A person holds up a portrait of the late Hugo Chávez, Venezuela's president from 1999 to until his death in 2013, at a March 2019 demonstration. Photo: Ariana Cubillos/Associated Press.
By Carlos Dürich – Jan 9, 2023
The Bolivarian process went through various phases in its almost three decades of existence. Part one of a historical analysis of the evolution of the dynamics of the class struggle in Chavista Venezuela.
“To historically articulate that past does not mean to know it ‘as it truly was.’ It means taking possession of a memory as it flashes at the moment of danger.”
Walter Benjamin, Thesis VI, Theses on the philosophy of history.
The emergence of rentier capitalism
Every revolutionary movement, paraphrasing Marx, has to draw tactics and strategies for struggle from a historical scenario that is bequeathed to it. Only from understanding that legacy, which is nothing other than its historical present, can it become both a referent and a driving force for the changes that occur in the entrails of the society that welcomes it.
At the end of the 20th century, Venezuela was undergoing the most profound social and political crisis in its recent history. The so-called puntofijismo was sinking under accusations of nepotism and corruption, and along with it, representative democracy was strongly questioned and publicly delegitimized. However, this schism was a symptom of a much larger problem, one that, to this day, despite the endless warnings received, we still do not fully understand. It was the exhaustion of a historical way of doing economic things, in short, the collapse of rent-seeking capitalism.
Political economy of collapse
For political economy, what is fundamental when analyzing a given social-historical formation is to unravel the web of social relations that generate the production of surplus resources. That is, the social division of labor. It is also imperative to analyze the subsequent distribution of this surplus in society through a particular property regime and, with the latter, determine the forms of reproduction or accumulation, showing the logic of economic growth in said social-historical formation.
Historically, Venezuela has combined an intense concentration of ownership of the means of production, specifically land and manufacturing, with a very low level of income for the majority with little capacity to save. This model promotes a profound inequality in the distribution of socially produced wealth. Further generating a deficient and constrained internal demand. In this way, Venezuela became a country of miserable masses and very rich minorities.
The dynamics of rentier capitalism reflected this logic. Although formally, the state appeared as the great owner of international oil income (income at source), it was the transnational and national bourgeoisie (income at destination) who really ended up appropriating the greater part of it. This was possible through 3 major distribution mechanisms: first, under the mechanism of the circulation of imports in the domestic market and the consequent effects on the price level, prefiguring import and distribution monopolies; secondly, by imposing the capture of increasing volumes of income through the indirect management of the exchange rates of the international currency; and finally, demanding less and less tax burden and more and more protectionism for their industries.
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Consequently, the drop in real wages for workers, the increase in the price of consumer goods and low investment rates in the private sector led to the exhaustion of the rentier accumulation model.
This internal collapse of the model of production and reproduction of capital–both simple and expanded–configured and continues to configure the objective conditions of the Venezuelan economic and social crisis, upsetting to different degrees the different social classes configured under the concrete Venezuelan social-historical model.
To paraphrase Lenin, only a crisis of the entire nation where the lower strata of society can no longer bear to live under the old model of reproduction and where its elites can no longer shape the domination they exercised over them makes a revolution possible. Faced with such a level of confusion, only the organized vanguards are capable of configuring emancipatory projects. That is, as long as they have the necessary firmness and audacity to respond to such a historic emergency.
This historical emergency forced the need for new national development models. At first, the fractions of the ruling classes strongly connected to the world market installed the neoliberal model, a project sponsored and promoted by the global hegemonic north. A model that ended up being circumstantially imposed in Venezuela during the 1990s. Neoliberalism was therefore presented as an alternative to this exhaustion. An anti-popular and elitist alternative. But an alternative in the end.
It is now time to clarify the popular alternative raised by the Bolivarian movement, which, as we have already said, inherited the responsibility of proposing an alternative to both neoliberalism and rentier capitalism.
