Is Maduro taking Venezuela down a pragmatic path‭? Interview with Steve Ellner

September 27, 2015

Workers from Venezuela's 'housing mission', which is building large numbers of public housing, march on Venezuela's independence day, July 5. Photo from Venezuela Analysis.

Venezuela's Bolivarian revolution has transformed the country since the rise to power of late socialist president Hugo Chavez in‭ ‬1998‭ ‬on a platform of tackling poverty and promoting participatory democracy.

As it has radicalised,‭ ‬it has nationalised key sectors of industry and promoted grassroots communal councils and communes as the building blocks of a new,‭ ‬revolution state.

Although it has drastically cut poverty and increased access to health care,‭ ‬education and other social services the poor were previously excluded from,‭ ‬in recent years the revolutionary process has faced growing challenges.‭

Problems of bureaucracy and corruption,‭ ‬as well as intense debates over economic policies,‭ ‬have been exploited by a US-funded right-wing opposition.‭ ‬Although failing with its military coup against Chavez in‭ ‬2002‭ ‬and unable to defeat Chavistas electorally,‭ ‬the opposition has used control over key sectors of the economy to wage an‭ “‬economic war‭”‬,‭ ‬causing shortages of goods and engaging in price speculation.

After Chavez's death in‭ ‬2013,‭ ‬the challenges facing his replacement,‭ ‬President Nicolas Maduro,‭ ‬have mounted as dropping oil prices has threatened the government's high levels of social spending.‭ ‬With a worsening economic war and popular frustrations over the revolution's failings,‭ ‬the December national parliamentary elections pose a serious challenge to the revolutionary forces.

In this context,‭ ‬there is an ongoing debate in the revolutionary camp over Maduro's policies and approach‭ — ‬and to what degree it is a continuation of Chavez's.

Steve Ellner is a well-known analyst of Venezuelan and Latin American politics and a retired professor at the Universidad de Oriente.‭ ‬He has published scores of journal articles and over a dozen books,‭ ‬his latest being‭ ‬2014‭'‬s‭ Latin America's Radical Left:‭ ‬Challenges and Complexities of Political Power in the Twenty First Century‭‬.

Ellner was interviewed by Evaristo Marcano‭ ‬on the challenges facing the Bolivarian revolution and the debates over Maduro's direction.‭ ‬It was‭ ‬originally published in Spanish in and‭ Part one of the interview, which first appeared at Links International Journal of Socialist Renewal,‭ ‬is published below. Part two can be read at Links.

‬* * *

In an article of yours posted in New Left Project,‭ ‬you speak of the pragmatic and populist policies of presidents Hugo Chavez and Nicolas Maduro.‭ ‬But these terms often lend themselves to confusion.‭ ‬The Venezuelan opposition attributes the economic difficulties facing Venezuela to the policies adopted by Chavez from the outset of his government,‭ ‬and calls them‭ “‬populist‭” ‬and‭ “‬pragmatic‭”‬.‭ ‬Opposition leaders say these policies represent a veritable‭ “‬original sin‭” ‬that inevitably led to the problems we now face.‭ ‬Is there any truth to this argument‭?

The terms populism and pragmatism have many connotations‭ (‬particularly in Spanish‭) ‬and some are contradictory.‭ ‬But when the opposition talks of both,‭ ‬they are referring to what can be called‭ “‬crass populism‭” ‬and‭ “‬crass pragmatism‭”‬.‭ ‬The policies implemented by Chavez were anything but crass.

