[R-G] Venezuela: Not What You Thin

[Anthony Fenton]

Venezuela: Not What You Think
December 23rd 2007, by Robin Hahnel
http://www.venezuelanalysis.com/analysis/3027

12/01/07 "MRZine" - -- -In the case of Hugo Chavez and the Venezuelan  
Bolivarian Revolution, the mainstream media and politicians in the  
United States have elevated their game of demonizing all who oppose  
US foreign policy and business interests to a higher level of  
absurdity than usual. According to the mainstream media, the only  
newsworthy stories in Venezuela are one sided diatribes lifted from  
the discredited, opposition-owned media in Venezuela. For example, we  
read about Chavez shutting down opposition TV stations. We hear that  
Chavez is rewriting the Venezuelan Constitution so he can be  
President for life. Chavez is a dictator, QED.

All the badly outgunned, alternative media in the US can do is try  
its best to rebut the bias in the storylines defined by the  
mainstream media. The tiny fraction of Americans who visit the  
alternative media discover that Chavez has submitted a proposal to  
change the Venezuelan Constitution in a number of ways, one of which  
is to eliminate term limits on the office of President. All changes  
will first have to be approved by the democratically elected  
Venezuelan National Assembly, and then also approved in a popular  
referendum before they become law. Only Americans who search out the  
alternative media discover that HugoChavez was elected President by a  
comfortable margin in 1998, survived an opposition-sponsored recall  
in 2004, and most recently was re-elected in December 2006 with more  
than 60% of the vote. International observers certified all three  
elections as fair and square. George Bush, on the other hand, was  
selected President by a partisan Supreme Court after losing the  
popular vote in 2000, and won re-election only because enough black  
voters in Ohio were disenfranchised by a partisan Republican official  
to keep the Buckeye State in the Republican column in 2004. Few  
observers believe Bush could survive a recall election today, but of  
course this basic element of democratic rule is not permitted by the  
US Constitution. Nonetheless, the only storyline ninety-nine percent  
of Americans hear remains: Hugo Chavez is a dictator and George Bush  
is the democratically elected leader of the free world.

Similarly, only the small fraction of Americans who access the  
alternative media learn that RCTV was not shut down because it  
campaigns openly against the government -- which it has for nine  
years. Instead, when its license came up for renewal, its application  
was denied because it had violated 200 conditions of its licensing  
agreement -- many violations having to do with its role in helping to  
organize a military coup that nearly toppled the duly elected  
President of the country. Moreover, the station continues to  
broadcast on a cable network, and the opposition in Venezuela still  
broadcasts on more major TV channels than there are channels  
sympathetic to the government. In stark contrast, the alternative  
media in the US cannot be viewed on any major channel. Consequently  
the vast majority of Americans receive all their news from a  
mainstream media which never questions whether the US has any right  
to dominate other nations, but only debates the wisdom of alternative  
strategies for doing so, and would never dream of questioning the  
desirability of an economic system dominated by their corporate  
owners. Nevertheless the storyline most Americans hear remains:  
Freedom of the press is dead in totalitarian Venezuela, but alive and  
well in the democratic United States.

It is important to distinguish between whether mainstream coverage of  
issues like amendments to the constitution and the TV license is  
biased, whether there are grounds for reproaching the Venezuelan  
government, and whether the policies are wise. Clearly the mainstream  
media has failed to report relevant facts and their coverage has been  
grossly unfair. From what I know, the procedure that led to non- 
renewal of the TV license was unobjectionable, and the proposed  
constitutional amendment will be decided by a thoroughly democratic  
process. So while there are ample grounds for reproaching mainstream  
media coverage in the US, as far as I can see there are no grounds  
for reproaching the Venezuelan government in either case. However,  
this does not mean the policies are necessarily wise. Those in  
Venezuela who argue that the revolutionary government would be  
hammered by the imperial press in any case are surely correct. On the  
other hand, that does not mean either initiative is good policy,  
independent of the news coverage it receives. Moreover, giving one's  
enemies an easy chance to focus on a negative storyline seems unwise  
-- unless the policy has important benefits.