The birth of the Bolivarian movement
The first part of this article was dedicated to outlining the economic and social dynamics that gave life and spirit to the birth of the Bolivarian movement. Again, paraphrasing Marx, the Bolivarian movement had to face circumstances that had been bequeathed to it and, from there, face the elaboration of tactics, procedures, methods and strategies aimed at the seizure of power and the total transformation of the nation and society.
The Bolivarian movement, both in its civil and military wings, was born from what Margarita López Maya and Luis Lander have defined as a society with adjustment fatigue. A society that, due to repeated failed attempts to solve a limiting situation, loses confidence in the ability of a certain project to overcome the crisis that afflicts it.
The Bolivarian movement emerged as a sample and result of this irresolute configuration, pushing and outlining a new project defined through the broader integration of the popular base, with the ambition of building a new consensus around an alternative to neoliberalism. This, in turn, responds to the longing of the great majorities to be the subject and object of their history.
This project arises with the goal of confronting the already known structural conditions of ownership concentration, supply rigidity, low remuneration and consumption strangulation, in addition to the problems generated by the neoliberal adjustment policies of the 1980s and a large part of the 1990s.
For example, when looking at employment in 1998, more than 48% of the country’s economically active force was in the informal sector of the economy, and 11% were unemployed. Contrast this with the richest 5% appropriating more than 53% of total wealth annually and the poorest 5% barely enjoying 0.6% of national wealth, with more than 4.5 million households living in poverty and 27% living in extreme poverty.
Economic thought of the Bolivarian process assessment and perspective
Before beginning the assessment, it is necessary to make some clarifications. An economic evaluation should not only obey the econometric indices referring to macroeconomics and microeconomics. As leftist analysts and specifically as Marxists, it is important to verify the impact that the new methods or forms of social reproduction have on the different classes and if these measures grant the political initiative to one class or another.
Ultimately, data such as the gross domestic product, the Gini coefficient, inflation or investment rates, volatility of the credit system, the qualification of the money supply, or the unemployment or employment rate tell us little about the volatility of the class struggle. What they really report is the health of the liberal bourgeois system, the property regime, and the level of exploitation of wage labor.
This does not mean that the indicators are unnecessary for evaluating the economic policies of a revolutionary process. Rather, these must be seen within the social totality: understood under the aspirations for change and transformation of the society that gives rise to these indicators.
It is precisely economic thinking as a whole that should qualify the scope and achievements that specific indicators point to. Otherwise, economic reading and reflection becomes a technocratic exercise of functional values for big capital, far removed from the real needs of the people. In short, an economy can show “stable and promising” indicators for its growth, but that does not mean that growth alone will make the necessary structural changes that the economy deserves. Far from it, to be successful, the great social majorities must see these healthy and promising precepts reproduced in their daily lives.
From the Bolivarian Alternative Agenda to the struggle for government
In 1996, the first economic-political program developed by the Bolivarian movement was the Agenda Alternativa Bolivariana (AAB). It was presented as a fundamental break with neoliberalism, the internationalization of capital, the measures of the Washington Consensus, and IMF adjustment plans.
Its premises can be summarized as follows: understanding the economic and the political as integral elements of a totalizing and holistic reality where “macroeconomic policies are subordinated to macrosocial policies, being consequences of these and not causes.” Understanding that “the best social policy is the one that satisfies the needs of the population” in the most dignified way and allows for the consolidation of an independent and sovereign future for the entire Venezuelan people.
To achieve this, the agenda established two issues to be resolved: poverty and denationalization. In the case of poverty, the objective was to democratize the economy by opening up the property regime of the productive apparatus. For this, an endogenous work model is established–from within–with sights to strengthen national power, that is, strengthening the internal market as opposed to the globalizing model of extractive exports.
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To combat denationalization, the agenda establishes the design of a state that owns, promotes, and regulates economic activity. It places special emphasis on revising the policy of internationalization of the oil industry. This process prioritizes the reduction of prices in the production of a barrel of oil, the expansion of its fiscal contribution and the reformulation of its investment projects.
To prevent the burden of the fiscal deficit from falling on the most vulnerable sectors of society, the refinancing of external debt services was established as a strategy, allowing the nation’s resources to be saved and directing them to existing social emergencies. The latter was combined with an expansive macroeconomic policy in productive investment.