If the word pragmatic means realistic,‭ ‬Chavez acted pragmatically during and after the general strike‭ (‬or bosses‭' ‬lockout‭) ‬of‭ ‬2002-2003‭ ‬when the government allied itself with businesspeople who refused to support the strike effort.‭ ‬Politically,‭ ‬Chavez had all the reason in the world to act against Venezuela's Chamber of Commerce‭ ‬-‭ ‬Fedecamaras.‭

Since its founding in‭ ‬1944,‭ ‬Fedecamaras claimed that it could not assume political positions,‭ ‬and for that reason refused to defend the democratically elected government of Romulo Gallegos at the time of the November‭ ‬1948‭ ‬coup and refrained from opposing the dictatorship of General Marcos Perez Jimenez until the final months of his regime.‭

But during the presidential campaign of‭ ‬1998,‭ ‬its spokespeople openly opposed Chavez's candidacy.‭ ‬Fedecamaras leader Pedro Carmona,‭ ‬for example,‭ ‬warned that if Chavez won in December,‭ ‬he would abolish the democratic system,‭ ‬at the same time praising the other presidential candidates.‭

Then,‭ ‬in‭ ‬2002,‭ ‬Fedecamaras‭ – ‬more than the anti-Chavista political parties and union leaders‭ – ‬was the main actor in the attempts to overthrow the democratic government.

What did the friendly relationship with the dissident businesspeople mean in practice‭?

Chavez's announcement shortly after the general strike of‭ “‬not one dollar more for the coup supporters‭” ‬signalled the beginning of a policy of favouring businesspeople who had broken with Fedecamaras over those who had supported the strike.‭

As a result,‭ ‬a group of emerging businesspeople,‭ ‬some of whom were of Arab origin,‭ ‬began to assume an important role in the economy.‭ ‬The most prominent‭ nouveau riche‭ member was the transportation magnate Wilmer Ruperti,‭ ‬who had imported gasoline with tankers he rented from the Russians during the general strike,‭ ‬at a moment when national oil production almost reached zero.‭

Another pro-Chavista businessman,‭ ‬Miguel Perez Abad,‭ ‬presides over Fedeindustria and is a member of the governing United Socialist Party of Venezuela‭ (‬PSUV‭) ‬and has political ambitions.‭

Perez Abad and other pro-Chavista businesspeople articulate the interests of the private sector at the same time that they defend the government.‭ ‬For example,‭ ‬they maintain that Venezuela's entry as a full member of the Market of the South‭ (‬Mercosur,‭ ‬a trade bloc initially involving Argentina,‭ ‬Brazil,‭ ‬Uruguay and Paraguay‭) ‬represented a major government success that opened great opportunities for Venezuelan business in foreign markets.

Furthermore,‭ ‬they‭ ‬say the government succeeded in‭ ‬raising national production,‭ ‬but that the purchasing power of Venezuelans also‭ ‬rose,‭ ‬and therefore it is necessary to loosen bureaucratic procedures to facilitate imports.‭

The pro-Chavista businesspeople frequently attend the meetings and assemblies called by the government,‭ ‬and their public statements generally contrast with the neoliberal discourse of Fedecamaras.‭ ‬In short,‭ ‬the alliance with the emerging business sector has met with some success on the political front.

Nevertheless,‭ ‬the political thinking of the emerging businesspeople does not always coincide with that of the government.‭ ‬Take,‭ ‬for example,‭ ‬the case of Alberto Cudemus,‭ ‬who as candidate for president of Fedecamaras on two occasions advocated friendly relations with the government and then withdrew from the group.‭

Thanks to contracts for the supply of pork to the state's food distribution network,‭ ‬Cudemus became the most important businessman in that area.‭

Nevertheless,‭ ‬last year Cudemus pushed neoliberal arguments when he criticised the Law of Just Prices‭ (‬that sought to combat speculation‭) ‬on the grounds that it represented a throwback to the interventionist concepts of the‭ ‬1960s.‭

He also attributed the Venezuelan economy's productive deficiencies to the pro-worker Organic Labour Law of‭ ‬2012,‭ ‬which was drafted by a commission headed by Maduro.‭

Subsequently,‭ ‬Maduro,‭ ‬now president,‭ ‬attacked Cudemus whose positions on economic policy appeared to coincide with those of Fedecamaras president Jorge Roig.‭ ‬The case of Cudemus demonstrates the limitations of the strategy of alliances with the emerging private sector.

You say that the policy of favouring a group of emerging businesspeople was a relative success on the political front.‭ ‬What about the economic front‭?

