Do we need another president for life?

Ex-foreign office minister Denis MacShane gives his analysis of the Venezuelan constitutional refere

This weekend, the world will see another president for life emerge. A referendum in Venezuela will vote to endorse changes to the nation’s constitution to allow President Hugo Chavez to stand as often as he likes to be president.

Unlike Mexico with its one-term rule or Brazil where a president has to stand down after two terms, Venezuela will now join those countries like Uganda, or the Maldives, or, if he gets his way Musharraf’s Pakistan where the people will enjoy the blessings of living under one leader for the foreseeable future.

Lieutenant-Colonel Hugo Chavez was the last expression of the golpismo – coup d’état – movement of South American militarism.

While the generals had been forced back into their barracks in Brazil after the great metalworkers’ strikes of 1978-1982 led by Lula, or been humiliated in Argentina by British soldiers on the Falklands, Lt Col Chavez saw himself as the man of destiny when he tried to stage a golpe in 1992.

He failed and had to wait a few more years before his chance came again, this time by electoral means. Still today, he wears uniforms as much as civilian clothes. Like his hero, Fidel Castro, his leadership is sartorially expressed by dressing up as a soldier and commandante, rather than the wearing the attire of civilian democracy.

What then should we make of Chavez? He is today’s idol for a global left that is looking for new bearings. Hagiographic biographies of him have appeared in several languages. For the British writers tired of the stubborn, patient search for a workable social democracy by a Cardoso in Brazil or a Lagos in Chile, the excitement and revolutionary rhetoric of a Chavez is thrilling to focus on.

To submit Chavez to the same critical analysis that other leaders have to put up with is to produce instant denunciations from those who search for the shining path to socialism in Latin America.

Probably Gabriel Garcia Marquez got it right when he wrote that there are ‘two Chavezes’. One might perform wonders for Venezuela. The other was ‘just another despot.’

For Gaba, whose left credentials are unchallenged to describe Chavez in such Jekyll and Hyde terms shows the deep doubts across the Latin American left and intellectual world about the Venezuelan president’s credentials and ambitions.

In the 19 November edition of Libération, the French left daily paper, sixty mainly Latin American intellectuals, writers, journalists and political activists, published an open letter critical of Chavez.

They argued that this weekend’s referendum would ‘abolish all controls on the powers of the state and the actions of the executive’. They further alleged that Chavez was spending a fortune on arms expenditure instead of using the golden showers of oil wealth Venezuela enjoys to develop a balanced economy based on sustainable development. The authors also claimed that Chavez was setting up his own private army, an armed militia that exceeded the size of the nation’s armed forces.

Naturally, not a word of this cry of alarm was published in the British media. Newspaper coverage of Latin America, other than in the Economist is a joke. The New Statesman, to its credit, has published reports on Venezuela which have been both supportive and critical of Chavez.

The most recent (published 15th November) showed a picture of a gunman on the back of a motorbike firing shots at students demonstrating for democracy in Caracas. As with the Mexican students in 1968, or other students movements over the years, the young men and women of Caracas are taking a huge risk in expressing concern about the slow death of democracy in Venezuela.

It does not have to be like this. Chavez presents no threat to capitalism in Venezuela. Businessmen are doing very well.

Like China, Russia, Saudi Arabia and Nigeria we are witnessing the arrival of unrestrained market economics fusing with centralised state power.

Chavez’s oil populism allows him to hand out money to the poor. In past eras of high oil prices, notably under Carlos Andres Perez (CAP) in the 1980s, a populist president acted charitably.

CAP was a hero of the global left and the international trade union movement as he supported the Venezuelan corporatist trade unions, especially the union controlling the country’s petrol industry.

In 2002, Chavez smashed the union to take full state authority over the oil industry and installed military trusties in key sectors of the economy and civil society.

It was this assault on a trade union which forced the trade union bosses into an alliance against nature with elements of the Venezuelan right that launched the abortive coup in April 2002.

I was in Caracas in the days before the coup in my then capacity as the FCO minister responsible for Latin America. The tension was palpable.

The streets were full of pro and anti-Chavez demonstrations. It was impossible to sleep at night as women lent out of their windows banging saucepans to express discontent. In the first years of Chavez’s rule, before the post-Iraq invasion oil price spike gave him more money to spend than any leader in Latin America has ever enjoyed, Chavez’s economic rule was unsteady. Poverty actually increased and growth slowed.

