February 2024 marked 25 years since Hugo Chavez became president of Venezuela. Following massive improvements to healthcare and education, the South American country was held up during the 2000s as a beacon of ‘socialism in the 21st century’ by many of those looking for an alternative to capitalism.
In the last 15 years though, Venezuela has become increasingly infamous for chronic food shortages, one of the world’s highest murder rates, runaway inflation and violent protests. Capitalist politicians and commentators the world over have been quick to point to Venezuela’s economic and social problems as proof that socialism doesn’t work.
Nick Hart, Socialist Party National Committee member, looks at the real lessons from Venezuela.
Chavez won his first of 16 national elections and referendums in December 1998, promising a break with the austerity policies that ordinary Venezuelans had endured over the previous two decades.
Upon becoming president, he declared a new “Bolivarian republic” and launched a constituent assembly to write a constitution which, among other pro-worker reforms, enshrined free healthcare and education as basic rights.
As a result, literacy programmes reached 1 million Venezuelans within the first six months. The number of primary care doctors increased from 1,628 in 1999 to 19,571 by 2007 and overall social spending per person increased by 170% between 1998-2006.
This was possible to finance thanks to Venezuela’s huge oil reserves, which accounted for 90% of the country’s exports. The doubling of the price of crude oil internationally during the early years of Chavez’s presidency created tens of billions of dollars annually in profits for the state-owned oil company which, as well as being used to expand public services, allowed for staple foods and other essentials to be sold in state-owned supermarkets at heavily subsidised prices.
This “first revolution of the 21st century” came about following a decade in which capitalism had seemed like the only game in town after the collapse of the USSR and other distorted ‘socialist’ regimes in Eastern Europe. Though limited in scope, the radical left governments elected in Venezuela, Bolivia, Brazil and Ecuador as part of a ‘pink wave’ in Latin America during the early 2000s stood in stark contrast to the privatisations and austerity cuts that had been the policy of capitalist governments around the world over the previous 30 years.
Chavez, and other leading figures of his Movement For a Fifth Republic party, initially modelled themselves on reforming capitalist governments such as that of US President Franklin D Roosevelt, who carried out the New Deal in the 1930s, under pressure to save capitalism from a prolonged slump and working-class unrest.
Hugo Chavez became a household name after leading a military insurrection against the government of president Carlos Andres Perez in 1992. Perez had accepted demands from the International Monetary Fund to increase the cost of fuel and public transport. 3,000 protesters were massacred by troops in the ‘Carazco’ demonstrations that followed.
Lieutenant Colonel Hugo Chavez was one of the dissident officers that made up a secret cell of radicalised army officers sympathetic to the protests, and influenced by 19th century independence leader Simon Bolivar as well as more recent Marxist insurgents. The 1992 insurrection failed, it was deliberately organised prematurely to avoid the involvement of civil society organisations. According to Chavez: “Civilians only get in the way”.
Historically, the organised workers’ movement in Venezuela was weaker than its neighbours in Chile, Bolivia and Brazil. Independent trade unions and the Communist Party were only formed in the 1930s. Thousands of activists from the socialist left were ‘disappeared’ by state forces during the 1990s and many of the unions had become openly corrupt and in the pay of employers and the CIA by the time Chavez was first elected. This was one of the factors in the top-down nature of Chavism.
However, despite his attitude that “civilians only get in the way” during the 1992 insurrection, it would be the Venezuelan masses who would come to rescue Chavez ten years later.
In early 2002, the Committee For a Workers’ International (CWI, of which the Socialist Party is a section) warned that the old ruling elite in Venezuela wouldn’t accept the curbs on its wealth and influence threatened by Chavez, and there was the possibility of a right-wing military takeover as had happened decades previously in Chile and Argentina. We also pointed out that the same ruling class and their US handlers would underestimate support for Chavez among the poorest at their peril.
Coup
In April that year, Chavez was deposed in a coup, with the head of the employers’ federation leading an interim government. However, this barely lasted two days!
Hearing announcements of austerity and anti-democratic measures by the new regime, and a message from Chavez, smuggled out from captivity and explaining how he had not voluntarily resigned as they were claiming, hundreds of thousands of workers and shanty town dwellers marched on the presidential palace demanding his release.
With much of the rank and file of the army backing Chavez, the coup quickly collapsed and he was released and restored to the presidency.
Having failed to remove Chavez and his allies at gunpoint, the capitalist opposition attempted to cripple the government economically through calling a shutdown of industry and commerce in 2002-03. This failed, as did a desperate attempt at a recall petition using as many as a million fraudulent signatures, including from deceased voters!
It was in the period following this that Chavez swung sharply to the left. After announcing nationalisation of the largest energy and telecoms firms, Chavez not only said, “We are moving towards a socialist republic of Venezuela”, but also referred to the ideas of Marx, Lenin and Trotsky.
The socialist transformation of Venezuela would have meant mobilising the working class to take all the levers of control from the ruling capitalist class. That includes nationalisation of the commanding heights of the economy under democratic workers’ control, and wresting control of the capitalist state machine – including the military and police – out of the hands of the bosses. On that basis, a democratic planned economy could be developed to meet the needs of all – and crucially an appeal made to the working class in the region and internationally to join in the struggle for socialist change.
