The violent anti-government protests that shook Venezuela in February have once again thrust the issue of the pace of change into the broader debate over socialist transformation. Radical Chavistas, reflecting the zeal of the movement’s rank and file, call for a deepening of the “revolutionary process,” while moderate Chavistas favor concessions to avoid an escalation of the violence. The same dilemma confronted the socialist government of Salvador Allende in the early 1970s, but under different political circumstances. Unlike in Chile, Hugo Chávez and his successor Nicolás Maduro have won nearly all national elections over a period of 15 years by absolute majorities. In addition, Chavistas, since the early years, have maintained firm control of the two most important institutions in the country: the armed forces and the state oil company PDVSA.
The invigoration of the Chavista rank and file, along with mass mobilizations, became a must for the Maduro government’s political survival in the face of the opposition’s disruptive and at times violent tactics in February. Thus on successive days in late February, Maduro spoke at mass rallies of women, oil workers, motorcyclists, telephone workers, and finally peasants and indigenous people. On each occasion social movement representatives called for the “deepening of the revolutionary process,” “radicalization,” and “people’s power.” Maduro, for his part, outlined popular measures and at times threatened the elite with radicalization. This combination of expectations of radicalization and announced programs favoring the popular sectors had enabled Chávez to overcome situations of crisis in the past.
Similarly, immediately after each triumph, the Chávez government took advantage of its political capital by announcing bold initiatives. For instance, following his victory in the recall election of 2004, Chávez defined himself as a socialist and expropriated several abandoned factories. After his capture of 63% of the vote in the 2006 presidential elections he nationalized strategic industries. The impressive showing of the Chavistas in the December 2013 municipal elections appeared to follow the same pattern in that immediately after the contests, Maduro took calculated risks. Opinion, however, has been divided within the movement as to whether his moves contributed to the deepening of the revolutionary process or represented a step backward. The measures he implemented were designed to face the problems of acute shortages of basic commodities, price increases far above those set by the government, a 56% inflation rate (nearly triple that of the previous year), widespread currency speculation, and the refusal of the opposition to recognize the government’s legitimacy.
The favorable electoral results in December represented a turnaround for President Maduro. Shortly after Chávez’s death in March 2013, Maduro was elected president by an unexpectedly narrow margin of 1.7%. In interpreting the outcome, the opposition and private media stressed the fact that Maduro failed to measure up to Chávez’s leadership capacity. The International Herald Tribune, for instance, ran a story on disillusioned Chavistas and quoted one who claimed he still supported the government but, in reference to Maduro, added, “We don’t want a president who is a joke.”
Maduro’s popularity recovered in November when he declared war on price speculation and in doing so invigorated the Chavista base. As part of a well-publicized campaign, Maduro and government authorities inspected large commercial outfits and documented what he called “grotesque prices” of household appliances and other products imported with “preferential dollars”—dollars sold by the government to merchants at an artificially low price in Venezuelan bolivars. The National Guard occupied the stores at the same time that prices were slashed; in several cases, the government detained and initiated judicial proceedings against store owners. This no-nonsense approach resonated among voters in December. According to the public opinion firm Hinterlaces, 70% of Venezuelans approved of the “economic offensive” and 62% supported measures to limit profits.
Following the December elections, Maduro defined three strategies. First, he indicated his willingness to meet with opposition leaders and businesspeople to find ways to reduce tension and solve specific problems. Second, he announced stringent measures against speculators, hoarders, and contrabandists. Finally, the president sought to “rationalize” government controls to narrow the disparity between regulated prices and market value of goods and services. All three approaches generated controversy in and out of the Chavista movement, and would not have been politically feasible had the Chavistas fared poorly in the December elections.
All three strategies were accompanied by specific actions. Just 10 days after the December elections, Maduro met with nearly all recently elected governors and mayors belonging to the opposition with the aim of listening to their grievances and suggestions on seven specific problems at the local level including personal security, housing construction, and health. Late January saw the approval of the Law for the Control of Fair Costs, Prices, and Profits, which establishes jail sentences of up to 14 years for contrabandists, 12 years for those accused of hoarding, and 8 to 10 years for merchants who sell above regulated prices. In addition, the law establishes a federal office to monitor prices and assure that profits do not exceed about 30% of investment.