From an economic viewpoint,‭ ‬the alliance with the emerging business sector has had dubious results.‭

The disappointing outcome was shown by the financial crisis of‭ ‬2009,‭ ‬which implicated some emerging businesspeople who backed the government during the general strike of‭ ‬2002-2003.‭ ‬In‭ ‬2009,‭ ‬they were arrested by the Chavez government,‭ ‬at the same time as it expropriated more than‭ ‬13‭ ‬banks.‭

The most prosperous of those arrested was transport magnate Ricardo Fernandez Barrueco with a fortune estimated at over one billion dollars and whose principal firms were confiscated.‭

During his three-year detention,‭ ‬Fernandez defended neoliberal arguments.‭ ‬According to him,‭ ‬Chavez promoted national industry during his early years in office,‭ ‬but after declaring himself a socialist in‭ ‬2005‭ ‬adopted interventionist policies that undermined national production and led to the financial calamity of‭ ‬2009.‭

The CADIVI scandal of US$20‭ ‬billion also involved some of these emerging businesspeople,‭ ‬but also the traditional private sector as well as multinationals.

‭<‬b>What you outline here runs contrary to the traditional strategy embraced by the pro-Soviet communist movement of an alliance with the so-called‭ “‬progressive bourgeoisie‭” ‬in Third World countries.

In the era of the‭ “‬Popular Front‭” ‬against fascism in the‭ ‬1930s and even in subsequent decades,‭ ‬that strategy made sense,‭ ‬although the progressive role of the so-called national bourgeoisie was greatly exaggerated.‭ ‬But in the era of globalisation,‭ ‬starting in the‭ ‬1980s,‭ ‬the national bourgeoisie in Latin American nations is no longer‭ “‬national.‭”

Also,‭ ‬far from playing the role of a‭ “‬comprador‭” ‬bourgeoisie with managerial or administrative functions,‭ ‬the Latin American capitalists includes some of the richest men on earth,‭ ‬such as Carlos Slim and the deceased Lorenzo Zambrano of Mexico,‭ ‬Alvaro Noboa of Ecuador,‭ ‬the deceased Julio Mario Santo Domingo of Colombia,‭ ‬Andronico Luksic of Chile and Venezuela's Gustavo Cisneros.‭

Now the capitalists as a whole are more intricately tied to global capitalism than in the past.

How does this transformation affect revolutionary strategy‭?

Chavez called for a‭ “‬strategic alliance‭” ‬with the so-called‭ “‬productive businesspeople‭”‬,‭ ‬but the idea was criticised by some analysts on the left,‭ ‬such as Argentine Marxist and Chavez advisor Luis Bilbao.‭

Nevertheless,‭ ‬the truth is that neither Chavez nor Maduro,‭ ‬who also talks of‭ “‬productive businesspeople‭”‬,‭ ‬really have had in mind a‭ “‬strategic alliance‭”‬,‭ ‬which signifies a high degree of trust between both parties and common long-term goals.‭

What is really at stake is what I would call a‭ “‬tactical alliance‭” ‬with much more limited objectives.‭ ‬For example,‭ ‬when the government engaged in a dialogue with representatives of Fedecamaras last year,‭ ‬in the context of the proposed‭ “‬peace dialogue‭”‬,‭ ‬the objective was to deal with the violence generated by right-wing protests known as “guarimbas‭”‬.‭

Now the objective is to overcome the current problems of inflation,‭ ‬scarcities and unwieldy distribution of goods.

Indeed,‭ ‬Chavez recognised the fragility of any agreement with the private sector.‭ ‬He pointed out that the Venezuelan bourgeoisie was‭ “‬transnationalised‭” ‬with a rentier mentality.‭ ‬It was less willing to assume risks than its counterparts in other countries in the continent.‭

When the price of the dollar skyrocketed in late‭ ‬2012,‭ ‬Chavez accused the bourgeoisie of inflating the prices of imported products for the purpose of swindling the government agency for providing dollars‭ (‬CADIVI‭)‬.‭ ‬To overcome the problem,‭ ‬Chavez called for state takeover of imports.

Is there any support within Chavismo for a‭ “‬strategic alliance‭” ‬with private sector allies‭?

