Venezuela: Chavez announces the nationalisaton of telecom and power

"We’re moving towards a socialist republic of Venezuela"

In a televised speech after swearing in his new Cabinet, Chavez announced the nationalisation of Electricidad de Caracas, Venezuela’s largest private electricity firm, and the telecommunications giant CANTV. Both firms were privatised in the early 90’s by pre-Chavez governments.

"The nation should recover its ownership of strategic sectors," Chavez said. "All of that which was privatised let it be nationalised." The scorn poured on Chavez in the international press is a measure of the fear of Imperialism for a radicalisation in Venezuela and its effects on the rest of Latin America.

The announcement to nationalise Electricidad de Caracas, CANTV and place the lucrative oil projects in the Orinoco basin under the control of the government comes after the re-election of Chavez for a third term last December. During the election campaign he announced that when re-elected he would introduce more radical changes. In his speech yesterday, Chavez not only said "We are moving towards a socialist republic of Venezuela" but also referred to the ideas of Marx, Lenin and Trotsky. "I am very much of (Leon) Trotsky’s line – the permanent revolution," he said.

While it is positive that Chavez quoted Trotsky and, in this way, can introduce Trotsky and Trotskyism to millions of people in Venezuela, he has not yet applied the method and programme of Trotsky especially in relation to the crucial issue of the role of the working class and the revolutionary party in the socialist revolution and workers’ democracy.

The reshuffle of his cabinet last week and the dismissal of the vice-president Vicente Rangel and the interior and justice minister Jesse Chacón heralded what appears to be a turn to the left. Vicente Rangel was widely regarded as the person bringing political stability to the coalition of no less than 20 pro-Chavez parties. Rangel was a veteran of the Venezuelan political scene and played a pro-capitalist role in the last government, repeatedly calling on business leaders to "take up institutional political positions".

International importance

The statements by Chavez and his proposal to rename Venezuela as a "socialist Bolivarian republic" are extremely significant for the workers’ movement in Latin America and internationally. After what was dubbed "the first nationalisation of the 21st century" when the president of Bolivia, Evo Morales, forced multinational gas companies to renegotiate their contracts early this year, Venezuela could become nominally the "first socialist republic of the 21st century". It is a measure of the extent of the rejection of neo-liberalism and imperialism by the masses throughout the Latin American continent. It is also a measure of how the idea of socialism has re-emerged in the struggle against capitalist and imperialist exploitation.

Popular support for Chavez but not for his politicians

Chavez won his third presidential election campaign with 63% of the vote to 37% for the candidate of the opposition, united for the first time in many years, Manuel Rosales. No other president in power today, least of all Bush junior, can boast to have won three presidential elections with an increased vote. On a turn-out of 70% Chavez won 6% more of the vote than when first elected in 1998. However, the personal support for Chavez does not reveal the whole picture of Venezuelan politics or the policies and standing of the Chavez government.

A deep rooted mistrust of the political parties around Chavez and the widespread conviction that a layer of bureaucrats has been enriching itself in the last period meant that participation in the election campaign at the outset was very low in comparison with previous campaigns. It was only when Rosales, the opposition candidate, succeeded in organising the biggest opposition demo in Caracas in recent years that the fear of a return of the pro-US opposition boosted the turn out in the election. Although the social programs introduced by the Chavez government have helped the poor, a growing feeling of frustration and distrust points to the failure of the policies so far to solve the fundamental problems of the majority of Venezuelans. 25% of the population is still living on less than US$1 a day. While the richest 10% of the population still takes 50% of the national income, the poorest 10% take a mere 2%. The rush of oil money into the economy has resulted in bank deposits rising 84% in the last year. Since 2003, bank assets have surged ahead by more than US$20 billion. It is the wealthy middle and upper middle classes who have largely gained from this, while the workers and poor have seen little change in infrastructure and the rise of violent crime. Homicides are up 67% since 1999 and Venezuela has one of the highest rates of gun-related deaths in the world, according to UNESCO.