Since then of course Chavez has been oil rich and some of that income has found its way to the poor. Other countries like Brazil or Chile have made bigger strides in combating poverty and done so without the oil windfalls Chavez has enjoyed.

Chavez is lucky in having one of the most arrogant, elitist, disconnected rightist oppositions that it is possible to imagine.

There are some exceptions like Teodoro Petkoff, a trained Marxist now editor of Tal Cual, but for the most part the right-wing press and opposition are boorish, arrogant and unworthy of support.

Nevertheless in 2002 they came together to do to Chavez what Chavez had done ten years previously – organise a golpe against the elected government of Venezuela. I had spent hours late at night in Miraflores , the presidential residence in the heart of Caracas, speaking to Chavez.

He claimed to be a supporter of Tony Blair and a fan of New Labour. The Labour government had gone out of its way to encourage Chavez, organising high level visits to London in 2001, in the hope that he would become an effective partner of the EU and Britain in a Latin America which needs to build bridges across the Atlantic in place of the region’s fatalistic obsession with the United States.

Other than the rightist government of Aznar in Spain there was no anti-Chavez feeling in any EU government. On the contrary, Britain invested in Chavez with John Prescott laying out a red carpet to greet him and in my 18 months as Minister for Latin America I detected no hostility to Chavez from British politicians or diplomats. The sentiment was rather one of curiosity at how this charismatic but politically unclear leader would develop.

I think Chavez was happy to meet a European politician with enough Spanish to listen to his views. We finished our talk towards midnight. He signed and gave me a copy of a biography of Bolivar. I gave him one of the wind-up radios invented in Britain. I wonder if he still has it? I left for the UN in New York when news arrived of the coup.

I put out a statement calling for a return of democracy in Venezuela. Britain was the only country to react this way. Other government bided their time to await the outcome of the coup.

Chavez now calls Aznar a fascist which is a silly, inaccurate insult unless we call every conservative a fascist. He says the US was behind the 2002 coup. All I know is that there was a planned naval exercise between the US Navy and the Venezuelan navy due to take place in the week of the coup. Against the protests of the US Navy who had spent $1 billion organising their biggest southern Atlantic exercise in years, the US State Department ordered that the exercise be cancelled. In the build up to Iraq, Washington could not afford, want or need accusation of supporting golpes in Latin America.

As a minister I was a useless civil servant. I wrote an article for The Times in which I described Chavez as a demagogue. I also said I was confident he would come back to power but sub-editors on The Times cut out that prophesy. Since then the uncritical Chavez worshippers have tried to paint me as some dark agent connected to the coup. If only. I was not sure of the man but I was clear democracy should be upheld in Venezuela.

Since then, like many, I have been tracking Chavez, more through the Spanish press than the useless puff or hate pieces written about him in the English media.

Michael Reid’s new book, ‘Forgotten Continent’ (Yale University Press) has a clear and objective chapter on Chavez. Reid is the Economist’s long-standing Latin America editor.

The 20 November edition of Le Monde, had a powerful editorial of concern about Chavez. ‘The concentration of power in his hands, the absence of dialogue with the opposition, the denunciation of the student movement as ‘facist’, the green light given to armed gangs, in short the militarization of political life is matched by unparalleled corruption’ the paper declared. Le Monde is no fan of the United States but its judgement cannot be ignored.

On the international scene, Chavez has embraced Robert Mugabe and told Belarus’ dictator, Lukashenko, that he is right to put down the democratic opposition in Minsk.

He has made five high profile visits to Teheran and calls Iran’s Jew-hating, gay-hanging, nuke obsessed president Ahmadinejad ‘my brother’.

There have been unpleasant outbursts of anti-semitism in the Venezuelan press and Chavez himself has made remarks which have frightened the Jewish community in Latin America.

So inefficient is Chavez’s economic management that the country has to import most of its requirement.

Petrol is a few cents a gallon as Chavez refuses any environmental politics that would lessen dependence on oil. At some stage, the uncritical admirers and promoters of Chavez will have to adjust to reality.

He is not yet a dictator like Castro, locking up poets and journalists and throwing away the keys. There is an opposition press. Elections are held and Chavez wins just as he will win the referendum this weekend. 20th century dictators are old hat.

This century we have Mugabes, and Lukashenkos, and Musavenis, and Putins, and Musharrafs, and now Chavez who cannot give up power. We need an adequate political science to describe this new type of populist, authoritarian but elected leader. Whether it is a direction the world left should go is for all of us to decide.

Denis MacShane is MP for Rotherham and was a minister at Foreign and Commonwealth Office
Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.