Venezuela in crisis
Stephen Durham
volume 37
issue 5
October 2016

Venezuelans line up outside a supermarket in San Cristóbal. Many basic food items are not available — and even if they are, they are often prohibitively expensive. Photo credit: Carlos Garcia Rawlins / Reuters

Three years after Hugo Chávez’s death, Venezuela is in a state of social and economic breakdown. Plummeting world oil prices have gutted the coffers of successor President Nicolás Maduro’s government, which gets 95 percent of its revenue from oil. As the treasury dried up, the government subsidies people depended on have vanished – and with them, support for Chávez’s project of “Socialism in the 21st Century.”

Inflation in Venezuela has skyrocketed to the highest rate on the planet. This year it is expected to reach 720 percent. Imported consumer goods, on which Venezuelans are heavily dependent, are disappearing due to speculation, hoarding and heavy smuggling of government-subsidized items. The majority of Venezuelans are suffering malnutrition. Their cheapened currency buys little, and there’s little to buy.

Confrontations between workers and bosses and between far-rightwing forces and government defenders are intensifying. To check the inflation and shore up his political base among the military, Maduro in January raised soldiers’ wages 45 percent while increasing workers’ salaries only 15 percent.

The bourgeois press, of course, blames Venezuela’s crisis on what remains of the government’s progressive social policies, not on the hugely profitable corruption of international and Venezuelan capitalists. Venezuela’s oil dependent economy, at least a century old, is actually the main culprit.

Chavismo’s roots. In 1989, a popular uprising erupted out of class antagonisms based in Venezuela’s economy. Decades of the production and sale of oil had spawned an elite class whose fabulous wealth and concentrated political power stood in stark contrast to the poverty and disenfranchisement of the country’s massive urban population.

Hugo Chávez was born into a working class family of educators and became a career officer in the military. In Latin America, the military had become a vehicle for social mobility for the poor and disenfranchised. Chávez’s political roots were among these sectors, including the legions of Venezuelan workers employed in the massive informal sector.

He was elected in 1998 on a reform platform with the support of a multi-class alliance that included the urban poor, large groups within the middle class, the military and a significant sector of the Venezuelan bourgeoisie. Once elected, Chávez and his allies set about channeling discontent into a process of bourgeois democratic reform. They elected a Constituent Assembly and adopted the Bolivarian Constitution with more than 71 percent of the popular vote.

Hazards of a “mixed economy.” The success of Chávez’s bourgeois constitutional reform established his credentials for mediating between the ruling class and the ruled. While providing a number of social rights for his mass power base — the exploited and super-oppressed — the new constitution also enshrined private property. Thus despite the 2003 nationalization of the majority of Venezuelan oil production, which funded the social safety net, Chavismo guaranteed the bourgeoisie would dominate economically. This was the mixed economy that would supposedly morph into socialism — someday.

It’s true that reforms enacted by the Venezuelan government disproportionately benefited the poorest urban dwellers, but they have not solved grave poverty, violence and crime, because national and international capitalism still calls the shots. Chavismo, while mobilizing mass support, sabotaged independent political power among workers and the urban poor.

Today, right-wing parties are gaining strength due to the economic crisis and are determined to reverse the gains of Chavismo by trying to recall Maduro. The mixed economy has been a vehicle, not to socialism, but to intensified poverty and exploitation of the Venezuelan majority.

What next? None of the social gains of Chavismo can be saved unless Maduro stops accommodating the rule of capital. The following are steps necessary to putting the country on a forward path toward socialism:

• Nationalize major industries under workers’ control, including banks and oil.

• Cancel foreign debts.

• Establish a state monopoly over foreign trade.

• Attack corruption by prosecuting and confiscating property of corrupt businesses and state functionaries.

• Institute democratic planning and distribution of subsidies, including support for women, children and elders, through worker, campesina and neighborhood councils.

• Establish a living wage for all workers, adjustable for inflation.

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