Swing to the left

That Chavez has now opened an ideological offensive around the necessity for Socialism and announced nationalisations is a clear shift to the left. It certainly is in part a reaction to the pressure building up from below for more far-reaching measures to alleviate poverty and control the power of a growing bureaucracy. This pressure is building up as more and more people are disgusted by what they see as the enrichment of a layer of pro-Chavez bureaucrats and temporary friends of the government who make vast amounts of money out of government-sponsored projects. Because of the lack of any real independent workers’ participation and control, corruption has been on the rise. Parts of the Chavista bureaucracy have come into direct collision with independent movements of the working class. These bureaucrats will oppose any independent movement of the working class or criticism of the government. They protect their personal privileges by denouncing independent workers’ activists as being in the pay of Imperialism. In the run up to the election campaign, several independent worker-activists, including comrades from Socialismo Revolucionario, the CWI section in Venezuela, were denounced by sections of the bureaucracy as "foreign agents" because of their criticism of the bureaucratic features of the regime. The same happened to fishermen in Guiria who occupied the port to fight for their livelihoods threatened by a coalition of private enterprises, oil companies and the port authorities.

The announcement by Chavez to create a United Socialist Party of Venezuela, replacing the different parties of the pro-Chavez coalition, is in one sense a move to cut across the criticism of bureaucracy and remove unpopular politicians. In his speech announcing the creating of the party he stressed that the new party should be built from below, be genuine and democratic. He said that it would be a deceit if the new party was made up of the same faces which led the old parties. He also praised the Bolshevik party which carried through the Russian revolution in 1917 and criticised what he called the Stalinist "deviation shortly afterwards". In reality the existing parties, including the Venezuelan Communist Party, have been served an ultimatum: disband and join the new party or else you will find yourself out of the government. In a more recent development, a member of the Venezuelan Communist Party has been chosen to be part of the cabinet, for the first time in its history.

How this United Socialist Party of Venezuela will develop is unclear. Nothing is known about its future program, structure or method of functioning. The building of a new revolutionary workers’ party with an independent class analysis and revolutionary socialist program is one of the fundamental tasks in order to deepen and complete a Venezuelan socialist revolution.

However, this party has to be built from below with the active participation of the working class and poor. A merger of different bureaucrats of the old parties will reproduce the top-down approach that will inhibit the development of the party.

Instead, the party would have to guarantee democratic participation, debate and decision making, would stand for the right of tendencies and minorities and would operate with elected representatives on a skilled workers’ wage and subject to recall.

As it is the working class that has the key role to play in changing society, its party as its main representatives have to be based upon the working class and its class interests.

In a party based on class conciliation, the working class would automatically be forced to play a secondary role and be unable to develop its own experience, draw its own conclusions and develop its own revolutionary program.

Real socialism is needed

The CWI supports every gain and every step forward taken by the exploited masses in their fight against capitalist exploitation and Imperialist domination. We are implacably opposed to US Imperialism and the Venezuelan bourgeoisie in their attempts to crush the Chavez regime and turn back the clock to the days of naked international plunder of the country. However, the building of a half way house between Capitalism and Socialism endangers the gains made for the working class and invites the counter-revolution to organise and strike. Up to the present, there have been very limited nationalisations when the government has taken over a majority shareholding in some factories under the banner of ‘cogestión’ (co-management) between the state and the workers. Chavez has also talked about imposing state control of the central bank, more price controls and control of interest rates and foreign exchange. The incoming finance minister, Rodrigo Cabezas, said "regulation of earnings is a priority for us". "We ask for understanding from financial and economic sectors but if there’s no understanding…we’ll make the necessary reforms."

What has not yet happened in Venezuela is the taking over of the decisive sectors of the economy. Mark Weisbrot, of the Centre for Economic and Policy Research in Washington, was quoted in the English newspaper ‘The Guardian’ (10/01/07): "After nearly eight years of Chavez’s government the private sector until now has actually been a bigger share of the economy. This may now change but not very quickly or drastically."