Unfortunately, the fact that only a tiny fraction of the American  
public are ever exposed to balanced coverage of the Venezuelan  
stories defined by our mainstream media is only one problem. A larger  
problem is that practically nobody in the United States ever hears  
anything about truly newsworthy stories in Venezuela. Stories about  
exciting new political and economic initiatives that are dramatically  
reducing poverty and challenging popular myths about the abilities of  
ordinary people to make good political and economic decisions for  
themselves go virtually uncovered in the United States.1

I speak fluent Spanish, have lived and worked in Latin America on two  
occasions, and have traveled extensively in Latin America for over  
forty years. One of the few Latin American countries I had never  
visited before a year ago was Venezuela. I have now made two trips to  
Venezuela in the past nine months at the invitation of the Centro  
Internacional Miranda. I was in Caracas for one week in October 2006  
-- before the December 2006 presidential elections that provided  
Chavez with a popular mandate to pursue a more aggressive socialist  
agenda. During that visit I met with officials in the Planning  
Ministry and faculty and students in the Planning Ministry school. I  
had long discussions with people at the Miranda Center working on  
projects in critical pedagogy, participatory budgeting, new models of  
production, human development through popular participation, new  
forms of political participation, and new models of socialism for the  
twenty-first century. I also visited health clinics, subsidized food  
distribution centers, community radio stations, and adult education  
centers in poor neighborhoods in Caracas. During a two-week visit in  
July 2007 I visited the rural state of Lara as well as Caracas. In  
Caracas I participated in numerous seminars and meetings at the  
Miranda Center, attended an adult education class at the new  
Bolivarian University, met again with officials in the Planning  
Ministry and students in the Planning Ministry school, met with  
officials in the new Ministry for the Communal Economy, and visited  
with workers in a "recuperated" factory and activists in a "nucleus  
of endogenous development." In Lara I attended meetings of three  
rural communal councils, a meeting of spokespersons from ten other  
rural communal councils, a meeting of spokespersons from all the  
communal councils in the town of Carora, and talked with citizen  
directors of a communal bank. I also met with the mayors of Carora  
(state of Lara) and Libertador (state of Carabobo) who pioneered  
participatory budgeting initiatives in their municipalities. What  
follows is an account of some stories I believe many Americans would  
find truly newsworthy.

Economic Progress

Like most Latin American economies, the Venezuelan economy  
deteriorated during the 1980s and most of the 1990s. From 1998 to  
2003 real per capita GDP continued to stagnate while the Chavez  
government survived two general strikes by the largest Venezuelan  
business association, a military coup, and finally a devastating two  
month strike by the state owned oil company. However, after Chavez  
survived the opposition sponsored recall election, annual economic  
growth was 18.3% in 2004, 10.3% in 2005, and 10.3% in 2006, and the  
unemployment rate fell from 18.4 % in June 2003 to 8.3% in June 2007.  
Moreover, most of the growth was in the non-oil sectors of the  
economy, as the oil sector barely grew during 2005 and 2006. While  
this impressive growth would not have been possible without the rise  
in international oil prices, it also would not have been possible had  
the Chavez government not ignored the warnings of neoliberal critics  
and pursued aggressive expansionary fiscal and monetary policies.

At the height of the oil strike the poverty rate rose to 55.1% of  
households and a startling 62.1% of the population. However, by the  
end of 2006 the poverty rate had declined dramatically to 30.6% of  
households and 36.3% of the population, which compares favorably with  
a pre-Chavez rate of poverty in 1997 for households of 55.6% and for  
individuals of 60.9%. While much of this decrease in poverty was due  
to strong economic growth, it was also due to a dramatic increase in  
social spending by the Chavez government. Social spending per person  
by the central government increased by an average of 19% per year  
from 1998 to 2007. However, this does not include social spending by  
the state-owned oil company. If social spending by PDVSA is included,  
there was an increase of 35% per person per year since 1998. The most  
dramatic increase in social spending was in the area of health care.  
In 1998 there were over 14,000 Venezuelans for each primary  
healthcare physician, and few physicians worked in rural or poor  
urban areas. By 2007 there was one primary healthcare physician for  
every 1,300 Venezuelans, and many of the new physicians were working  
in clinics in rural areas and poor barrios that had never had  
physicians before.2 There are also now 16,000 stores in poor areas  
throughout the country selling staples at a 30% discount on average.

