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For much of the 19th and 20th century, socialism was the hope of millions of working people around the globe, including the United States in the early part of the 20th century. This was the period of the growth of the Socialist Party and the Industrial Workers of the World, the IWW. Socialism has meant a society committed to meeting the basic needs of all people including health, food, education, and housing , where there is no poverty and full employment, where enterprises and firms are socially and publicly owned not privately owned by capitalists to make profits. It has meant a society where workers control how firms are run and where the economy is democratically planned to serve human needs. As a great socialist revolutionary, Rosa Luxemburg said in the early 20th century, socialism requires democracy, and democracy requires socialism.
In the 1980's, we were told by government leaders such as Margaret Thatcher, Ronald Reagan, most economists, media pundits such as Thomas Friedman that there is no alternative (TINA) to unregulated market capitalism. This economic model and the related policies are called neoliberalism in Latin America.
By the early 1990's, the fall of the Berlin Wall, the collapse of Soviet Union, and the defeat of the Sandinistas in Nicaragua, signaled to many the end of socialism. So did the movement by formerly non-capitalist nations such as Vietnam and especially China towards a private enterprise led production for profit capitalist system. The severe economic difficulties of Cuba was considered as further evidence that the period of alternatives to capitalism was coming to an end. This led to the "end of history" claims that liberal capitalism was the economic system that the entire world was evolving towards and would not evolve beyond, and that the time for socialism had passed and that it was not a desirable model.
In 1998, Hugo Chávez was elected President of Venezuela. He spoke strongly and acted against savage neoliberalism in his electoral campaign and after taking power but socialism was not a part of his vocabulary or program for his first few years in office. Since late 2004, he has been increasingly calling for Socialism for the 21st Century in Venezuela, and speaking out against capitalism and imperialism.
This call for 21st century socialism has resonated throughout the Americas, although a little more slowly in the U.S. than in other places. Even here in the U.S., there is increased interest in and decreased hostility towards socialism.[i]
I will share some of my understanding of the present and possible future of Venezuela so that we can effectively counter the criticisms we hear of it by our politicians and media.. Another reason to study the Venezuela proceso is so that we can dream about and learn lessons for organizing and advocating for socialism in the 21st century in the U.S., a country that today is more unequal in its income distribution than Venezuela. [ii] Venezuela is not socialist but rather Chávez and others calling for 21st century socialism are placing Venezuela in that tradition while calling for something different and new and culturally appropriate and historically specific for Venezuela. In this paper, I will also briefly examine the Venezuelan economy today.
Reads dis yu mite learn something beyond "hurr durrr Chavez is a communist dictator fox and big news corp tolds me so"
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Yeah, run right out and subscribe to thinkprogress, Daily Kos, and the Huffington Report. That'll give you all you need to know.
Then, you'll be all ready when Hooogo Chavez and his minions replace BarackO at the WH, and maybe you'll have learned a few characters of Chinese to welcome your new overlords.
But by then, "sorry" will be too late.
[i] A Rasmussen national telephone survey of 1100 adults on April 6-7, 2009 found 53% saying capitalism is better than socialism, 27% not sure and 20% saying socialism is better. Among those under 30, the respondents were almost evenly divided, 37% prefer capitalism and 33% socialism with the rest undecided. April 9, 2009. Rasmussen Reports: The Most Comprehensive Public Opinion Data Anywhere
[ii] A common measure of income inequality is the Gini coefficient. 0 is total equality, 1 is total inequality. The higher the number, the greater is the inequality. In Venezuela, the Gini coefficient was .422 in 2007 and lower in 2008. See Mark Weisbrot, Rebecca Ray and Luis Sandoval, "The Chávez Administration at 10 Years, The Economy and Social Indicators", Center for Economic and Policy Research, February 2009. For the United States, it was .463 in 2007 (U.S. Bureau of the Census, Income, Poverty and Health Insurance Coverage in the United States 2007, Current population Reports P60—235). Using this measure, the U.S. is significantly more unequal than Venezuela. . Moreover, the Gini coefficient has been trending downwards in Venezuela, towards less income inequality, and upwards in the United State, towards more inequality. Yearly measurements are presented in these two sources.
[iii] By anti- imperialist, I mean where one actively opposes the economic, political and cultural domination of a country in the global South by governments and multinational corporations centered in the global North and by international institutions such as the IMF, World Bank and WTO which are dominated by the global North.