Chavez and his ministers have repeatedly stated that their aim is not to take over the economy and have invited the private sector to cooperate. The latest announcements of nationalisation would only apply to those strategic sectors which were privatised in the early 1990’s. CANTV, the country’s largest publicly traded company and the only Venezuelan company traded on the New York Stock Exchange, has been allowed to disregard several court rulings to adjust its pension payments to current minimum wage levels. It is unclear what the announcement to nationalise CANTV and the electricity company will mean in practice. In recent years, the Chavez government has preferred to renegotiate its contracts or to engage in a number of joint ventures with multinationals rather than opting for nationalisation. The Morales government in Bolivia mirrored this policy when it announced the nationalisation of its natural gas industry but went no further than a renegotiation of existing contracts improving the terms that it got from international energy firms.

There are historical lessons which could be drawn with the Allende government in Chile which nationalised 40% of the economy or the Sandinista regime in Nicaragua which nationalised 25% of all industrial capacity. In both cases, failing to expropriate the expropriators meant that the capitalist class still had control over the economy. Whilst the counter-revolution in Chile and Nicaragua took different forms the basic premise that made it possible was the same. Having terrified the bourgeoisie by supporting the mass movement and taking partial measures against their interests, the failure to disarm the ruling class economically and politically opened the way for the counter-revolution. In Nicaragua and in Chile the ruling class, in conjunction with US Imperialism, started a campaign to sabotage the economy, spread chaos and paved the way for the defeat of the Sandinistas in Nicaragua and the military dictatorship in Chile.

While the masses have saved Chavez on three occasions, the threat of counter-revolution has not disappeared. The problems of US Imperialism in Iraq may mean that it is temporarily compelled to limit its involvement in Latin America, a position it will change, however, if the revolution advances towards socialism. Imperialism can still intervene by proxy, fermenting and financing counter-revolutionary forces in Venezuela, supporting paramilitary organisations along the border with Colombia or preparing right-wing forces in the state machine and the military.

Chavez seems to be trying to emulate some features of what was done in the Cuban revolution only in slow motion. However, the historical experience of the working class has repeatedly shown that it is not possible to tiptoe towards socialism. A socialist revolution needs the conscious and concentrated participation of the working class to seize political power, in alliance with the peasantry. The first step is to expropriate the ruling class from its political and economical power and for the working class to build its own independent institutions of the working class. That process can not be step by step, as a matter of subsequent reforms which end up in socialism.

The permanent revolution

Chavez is right when he refers to Trotsky and his theory of the permanent revolution. Yet it remains to be seen if he applies its lessons in practice. It is the key issue in Venezuela and in Latin America in general. Throughout Latin America, in the last couple of years, tremendous movements have taken place. From Mexico in the north through countries like Bolivia, Ecuador, Argentina, thousands of people have been involved in struggles and semi-uprisings against neo-liberalism and Imperialism. The tasks that these movements pose are the development of industry, the resolution of the land question, breaking the exploitation by Imperialism and securing a unified, independent nation state and the establishment of stable parliamentary democracies. These are the tasks of what is basically the bourgeois revolution.

As Lenin and Trotsky explained, in the modern epoch these problems cannot be resolved by capitalism in the present period and still less by the weak national capitalist class in the colonial countries. The indigenous capitalist class is unable to play an independent role, bound as they are to imperialism internationally and to the landlord class nationally. The countries of Latin America, as with the other neo-colonial countries, are used by Imperialism as sources for cheap labour; they are plundered for their natural resources and are kept in subservient role.

Trotsky explained that in the modern era it falls to the working class to resolve these fundamental problems, indispensable for the further development of society. As was proven in the Russian revolution, it fell to the working class to break the chains with which backward Russia was bound to Imperialism abroad and landlordism at home. To succeed in doing this it was not enough to merely confine itself to capitalism. To unleash the productive powers of society and take it was necessary to nationalise the economy and work out a centralised plan of production based upon a system of workers’ democracy. In other words to complete the tasks of the bourgeois revolution the economic and social powerhouse of a socialist revolution and development were necessary or, to put it in Leon Trotsky’s words, "The proletariat which has risen to power as the leader of the democratic revolution is inevitably and very quickly confronted with tasks, the fulfilment of which is bound up with deep inroads into the rights of bourgeois property. The democratic revolution grows over directly into the socialist revolution and thereby becomes a permanent revolution."

