANCE24-CLASS97.html].
However we will note that a large part of
his
revision of the notion of the national bourgeoisie takes place within
the
assessment of the
‘national’ capitalists of the European
Economic
Community (Later the European
Union).
This paradigm we contend is a false one -
since what
Poulantzas is discussing here are inter-imperialist contradictions.
He is not discussing the contradictions
between an
imperialist bourgeoisie and a national bourgeoisie of a colonized or
neocolonial state.
For the current purpose, we outline why
Chavez story
actually disproves the Poulantzas revision, in practice.
We outline briefly the formation of the
Venezuelan
national bourgeoisie; the role of oil in the economy; how the
Venezuelan
national
bourgeoisie failed to form an effective cartel to withstand USA and UK
imperialist oil companies; and their attempts and failure to
enact a meaningful land reform.
We argue that all of this - remains the
un-fulfilled
legacy of the stalled national bourgeoisie of Venezuela.
We argue that this is the legacy that Chavez is attempting to fulfill.
For the
part of Alliance we support this attempt.
But we believe that it neither is socialist, nor can it succeed without
a
Marxist-Leninist party to carry through the agenda.
Once conquered by the Spanish Hapsburg monarchy, following the
voyages of Christopher Columbus
and Amerigo Vespucci,
Venezuela became a colony of Spain. But largely because it was a land
devoid of
silver and gold, the Spanish tended to disregard it, and it was a
“backwater”.
It is very telling that it was only in 1776 that the Spanish created
governing
Venezuelan bodies, such as the Real Audiencia de Caracas
[Michelena JAS
‘The Illusion of Democracy in Dependent Nations”; Cambridge Mass; 1971;
p. 36].
With a central vacuum, rural power bases
grew up
around landlords. Their main crops were cocoa, coffee and indigo. These
were
grown on large land holdings, or latifundia,
largely owned by criollos
(South
American born Spanish whites) and run by African slaves and indigenous
Indians.
Local militia was paid by Spain to maintain order, and these developed
into
local strong men (Caudillos).
“Caudillo is a Spanish (caudilho
in Portuguese) word designating "a politico-military leader at the head
of
an authoritative power". The related caudillismo
is a cultural phenomenon that first appeared during the early 19th
century in
revolutionary South America, as a type of militia leader with a
charismatic
personality and enough of a populist program of generic future reforms
to gain
broad sympathy, at least at the outset, among the common people.
Effectively Caudillismo depends on
a
personality cult.”
http://en.wikipedia.org/wiki/Caudillo
The caudillos were given
privileges by the
Spanish which only later after Independence, grew into a considerable
power. At
first they were subordinate to the criollos:
“The root of caudillismo lies in
Spanish
colonial policy of supplementing small cadres of professional,
full-time
soldiers with large militia forces recruited from local populations to
maintain
public order. Militiamen held civilian occupations but assembled at
regular
times for drill and inspection. Their salary from the Crown was a
token; their
recompense was in prestige, primarily because of the fuero militar
("military privilege"), that exempted them from certain taxes and
obligatory community work assignments (compare the feudal corvée),
and more
significantly, exempted them from criminal or civil prosecution. Away
from
colonial capitals, the militias were at the service of the criollo
landowners.”
http://en.wikipedia.org/wiki/Caudillo
When the criollo latifundia-owners
themselves began
to resist the rule of the Spanish Bourbon monarchs, they were initially
a force
only by themselves.
For at first the masses resisted the
anti-Spanish
moves.
This was because:
“Although 25% of the population labeled white may have controlled power and privilege, by the late 18th century they ... saw their social position weakened from above and attacked form below. Blacks slaves and free, appeared to be losing the traditional respect of the elite... the Spanish metropolitan authorities gave little encouragement to the whites in their exclusivist pretensions and in some instances even supported the blacks bid for social improvement………..
Most blacks recognized that any improvements in their condition had occurred … had come principally from Spain and Spanish official, not from the Creole landlords who so jealously guarded their privileges.”
Editors JD Martz, DJ Myers “Venezuela – the Democratic Experience”; p. 10-11; New York; 1986.
An example of this patronage by the
Spanish
authorities was the law “Gracias al Sacar” whereby pardos (black-white mixed descent,
also known
as mulatos) could
become legally
white by payment of a sum of money (Michelena; p.40).
Finally, the masses were brought into the
Independence struggle by false promises of land.
The Criollo distrust of the masses is in fact reflected in Bolivar’s Constitutional views [See this issue Alliance].
After the Independence movements led by Simon Bolivar, San Martin and Antonio Jose de
Sucre,
Spain was ejected from South America in 1824, when a small period of
true
independence was initiated. But very soon, regional vigilante elements,
originally Spanish Caudillo-militiamen - engaged in a fierce rivalry
for power.
Venezuela was therefore for a period in an intense flux, and the
regional
rivalries erupted. The age of ‘Caudilloism’ had begun. Eventually one regional
section won over
the others, and the ‘caudillo’ was transformed into the ‘president’.
President
Juan Gomez later called his own regime “Democratic
Caeserism” [Lindqvist S; Land and Power in South America;
Harmondsworth 1973; p.139], exemplifying the modernization of the term
‘caudillo’.
The term President was
now
the modern, preferred one.
During the chaos of the war of
independence a
fragmentation of the latifundia had taken place. The Spanish colonists,
recognizing that a significant portion of the independence leaders were
criollos,
had fomented the pardos to rise against their white overlords.
Some
lands were seized. In this way, a small scale primitive land reform was
performed.
In response the independence forces also
promised a
land reform, and issued “land bonds” to the soldiery recruited. These
however
were not honored and over the period of the period of the Caudillos (up
to
1908) the peasantry was never actually given land – but was always
promised it.
They formed the backbone of the armies of the warring Caudillos.
Post independence, most of the rural
population lived
as conuqueros – or
switheners, or
migratory squatters. These obtained their meager living by subsistence
farming
on the burnt-off forest lands. As land concentration took hold, most
were
driven into servitude and corvee labour. Payment was as
indentured land,
or in sugar-cane spirit. Around the latifundia, it is true there were
so called
minfundia (small or medium
sized farms
that supported a peasant family).
But these were few, and were too small to
generate
anything more than a purely subsistence level of life [Herman DL
“Agriculture”:
In Martz & Meyers Ibid; p. 329.]. Moreover as land concentration
got more
intense, these were absorbed by the rich, into their latifundia. In
total, the
land tenure was regressive:
“This type of land tenure system is an
obstacle to
development. Economically the land is not used efficiently because the
latifundia are either excessively labor-intensive or modern technology
is
practically non-existent. Furthermore the average agricultural tenant
and
laborer have so little money income that they have almost no purchasing
power
and cannot contribute to the consumer market. Socially the system gives
rise to
rigid social stratification... Culturally the peasants comprise a
subculture
dependent upon the protection of the latifundistas.”
Herman Ibid p. 330.
Immediately post-independence, agriculture
concentrated upon the export of only one crop - coffee.
During this period:
“Landowners pledged their properties to
commercial
houses in exchange for the credit they needed to produce the coffee...
Those
supplying credit had little interest in Venezuela except for the
planter’s
ability to pay his debts and provide sufficient quantities of coffee”:
Martz and Meyers Ibid; Ibid; p. 14.
For a while the inefficient latifundia
production
could still generate enough profits. But a crash in the international
coffee
market occurred around 1840, largely due to over-production in the
colonies.
This had immediate effects on Venezuela:
“Venezuela... controlled neither the terms not the conditions of its participation in North American trade. When a shift in the world commodity market in the later 1930’s-40’s brought the price of coffee down, Venezuelan coffee growers often found themselves unable to pay their debts or escape form the consequences of their over-extension... the local elite serving as intermediaries for international trade found itself enforcing foreclosures and debt procedures... as in the landowning elite”; Martz & Meyers; Ibid p. 15.
Civil war erupted at the end of which the
Caudillos
took control. Under the rule of one of them, Antonio
Guzman Blanco (1863-1889), the comprador commercial classes
attempted to consolidate a more efficient latifundia economy.
When Juan Vicente Gomez came
to power (1908), latifundia concentration was intensified. This was as
Gomez
and his small elite enriched themselves, and engendered an enormous
further
concentration of land ownership.