Building the Social Economy

Reforms First: For eight years the Chavez government went out of its  
way not to threaten the private sector. Despite relentless hostility  
and numerous provocations from the Venezuelan business association  
and the privately owned media, there were few nationalizations and  
the state sector did not grow appreciably. While the government did  
launch a serious land reform, the program proceeded more cautiously  
than government rhetoric and landowner complaints would lead one to  
expect. Instead, Chavez concentrated on redirecting profits from the  
state owned oil company to social programs to benefit the poor, and  
financing development of what the government called the "social  
economy." In addition to increasing spending dramatically on  
healthcare and food subsidies, the government launched a massive  
program of adult education. Millions of poor Venezuelans have now  
overcome illiteracy, and hundreds of thousands have received primary  
diplomas and secondary degrees studying in store-front schools named  
Mision Robinson I (literacy), Mision Robinson II (primary), and  
Mision Rivas (secondary).

But none of this addressed the high rate of unemployment and the most  
pressing economic needs of those who had voted Chavez into office.  
The business sector was hostile to the Chavez government from the  
outset and oscillated between economic sabotage and capital flight.  
So the private sector could not be relied on to increase investment,  
production, and employment. Nor was extensive nationalization an  
attractive option because Chavez wanted to avoid provoking the  
business community unnecessarily, and there was a shortage of  
competent officials who were also politically trustworthy to run more  
state enterprises. Moreover, neither Chavez nor his closest  
associates were enamored of the "state socialist" model. So  
increasing employment by expanding the state sector was also not seen  
as a desirable option. Determined not to renege on electoral promises  
to better economic conditions for his supporters as many populists in  
Latin America have in the past, Chavez launched a massive program to  
create worker-owned cooperatives in both rural and urban areas.

Cooperatives: New worker-owned cooperatives not only provided much  
needed jobs producing much needed basic goods and services, they also  
featured what was soon to become a hallmark of Bolivarian socialism  
-- popular participation at the grassroots level. When Chavez was  
first elected President in 1998, there were fewer than 800 legally  
registered cooperatives in Venezuela with roughly 20,000 members. In  
mid-2006 the National Superintendence of Cooperatives (SUNACOOP)  
reported that it had registered over 100,000 co-ops with over 1.5  
million members.3 Generous amounts of oil revenues continue to  
provide start-up loans for thousands of new cooperatives every month,  
and the Ministry for the Communal Economy continues to spearhead a  
massive educational program for new cooperative members. However, the  
ministry provides more than technical assistance regarding  
technology, accounting, finance, business management, and marketing.  
It also teaches participants about cooperative principles, economic  
justice, and social responsibility.

Participatory Budgeting: Even before the December 2006 referendum  
provided Chavez with a popular mandate to deepen the social  
revolution, the government had moved ahead to add participatory  
budgeting and local economic development initiatives called "nuclei  
of endogenous development" to the educational Misiones, subsidized  
food stores, and worker cooperatives comprising the social economy.  
Three international experts on participatory budgeting in other  
countries were part of the Miranda Center work team during my visit  
in July. Richard Franke (USA) shared his research on the history of  
participatory budgeting in Kerala India, and Marcos Arruda (Brazil)  
and Daniel Schugurensky (Canada) shared their research on  
participatory budgeting in Brazil with those developing the program  
in Venezuela. What was clear to all of us was that while the practice  
of participatory budgeting may be more advanced in Kerala and Brazil  
where decades of experience have helped people learn how to deal with  
important practical problems like how to combine technical expertise  
about public work projects with popular determination about  
priorities, the prospects for participatory budgeting in Venezuela  
are much greater.

A hostile national government in India limits how far the left united  
front government in the state of Kerala can take the program there.  
And unfortunately the Lula government in Brazil has done little to  
build other elements of a "solidarity economy" to compliment  
participatory budgeting, and even damaged the reputation of  
participatory budgeting by using it to administer austerity measures.  
In Venezuela, on the other hand, the President and Congress are now  
fully supportive of participatory budgeting and busy building  
complementary components of a full-scale "social economy." In  
Venezuela, participatory budgeting is viewed by many not merely as a  
better way to make decisions about local public goods, but as part of  
a process to democratize all aspects of economic life. Not  
surprisingly some local officials have resisted participatory  
budgeting because it challenges their traditional powers and  
privileges. Others, like the mayors of Carora and Libertador who  
turned all municipal revenues over to neighborhood assemblies to use  
as they saw fit, have embraced the program as well as the changes it  
brings to the role of mayor.