As can be seen, the Bolivarian movement developed a programmatic economic strategy aimed at combating and reversing the neoliberal process carried out in Venezuela since the 1980s, whose most adverse mechanism had been the denationalization of the productive apparatus.
At the same time, by placing particular emphasis on the democratization of the economy, it revealed a potential willingness to problematize the high concentration of ownership within the Venezuelan productive apparatus, although without questioning the private property installed in it. In this sense, although the AAB is not a revolutionary program in the traditional sense of the term, it does represent a qualitative leap with respect to the previous understanding of the Venezuelan social-economic problem.
This first economic program became a government tactic when included in the document “Hugo Chávez’s proposal to transform Venezuela: A democratic revolution of 1999”, where part of what is established in the AAB is developed in greater depth.
Two elements of that document are worth highlighting. The first is the link between the economic transformation and the constituent process, reinforcing the idea of the social pact as a way of settling the economic conflict. The second is the idea of a humanist, self-managed and competitive economy. This was underlined as the fundamental sponsor for the process of change.
All this with the aim of “developing an economic model that allows for the global production of wealth and the justice of its enjoyment.” Putting special emphasis on the organization of the productive forces and the participation of the people in social wealth, but not in the ownership of the means of production. Therefore, reinforcing the reformist aspirations of this first period of the Bolivarian process.
The constitution and the new economic framework
The constituent process of 1999 was intended to satisfy the aspirations of the large social sectors of the country that had remained mobilized around the people’s agenda. Their agenda can be summarized by the anti-neoliberal aspirations raised in the protests of the 1990s, which would end up being part of the constitutional debate. Their demands revolved around the protection of wages, the protection of human rights, the formalization of economic rights, and guarantees of access to health and education for lower-income sectors.
Also in dispute within these constituent debates was the business sectors’ agenda, which expected greater recognition from the state while seeking better instruments to improve their income and profit levels. However, businesspeople were divided on the new legal framework. Within the non-monopolistic sectors, there was a consensus regarding the need to establish a protectionist system against the processes of globalization, together with a mechanism that would allow economic, budgetary and financial balances by the state to strengthen the development of the business sector. On the other hand, the monopolistic sectors demanded less regulation and greater openness but with a government rescue mechanism that would protect national and international investments, with a special interest in the privatization of key sectors of the oil industry.
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The ideological framework of the constituent consensus in economic matters was conceived, therefore, as Keynesianism that is closer to the left or right depending on its point of enunciation (popular or business)–even on some occasions overlapping one over the other.
Consequently, to analyze the constitution itself and its possibilities, it must be clear that its wording obeys a relationship of force between classes within and under the objective conditions that meant the exhaustion of the economic and political model of accumulation since the 1980s. This first effort by the Bolivarian process to create a new framework for political action was formulated under the need to organize a new structure for political action and participation. Thus, rescuing the figure of the liberal bourgeois state but linking in its heart the popular classes as referents of political action. The Bolivarian process then set out to design a series of levers that would allow these sectors to exert pressure and force actions within the national political structure.
A look inside the constitution
The economic framework present in the constitution can be understood by analyzing Title VI, referring to the socioeconomic system that governs the economic conduct of the nation. Understanding economic conduct as a complementary system between private initiative and the state, under the principle of free competition and legal certainty (Art 229), with a protectionist state that would use its commercial monopoly to defend public and private companies against foreign competition (Art 301).
Fiscal balance would be the center and foundation of macroeconomic management (Art 311). Based on the principle of promoting and defending economic stability, avoiding its vulnerability at all costs and ensuring the stability of the currency and prices, thereby ensuring social welfare. (Article 320).
The defense of private property is also ratified, leaving the provisions of the 1961 constitution (Art 99 and Art 101) practically intact, although valuing its vigor based on social interest (Art 115). This assessment allows a field of possibility to stress this defense of private property.