Gomez was immensely avaricious. By his
death he had
acquired more than 8 million hectares (larger than Holland and Denmark
together) [Lindqvist Ibid; p. 140]. His henchmen followed suit:
“Land concentration occurred swiftly and reached fantastic proportions. About 5% of Venezuela’s landowners acquired 78% of the land, while only 10% of the rural population owned any at all.”
Lindqvist Ibid p. 140.
By the 1935 point, land holdings were
concentrated
into either ‘Government’ or openly private hands. Credit offered by the
government agency – the Agricultural and Livestock Bank (BAP)
established in 1928 accentuated the impoverishment of the minfundistas.
Land in
the Government agencies books, was eventually transferred to the
latifundistas:
“The first national Agricultural Census of
1937
indicated that 4.4 % of the latifundistas held 78% of the land and 95%
of the
minifundistas held 22%… Due to a high percentage of foreclosures, the
government became a major landowner holding approximately 25% of the
arable
land by 1945. By the end of the Gomez period, the latifundistas
and
cattle ranchers of the Llanos dominated the rural area””
Herman Ibid p. 331-332.
By the 1930’s the rural poor formed a mass
of
landless indentured labour. By 1940 there were 500 peasant syndicates
with
100,000 members. They presented the call “Land to those who till it”
[Lindqvist
Ibid p. 141.
But the land concentration became rapidly
largely
un-productive, with the intensified dependence on one commodity – oil.
For the entire 20th century,
Venezuela has
been a comprador state.
By 1902, this resulted in a comprador
trading
relationship with Germany and Britain, dependent on the then coffee
trade. But
the state consistently reneged on debts amounting to 21,421,798
bolivars of a
total fiscal state income of 31,650,000 bolivars in 1901 [cited
Michelena
Ibid p. 51] to these countries. This had already led to the 1899
seizure of
Guyana and then La Guajira (part of Venenezulan territory) by Great
Britain; in
farcical court proceedings where a US Supreme Court judge supposedly
represented Venezuela [Michelena Ibid p. 52].
But a much more serious portent for the
future came
in 1908, when the then Caudillo (President Cipriano
Castro) was faced with a joint British German naval
expedition off
the coasts. Both Britain and Germany were intent on using the
pretext of
loan repayment in order to establish South American colonies of their
own.
Castro appealed to Theodore Roosevelt
to
intercede, and the USA navy enforced the Monroe
Doctrine.
Originally promulgated in 1823, the Monroe
Doctrine
had stated in no uncertain terms that no European power had any
jurisdiction in
South America. Using this crisis, the USA warned off the European
powers, in
order to then ensure the accession to power of their comprador forces.
From
herein on Venezuela was led by a comprador
bourgeoisie in hock to the USA.
This comprador bourgeoisie emerged from a
landowning
latifundia class, from Tachira (a region of the plains), led by President General Juan Vicente Gomez
(1908-35). But in the Gomez years such a super-concentration of
wealth in
his immediate circle occurred, that this of itself impeded the
development of a
national bourgeoisie.
Gomez developed a true plutocracy.
After his death, the remaining landowners rapidly shifted to a new
moneymaker –
oil.
By the beginning of the 20th
century, Venezuela
was a typical semi-colonial state. It can be described then as:
“Typically underdeveloped. It was
essentially a
one-product economy from whose export the country derived the major
part if its
income. Approximately 85% of the work forces was involved in
agriculture, and
the per capita rate of growth of the economy was almost stationary
(0.3%) as it
had been since the beginning of the republic’s life and as it continued
to be
during the first quarter of the 20th century”;
Cited by Michelena; Ibid; p. 49.
Oil was known to the native Indians of
Venezuela, who
had used it for medicinal purposes. Oil was even mentioned by the
chronicles of
the Spanish in 1535. But it was only in 1839, that Venezuelans
attempted to
develop production. The first Venezuelan oil concession was offered in
1878.
With the First World War, its economic potential became clearer. Gomez
formally
invited the foreign companies into Venezuela, while putting no
conditions on
the foreign oil companies that exploited the oil wealth:
“Gomez... maintained the most liberal oil
policy of
Latin America... Shell, and later Rockefeller’s Standard Oil as well as
other
companies invested heavily in Venezuela. Gomez, propped up by their
support,
kept his promise: he preserved unrestrictive conditions and guaranteed
“social
peace”... By the late 1930’s, Standard Oil and Shell had come to
control
85% of oil extraction in Venezuela (50 and 35% respectively).”
Coronil F; “The Magical State. Nature,
Money and
Modernity in Venezuela” Chicago 1997; p.76.
By the 1920’s, Venezuela was the world’s
biggest oil
exporter. With the appalling state of land management, coffee had
declined
after 1925, in contrast to states such as Brazil and Colombia. In the
process
of transforming the economy into a completely dependent oil based
mono-commodity, the landowners transferred their holdings into new
urban-based
conglomerates:
“At the outset there developed a system by
which the
local elite mediated between the government and the coil companies. The
government granted land concessions to the local elite landlords, and
the elite
in turn, sold these concessions to the oil companies at a high rate of
profit.
… The traditional agrarian oligarchy and the commercial
bourgeoisie
which had once shared a common interest in export agriculture now
became
oriented towards activities in urban commerce and real estate based on
oil
income and was challenged by the new ascendant commercial and
manufacturing
interests... opened up by the expansion of the oil industry…. The
transformation
of agricultural lands into urban real estate became a central path to
wealth
and the basis for the formation of major grupos economicos, which are
diversified conglomerates centered on a few families linked...
Landowners were
quick to adapt and to shift investments to new activities”.
Coronil Ibid
p. 79; 87.
As this shift occurred, the emphasis on
revenue from
agriculture for the state as well as for the landowner rapidly
declined. But at
the same time, the Gomez plutocracy created effectively a state
monopoly on oil
relations with the foreign companies. They set up a national body in
1923,
called the Compana Venezolana de Petreo
SA (CVP)
which:
“monopolized all oil concessions and negotiated the sale of these concessions and national reserves to the oil companies”;
Coronil Ibid p. 80.
Revenues were plundered by the Gomez
plutocrats.
Some ministers, in particular Minister of
Development
Gumersindo Torres, argued for
stricter
control of the foreign companies, for Venezuelan state growth. This was
never
enacted. Torres was simply ousted in 1922, when he tried to issue tax
regulations.
Gomez’s personal monopoly ensured a
corrupt system of
intermediary companies and bribes for any oil concessions, and more.
Accordingly he became one of the wealthiest men on the continent and:
“Took exclusive control of the soap,
paper, cotton,
milk, butter, and match industries; he became the only meat supplier
for the
port of Puerto Cabell and other urban markets ... etc”;
Cited Coronil Ibid p. 82.
This plutocracy coupled with corruption,
and its
elite leaders, became known as the gomecismo.
Coupled to that was a brutal dictatorship outlawing any political
activity.
Caudillo
Jimenez
Emblem of Accion Democracia Romulo
Betancourt
With
J.F.Kennedy
By the time that Gomez died in 1935, the
country was
in ferment. In 1928 a student rebellion had been brutally
crushed,
leaving the Generation of 28
to await a
later time. The 28 Generation had agreed about the:
“need
to overcome feudal structures, free Venezuela from the grip of
imperialism, and
democratize the political system… and to maximize oil income...”
Coronil Ibid p. 91.
By 1931 the Communist
Party had been formed, but they were successfully opposed by
the
openly bourgeois nationalists led by Romulo
Betancourt. The nationalists outlined the Barranquila Plan for a democratic
nationalist regime.
The non-communists of the generation of 28
formed the
Bloque Nacional Democratico
and
organised a large scale demonstration that was brutally suppressed on
14
February 1936.
In response, and in order to placate the
growing
unleashed tide of opinion, the President Lopez
Contreras presented a “February
Programme” that outlined attempts at reform. These were
inadequate
however for the now insistent nascent bourgeoisie of Venezuela.
The generation of 28 organised the Moviemento De Organizacion Venezuela (ORVE),
which later became the Partido
Democratico Nacional
PDN), later to become Accion Democratica (AD).
All these variously argued for a national movement, as the
ORVE’s
program proclaimed:
”Under the previous regime there was no national existence. The state
served
interests opposed to those of the nation. It served the foreign
penetration of
the nation and provincial caudillos. A group of Caudilllos, seizing the
country, subjected Venezuelan honor to powerful foreign interests and
made the
public administration a tool of foreign plunder”.
Coronil Ibid p. 95.