Finally, in an attempt to put the economy in order, Maduro dramatically devalued the bolivar from 6.3 to 11.3 to the dollar for imports of non-essential goods as well as for tourists who travel abroad. To infuse flexibility into the economy, Maduro left open the possibility that the exchange rate could fluctuate on a regular basis as could regulated prices for basic commodities. Minister of Energy and Oil Rafael Ramírez also floated the idea of increasing gasoline prices, the cheapest in the world, in order to cover production costs.
In some respects, government discourse and actions have differed, albeit in degree, from the positions assumed by Chávez. Most important, ever since the early years of his rule, Chávez refused to negotiate with representatives of the political and economic elite in order to achieve national reconciliation. Indeed, Chávez’s point of honor was that he would not take part in the old wheeling and dealing that had guided Venezuelan party politics since the ouster of dictator Marcos Pérez Jiménez in 1958, and had left the popular sectors on the sidelines.
Radical Chavistas and many in the rank and file of the movement feared that Maduro’s overtures to the opposition signaled a softening of government positions and possible concessions to powerful interests. This viewpoint was most forcefully put forward by former guerrilla Toby Valderrama, who argued that the only alternative to capitulation to economic elites was the expropriation of their companies, particularly those that convert food into a “commodity” by illegally jacking up prices to maximize profit. While affirming his support for Maduro, Valderrama, in an essay titled “Rectify or Die,” questioned the logic of the president’s willingness to meet with businesspeople: “At a time when we should have deepened the process of socialism, we asked for help from the capitalists. True to form, the oligarchy [the capitalists] ate from our hand and then bit it.”
An announcement by several top government officials and then by Maduro himself in 2013 came as a shock to Venezuelans and generated considerable support for Valderrama’s call for expropriations and jailing. The public was told that during the previous year bogus companies had received preferential dollars allegedly to pay for imports of up to 20 billion dollars. Maduro placed part of the blame on government functionaries who were in cahoots with commercial interests. Even though planning minister Jorge Giordani first leveled the charges in March 2013 and the public rip-off was confirmed shortly thereafter by the head of the Central Bank, only in December did Maduro name a presidential commission to investigate the case. Furthermore, while announcing that 1,245 companies no longer qualified for preferential dollars due to the falsification of information, the government failed to reveal their names or take them to court. In early March, Vice-president Jorge Arreaza announced that the government would shortly publish the names of the spurious companies that received preferential dollars.
It is puzzling that the Maduro government formulated the accusations if it lacked the willpower to proceed vigorously against powerful economic interests and state bureaucrats. Some Chavistas attributed the inconsistency to Maduro’s lack of political acumen or ingenuity. An alternative explanation is that Maduro lacks Chávez’s prestige and power and thus decided to avert a head-on confrontation with business groups, some with ties to sectors of his own government and movement. Proponents of this explanation feel that Maduro’s warnings and some of his actions—such as the confiscation of warehouses that stored goods for contraband—demonstrate that he is not willing to close his eyes to blatant abuses.
Maduro began his presidency with a commitment to combat corruption. Throughout 2013, several hundred government officials and others were jailed on charges of wrongdoing in the public sphere. High-profile cases included the ex-governor of Guárico, the ex-head of the state iron company Ferrominera, and the mayor of the country’s third largest city, Valencia. All three were Chavistas who were not considered dissidents and were jailed along with various businessmen and aides. The social democratic and social Christian governments that ruled Venezuela for four decades prior to Chavez’s coming to power never took concrete actions of this nature.
In early February, National Assembly president Diosdado Cabello led a campaign against merchants who made extraordinary profits by illegally exporting essential commodities whose prices were kept artificially low by the government to facilitate popular consumption. Cabello presided over the confiscation of contraband in states bordering on Colombia and insisted that the companies that produced and processed the goods appeared to be “accomplices” of the price-gouging merchants and consequently would be investigated. Holding up a container of cooking oil of the recently expropriated Industrias Diana, Cabello accused state functionaries: “This cannot be pardoned because Diana is a company of the people.” At the same time Lactea Venezolana, a subsidiary of the Italian dairy corporation Parmalat, received hefty fines for hoarding powdered milk in its Caracas installations.