In this constitution, speculation, hoarding, usury and cartelization are established as illegal (Art 114), forcing the state to play an active role against these scourges, marking a quantitative difference with the provisions of the 1961 constitution, where the state acted as a passive regulator of these activities (Art 96).
Likewise, latifundismo is considered contrary to the social interest, as decreed in the 1961 constitution (Art 105). However, the new jurisprudence complements what was previously established. On the one hand, it guarantees the right of peasants and agricultural producers to own land. And on the other hand, it establishes the responsibility of the state to create financing funds to promote the competitiveness and productivity of the agricultural sector (Art 307).
The difference established in both constitutions regarding the minimum wage should be highlighted. While the previous ordinance simply establishes the responsibility of the state in creating the means conducive to obtaining a fair salary (Art 87), the new legal order established the right to a sufficient salary for the worker that allows them to live with dignity and cover basic material, social and intellectual needs for themself and their family (Art 91). The state is obliged by force of law to carry out the execution of said right.
Work is also defined as a social right, as opposed to the previous exclusively commercial notion. The state is obliged to establish firm guarantees regarding the progressivity of labor rights and benefits (Art 88).
Complementing these measures, the Magna Carta establishes a framework of state responsibility regarding the right to the quantity and quality of consumption (Art 117), another mechanism that did not exist in the previous constitution.
All of the above, workers’, peasants’ and consumers’ rights must be nuanced and understood based on the principle of progressive rights (Art 19). This regulation is transversal to the entire constitution, endowing it with nodules of permanent inter-class tensions.
The new constitution and the fifth republic arose from the need to reconstitute the political structures that had been deeply eroded by the neoliberal period. This process summoned the popular sectors, which were traditionally isolated, and the whole of the petty bourgeoisie, bankrupt after the financial and commercial deregulation of the 1990s. Along with this bloc, an alliance with the big nationalist bourgeoisie was considered possible, using the state as a regulatory apparatus for a strengthened and diversified emerging economy.
The main aspiration was to regularize an economy deeply affected by the neoliberal process. For this, inter-class agreements were formulated. The rights of workers would serve as a tool to fuel the struggles against the excessive exploitation by the boss but within the framework of formal recognition and protection of private property and a leading role of the private sector within the national economy.
As a result of temporary alliances with the traditional sectors of Venezuelan politics, the constituent process consolidated itself into a state that guaranteed social stability and, at the same time, protected the benefit of the business sectors. This formally and ideologically aligned it with the objectives of the so-called “third way,” a state with aspirations of high social-democratic and reformist content.
Complying with these principles, fiscal balance and monetary order became the state’s main financial task. Likewise, a wide range of social rights came to be governed under its guarantee, generating a contradiction with the fiscal aspirations of the most conservative sectors of the economic orthodoxy of the moment.
From this early stage, it became evidently clear that one factor would cross the interior of the Bolivarian revolution and undermine its aspirations for economic change. For having been a revolution developed within and from the regime of the bourgeois liberal state, a tendency to subsume the political struggle within the framework of formal law was fostered.
The popular camp would take some time to recognize the new political tableau that would emerge after the new constitution. In some cases, due to naivety, and in others, due to mistaken analysis, it was thought that the revolution would be framed within a democratic revolution and that this alone would be enough to change the unequal economic reality that persisted in the country.
Again paraphrasing Marx, what time would show was that: the conquests of the popular sectors in institutional politics opened the ground for their emancipation through revolutionary struggle. But, emancipation itself was not settled only with institutional conquest.
The open confrontations in the following years would be the ones that would invigorate and sharpen the contradictions of the social-political framework. This forced the conservative democratic revolution to dialectically convert itself into a revolutionary democracy devoted to economic equality.
The two exposed inconsistencies, both the technically economic ones surrounding the fiscal order and the strictly institutional ones, stridently manifested their tension only two years after the Bolivarian revolution came to power during the political crisis that would last from late 2001 to mid-2004. These tensions would give rise to a new periodization in the Bolivarian process that we will analyze in the next installment.
Translation: Orinoco Tribune
OT/FV/SF