It was at this time that one of the
national
bourgeoisie – Arturo Uslar Pietri,
coined the phrase:
“sow the oil” – later to be taken up Betancourt:
“If we are to propose a motto for our economic policy, we would suggest the following one, which dramatically sums up the need to invest the wealth produced by the destructive mining system in order to create reproductive and productive agricultural wealth: “sow the oil” (sembrar el petroleo)”; Cited Coronil Ibid p. 105.
Under the tide of national democratic
opinion,
President Lopez Contreras attempted to level higher taxes on
the oil
companies. But they sued against this, and won, in the Venezuelan
courts.
Later, during World War II, President Medina
made a plea for intercession with the companies to USA President Roosevelt, who agreed, provided that
Venezuela
granted “stability” of supply to the USA i.e. monopoly status.
Upon Medina’s agreement to this, the Oil law of 1943 passed, granting USA
companies
concession for 40 years and simply validating the Gomez oil concessions
offered
previously. It did increase however, state revenue to a level of
royalty of 1:
6 barrels (one for the state, six for the companies). It was hoped that
together with other taxes, this would yield about a 50-50 split in oil
profits.
However the national bourgeoisie were
aiming higher
still.
Meanwhile, for their own separate
interests, a group
of disaffected generals became organised as the
Union
Patriotica Miltar (UPM), led by Major Marcos Perez Jimenez.
They approached the leading democratic militants centered on Betancourt
and the
AD. Agreement led to a successful coup in October 1945.
The new ruling junta was led by Romulo Betancourt, and organised
elections, which
were won for the Presidency by the democrat novelist, Romulo
Gallegos., standing for the AD. The AD was in power for a
short
period of 3 years.
However, during this “Treineo” the AD
wrought major
changes:
“AD legislated wage raises, and subsidies
for basic
consumer goods... the number of trade unions increased from 215with a
membership of almost 25 thousand in 1945 to 1,047 with almost
140-thousand
members in 1948; in the rural sector the expansion was from 53 unions
with
fewer than 4 thousand members in 1945 to over 500 unions with over a 40
thousand members in 1948”
Coronil Ibid p. 135.
This was coupled with other progressive
steps that
almost exactly parallel the steps being taken today by Chavez. For
example Decree 321 aimed to
raise and homogenize
educational standards.
However the most essential feature that
sealed the
fate of the first rule of Betancourt and the AD was raising of taxes on
the oil
companies to parallel the same rates of tax they faced in the USA. This
first
brought the tax level to 28% and effectively raised the states share
from
profits of 50% to 58%. But then the Venezuelan state proposed that both
royalty
and taxes should be added together, to calculate a split of profits at
exactly
50-50 – which calculated like this would have cut oil profits and
increased
state revenue. The companies baulked.
The companies organised a movement of
local
compradors and the military in a counter-coup.
On the day of the coup, Colonel
Adams the US Military Embassy Attaché, was observed in the
Presidential Place,
”busily conferring with various military
leaders”;
Cited Coronil Ibid p. 147.
The same army officers who had assisted
the AD now
took power in a simple “coup by telephone”, an easy victory, because
the AD did
not launch a mass rebellion, fearful of the masses (Coronil Ibid p.
141). A
three-man junta took power only to be supplanted by the one-man rule of
Jimenez
a mere 2 years later.
Naturally the Jimenez government opened
the doors of
Venezuela to the USA and provided favorable conditions (See Coronil
Ibid p.
180-183). ‘Time’ magazine proclaimed:
“One place where US businessmen abroad can still flourish in a climate of high-riding free enterprise is the oil-boom republic of Venezuela”; Coronil Ibid; p. 183.
In 1952 the signing of the US-Venezuelan Commercial Treaty
ensured that local national
business did not erect tariffs (Coronil Ibid p.188). The rampant
comprador
forces inevitably created business opposition leading business leader
secretly
met with the AD in exile and with the leaders of the major alternative
party –
the Christian Democrats, or Partido
Social
Cristiano Copei (COPEI) – in 1957. Opposition mounted to
growing
mass poverty. A mass strike was faced down. But then the higher
echelons of the
military turned absent Jimenez and forced his hasty departure from
office in
January 1958. After a short interim government presided over by Rear
Admiral
Larrazabal, elections were held.
In the lead up to the elections, all
parties signed
the “Reconciliation Pact Between Labour
and Capital
(El Avenimiento obrero patronal) “. This included the
openly
revisionist Browderite Communist Party.
The other three main parties [AD, COPEI
and the Union Republicana Democratica (URD)] signed the ‘Pact
of Punto Fijo’, which agreed to accept the results of
elections, and where each party accepted a Minimum Government Programme
and
Declaration of Principles. There was to be in effect, a coalition government.
This effectively was a temporary alliance of all national and comprador capital
which:
“Defined a project of capitalist development, sponsored by a reformist democratic state and with the active participation of local and foreign capital”; Coronil; Ibid p. 219.
The AD won by a wide margin, and Romulo
Betancourt
was in power a second time. Again – how to tame the Oil Companies was
his agenda.
Having learnt from previous experience, he was to attempt a back door –
using
as many allies a he could.
While the influence of the Communist Party
was
profound, it was not able to challenge either the AD or the COPEI. Both
had
agreed to collaborate as we saw. What this marked was an agreement by
both the
compradors and the nationalists, that collaboration was needed to build
a
viable state, given the immense poverty engendered under Gomez and
Jimenez.
Although the overall programme of the AD
was
nationalist, it was neither anti-capitalist nor was it overtly
anti-USA. The
Betancourt government was a coalition one, of forces from the AD,
COPEI, and
the URD. The URD left the coalition in 1960, over the Government’s
refusal to
support Fidel Castro more overtly against the USA. This
illustrates that
the government tried hard to maintain its good relations with the USA.
For
example, by refusing to support Fidel Castro as after Castro’s
revolution in
Cuba, he began out of necessity to court the USSR. After all the USA
had
spurned Castro’s overtures.
Despite the coalition status the
government largely
devolved onto the AD. It is true that Betancourt and his government
tried very
hard to limit the oil company supremacy. The real architect of the oil
policy
was the minister of oil, Juan Pablo
Perez Alfonso.
But while nationalists, they refrained
from all-out
battle with the USA. For instance, they recognized the power of the USA
and
wished to obtain better bargaining conditions, by asking for
“preferential
treatment”.
“Once in office the Betancourt government
declared
its policy to be that of Perez Alfonso’s “Petroleum Pentagon” Which
consisted
of five basic principles: (1) no more concessions to foreign companies,
(2)
uncompromising defense of prices, (3) A quest for preferential
treatment form
the US, (4) Creation of a national oil company (5) promotion of an
organisation
of petroleum exporting countries”:
Martz JD in Martz & Meyers Ibid; p.
245.
Furthermore, the AD polices on foreign
concession
only applied to oil companies. They specifically sought outside
investment for
instance, in other industries:
“Betancourt’s regime did not discourage further foreign investment except in the oil industry. Rather it sought to encourage the establishment of branches of foreign manufacturing companies in the country, feeling that these would be in “nationalized’ in the sense of being run by Venezuelans and having Venezuelan capital invested in them”;
Robert J. Alexander “The Venezuelan Democratic revolution”; Rutgers 1964; p.8.
“The Betancourt regime also sought to encourage private enterprise both domestic and foreign, to play a major part in the process of economic development… The economic policy of the Venezuelan democratic regime after 1959 was fundamentally nationalistic. Although in no sense xenophobic or extreme, the Betancourt policy of nationalism was nevertheless real. It was reflected in the decision of the President and his associates that the country’s basic manufacturing industries a- iron and steel, petrochemicals and aluminum – should be in the hands of firms in which the Venezuelan government has a majority interest”;
Alexander “The Venezuelan Democratic revolution” Ibid p. 68.
But although wanting national industrial development, Betancourt, in fact advocated only a limited industrialization:
”In July 1932, he asserted that he was not proposing that Venezuela become “another England”, nor that he was advocating that industrialization be carried through the “realization of plans of four years a la Nazi or five-year plans a la Soviet”. He went on to argue that our destiny is fixed by geography and history, And in the great division made in modern times by economics between machine countries and rural countries, Venezuela is and will be placed with the latter; predominantly agricultural countries, exporters of raw materials, purchasers from the machine countries of the utensils required to modernize production and to make their existence more comfortable”;
Robert J. Alexander, “Romulo Betancourt
and
Transformation of Venezuela”; New Jersey 1982; p. 145.