Another way in which the revolution must be permanent is in its objective to break out of the constraints of a backward, underdeveloped country. The completion of the socialist revolution is not possible within the national limits of the nation state. To quote Trotsky again: "The socialist revolution begins on the national arena, it unfolds on the international arena."

This does mean that the socialist revolution must be internationalised breaking its isolation and spreading to other nations on Latin America as a way in building a world socialist federation.

Genuine internationalism

Today’s conditions in Latin America are very favourable for the genuine cooperation and joint struggle of the Latin American workers and peasants. The completion of a genuine democratic socialist revolution in Bolivia, Venezuela and Cuba could allow the beginning of planning and the establishment of a socialist federation as a first step towards spreading it throughout the continent.

Even in the initial stages, a democratic socialist federation of Cuba, Venezuela and Bolivia could make a huge economic and social leap forward and be a point of attraction to workers and youth around the world. It would highlight what is possible on the basis of genuine democratic socialism and the people of Cuba, Bolivia and Venezuela would soon be able to enjoy higher living standards than the majority of people on the continent.

However, these tremendous tasks can not be fulfilled in the name of the working class, in her service, by well meaning leaders. They are the tasks of the working class and require its full involvement and leadership. Many features of the process initiated and lead by Chavez are characterised by a top down approach, substituting the independent initiative of the masses by dictates from the government. Much of what Chavez has been able to achieve so far has been financed by the high price of oil. But currently the oil price is falling; if the world economy slows down, let alone stagnates or goes into recession, it could fall much further. This could undermine the reforms and strengthen reaction, something that can only be prevented by socialist policies that finally break the power of capitalism and have an internationalist appeal. But if the proposed party and the reforms enhance the already existing tendency of concentrating power in the hands of sections of the bureaucracy and the Chavista leadership, it will undermine the active and conscious participation of the working class. The proposed nationalisations should go hand-in-hand with the introduction of workers’ control, as a first step towards workers’ management. Workers’ control means workers, through their elected representatives, would have total control over hiring and firing, wages, and control over the day-to-day running of the workplace. To combat corruption, measures would need to be taken to limit the wages of managers, managers and supervisors should be elected and subject to recall. Finally the nationalised industries must be part of a larger plan of production on a national scale to use their capacity to the full.

The way the Chavez government has been able to invest in public services, infrastructure and education is a pointer to what would be possible on the basis of a democratically planned economy instead of his policy at present, which is to try and direct chaotic market forces with limited state regulation and intervention. On the basis of workers’ control and management of the commanding heights of the economy it would be possible to plan economic and social progress. The vast majority of the oil wealth would go towards rebuilding the lives of ordinary Venezuelans instead of lining the pockets of private contractors. A democratically planned economy could start to radically alter Venezuelan society and the lives of millions of working class and poor people. The realisation of genuine workers’ democracy can only be achieved on the basis of the mass participation of the working class in the political process and the building of instruments to control, manage and plan the economy and the resources available. Committees would need to be established in every workplace, university and borough. On these bodies, representatives would be elected, subject to recall and, if paid, would not receive more than the average wage of a skilled worker. The representatives would then organise to meet on the basis of district, city and national levels. The linking up of these committees on a city, regional and national level would be the basis for the establishment of a workers and peasants’ government.

A train of socialist social progress would have an electrifying effect on the masses in Latin America and spread a new language of socialism, a fluent language of social and economic progress, expressed in the amount of houses built, tonnes of food distributed, jobs created and democracy ensured. This would be the best guarantor to secure the national and international defence of the Venezuelan revolution and its linking up with other Latin American states to form a socialist federation of Latin America as a first step towards a world federation of democratic socialist states.

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January 2007