Communal Councils: After the referendum in December 2006, a major  
campaign to organize and empower communal councils was launched as a  
new step toward building the social economy. The Ministry of  
Participation and Social Development, MINPADES, worked to establish  
the initial components of the social economy. In 2004 the Ministry  
for the Popular Economy, MINEP, was created to help build new  
components of the social economy. When the government decided to  
create communal councils in every neighborhood, MINEP was  
strengthened and renamed the Ministry for the Communal Economy,  
MINEC. After lengthy debate, it was decided that communal councils  
should be comprised of twenty to fifty households in rural areas and  
two-hundred to four-hundred households in urban areas. Since communal  
councils are the building blocks of a whole new political structure  
in Venezuela, it may seem odd that sometimes they are comprised of  
fewer than fifty families in rural areas. The small size was chosen  
to ensure that every family, even in rural areas where small villages  
are often distant from one another, would have a real chance to  
participate in the most fundamental political decisions that affect  
them.

All the rural communal councils we visited in the state of Lara had  
decided that housing was a high priority. Each went through the  
difficult process of deciding which families would get new houses  
since there was not enough to provide new houses for all. We asked  
the members what criteria they used. We asked about nepotism. We  
asked what happened to families who were disappointed and disagreed  
with the decisions. While answers varied, the major criterion taken  
into consideration was need -- the state of a family's existing  
housing and the number of children. While all tried to reach  
consensus, in some of the communal councils votes were taken, and in  
some cases those who were disappointed threatened to leave. A major  
difference between councils was how far they stretched their housing  
budget by providing materials locally, reducing the number of rooms,  
or providing labor. In one case, a council member was a builder  
himself who was able to oversee much of the building by community  
members, thereby stretching the housing budget the farthest. The  
builder did not receive one of the new houses because, we were told,  
his house was predictably in decent repair. He said he was not  
disappointed because he was confident he would receive a new house  
next year, or the following, after others whose houses were in worse  
repair got theirs. In another council the disappointed family who had  
threatened to leave was talked out of it, in part because they  
thought they had a good chance of getting a house the following year.

Other projects varied a great deal. One communal council built a  
facility to raise chickens -- against the advice of a government  
agronomist who thought they would be better off upgrading their  
facilities for goat herding. We asked who would work in the new  
communal chicken farm, how they would be paid, and how profits would  
be shared. It was clear from their answers that all of that remained  
to be thought through, although everyone agreed that not all would be  
expected to work in the communal chicken business since some had  
paying jobs outside the community that nobody expected them to give  
up. Several councils had mud roads paved over so people would be able  
to get out to a main road during the rainy season. One built a health  
clinic. Both these projects required coordination with outside  
agencies. Council spokespeople lobbied the municipality to pave more  
of their mud roads and only used communal council funds to pay for  
the remainder. The Ministry of Health had to be consulted about  
staffing the clinic. One communal council decided to build a  
community building for meetings and festivals.

The meetings we attended were well attended -- with representation  
from over half of the households. That was frequently not the case  
initially, as facilitators -- often municipal employees who had  
previously worked in educational Misiones -- had to help communities  
organize a second meeting after attendance was poor at the first  
meeting. Choosing more convenient meeting times, passing out more  
flyers, and knocking on more doors was often necessary, but making  
clear residents would forego significant funds unless they created a  
communal council eventually led to functioning communal councils in  
every community in the municipality. Every communal council had  
elected a vocero, or spokesperson, and a suplente, or substitute  
spokesperson, for each theme decided by the communal assembly (for  
example, health, recreation, electricity, etc.). Of the roughly two  
hundred spokespersons we met in rural communal councils and urban  
communal councils in the town of Carora, a disproportionate number  
were poor women of color with several children. Most of them had only  
recently become politically active. Almost all of them were strongly  
Chavista. A disproportionate number of facilitators in the  
municipality were younger women from working-class families who had  
some college education, who were also strongly pro-Chavez. One  
spokesperson we interviewed extensively was a middle-aged white man  
who appeared to be the wealthiest person in his community and was  
active in an opposition political party. His neighbors were fully  
aware of his political allegiance, which few of them shared, but  
expressed complete trust in his integrity and described him as the  
person in the community who was best at getting things done. For his  
part, he expressed strong support for participatory budgeting and  
communal councils for which he credited Chavez and the Chavista mayor  
of Carora. But he said he had no intention of quitting his opposition  
political party or becoming a Chavista himself.