So
although Betancourt wished to increase oil revenues for the Venezuelan
state, Betancourt was not willing to
clearly separate from foreign
capital:
“Betancourt clearly laid down the lines of the oil policy he was to ... follow in office… He laid particular stress on the need for getting the possible return for Venezuela from the exploitation of its oil, the need to begin to establish a national oil industry, and the need to “sow petroleum”, that , use income form it in order to develop other parts of the economy. In ‘Ahora’, on April 25 1939, he summed up his point of view: “The Mexican formula of nationalization cannot be suggested presently in Venezuela. Not even the most intransigent nationalists consider viable or opportune at this moment a decree on nationalization… the concrete objectives put forth by the social forces interested in rescuing petroleum for Venezuela, are in this historical moment , the following: real increase in government income and of the material advantages obtained by the government and the native worker of the industry… and the beginning of the Venezuelan exploitation of the industry , parallel to that of foreign capital, and using exclusively national capital, of the state and private interests”;
Robert Alexander; Romulo Betancourt
and the
Transformation of Venezuela; New Jersey 1982; p. 142.
“Betancourt’s attitude to the oil
companies reflected
his general attitude toward the role of foreign capital in the
Venezuelan
economy – that it was needed, but only under conditions satisfactory
for
Venezuela. He put forth this position succinctly in one of his columns
in
February 1938, commenting on the move of the Ecuadorian government of
imposing
higher tax levies on foreign concessionaries he argued for the
rectification of
the policy of making our national resources available at low prices to
colonizing foreign capital.. one can see the slow triumph of the
nationalist
thesis which denies the necessity of attracting foreign capital for the
exploitation of our zones of potential wealth, and which demands
instead
negotiations with the international trusts of terms favorable to the
national
economies and under conditions which are never damaging to the
sovereignty of
our peoples”;
Robert Alexander; Romulo Betancourt
and the
Transformation of Venezuela; New Jersey 1982; p. 142.
However, he understood the need to carry
out a
modernisation scheme. This was to consist of firstly, agrarian reform:
“Betancourt argued for agrarian reform –
land
redistribution in favor of landless peasants and small farmers. … July
1937:
“To proceed to carry out an agrarian
reform and
develop a peasant policy with a view to creating a system of small
landed
property in the countryside is for the state not only a requirement of
social
justice. From the point of view of the national wealth – which any
state
conscious of its purpose must increase – it is also urgent to modify
profoundly
the system of agricultural production. Because in Venezuela, as the
rest of
Latin America, the latifundist system must be liquidated not only
because of
what it represents as an attack on justice, but also because of its low
productivity.”
“He sought to answer the argument that
land
distribution to peasants was uneconomical: “It is undoubtedly true that
modern
and scientific cultivation of the land does not go along with
minfundia, that
is, the parcel. But it also true – as an ancient said in a sentence
whose
justice has resisted the war of the ages – that the sweat of the slave
irrigates the land but does not make it fecund. And he who cultivates
the land
for the benefit of others feels himself a slave of the land and not a
beneficiary of it.”
Robert Alexander; Romulo Betancourt
and the
Transformation of Venezuela; New Jersey 1982; p. 143.
“Betancourt also laid stress on
agricultural
development ... that resources generated by the oil industry
should be
invested in other parts of the economy, he lamented the failure of the
Gomez
regime to pay any attention to agriculture, and urged a variety of
programmers
to develop the rural sector, and particularly, to make Venezuela less
dependent
on imports of agricultural products and, indeed a larger exporter of
them”;
Ibid; p. 144.
In actual fact the differences, given the
agreed
political agenda between the COPEI and the AD were minute:
“Both
of the political parties that bore responsibility for Venezuela’s
Democratic
Revolution – the AD and the COPEI – endorsed a mixed economy of public
and
private enterprise in which the guiding role is taken by the state...”
Alexander “Venezuela’s Democratic Revolution”; Ibid p. 63.
The AD split to the left due to its
vacillations and
refusal to attack the USA more centrally. At the same time it was
insufficiently supportive of the workers wages in the view of the
left-wing.
This erupted into conflict over a new contract with eh oil workers in
1960. The
split to the left became the Movimiento
de
Izquierda Revolucionaria (MIR). This moved closer to the CP,
but
remained separate. (In a subsequent article we will discuss events on
the left
in Venezuela in more detail). As Betancourt moved more openly to an
anti-worker
and suppressive regime, he viciously attacked the left opponents. In
1962, the
CP and the MIR jointly began a campaign of guerrilla warfare, although
not
overall achieving only limited success in mobilizing the people.
The COPEI polices were not radically
different from
those of the AD. They were never outlawed under Jimenez unlike the AD,
but they
were harassed. Their appeal was towards the adherents of the
Church and
radical clerics, but also of the military caste, and of the comprador
class:
“When AD was in power between 1945-1948,
COPEI
adherents were the most violent opponents of the regime. At that time
they
included many of the most conservative elements of Venezuelan political
life
and the party had a marked clerical tinge... The leaders of the party
became
firm adherents of a radical interpretation of the social teaching of
the
Catholic Church…. It was probably the party that was regarded as least
noxious
by important elements in the officer caste of the armed forces. And in
spite of
its turn to the left after 1958, the COPEI still have the sympathy of
important
elements among the industrial and commercial classes.”
Alexander Ibid p. 85-6.
Rather than confront the USA imperialist
directly, AD
had decided to ally itself with the COPEI and be much more cautious. As
part of
their caution, they decided to establish an international cooperative
of oil
producing nations. Chavez comes from a long line of so-called
national
bourgeoisie whose interests lie in developing the economic base of a
colonial
or semi-colonial country, to the greatest extent possible; rather than
submit
to the wish of imperialists to subjugate the colony. These nationalist
politicians
take this position in tandem with the national capitalist class, whose
economic
interests demand the cutting of dependent colonial relations. But
they
are only able to take an uncompromising stand to the imperialists if
they are
prepared to unleash mass power. AD was not. Chavez to an extent has
been forced
to adopt this approach.
Chavez and Venezuela are familiar with the
prior
attempts of their country to break loose from USA control. Their story
is that
of the colonization of oil-rich states. Their national struggles around
oil
really start not in Venezuela – but in Iran. The USA imperialists are
behaving
now – with regards to Chavez – in exactly the same way they had earlier
on,
reacted to Mussadiq of Iran.
For Mussadiq had the temerity to believe
that:
"The
Iranian must administer his own house."
Cited J.A.Bill "The Eagle and the Lion - the tragedy of Iranian
-American relations. New York 1988 p.56.
The USA effectively removed Mussadeq for
his
temerity. This was ‘necessary’, in order to prevent the nationalist Muhammed Mussadiq effecting
nationalization of Anglo-Iranian Oil
Company (AICO)
later the Anglo-Persian Oil Company.
When Mussadeq had become Prime Minister of the Majlis (the Iranian
Parliament)
in April 1951, he inherited a Bill that nationalized AICO. Refusing to
rescind
the Bill, he was held to ransom by AICO which in a boycott, refused to
allow
Iran to sell its oil on the international market. Quick results ensued:
"This boycott was effective. Iran's oil
export
income dropped from more than $400 million in 1950 to less than $2
million in
the 2 year period from July 1951 to August 1953.. Musaddiq faced a
deteriorating economic and political situation in 1953.. and was forced
to rely
on the radical left and the communist (revisionist - Editor) Tudeh Party.. on May 28th Musaddiq
wrote to
President Eisenhower requesting economic aid.. the answer was
negative..".
J.A.Bill ibid P.66-7.
The British then persuaded the USA to
participate in
a putsch, termed Operation Boot
by the
British and Ajax by the US. The Chief British operative, Major C.M.Woodhouse was conscious of
difficulties
in getting the US to take part :
"Not wishing to be accused of trying to
use the
Americans to pull British chestnuts out of the fire, I decided to
emphasise the
Communist threat to Iran rather than to need to recover control of the
oil
industry. I argued that even if a settlement of the oil dispute could
be
negotiated with Musaddiq, which was doubtful, he was still incapable of
resisting a coup by the Tudeh party, if it were backed by Soviet
support.
Therefore he must be removed."