Former Chavez advisor and ally Luis Miquilena supported this strategy.‭ ‬As head of finances in Chavez's‭ ‬1998‭ ‬presidential campaign,‭ ‬he established relations with economic groups of different sizes,‭ ‬both Venezuelan and foreign,‭ ‬such as Spain's Banco Provincial,‭ ‬as well as business person Tobias Carrero,‭ ‬now opposition-aligned.‭

Alejandro Armas,‭ ‬who belonged to Miquilena's faction and headed the National Assembly's finance commission,‭ ‬was accused of being tied to financial interests.‭ ‬Not surprisingly,‭ ‬Chavez's first economics minister,‭ ‬Maritza Izaguierre,‭ ‬remained in her position only five months.‭

Indeed,‭ ‬a point of honour of the Chavista movement is that after Izaguierre,‭ ‬no representative of the private sector occupied positions in charge of the formulation of economic policy.‭ ‬This was true in the case of nearly all minsters of the economy,‭ ‬planning finance,‭ ‬as well the president of the Central Bank.

Chavez's electoral triumph in‭ ‬1998‭ ‬was due in large part to the generalised belief among voters that not only politicians but also businesspeople were responsible for corruption in Venezuela.‭ ‬This fact was demonstrated empirically by US political scientist Leslie Gates in her book‭ Electing Chavez‬.

What happened after Miquilena left the Chavista movement in‭ ‬2002‭?

Aurora Morales,‭ ‬who directed the ideology department of Chavez's first political party,‭ ‬Movement for the Fifth Republic‭ (‬MVR‭)‬,‭ ‬told me in an interview that Miquilena's thesis of a strategic alliance with representatives of the private sector was defeated within the party after Miquilena left the Chavista camp.‭

Nevertheless,‭ ‬in the following years the same position was defended,‭ ‬though less explicitly,‭ ‬by Luis Alfonso Davila.‭ ‬He headed a Chavista current that some called a‭ “‬rightist‭” ‬faction.‭ ‬Davila was defeated in the MVR's internal elections in‭ ‬2003‭ ‬and abandoned the movement.

In the recent past,‭ ‬the thesis of a strategic alliance with the productive business sector has been defended by Temir Porras,‭ ‬who was a vice-minister of foreign relations and executive secretary of Venezuela's National Development Fund‭ (‬FONDEN‭) ‬before leaving the government.‭

Porras advocated a policy of fomenting national capitalist production to cut imports.‭ ‬This recipe recalled import substitution policies of a half a century ago.‭

At the same time,‭ ‬he proposed a‭ “‬pragmatic strategy‭”‬.‭ ‬In an article published in‭ Rebelion in June last year,‭ ‬Porras asked:‭ “‬Who can deny that pragmatism is an extremely necessary virtue in the complex circumstances in which we live‭?” ‬He added:‭ “‬A pragmatic Maduro is what we very much need.‭”

Indeed,‭ ‬he used the words‭ “‬pragmatism‭” ‬and‭ “‬pragmatic‭” ‬no less than ten times in the article.‭ ‬For Porras and others,‭ ‬pragmatic policies are designed to guarantee stability and the consolidation of the advances achieved since‭ ‬1998.‭

Needless to say,‭ ‬stability and consolidation are desirable.‭ ‬But as overriding goals,‭ ‬they can put the brakes on the deepening of the process of change.‭ ‬Once stability is privileged at the cost of struggle and belief in the centrality and inevitability of conflict is abandoned,‭ ‬the resulting drop in popular zeal leads to reverses.

How does the‭ “‬tactical alliance‭” ‬you refer to play out at the local level‭?