Activists, Politicos, and Experts: While it is important to focus on  
what is happening on the ground, and what activists in different  
parts of the social economy are thinking, one should not ignore the  
influence of politicians and ministries that affect the social  
economy. More than anyone else, of course, Chavez has the greatest  
effect on the political agenda in Venezuela and especially on  
initiatives in the social sector. My impression from his speeches,  
and from what senior fellows at the Miranda Center who are familiar  
with his thinking have told me, is that Chavez is both the leader of  
the entire Chavista movement, but also the leader of its radical  
wing. Over the past nine years Chavez has frequently led the charge  
to deepen the process of social change -- often through new  
initiatives in the social economy. In this respect the role played by  
Chavez has been similar to the role Mao played in China during the  
1950s and 1960s when he was both the head of government and the  
party, but also the leader of the left-wing faction within the CCP.4  
What we might call the "Chavista camp" is an amalgam of small left  
parties and groups that initially included some small centrist and  
center-left parties as well -- all predating his election -- and a  
much larger diverse group of activists politicized by different  
campaigns and programs launched by his government. Although there is  
now an attempt underway to create a unified Venezuelan socialist  
party comprised of all who typically refer to themselves simply as  
"Chavistas," one of the defining features of the last nine years has  
been the absence of a unified socialist political party driving the  
political process -- for better or worse.5

While somewhat arbitrary and imprecise, it is useful to distinguish  
between two different tendencies within this diverse and loosely knit  
"Chavista" camp. The vision of the more moderate tendency includes  
left-Keynesian policies combined with further welfare reforms, but  
does not extend beyond a market system with a "mixture" of private  
and public enterprise. Since one of the two opposition parties  
representing the oligarchy, Accion Democratica, is officially a  
social democratic party and member of the Socialist (formerly Second)  
International, one has to be careful when using the term "social  
democrat" in Venezuela. But elsewhere this moderate tendency within  
the Chavista camp would be described as solidly social democratic,  
and mostly unmarred -- at least so far -- by retrogressive "third  
wave," or "New Democrat" tendencies. These moderates within the  
Chavista camp are generally less optimistic than those in the more  
radical tendency about the ability of ordinary Venezuelans to make  
good decisions for themselves, and therefore tend to be more  
skeptical about how well what we might call "power to the people" as  
opposed to "serve the people" initiatives will work.

The guiding vision of the more radical tendency in the Chavista camp  
reaches far beyond a mixed economy guided by left-Keynesian policies  
and humanized by a substantial welfare state. Most in the radical  
tendency describe what they are part of as the "Bolivarian  
Revolution," and call their guiding vision "twenty-first century  
socialism." Because these terms are unique to Venezuela, they offer  
little help to those of us outside trying to understand what they  
mean.6 Those in the radical tendency see what is happening as a  
revolution because they see it as a profound social transformation  
and dramatic change in power relations among social groups. They also  
believe this revolutionary transformation should continue until  
popular self-rule has been achieved in every area of social life.  
These "Bolivarian revolutionaries" call their vision "socialist," but  
they do not emulate any models of socialism developed by those who  
called their societies socialist in the twentieth century. For  
example, while they see Cuba as their closest ally, pay homage to  
Cuba for its lonely but steadfast opposition to US imperialism for  
half a century, and admire all that Cuban socialism has achieved for  
the Cuban people, they do not see Cuba, much less any other  
"socialist" country, as the model of socialism they aspire to. In  
particular, they make clear that their vision of a twenty-first  
century socialist economy is quite different from the Cuban economic  
system and the economic systems in all other countries that call or  
called themselves socialist. Instead, Bolivarian revolutionaries are  
socialist in the sense that they are committed to achieving what they  
believe those who have called themselves socialist dating back to the  
nineteenth century have all aspired to -- an economy qualitatively  
distinct from capitalism, where production is for use not profit, and  
where workers and consumers plan their own activities democratically  
and equitably.