[iv] Gregory Wilpert, Changing Venezuela by Taking Power, (Verso, 2007)
[v] By left, I mean moving towards furthering economic and other forms of equality, in a socialist direction.
[vi] By popular classes, I mean 80% of the Venezuelan adult population. It includes those who work in the formal sector for wages and whose income and status is below what is called middle class. The popular classes also include those employed in the informal sector, farmers with small plots of land, the unemployed and underemployed, and single mothers who work in the home. It includes the working class but is a broader and more inclusive concept.
[vii] For example, there are many communal councils where the majority of its members do not support Chávez and are not members of the party he leads, the PSUV.
[viii] Mark Weisbrot, Rebecca Ray and Luis Sandoval, "The Chávez Administration at 10 Years: The Economy and Social Indicators." Center for Economics and Policy Research. February 2009, pp. 13. According to these authors, university attendance grew by 138% between these two periods. I refer to this article which I use for much of my data as Weisbrot, et. al.
[ix] For more explanations of these data, see Weisbrot, et. al. The numbers in my table are from this article. The authors use data primarily from the Venezuelan National Institute of Statistics (INE) and the Banco Central de Venezuela (BCV).
[x] Ibid., pp. 6-8
[xi] Ibid., pp. 7,8, 15
[xii] See the excellent article by Courtney Frantz in this book for the development of this point.
[xiii] Surplus is similar to but not identical to profits. Surplus is the remaining revenue of an enterprise after its pays out wages to its workers and all other costs. The objective of these socialist enterprises is not to maximize the surplus but to meet human needs.
[xiv] Víctor Alvarez, an economist and former minister of Basic Industry and Mines, and graduate professor at the Central University of Venezuela used this three sector model formulation of the economy. These are the estimates of their relatives proportions that he gave to us in a talk at the Centro Instituto Miranda in January, 2009 and in a private conversation on March 25, 2009. See also Víctor Alvarez, "Responsible del Programa de Investigación Sobre un Nuevo Modelo Productivo", in El Viejo Topo, October, 2008, pp. 24-31. He said these numbers were approximate proportions of their contribution either to GDP or to employment
[xv] Weisbrot et al, pp. 8. They do not provide data on agriculture but based on my looking at Venezuelan government data and from many conversations I had in Venezuela, I am quite certain that agricultural production has been growing but slower than the overall growth rate of output.
[xvi] James Suggett, "Venezuela Nationalizes Gas Plant and Steel Companies, Pledges Worker Control", May 22nd 2009, venezuelanalysis.com | Venezuela News, Views, and Analysis
[xvii] See endnote xiv.
[xviii] See Robin Hahnel, Economic Justice and Democracy, (Routledge, 2005), Chapter 1, for an in-depth discussion of economic justice.
[xix] Weisbrot et. al, pp. 18
[xx] See the in-depth article on food sovereignty in this publication
[xxi] If Venezuela's prices of traded goods are rising much more rapidly than that of their trading partners, and the value of the Venezuelan currency is fixed in relation to other currencies, particularly the dollar, this will cause increased Venezuelan imports and decreased exports. If oil revenues are sufficiently high and currency convertibility from the bolívar to the dollar is restricted in Venezuela, the official foreign exchange rate may be maintained for a while. The social costs of this overvalued Venezuelan currency are declining non oil-related production and a black market exchange rate between bolivars and dollars that increasingly diverges in a downward direction from the official exchange rate. Weisbrot, et. al. (page 20), estimate that the bolívar fuerte as of February 2009, should be valued at about 4.2 to the dollar, roughly ½ of what it is officially. The current black market rate for the bolívar fuerte compared to the dollar, June 2009, is even lower, only about 1/3 of the official rate.
[xxii] This could be done by bigger price subsidies for goods that fill basic needs, and by raising the minimum wage. Other alternatives could be multiple exchange rates that vary for different goods and/or further rationing foreign exchange in order to promote domestic production.
[xxiii] Weisbrot et. al., pp. 19-20.
[xxiv] Ibid., pp. 25
[xxv] Development and use of alternate energies and the promotion of trains and mass transit to reduce dependence on both oil and cars are openly discussed and to some extent being implemented. It is unlikely in the near future that Venezuela will reduce its production of oil for the purpose of reducing carbon dioxide emissions and the serious and major problem of climate change.