Long-time leftist political analyst Vladimir Acosta hailed the government’s February counteroffensive as “positive news,” particularly because the business-induced scarcity was designed to “bleed Venezuela to death.” Acosta, however, went on to refer to the government’s announcement that 32 companies had been held responsible for numerous abandoned containers in a Venezuelan port, “but not one word was said about who the businesspeople were, what measures if any were taken against them and where the merchandise was found.”
In short, the government has waged a counteroffensive against the “economic war” carried out by powerful interests. The radical critique, while undoubtedly failing to give the Maduro presidency sufficient credit for facing up to corrupt functionaries and what it calls the “parasitic bourgeoisie,” points to shortcomings in the government’s campaign: The effort has not been ongoing; names of those involved in illegal and corrupt dealings have not always been revealed; local government and community groups have not played a central role in choosing targets; and the government has often failed to follow up on its threats of judicial proceedings.
Similarly, the government’s strategy of an opening toward business and political adversaries has been met with mixed reactions on the left and in the labor movement. Worker leaders of both the radical UNETE faction and, to a lesser extent, the more moderate Bolivarian Socialist Workers Central, manifested apprehension. UNETE national coordinator Servando Carbone told me he feared that negotiations could be a prelude to the abandonment of key labor gains, especially the provision of the Labor Law of 2012 that outlawed outsourcing within three years of its passage. The government to its credit has incorporated large numbers of contractor-firm workers into the payrolls of state industrial companies, but it continues to hire employees in the public administration on a contractual basis. Carbone insisted: “Implicit in all negotiations is the willingness to grant concessions; this is what may be in store for the ban on the vile practice of outsourcing.”
Some of the grassroots radicals also reject conciliation with opposition political leaders, but the government’s discourse in favor of dialogue appeared as a logical and effective response to opposition-promoted violence and aggressiveness. The meeting between Maduro and opposition governors and mayors in December, for instance, was an implicit recognition of the president’s legitimacy by leaders who had refused to accept the results of the April 2013 elections. Similarly, various opposition politicians including the executive secretary of the Movement toward Socialism (MAS) along with the top business group Fedecámaras, which had led the coup against Chávez in 2002, participated in the “National Peace Conference” organized by Maduro in late February. Their call for an end to political violence represented a blow to the opposition alliance, the MUD, which boycotted the meeting.
Indeed, Maduro’s decision to negotiate with anti-Chavista political leaders was premised on the existence of a rift within the MUD. According to this view, what the Chavistas call the “fascist” faction, which organized the demonstrations calling for Maduro’s removal in February, is pitted against a “democratic” one, which focuses on specific issues rather than regime change. Former vice president and long-time leftist José Vicente Rangel has for years advocated this differentiation strategy. In his weekly talk show, “José Vicente Hoy,” in February, Rangel asserted that support for dialogue is producing “a pressure cooker effect on the MUD; the alliance’s days are numbered.”
Nevertheless, the protests that rocked Venezuela in February have another reading. According to National Assembly Vice-President Diosdado Cabello, MUD standard-bearer Henrique Capriles and others are playing the role of “good cop” and are working hand in glove with the “bad cops,” the so-called fascists. Even peaceful protests that were applauded by the entire opposition involved daily disruption of traffic designed to paralyze urban transportation. In addition, Capriles, in his role as governor of the state of Miranda, along with other opposition governors and mayors who were considered “democrats,” refrained from containing the violence in their areas of jurisdiction. Equally important, the opposition as a whole, and not just the radical fringe, refused to recognize Maduro’s legitimacy after he was elected in 2012, as was the case for much of Chávez’s rule. Chavista leaders vacillated between appeals to the democratic commitment of “responsible” opposition leaders and condemnation of the conspiratorial plans of the entire opposition.