The actions of Chavez’s newly refashioned United Socialist Party (PSUV) fell short of doing this, with the man himself declaring in 2007: “We are not extremists nor can we be. No! We have to pursue alliances with the middle classes, including the national bourgeoisie. The elimination of private property is not our theses”.
Following the recall referendum being defeated, nationalisations and land reform accelerated, but these only touched 700 or so bankrupt and ‘lame duck’ companies. A state supermarket chain, telecoms company and airline were also set up to compete with private companies rather than replace them outright.
Working-class appetite
There was a clear appetite from sections of the working class to go much further than that. Factory occupations took place with workers calling on the government to nationalise them. The raw material for a revolutionary socialist transformation of Venezuelan society existed at that time, what was missing was an organisation with a clear rounded-out programme to lead the working class in that struggle.
During this period, the small forces of the CWI supported the steps forward taken under the Chavez government, but pointed out the problems it could encounter later on and that a different approach based on the involvement of the masses would be needed to decisively take wealth and power out of the hands of the old elite.
In reality, the companies that were state-owned (often joint ventures in which private conglomerates took a stake) didn’t use the initiative and ideas of the workers who ran them on a socialist basis, but instead functioned like extremely bloated and corrupt mirror images of their capitalist counterparts.
The term ‘Boli-bourgeois’ became common place, referring to the caste of senior managers in state bodies and enterprises who have used their positions to enrich themselves.
Though at one point staple foods were subsidised by up to 40% in the state supermarkets, over 60% of them were imported due to much of the farmland remaining underused in the hands of the landlord class, and food manufacturing and distribution being controlled by five large conglomerates.
Many regulated goods such as foodstuffs and medical supplies were bought in bulk following import by black market traders, and later passed to street traders to sell at a huge markup to the prices in the state-run supermarkets.
Part of the responsibility for the widespread shortages that developed lies with these middle men and women. But the fact that it was possible for them to make a killing doing so is an example of the problem of trying to regulate prices in favour of ordinary consumers in a system where the distribution and sale of essential goods is still a source of private profit and subject to the vagaries of the market.
Though double-digit inflation and shortages were a feature during the boom years of the mid 2000s, the situation deteriorated rapidly when the price of oil collapsed during the worldwide recession from 2008 onwards and there was a 50% drop in exports of Venezuelan oil.
As the CWI had warned could happen as early as 2007, this had devastating consequences for the Venezuelan working class with cuts to subsidies of consumer goods and public services and suppression of wages in the face of hyperinflation that peaked at 130,000% in 2018-19 according to the president’s office and 2,688,670% according to the opposition. Venezuela has gone from being Latin America’s least unequal nation by some measures of wealth in the early 2010s to the most unequal today!
Maduro
As well as this economic crisis, a series of political crises followed the death of Chavez in 2013. His successor as president Nicholas Maduro continued the turn towards reconciliation with sections of the capitalist class and opposition, dressed up in patriotic language of national unity.
This has not been enough to prevent Venezuelan society becoming increasingly polarised. Far-right gangs of demonstrators emerged from among the upper layers of society and would vandalise and set fire to public buildings, shoot or lynch socialist activists and provoke clashes with riot police in the hope of creating a climate of instability more favourable for intervention by the UN or neighbouring capitalist powers.
In some parts of the west of the country the cost of living and shortages were further increased by extortion carried out by right-wing paramilitary groups from neighbouring Colombia, and criminal gangs buying subsidised goods to smuggle out over the border. At one point, Maduro estimated 40% of the regulated food in Venezuela was leaving the country in this way.
A landslide victory for the right-wing opposition MUD (Roundtable of Democratic Unity) coalition in parliamentary elections in December 2015, coupled with high levels of abstention, represented an exhaustion of the masses who had previously supported Chavez and an inability to see an end to plummeting living standards under the Bolivarian system.
The declaration of Juan Guaidó as the “interim president” by the right-wing majority in Congress in January 2019 marked a step change in attempts to remove Maduro from power. For the first time, workers from former strongholds of Chavism joined opposition protests calling for Maduro to resign.
However, the call by Guaidó on 30 April that year for a military uprising against Maduro failed to gather substantial support at both the rank-and-file and upper levels of the armed forces. A call for a general strike failed to gain any support from workers, showing the limited social roots of the opposition.
Venezuela goes to the polls on 28 July. The return of an openly capitalist government would be a step back for workers not just in Venezuela but in Latin America more widely.
A right-wing government would be no more capable of solving the contradictions of Venezuelan capitalism than Chavez and Maduro have been – and would leave the economy more at the mercy of international finance capital. So what lessons can be learned from the Venezuelan experience?
In an increasingly feeble global capitalist system, governments aiming to implement wide-reaching pro-worker reforms as Chavez did are all the more likely to see the kind of political dirty tricks campaigns or attempts at military overthrow by an enraged capitalist class. But that’s not a reason to settle for the status quo of continued capitalist austerity!
Instead, the events in Venezuela over the last quarter of a century show the need to make a clean break with the chaotic capitalist system and the need for the working class itself to take power. It also shows the need for a party with a clear programme to achieve that, and to begin the process of the socialist transformation of society.
- Read ‘Venezuela: Hugo Chávez and Socialism’, written by CWI secretary Tony Saunois in 2007, at the height of Chavez’s popularity, at socialistworld.net