J. A. Bill, Cited, Ibid. p.86.
The USA ‘bought’ the argument. But they
proceeded to
ensure their – and not British – domination over the state of Iran:
“The 1953 anti- Musaddiq coup resulted in
the Shah of Iran being bought
back to Iran. He
understood fully who had placed him on the Peacock Throne, and remained
thereafter much indebted to US imperialism. Musaddiq was treated with
relative
leniency - he was not killed, but after 3 years in jail, was allowed to
return
to his home village Ahmadabad under house arrest”; (J.A.Bill Ibid p.
101).
Following this demonstration of USA power,
the
colonial oil-producing nations decided to form a cartel in 1960 – the
so-called
OPEC. The inspirer of this
more cautious
tactic was the national bourgeois representative Alfonso
Perez of Venezuela. Alliance has previously discussed
so-called “oil
crisis” of the 1980’s, and the Gulf Wars of USA imperialism.
Despite the 1948 set-back for the
Venezuelan national
bourgeoisie, the "50-50 rule" had become a standard in dealings with
oil-exporting nations. For instance Aramco
(Arabian American Oil Company ) used this formula in Saudi Arabia in
1950.
(J.A.Bill, op cit, p. 61). However this still left considerable
super-profits
for the imperialist owned oil companies.
When
they returned to power in 1959, the national
bourgeoisie of Venezuela recognized that a key factor in negotiations
over the
price of oil, was the erosion of Venezuela's selling power by Middle
East oil.
Oil companies when faced with demands for a fairer distribution of
profit
simply expanded production from the compliant Middle East.
Some
have argued that Perez
Alfonzo had:
"Only envisaged an 'entente' and
'arrangement'
between a few producing countries to establish, links of solidarity
between
them, reduce the oil companies ‘capacity for maneuvering and prevent
them from
playing one country off against another."
(Statement in Petroleum Weekly, New York May 1 1959 p. 19. Cited by
Pierre
Terzian "OPEC: The inside story"; London 1985.)
This seems likely. But Perez Alfonso may
have also
had a much grander vision than simply trading a better price:
“Venezuela has a great resource in its
petroleum, but
it is faced with great responsibility. It must not impede its use of
this
resource to satisfy the needs of other people, but in protecting its
own
national interest, it must never let the industry become dilapidated.
Petroleum
is the principal of all indispensable fuels in modern life… Venezuela
needs to
maintain and even to increase the income it receives from petroleum.
With a
policy of just participation, the exploitation of present concessions
is enough
for the country”:
Cited Martz and Myers Ibid; p. 72.
After the national bourgeoisie of
Venezuela returned
to power in 1959, they took up the cause of combination of the oil
producing
countries. Under their leadership, a secret agreement known as the Maadi Pact was concluded at the first
Oil Arab
Congress in Cairo on 16th April 1959. The Agreement between the UAR,
Iraq,
Venezuela, Kuwait and Saudi Arabia included the following:
"1. Improvement of the oil producing
countries
participation on a reasonable and equitable basis. The consensus of
opinion was
that said government should tend to at least a 60-40 formula to be on a
par
with the recent Venezuelan attitude.. and with other countries ..the
price
structure should be maintained - any change in prices should be
discussed with
precedent in time and be approved by all parties concerned.
2. Convenience of arriving at an integration of the oil industry-to
ensure
stable markets to the producer countries avoiding transfers of gains
from one
phase of the operations to another, affecting the oil revenue of the
governments.........
4. Establishment of National Oil Companies that would operate side by
side with
the existing private companies."
P.Terzian. Ibid , p.27-8.
Perez Alfonso arranged that the USSR
would
support the OPEC move. This was important because the Oil companies
were
constantly citing the USSR's tariff policy as a pretext to justify
their own
decision to cut prices. (P.Terzian, Ibid p.34).
After an initial disbelief, the
major oil
companies, led by Shell,
tested the
strength of resistance by announcing cuts in the posted prices of oil
that they
were prepared to pay. The vigorous resistance they met, along with
announcements of a meeting of oil-producer nations at Baghdad in
September
1960, induced Shell to withdraw their price cuts. The Financial Times
concluded:
"In
effect Shell is.. paying a premium to the Governments of the producing
states.
What the countries particularly objected to was the fact that they were
not
consulted."
Cited, Terzian. Ibid. p.53.
However efforts to involve the Middle East
nations in
an effective combative combination were doomed to failure. This was
because
combination had to involve some countries that were ruled by comprador
bourgeoisie (e.g. Saudi Arabia and Iran.
The Baghdad Meeting in September 10th 1960
started
off tense. Both the Venezuelan nationalists and the Iraqi national
bourgeoisie
led by President Kassem, were
in the
midst of fending off a coup at home.
Tension rose as it became clear that Iran
was
blocking agreement on going further than the agreement reached at
Maadi. The
Irani representative Fuad Ruhani
had
been given:
"Very precise instructions from my
Government.."
Terzani , Ibid. p.41.
Suddenly on 14th September the Shah of
Iran sent new
instructions. This agreed to the creation of a permanent
organisation. Moreover, the Shah even had a name for it - The Organisation of the Petroleum Exporting
Countries (OPEC).
This about face indicated a new tack on
the part of
the Oil Companies. They had accepted the inevitability of the cartel.
As Perez
Alfonso found when he met the directors of the Seven Sisters:
"My impression is that the main companies
recognize that the Baghdad Agreement was necessary, or at least
inevitable.."
Ibid p.44.
Theoretically the OPEC countries
were in a very
strong position controlling 82 % of world crude exports. But ‘The
Times’,
accurately saw the situation:
"The strength of these producing countries
is
not as great as might appear - offering two reasons - the surplus of
supply
over demand in the world oil market and the divergent interests of the
5
countries concerned, some of who wanted to increase production whilst
other
sought a reduction."
The Times 15 September, 1960. Cited by Terzian p.44.
Irrespective of this, the imperial oil
companies
decided to emasculate the
oil-producers
from within. The oil producer nations – or OPEC - were hijacked by
pro-imperialist forces. The comprador states of the Middle East, were
key to
the strategy of the oil companies. Saudi Arabia was and is a
reactionary state
with elements of mystic Muslim feudalism, but essentially represented
USA
interests in the Middle East.
As
the US Senate Committee on Energy and Natural
resources commented:
"The US, by virtue of its commercial
oil
interests 'long standing monopoly over the disposition of Saudi crude,
now
reinforced by the 1974 conclusion of a "special relationship"
embracing economic and military agreements, is very widely regarded
amongst its
allies and by Arab and Iranians as having secured preferential and
near-exclusive access to Saudi oil. Given the extraordinary importance
of Saudi
oil production to the world generally, the US relationship is
considered key to
supply security."
(U.S. Senate: "Access to oil - the USA relationships with Saudi Arabia
and
Iran." Washington D.C. U.S. Government Printing office, Publication No.
95-70. 1977 (p. xi). Cited by Peter Nore and Terisa Turner in: "Oil and
the class struggle"; London; 1980).
At critical times the Saudis refused to
allow OPEC to
raise prices in accordance with the demand of the more nationalistic of
the
OPEC countries such as Iraq and Libya. Saudi
Crown
Prince Fahd has
pretentiously
revealed his unwillingness to be an effective member of the cartel:
"My
country which possesses the largest oil reserves in the world will not
be the
cause of a weakening in the capacity of humanity to live in stability
and
prosperity. In view of this lofty aim, commercial considerations cease
to exist
and consequently the methods which are used to increase or lower prices
will
likewise disappear.."
Frankfurter Rundschau. I April 1975. Cited by Mohssen Massarrat. The
Energy
Crisis p.67. in Oil and the class struggle" Ed. P.Nore and T.Turner.
London, 1981.
It
is not surprising that for decades:
"Saudi
foreign policy consists largely of
support for Washington in the Middle East";
(Sunday Times, - 5th August 1990. p. 12)
Nor is it surprising that given the
membership
of nations like Saudi Arabia in OPEC, that OPEC could
not reflect the interests of the oil producing national
bourgeoisie.
As Henry Kissinger commented:
"OPEC was not perceived as a serious
cartel..."
Jack Anderson and James Boyd. "Fiasco. The real story behind the
disastrous worldwide energy crisis - Richard Nixon's "Oilgate". 1983.
Toronto. p. 163.
In fact as, the manufactured oil crisis of
the 1970's
shows, OPEC was transformed into an agency that performed objectively
in the
interests of the USA imperialists. It is in this context that the rise
of
Chavez must be seen.