One is tempted to describe these radicals in the Chavista camp as  
libertarian socialists because of their insistence on the centrality  
of worker and community self-management, and their rejection of any  
models of socialism where it is absent. But this would be misleading  
in important respects. Few Bolivarian Revolutionaries seem to trace  
their intellectual origins to libertarian socialism. Nor do many of  
them share the libertarian socialist critique of Marxism-Leninism.  
While Bolivarian Revolutionaries do not believe any who called  
themselves socialist in the twentieth century succeeded in achieving  
socialism as they envision it, most of them appear to believe it was  
the intent of socialists in Marxist-Leninist parties who achieved  
state power to do so, even if they failed to find the means, or got  
lost along the way. They also have a different perspective on reforms  
than many twentieth-century libertarian socialists. They see their  
Bolivarian Revolution as an evolutionary revolution -- feeling its  
way toward new social relations and new human values -- rather than  
as an abrupt reversal of class rule derived from a change in control  
over the means of production. As best I can tell, most Bolivarian  
revolutionaries also regard reforms in what is still predominantly a  
capitalist economy as positive steps in the revolutionary process.  
Libertarian socialists have often been inclined to view reforms  
within capitalism negatively, as distractions deployed by the enemies  
of "real" social change to forestall revolutionary momentum.

My ability to gauge the thinking of "experts" working in ministries  
involved with the social economy is limited. It is based on a few  
conversations I was able to have with officials in the Planning  
Ministry and the Ministry for the Communal Economy, on reactions to  
presentations I made at both ministries, and on my review of the  
curriculum students are studying at the Planning Ministry school. I  
was constantly surprised and invariably pleased by what these  
"experts" were thinking. At the beginning of my first visit, at the  
risk of never being invited back, I decided to take advantage of my  
opportunity to address the vice ministers, faculty, and first class  
of students at the Planning Ministry school to challenge the  
traditional conception of socialist planning. I began my talk by  
saying that if they thought their job was to make better and better  
plans, I thought they were wasting their time at best, and having a  
negative effect at worst. After an embarrassed silence, I went on to  
say that instead I thought the job of people working in the  
Venezuelan Planning Ministry was to help workers in cooperatives and  
consumers in communal councils and assemblies plan how to cooperate  
more effectively among themselves. To my surprise my audience agreed.  
Moreover, they said they understood this meant they rejected the  
foundation underlying previous conceptions of socialist planning, and  
had, in effect, accepted a new prime directive: "Do not plan for  
others, facilitate planning by others." Since I was invited back, I  
have had several opportunities to confirm that people at the Planning  
Ministry were not merely humoring a rude foreigner during my first  
visit. I have also studied the curriculum and read the texts being  
used to train those who will soon be key personnel in the Planning  
Ministry. It is completely different from standard curricula on  
national planning and reflects the perspective of "facilitator"  
rather than "plan maker."

At the new Ministry for the Communal Economy, the people I met seemed  
equally clear about what their job was. They are busy creating the  
basic elements of a social economy -- self-managed worker  
cooperatives, communal councils, and communal assemblies. They are  
busy teaching the elected leaders of these cooperatives, councils,  
and assemblies that they must work with one another on the basis of  
mutual respect and solidarity rather than treat one another as  
antagonists in commercial exchanges. And finally, they are trying to  
help cooperatives, councils, and assemblies find practical ways to  
plan their interrelated activities fairly and efficiently among  
themselves so the market system can be replaced within the social  
economy. The fact that nobody before has ever succeeded in helping  
large numbers of autonomous groups of workers and consumers plan  
their joint activities democratically, equitably, and efficiently  
themselves does not seem to daunt those I met at MINEC. They are  
sceptical of formulaic proposals and believe answers for how best to  
do this will emerge from trial and error over time. But they seem  
convinced it can and will be done.