Another relative change since the Chávez years is the tension between the Chavista leaders and radicals, the latter of whom in many ways express the concerns of the movement’s rank and file. Maduro railed against radical Valderrama even though he is a minor figure in the Chavista movement, calling his writing “stupidity” (pajuatadas). Furthermore, while under the Chávez presidency there were always several Chavistas in leading positions with whom the radicals could identify—Fernando Soto Rojas (president of the National Assembly) and Eduardo Samán (head of the consumer protection agency), for example—this has been less the case under Maduro, particularly with Samán’s exit in January. Finally, several critical Chavistas with talk shows on the main state TV channel and radio station encountered problems and now broadcast their programs on the independent Chavista aporrea.org web page and elsewhere.
More troublesome for the radicals is the top-down nature of Maduro’s party, the United Socialist Party of Venezuela (PSUV). All seven of the PSUV’s vice-presidents representing different regions are governors or members of Maduro’s cabinet. Furthermore, in 2012 the party discarded the system of primaries that the Chavistas had employed in the past. The PSUV’s congress to be held in late July, unlike the previous one in 2009 when delegates were chosen in internal elections, will consist of 361 delegates who are governors, mayors, and national deputies, and a slightly larger number chosen by “consensus.”
At the heart of the division within the Chavista movement are the ties between the government and business groups dating back to the two-month general strike that almost toppled the government in 2002-2003. With the aim of breaking the strike, the government enlisted the support of businesspeople, some of whom were self-serving anti-Chavistas, others who believed that the strike was professionally unethical, and others who to varying degrees supported Chavismo. Subsequently, the Chavista leadership rejected the thesis that the government should maintain the entire private sector at arm’s length. Instead the Chavistas in power opted for a favorable treatment in the granting of public works projects and the like to those who had collaborated with the government during the general strike. Regardless of their motivation, these businesspeople were considered more reliable than the established business organization Fedecámaras, which had led several attempts to overthrow Chávez.
While a special relationship with certain businesspeople was useful from a pragmatic viewpoint, it generated corruption. The scandal of the 20 billion preferential dollars, more than any other development, exposed the strategy’s pitfalls. Maduro himself recognized the extent of the problem when he promised to investigate the possible existence of a boliburguesía—a term previously used mainly by the opposition to refer to businesspeople who had entered the ranks of the bourgeoisie as a result of their connections with the Chavista Bolivarian government. The Chavista radicals are convinced that businesspeople—such as Wilmer Ruperti, who made the biggest killing of all during the general strike and went on to purchase a TV channel—would be the first to go over to the enemy camp should the opposition be on the verge of returning to power.
In an interview, the Secretary of Organization of the Venezuelan Communist Party (PCV), Perfecto Abreu, contrasted his own party with the PSUV, with its multi-party makeup. “The PSUV takes in businesspeople who are organized as such within the Chavista movement and reap benefits.” As an example, Abreu pointed to the business organization Fedeindustria headed by the politically ambitious Chavista Miguel Ángel Pérez Abad.
In short, while the Venezuelan economic system continues to be capitalist, leaders committed to socialism hold power within the state. The case of the 20 billion preferential dollars puts in evidence the close ties between the capitalist structure and the socialist government. Socialist transformation in Venezuela will be a long and difficult process, and an understanding of the complexity of this process is necessary to avoid disillusionment—which the radical critique of the government runs the risk of encouraging—among those who opt for a peaceful road to socialist and democratic change.
All this points to the overriding importance of truly democratic political parties and social movements, which, unlike the state, are independent of the capitalist base. Precisely for this reason, the final outcome of the process of transformation in Venezuela will be determined not so much by those on top, but rather by the rank and file of the PSUV and allied parties and social movements in a variety of venues including, to a great extent, the streets. This dynamic was made evident during the violence-ridden month of February. The Chavista mobilizations, along with the perception at the grassroots level of a continuous process of change, were more important in facing the subversive threat than government-opposition conversations, which included some political leaders with no intention of abandoning their regime-change tactics.
Steve Ellner has taught economic history at the Universidad de Oriente in Puerto La Cruz, Venezuela since 1977 and more recently in the Misión Sucre university program. He is the editor of Latin America’s Radical Left: Challenges and Complexities of Political Power in the Twenty-First Century, recently released by Rowman and Littlefield.