Chavez has taken over the mantle of the
nationalists
from oil producing countries, who are trying to get a ‘fair price’ for
their
oil.
Following the immediate collapse of the
nationalist
goals to control the oil output, the Venezuelan state slipped deeper
into
dependency upon the imperialist world order. The entire agenda for any
national
development was blocked. The comprador capitalist class alliance with
the
national bourgeoisie was broken. Both the COPEI and the AD pursued now
openly
pro-comprador policies.
Although the first AD government had
initiated a
rural reform, it was stalled. It is true Venezuela was the first South
American
country to attempt a comprehensive land reform. The mechanisms used
were:
To empower the Colonization Institute to
distribute
land;
Setting up in 1947 agrarian commissions
which
expropriated all state-owned land and all privately owned land not
being
cultivated – which then distributed 125,000 hectares to 73,00 peasants;
In 1948 setting up the Land reform
Institute which
began to expropriate even land already under the plough.
(Sven Lindqvist: “Land and Power in South
America”;
Harmondsworth; 1979; p.141-3).
These were effectively halted by the
Jimenez
take-over. But even after the second AD government, land reform was not
effectively completed:
“The 1960 reform- after legalizing the
spontaneous
land invasions – was a slow integrate process.. to give the poor
peasants
access to the market economy.. it did not intend to .. overthrow the
landed
estate owner class. On the contrary, large scale commercial
agricultural was
strongly encouraged by food tariff sand other price supporting measures
as well
as by agricultural credits and subsidies… one third of the land reform
peasants
had received less than 5 hectares. … many smallholdings had been
distributed of
a size insufficient to support a family.. the land distributed was
rarely under
the plough. Often the reform peasants had to content themselves with
marginal
land, nor regarded as profitable by the estate owners.. others had been
obliged
to become out croppers, breaking fresh ground on the state’s forest
reserves..
credits technical aid, road construction had not been distributed
equally..”
Lindqvist Ibid pp 146-8.
A survey in 1969 showed that the peasants
had only
been able to maintain their incomes by resorting to wage labour.
Moreover up to
41% of the so-called “landed reform peasants” simply did not exist, but
had
been ‘lost souls’ made up by businessmen and estate owners to obtain
more land
or revenue. The net situation in agriculture has remained bleak up to
the
Chavez rise to power:
“Although the cumulative annual
agricultural growth
rate of approximately 4.3 per cent over the last 35 years.. is
insufficient to
satisfy the demand generated by accelerate urbanization, the general
rise in
income, an average high demographic rate (3-5% annually) augmented by
illegal
immigration principally form Colombia… Venezuela continues to be
characterized by
the bimodal pattern of agricultural development consisting of numerous
minfundia and the large farms of 50 hectares or more, the latter
accounting for
most of the cultivated area and production and .. credit.. More than
90% of the
agricultural producers go to the official bank for credit because they
not have
collateral.. Added to these inefficiencies, is increasing agricultural
dependency on imported machinery, equipment, seeds, fertilizer,
pesticides,
technology, and food.. it imports up to 70% of its food”;
D.L.Herman in Martz & Meyers Ibid;
1986; p. 357.
The failure in the oil industry to ensure
Venezuelan
supremacy, was mirrored by the failures of attempts to build other
industries.
Perhaps the clearest examples were that of the automobile industry that
was
supposed to be a part of a regional conglomerate – the Andean Pact, and the farm tractor
business. Both
ventures were sabotaged by USA capital (Coronil Ibid; pp.237-320).
These collective failures meant an
increased
dependency upon the USA.
Especially with respect to the
International Monetary
Fund and its insistence in recent years on so-called “austerity”
programmers.
When the AD
Presidency of Carlos Andres Perez
between 1989-93 lied to the electorate that they would stand up to the International Monetary Fund (IMF) –
and then
rapidly submitted to IMF demands on the country, a massive rebellion
and riots
which broke out on 27 February 1989. Police shot and killed over 400.
This
rebellion is known as the Caracazo.
The capitulations to the IMF were
excoriated by
Chavez, and were in fact his main impetus for seeking political office.
As
described by Richard Gott,
the extent to
which the IMF wished to submerge the Venezuelan state into
“neo-liberalism” is
evident.
This lengthy quotation is worth citing in
full:
“Chavez makes a general complaint
against these
(IMF) programmers – he always refers to them as 'savage' neo-liberalism
– his
particular arguments inevitably hark back to the dismal experience of
Venezuela
during the years after 1989, and his chief target has been the policy
turnaround introduced by Perez that had led directly to the Caracazo, and was to lead later, in 1993, to the
downfall of Perez himself.
The immediate cause of the Caracas
rebellion, noted
in the previous chapter, was the rise in the price of petrol, and
therefore of
bus fares;... Yet the price rise was itself part of a more
extensive
change in economic policy
undertaken by the
government earlier in the month, swiftly dubbed el gran viraje, 'the great U-turn'.
The policies of neo-liberalism
unleashed on Latin
America (and elsewhere) in the 1990s are often and usefully defined as
the
'Washington Consensus', a ten-point programme originally devised and
codified
in 1989 by John Williamson,
formerly an
IMF adviser in the 1970s. The programme, deemed appropriate in
Washington, was
directed essentially at countries with large foreign debts, forced on
them by
international banks in the 1970s and 1980s. Its purpose was to reform
the
internal economic mechanisms of debtor governments in Latin America
(and
elsewhere) so that they would be in a position to repay the debts they
had
incurred, usually from American banks.
Venezuela, with its large accumulation of
debt, rashly borrowed at high
interest rates by a
succession of corrupt and incompetent governments, was a prime target
for the
reforms of the 'Washington Consensus'. Some reform was clearly
necessary if
foreign investment was to continue. Yet the specific reforms had a
serious
downside. While taking into account the requirements of the foreign
banks, they
effectively ignored the needs of the poorer inhabitants of the debtor
countries.
In practice, of course, the reforms embraced a far wider agenda than
the mere
solvency of a handful of international banks.
John Williamson,
the codifier of
the 'Washington Consensus', explained his terms at a conference on the
subject
in 1994. He claimed to have identified 'ten areas where policy-makers
and
scholars in "Washington" could arguably muster a fairly wide
consensus as to the character of
the policy reforms that debtor
countries should
pursue'.
Couched in the cool language of
imperial economists, his
pro-gramme might seem
innocuous enough. Yet, in practice, the terms demanded of the debtor countries spelt out a new
form of
colonialism. The advantages granted to US-based transnational companies
under
the neo-liberal programme went far beyond a simple policy of debt
recovery.
The 'ten areas' of the
'Washington
Consensus', defined by Williamson, involved government
agreeing to
enforce the following reforms:
a guarantee of fiscal discipline, and a curb to budget deficits;
reduction in public
expenditure,
particularly in the military and in public administration;
tax reform, aiming
at the
creation of a system with a broad base and with
effective enforcement;
financial
liberation, with
interest rates determined by the market;
competitive
exchange rates, to
assist export-led growth;
trade
liberalization, coupled
with the abolition of import licensing and a reduction
in tariffs;
promotion of foreign direct investment;
privatization of
state
enterprises, leading to efficient management and improved performance;
deregulation of the
economy;
protection of
property rights.
This was the
programme of economic
reform that the Perez government felt called upon to adopt in February
1989”.
Richard Gott, “In the Shadow of the
Liberator –
Hugo Chavez and the transformation of Venezuela”; London 2000; “pp.
52-53.
All these capitulations to the USA
machinations led
the state into more and worse dependency. An interesting new
development was
the extent to which this dependency was no longer reflected in just raw
material exports from Venezuela, but also in terms of huge outflows of
capital.
All this has meant that:
Short term indebtedness to either the
International
Monetary Fund (IMF) or to imperialist countries directly, increased.
This means a huge portion of total
borrowing will go
to paying off interests:
“According to estimates made by the Morgan Guaranty Trust Company for 1982, short-term indebtedness accounted for .. 45% of Venezuelan total borrowing; the Philippines 38%, Colombia 32%, Mexico 30%, Peru 29%, South Korea 28%, Nigeria 27%, and Brazil, Argentina, Chile and Turkey all 19%”;
(World Financial Markets June 1983);
Cited Corner P, Mass, Siebel T, Tetzlaff R. “The IMF and the Debt Crisis – A Guide to the Third World’s Dilemmas”; London; p.8).