A sum bigger than its parts: At present the social economy -- made up  
of educational Misiones, healthcare clinics, subsidized food stores,  
worker cooperatives, nuclei of endogenous development, participatory  
budgeting, communal councils, and assemblies of communal councils --  
is the most rapidly growing sector of the Venezuelan economy and is  
the driving force behind the Bolivarian vision of twenty-first  
century socialism. Its typical promoter in policy circles is a new  
breed of left intellectuals thoroughly convinced that ordinary people  
can make their own economic decisions and determined to devise means  
to help them do so. Its typical face is a newly empowered, poor  
mother of color -- and make no mistake, she is a force to be reckoned  
with! It is in the social economy, not the state sector, that the  
future of Venezuelan socialism lies. The state sector is in many ways  
disappointing. Attempts to promote worker participation in state  
enterprises have been largely unsuccessful. There have been no  
serious attempts to plan within the state sector, as state-appointed  
managers are expected to keep their individual enterprises out of the  
red -- both economically and politically! What one must hope for in  
Venezuela is that, as the new social economy deepens and grows, its  
values and institutions will eventually absorb not only the private  
sector but the state sector as well.

What I found particularly impressive was how clear Venezuelan  
revolutionaries are for the most part about how they want their  
social economy to function, and why it must differ from both a market  
system and the kind of bureaucratic planning common in twentieth- 
century socialist economies. They have correctly identified the  
Achilles' heel of centralized planning -- failure to allow for self- 
management. Every component of the new social economy is self- 
consciously designed to give "direct producers" and consumers control  
over the economic decisions that affect them. There are no  
bureaucrats to tell workers in their cooperatives what to produce and  
how to produce it. There are no politicians to tell residents of  
barrios what local public goods to prioritize in the participatory  
budgeting process. The families in the new communal councils discuss  
and decide on their own spending priorities in open meetings, and  
spokespeople from communal councils decide on municipal spending  
priorities in communal assemblies. Communal banks, whose officers are  
members of the communal councils that the banks serves, allow  
communities to make their own decisions about who among them most  
deserve loans and can make best use of available funds. And nuclei of  
endogenous development are designed to organize local resources to  
meet local needs through local initiatives in ways that devotees of  
community-based economics in the developed capitalist world can only  
fantasize about.

But those building the social economy in Venezuela also reject the  
anti-social effects of commercial relations inherent in the market  
system. From the very beginning, those working with the new  
cooperatives worried that market forces lead worker cooperatives to  
prioritize their narrow self-interest at the expense of community and  
social interests. MINEP training programs for new members emphasized  
that cooperative values include serving the social interest. The  
decision to encourage cooperatives to join nuclei of endogenous  
development was intended to build community ties, involve  
cooperatives in local planning initiatives, and help cooperatives see  
themselves as part of a larger community. The vision for the social  
economy is clearly one where producers in worker councils, and  
consumers in communal councils, and communal assemblies plan their  
own activities and coordinate their interrelations among themselves  
equitably.

In his Alo Presidente program on September 14, 2003 devoted to the  
social economy, Chavez emphasized: "The social economy bases its  
logic on the human being," and its purpose is "the construction of  
the new man, of the new woman, or the new society." Popular  
participation, equitable cooperation, and solidarity -- the defining  
features of the social economy -- also permeate the new Bolivarian  
Constitution. Article 299 emphasizes the need to ensure "overall  
human development." Article 102 calls for "developing the creative  
potential of every human being." Article 62 declares that  
participation by people is "the necessary way of achieving the  
involvement to ensure their complete development, both individual and  
collective," and calls for democratic planning and participatory  
budgeting at all levels of society. Article 70 refers to "self- 
management, co-management, and cooperatives in all forms" as examples  
of "forms of association guided by the values of mutual cooperation  
and solidarity."

Socialism for the Twenty-First Century

I was invited to work with the Miranda Center and speak at both the  
Ministry of Planning and the Ministry for the Communal Economy  
primarily because my chief research interest is how to make economic  
planning more participatory. As traditionally studied this subject  
has two subfields: Most researchers focus their attention on how to  
broaden and deepen participation of members within a worker council  
or cooperative, or how to facilitate participation of consumers  
within a consumer or communal council. A smaller group of us focus  
our main attention on how production and consumption units that are  
internally self-managed can coordinate their interrelated activities  
among themselves fairly and efficiently while preserving their  
autonomy. A unique feature of a theoretical model of a participatory  
economy7 I helped design is a "participatory planning" procedure  
which solves this problem without resort to either markets or a  
planning bureaucracy. The participatory planning procedure is  
designed to give worker and consumer councils autonomy of action  
while helping them discover and commit to an equitable and efficient  
division of labor among themselves -- with as little time wasted in  
discussion and meeting as possible. To what extent my research in  
this area proves useful to those building the social economy in  
Venezuela remains to be seen.