The same policy of alliances was applied at the local level.‭ ‬The reasoning was as follows:‭ ‬After various attempts to overthrow the government,‭ ‬and after the violence and disturbances generated by the guarimbas,‭ ‬and with an opposition that does not recognise the legitimacy of those in power,‭ ‬it is necessary to take into account that the situation in Venezuela is not normal.‭

Chavez's announcement of‭ “‬not one dollar more for the coup supporters‭” ‬signalled a policy at the local level of avoiding granting contracts to groups that supported the coup and general strike.‭

The argument was:‭ ‬Why should the government authorise contracts to someone who is going to use part of their profit to support subversive movements‭? ‬This line of thinking demonstrates the degree to which political polarisation has enveloped the nation.‭

In any case,‭ ‬the acceptance of this criterion requires mechanisms to guarantee transparency in the granting of contracts.‭ ‬The‭ “‬social controllership‭” ‬needs to be institutionalised and specifically it is essential for state authorities to turn over public works plans to respective community councils.

If the government is allied with an emerging business sector,‭ ‬why did Fedecamaras agree last year to participate in the‭ “‬peace dialogue‭”?

The decision to penalise the businesspeople belonging to Fedecamaras due to their subversion in‭ ‬2002-2003‭ ‬came as a heavy blow and helps explain the group's receptivity to the government's proposal to engage in dialogue last year.

Fedecamaras‭' ‬acceptance of the proposal,‭ ‬which took place in Miraflores,‭ ‬represented a triumph for Maduro.‭ ‬It occurred at a moment when the leaders of the opposition grouped in the‭ ‬Roundtable for Democratic Unity‭ (‬MUD‭) ‬rejected the proposal,‭ ‬thus signifying a rupture between the anti-Chavista politicians and the business class,‭ ‬contrary to what happened in‭ ‬2002.‭

At the same time,‭ ‬the more conciliatory position of the government toward Fedecamaras during the guarimbas was a recognition on the part of Chavista leaders that the emerging business sector was not capable of converting itself into a productive force that could replace traditional economic groups.‭

More recently,‭ ‬Maduro's April announcement that the government would not grant Fedecamaras preferential dollars was also effective,‭ ‬politically speaking.‭ ‬Several months later,‭ ‬Fedecamaras chose Francisco Martinez as its president,‭ ‬who immediately called for an understanding between government and business,‭ ‬at the same time as recognising the group's past errors.‭

Nevertheless,‭ ‬a conciliatory posture does not signify a change on the economic front.‭ ‬Fedecamaras possibly decided to abandon the role of political opponent it had played in the past because it considered the economic front a more effective battleground.

Can you summarise the principal conclusions related to the relations between the Chavista government and the private sector‭?

On the political front,‭ ‬the tactical or tacit alliance with businesspeople who have benefited from ties with the state has served to strengthen the government's position in the face of an aggressive opposition,‭ ‬including Fedecamaras.

But these business allies have not been completely trustworthy and have certainly not filled the economic expectations of Chavista leaders‭ ‬-‭ ‬and are very far from being consistently‭ “‬productive.‭”

This dilemma shows that a stage of consolidation and harmony on the road to structural change or socialism is unlikely.‭ ‬The road is necessarily full of contradictions,‭ ‬conflicts and struggles.‭

It is needed to prepare the people for this type of scenario and not sow excessive optimism that minimises the challenges facing those attempting to achieve far-reaching change.‭

A second conclusion is that a government committed to socialism,‭ ‬but with a capitalist economy‭ (‬or‭ “‬structure‭”) ‬cannot be immune to business pressure.‭ ‬This is the case even though businesspeople cannot count on representatives of the economic elite in the highest spheres of the state‭ ‬-‭ ‬as they did before the rise of Chavez.‭

Nicos Poulantzas,‭ ‬the great Marxist state theorist,‭ ‬described this dynamic metaphorically when he said that in spite of the commitments and loyalty of those in power,‭ ‬the state is a‭ “‬relation‭” ‬of the forces of society and more specifically the‭ “‬condensation‭” ‬of them.‭

In other words,‭ ‬the state to a certain extent internalises the interests of the private sector,‭ ‬even when none of its members hold important positions within the public sphere.‭

This leads to the following observation:‭ ‬if a socialist government does not deepen the process of change and open channels for popular participation and self-criticism,‭ ‬over time business influence will become institutionalsed and revolutionary gains run the risk of being dismantled.

[Read part two at Links International Journal of Socialist Renewal.]

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