(ii) As noted above, in turn this
distorted the
Venezuelan economy by the high debt repayment or “debt servicing
ratios”
required:
Country
|
1977 |
1980 |
1982 |
1984 |
All Developing Countries |
15.1 |
17.4 |
24.4 |
21.5 |
Asia |
7.6 |
8.2 |
11.2 |
9.9 |
Africa |
11.9 |
16.5 |
22.2 |
24.9 |
Middle East |
14.1 |
16.9 |
22.9 |
23.1 |
Latin America |
32.0 |
35.7 |
55.1 |
44.6 |
Europe |
14.9 |
18.8 |
22.1 |
21.4 |
(Figures
from IMF 1984; Cited Corner P et al Ibid; p. 90).
According to more recent figures, the
gross external
debt of Venezuela in 1985 of 31 billion, would be zero if there were no
capital
flight [James Petras & Morris Morley “US Hegemony Under Siege”;
London
1990; p. 197].
The total debt of Venezuela was ranked 5th
in the world by the year 1984 (Cited Corner P et al; Ibid p. 10).
(iii) As noted above, there was a huge
capital flight
from the country. The comprador class had used its relationship with
foreign
capital to invest overseas. In a further twist, this capital flight was
then
“re-loaned” to the Venezuelan state. The proportion of new loans to the
country,
formed out of this capital flight fund, was very high. This phenomenon
accounted for some $71 thousand million of investment in the developed
world
from seven countries alone:
Country |
Capital Flight Thousands, of millions dollars |
New Indebtedness Thousands,
of millions dollars |
Capital Flight – Its’
proportion of “New Debt” (%) |
Mexico
|
26 |
45 |
58 |
Venezuela |
18 |
8 |
225 |
Argentina |
11 |
18 |
61 |
Nigeria |
6 |
8 |
75 |
Indonesia |
4 |
9 |
44 |
Philippines |
3 |
9 |
33 |
Egypt |
3 |
9 |
33 |
(Business Week 3 October 1983; Cited Corner P et al Ibid; p. 37)
As a leading businessman in Venezuela, Gustavo Cisnero admitted to the Wall
Street
Journal in 1994:
“We have reinvented ourselves. Any group who doesn’t in Latin America is lost, gone retired” referring to the group’s new ability to compete in international markets”;
Cited Coronil Ibid p. 382.
The result of all of this was an intense
impoverishment of the people.
It is important to realise the extent to
which the
IMF and imperialism forced the state of Venezuela into accepting an
impoverishment of its people. As President Caldera noted in
August 1996,
of plans of the IMF in March:
”While international capital and the IMF pressured Venezuela to accept
these
measures.. of an IMF austerity plan” including an immediate 600%
increase in
the price of gasoline”;
Coronil Ibid; p. 384.
Given the stances of the Chavez government
against
such capital flight and such foreign indebtedness, it is ultra-leftist
not to
recognize the progressive nature of the Chavez struggle on behalf of
the
national bourgeoisie of Venezuela.
We have argued before that the essential character of imperialism as
was
originally defined by Lenin
has not
changed, despite the constant fluff of “globalization”.
[See: “Globalization;
Do Lenin's
Criteria of Imperialism still Hold?” at
http://www.allianceml.com/ISML/AllianceParisGlobalNatQuest1999.html].
We acknowledge that the direction
of flow of capital has
changed –
From ‘classical’ imperialism being an
export of
capital from the developed world to the developing world;
To ‘neo-imperialism’ – where capital flows
from the
developing world to the developed world.
[British Neo-Imperialism See http://www.allianceml.com/allianceissues/A2003/Neo_imperialism_FIN.htm].
However, again - the essential nature of
imperialism
has not changed.
In this situation, the need for the
proletariat and
peasantry to find even temporary allies remains unchanged. We believe
that the
position of Marxist-Leninists towards the national liberation struggle
remains:
To support the national liberation
struggle and its
representatives while it genuinely fights against imperialism;
while
moving forward from the anti-colonial and
anti-imperialist struggle into the socialist struggle.
This position has been stated on our
web-pages at
several places [See for example, Comintern Second
Congress; Alliance 5, at:
http://www.allianceml.com/AllianceIssues/All-5table.htm].
Chavez’s policies bear more similarities
to the
Betancourt policies than is generally admitted.
These are generally to ensure some degree
of autonomy
for his state – especially in oil, while pushing through a land reform.
It would seem
that the major tasks as were laid out by Romulo Betancourt are still to
be
performed.
We argue that each component part of the
Chavez
programme is a part and parcel of the usual programmers of what is
known as the
national bourgeoisie.
They are halting, true – but they are
progressive.
They are not revolutionary:
As Chavez has stated:
“Our project is neither statist nor
neo-liberal; we
are exploring the middle ground, where the invisible hand of the market
joins
up with the visible hand of the state; as much state as necessary, and
as much
market as possible”; Inauguration Speech as President; 2 February 1999;
Cited
Richard Gott In the Shadow of the Liberator. Hugo Chavez and the
Transformation of Venezuela; London 2000; p. 173.
Chavez wants foreign investment:
“is
desperate for foreign investment. He has to steer a difficult and
almost
impossible course, telling his nationalist country what it wants to
hear, and
making the right kind of reassurances noises that will not frighten the
foreign
investors. In this of course he has the warm support of Fidel Castro.
The US
Ambassador in Caracas, Jon Masito spent much of 1999 trying to get the
Chavez
government to sign the treaty of the promotion and protection of
foreign
investment.. He turned out to be knocking on an open door.
Chavez’s
cabinet quietly agreed to sign.. A strong element in (his) programme
has been
the encouragement of local investors.. In spite of all the rhetoric,
President
Chavez in office has turned out to be a pragmatic ruler..”
Gott Ibid p. 173-74.
Foreign investors have been willing to
come into
Venezuela, even after Chavez’ victory over the attempts to unseat him:
In fact within the state, the comprador
and
reactionary elements of the bourgeoisie have – for the movement, seen
the need
to reconcile with him:
“In a bid to jumpstart the national economy and to create jobs, the confederation of Venezuelan industrialists, Conindustria, proposed a strategic alliance with the national government yesterday. The president of Conindustria, Lope Mendoza, met with vice-president Jose Vicente Rangel and agreed to present a plan to reactivate the industrial sector of the country. Mendoza said that her organization is prepared to work with those ministries most related to the industrial sector including Science and Technology, Health, PDVSA, and the Venezuelan Corporation of Guyana.
Conindustria prioritized jobs, finance, integration and competition.
Mendoza said the company is interested in looking into opportunities with Mercosur and to strengthen small and medium sized companies in Venezuela. The organization wants to build the small and medium business sector into non-traditional exporters and include it in the endogenous development plans of the national government.” Robin Nieto; “Industrialists Propose Alliance with Venezuelan Government”.
Oct 26, 2004 at http://www.venezuelanalysis.com/news.php?newsno=1398
Above we discussed the AD agenda for land
reform.
This was stalled abruptly with the failure to enact meaningful
restrictions on
the oil companies. The desperate poverty of the people and the very
inefficient
land usage by virtue of the small plot sizes owned by families creates
a
crisis. The objective factor of the land and geography itself,
conspires
against good agriculture:
“In addition to the land tenure system Venezuela has two other problems, a tropical climate and poor agricultural land. The llanos (plains-ed), which comprise one third of eth country’s landmass and yield the highest percentage of crops are intermittently parched and flooded. Although much of the dry, barren soil can be made productive by irrigation, major projects take at least 20 years as well as considerable investment to attain the desired results. Because of its warm temperatures, the country cannot grow basic feed grain such as soy or wheat, commodities that are essential for agricultural self-sufficiency, ,, Furthermore the country’s geography is only moderately suited to agricultural production and a mere 2% of its land surface is currently devoted to crop raising”;
Herman DL In Martz & Meyers Ibid; p. 330.
Even with the rapid expansion of the oil
industry, a
large portion of the population 28% in 1968) is still dependent upon
agriculture as seen below.