In my opinion, all the essentials for a truly participatory, social  
economy are already in place in Venezuela -- worker cooperatives,  
communal councils and assemblies, and participatory budgeting. A  
strong political campaign encouraging popular participation, economic  
justice, and solidarity is in full swing. And the search for  
practical ways for worker cooperatives, communal councils, and  
communal assemblies to coordinate their interrelated activities  
themselves -- democratically, fairly, and efficiently -- is on. From  
what I saw during my visit, a great deal is being discovered about  
how to coordinate effectively with other units in the social economy  
by those who are making participation within worker cooperatives and  
communal councils a reality. From what I heard, most involved in  
developing the social economy in Venezuela understand that  
traditional solutions to the coordination problem should be studied  
as negative, not positive, examples to learn from. And from what I  
experienced, those involved on both the grassroots and ministerial  
levels in the first, great social experiment of the twenty-first  
century have open minds about how best to coordinate semi-autonomous  
groups in their social economy, and are asking all of the right  
questions about the pros and cons of different options.

There is no guarantee that all of this positive momentum will  
succeed, and one does not have to look hard to find reason for  
concern. In the US, the foreign policy establishment, which includes  
the leadership of the Democratic Party, remains adamantly opposed to  
the Venezuelan alternative to neoliberalism. Prior to the rise of  
Chavez, socialist political parties were not as strong in Venezuela  
as in some other Latin American countries, and therefore socialist  
ideology is still quite new to most Venezuelans. The hostility of the  
oligarchy and opposition parties has not diminished, and it is  
possible that disagreements between the moderate and radical wings of  
the Chavista movement will create dangerous political moments in the  
next few years. And finally, while much of what I saw and described  
above is extremely encouraging, the process of building the social  
economy has been very uneven. While millions of Venezuelans have been  
deeply affected and undergone a profound political transformation,  
there are still millions who remain passive even if they have  
benefited materially from a government-sponsored program. Socialism  
is by no means yet secured in Venezuela, and "all the right moves" is  
a lot to ask for. But what is happening in Venezuela should make us  
all more confident than ever that "a better world is possible," and  
millions of people in Venezuela are busy building it now.



1 I intend no criticism of alternative media coverage of Venezuela.  
For the most part, the alternative media does the best it can given  
the restrictive conditions under which it operates. In particular  
venezuelanalysis.com provides high-quality, professional coverage of  
Venezuela on a regular basis.

2 For an informative report on the new neighborhood clinics where  
healthcare and medicines are free and the emphasis is on preventative  
medicine, see a three-part series by Rebecca Trotzky Sirr on the  
Upside Down World web site: upsidedownworld.org/main/content/view/ 
852/1/.

3 For a description of the cooperative sector in Venezuela, see Betsy  
Bowman and Rob Stone, "Venezuela's Cooperative Revolution," Dollars &  
Sense, No. 266, July/August 2006, Camila Pineiro-Harnecker in MRZine,  
mrzine.monthlyreview.org/harnecker051205.html, and articles by C.  
Pineiro-Harnecker, S. Wagner, and F. Perez-Marti at  
venezuelanalysis.com. For an excellent account of the role the  
"social sector" played prior to 2005, see Michael Lebowitz, Build It  
Now: Socialism for the Twenty-First Century, Monthly Review Press,  
2006, Chapters 5, 6, and 7.

4 I am not likening Chavez to Mao in any other way, and certainly not  
suggesting that Chavez is a "Maoist."

5 A discussion of the pros and cons of attempting to organize a  
unified socialist party is beyond the scope of this essay. The  
initial local meetings of the five million Venezuelans who signed up  
to join the new party were beginning during my visit in July.

6 On the other hand, because the terms are new and unique to  
Venezuela, they do help us avoid the mistake of thinking that the  
process and associated vision can be neatly pigeon-holed into  
familiar leftist categories from the past -- which they cannot.

7 Michael Albert and Robin Hahnel, The Political Economy of  
Participatory Economics (Princeton University Press, 1991), and Robin  
Hahnel, Economic Justice and Democracy: From Competition to  
Cooperation (Routledge, 2005).

Robin Hahnel is a Professor of Economics at American University.