SECTOR
|
1920 N
% |
1936 N
% |
1950 N
% |
1958 N
% |
1968 N
% |
Petroleum
|
2
0.3 |
13.8 1.2 |
42.7 2.7 |
44.3 2.1 |
35
1.2 |
Mining |
- |
1.6
0.2 |
5.7
0.3 |
11.5 0.5 |
12
0.4 |
Industry Crafts |
22
3.1 37
5.6 |
51
4.7 97
9.0 |
93
5.8 114 7.1 |
156 7.3 99 4.7 |
445 15.4 |
Commerce |
51
8.0 |
64
6.0 |
150 9.4 |
237 11.0 |
396 13.7 |
Public Services (A) |
13
2.1 |
56
4.0 |
113 7.1 |
172 8.1 |
|
Domestic Service (B) |
35
5.5 |
108 10.0 |
150 9.3 |
193 9.0 |
|
Others (C) |
- |
15
1.4 |
79
4.9 |
132 6 |
|
A + B + C |
|
|
|
|
799 27.6 |
Agriculture |
437 71.6 |
625 57.9 |
704 44.1 |
824 38.4 |
813 28 |
Table adapted from Michelena S; In “The
Illusion of
Democracy in Dependent Nations “; p. 55.
Original figures compiled
from
official sources & authorities;
After Chavez survived the
referendum
vote, he has pledged to push a long overdue land reform through:
“Venezuela land reforms
to push on: Supporters
of President Chavez celebrate his referendum victory Mr. Chavez's
supporters
are keen for him to push ahead with reforms Venezuela's President Hugo
Chavez,
who survived a referendum earlier this month, has vowed to step up
controversial
agricultural reforms. The government
plans to enforce a 2001 land law that allows it to either tax or seize
unused
land, Mr. Chavez said during his weekly television address.
"We
are going after the idle land and will put it to work," he said. ..
Mr. Chavez tried to play
down the
threat he poses to the landed classes.
"We
are not the enemy of the rural estates, we are not going to burn them,
we are
not going to invade land," he explained.
But,
"in this stage of the revolution, I
demand strict application of the constitution and the land law."
However,
some workers, impatient for the government to intervene,
have already seized land.
Productivity check
The government will
assess large
estates and look at how best to utilise unused land. The redistribution
programme allows for some of it to be given over to peasant
cooperatives, which
will get state aid to farm the land.
…The government last year
said that
it planned to hand out as much as 3.7 million acres (1.5 million
hectares) to
rural workers in the early stages of its programme, the Reuters news
agency
reported.” http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/2/hi/business/3612114.stm
Already strides in land
reform have
been made:
”The more positive developments in Venezuela
under Chávez…
Most important of these are the so-called "missions," which are
designed to provide literacy programs to Venezuela's illiterate, free
community
health care, especially in the remotest and poorest neighborhoods,
large-scale
financial aid for the poor to
attend a
university, subsidized supermarkets in poor neighborhoods, and
employment for
graduates from the educational missions. Also very important in the
Chávez
government's efforts to institute greater social justice are the rural
land
reform program, which has redistributed land to over 100,000 families,
and the urban
land reform program, which is providing barrio inhabitants with titles
to
their
self-built homes and terrain.”
Gregory
Wilpert - Venezuelanalysis.com: “Venezuela's "Bolivarian Revolution"
Continues, Despite U.S. Resistance”; Jan 01, 2005
http://www.venezuelanalysis.com/articles.php?artno=1344
The
Future Prospects
There is little doubt
that Chavez is
trying to build up allies against the inevitable new attacks from the
USA.
He is trying to advance
slowly with
reforms, while not igniting the mass working class into an overt
revolutionary
spirit.
At the same time he is
trying build
regional and international alliances, with potential enemies of the
USA.
He recently was visiting
China to
this end.
Perhaps his most staunch
support
will come from a combination of the Andean countries, and the former
Russian
state.
We largely agree with
this editorial
viewpoint below:
“After Iraq it is oil
rich Venezuela
led by Hugo Chavez that has become the center for confrontation between
America
and the Euro Zone. Chavez is dead against America and Euro Zone needs
him to
keep the oil balance - the power symbol in 2005. But this time the
equation is
a little different. A new regional and super power coalition of India,
China, Russia
and Brazil is making a huge difference. Russian President is in the zone to pull Brazil
in the
coalition and influence on Chavez for mutual support.
While the whole world is focused on America and the Euro zone for the
super
power challenges, both these powers are looking small when you combine
the
powers of the new coalition Putin is building with India, China, Russia
and
Brazil. Add to that Venezuelan oil that supplies America a substantial
crude
oil, and now you have the actual scenario of confrontation.
Venezuelan President Hugo Chavez is leveraging his country's oil
resources to
build new geopolitical relationships with key regional powers like
Russia,
China, India and Brazil. Northern Andean region is where the new super
power
coalition is
planning to influence most. It is in the corridor of America and rich
with many
natural resources. This is the region that America takes it for
granted.
For Russian, Chinese and
other
non-US. oil companies, the Chavez government's oil-based foreign policy
also
will translate into
profitable investment opportunities in Venezuela in coming years.
Brazil, a
member of the superpower coalition is a neighbor of
Venezuela, And though Brazil has special relations with America, it has
far
more interest in Venezuela than any other countries.
According to think tanks, it is not Iran but Venezuela will be the next
epicenter
of confrontation for oil supremacy. But this time both Euro zone and
America
will face a real formidable super power coalition - the combined
resources of
India, China, Russia and Brazil”.
Sudhir Chadda, November 27, 2004
http://www.indiadaily.com/editorial/11-27b-04.asp”
CONCLUSION:
Chavez is far from being a communist.
As he revealed to Tariq Ali, a prominent Trotskyite, he is a social democrat, carrying out a democratic agenda:
“The Bolivarians have been incredibly restrained. When I asked Chavez to explain his own philosophy, he replied:
'I don't believe in the dogmatic postulates of Marxist revolution. I don't accept that we are living in a period of proletarian revolutions. All that must be revised. Reality is telling us that every day. Are we aiming in Venezuela today for the abolition of private property or a classless society? I don't think so. But if I'm told that because of that reality you can't do anything to help the poor, the people who have made this country rich through their labour and never forget that some of it was slave labour, then I say 'We part company'. I will never accept that there can be no redistribution of wealth in society. Our upper classes don't even like paying taxes. That's one reason they hate me. We said 'You must pay your taxes'. I believe it's better to die in battle, rather than hold aloft a very revolutionary and very pure banner, and do nothing ...
That position often strikes me as very convenient, a good excuse ... Try and make your revolution, go into combat, advance a little, even if it's only a millimetre, in the right direction, instead of dreaming about utopias.'
http://www.trinicenter.com/modules.php?name=News&file=article&sid=755
Why has there been such opposition to
Chavez?
We agree with this following assessment.
Chavez represents a threat partly for his
national
tendency, but partly because he threatens to unleash the political
drive of the
masses:
“The truth of the matter is that despite
repeated
appeals by Chávez to business not to get involved in politics and to
concentrate on developing the country and the economy, the decisive
sectors of
the capitalist class in Venezuela have responded by organizing military
insurrections against the democratically elected government and
sabotaging the
economy.
Despite the fact that so far the Chávez
government
and the Bolivarian revolution have not attacked private property
rights, the
oligarchy (the alliance between capitalists, bankers, landowners and
imperialist interests) cannot tolerate the Bolivarian movement, because
they
understand clearly that the revolutionary movement of the masses poses
a direct
threat to their domination of the economy and the country as a whole.
The struggle of the Venepal
workers is one example of this contradiction. The
owners of the company supported the military coup and the bosses’
lockout
against the democratically elected government. The workers fought back.
Now the
owners have declared the factory bankrupt and the workers have occupied
the
premises and are demanding nationalization under workers’ control. William Izarra has come out in favor
of this
proposal at a mass meeting he addressed in Venepal.
This conflict, over the control of the
economy, will
come increasingly to the fore in the next period, and the future of the
Bolivarian revolution depends, to a large extent, on how it is
resolved. The
October 31 elections are an important battle in this war.
October 29, 2004. Jorge Martin
;“Venezuela’s regional
and council elections,” http://www.marxist.com/LatinAm/vnz_regional_elec04.htm
Without a Marxist-Leninist party however,
the innate
militarist in Chavez will not ultimately deliver more than reforms.
Marxist-Leninists inside Venezuela will
have to
support the Chavez movement for these reforms, and enable the masses to
see
through Chavez’s limits. The masses
push Chavez left, and the Marxist-Leninists must move with them,
slightly ahead
- raising the demands for moving from the national democratic
revolution through
to the full socialist revolution.