Chávez's U-turn on socialism

Venezuela-based economic advisor and analyst, Stephanie Blankenburg, on what could be Chávez's fight

On 2 January, a month on from his defeat in a referendum about a socialist reform of the county’s constitution, President Hugo Chávez Frías of Venezuela performed a stunning political U-turn.

In typically flamboyant style, he made a surprise call to Venezolana de Televisión, the country’s main state-owned TV channel, “to drop a ‘bombita’ (small bomb)” on an unsuspecting public: He had decided to abandon his socialist agenda “for now” in order to form stronger alliances with the country’s middle classes, its private sector and the national bourgeoisie instead.

To dispel any doubts about his seriousness in adopting this new political course, he replaced vice-president, Dr Jorge Rodríguez – the public face of his campaign for “21st century socialism” in Venezuela – with Ramón Carrizales, a military officer and technocrat, known for his good relationships with the country’s business sector.

Perhaps more significantly still, Chávez had already signed an end-of-the year amnesty for imprisoned perpetrators of a right-wing coup attempt against him in 2002.

The President’s version of events

Two days later, on his Sunday TV show “Aló Presidente” (Hallo, President), Chávez presented his fully reshuffled new cabinet and set out to explain the rationale for his action. His socialist project had been defeated, because the country had not been ready for such a radical approach.

The only democratic response was to acknowledge defeat and to adopt a more gradual and inclusive way forward. Apart from broadening alliances to bring private business and the middle classes back into the fold, this would also mean a more careful focus on mass education and communal self-organisation. Socialism had not been abandoned, but postponed, although, by the sound of things, for quite some time to come.

Chávez’ analysis of the current situation certainly has the pleasant ring of reasonableness to it. There also is little doubt, even amongst the most fervent socialists in Venezuela, that the agenda for “21st socialism”, adopted in January 2007 as abruptly as it has now been abandoned, had been rushed in with too much haste, limiting space and time for public consultation and debate of often complex issues.

Yet, the solidity of this analysis stands and falls with the correctness of its main premise – that the failure of voters to approve the constitutional reform project in the referendum of 2 December was a vote against socialism. This is much less clear.

What is clear is that the defeat of Chávez’ reform project at the polls is down to the abstention of roughly three million voters, who only a year earlier had voted for him as their president on the same socialist platform.

Compared to the December 2006 presidential elections, the opposition did not gain any votes. It seems unlikely such a substantial bloc of Chávez supporters should have been deterred merely by deficient campaigning a year after enthusiastically endorsing him.

In fact, a closer look at electoral patterns reveals a clear protest vote, not against a socialist agenda, but against corrupt administrations, at the national and the regional level.

Chavismo and the ‘oil curse’

To understand, where this protest vote came from and why it outweighed the pro-Chavez and pro-socialism vote, it helps to remember that Venezuela is defined by only one thing – oil.

For almost a century, the state has been a gigantic machine to distribute oil rent. In this context, left and right have a rather different meaning from their usual connotations.

On one side of a profound societal divide, there are those who benefit from oil from the very rich elites down to middle-rank state employees with comfortable pension arrangements.

On the other side, there are those who are excluded from a share in this bounty, the poor and the lower middle classes.

Not surprisingly, the main objective of the “insiders” is to defend and expand their share in the country’s oil wealth. Those on the outside divide into the small group with some chance of eventually making it to the inside, and the much larger group of people without any realistic chance of ever getting there.

The latter are, or used to be, core Chávez supporters: Their only hope is structural reform that dismantles the distributive rent state and replaces it by a productive developmental state. Until now, they had set their hopes on Chávez.

That these hopes have been rattled, is only marginally to do with a hasty referendum campaign, or with the people’s ideological immaturity.

On the contrary, one of the most impressive achievements of Chavismo is precisely the very high degree of political awareness and education amongst the poor.

No, the vote outcome has everything to do with the accession of many a Chavista to the rank of “insider” over the past eight years. This process has been gradual, and perhaps inevitable in a society in which institutionalised rentier-mechanisms have been endemic for decades.

But the contradiction between a radical socialist government agenda and the “Chavista elite”, bent on defending its share in the oil rent, effectively came to a head last year.

Far from being a left-wing administration, the bulk of ministerial positions in the old cabinet, as well as many governorships, remained in the hands of the “Chavista right”, or “new insiders”.

For example, the new vice-president, Ramón Carrizales, is also ex-minister of Housing, a core social policy ministry.

All through 2007, the battle between this “Chavista elite” and the “Chavista street” was fought out within government, with the so-called left-wingers, led by Jorge Rodríguez, in the minority.

It is an open secret in Venezuela that many governors, while publicly campaigning for a 'yes' vote in the referendum, used their resources to mobilise for the no-vote behind the scenes.

Equally an open secret is the sudden destabilisation of the economy through food shortages and an escalating black market dollar exchange rate which was at least allowed to linger on for longer than necessary.

A ‘soft coup’ or a return to electoral glory?

So the Chávez U-turn looks a lot less radical. For one, the new cabinet resembles its predecessor more than it differs from it. More importantly, it is not at all obvious the strategy of a shift to the “right” will help to pacify the country and stabilize the economy.

Why? Well if it is correct that the result of 2 December was essentially a protest vote by the “Chavista street” against the “Chavista elite”, then giving the latter free range is unlikely to boost Chávez with the popular base.

Yet, this popular base is all that stands between him and a ‘soft coup’ by an emboldened middle class, made up of the “Chavista elite”, the largely a-political state bureaucracy and moderate such as ex-General Raúl Baduel, a former ally and defence minister who joined the opposition ranks in November 2007.

After all, with the control over the country's state apparatus and economic resources firmly in the hands of these groups, and a weakened popular base for Chávez, perhaps unable to deliver election future victories, why would the middle classes and their allies in the new and old elites still need Chávez?

Chávez is too much of a seasoned politician not to know this. If he still has chosen this course, it is not necessarily because it is of his liking or even of his making alone. It simply reflects the real distribution of power on the ground. His most important response is not the much publicized government reshuffle, but his decision to accelerate the organisation of a Chavista mass party, the United Socialist Party of Venezuela (PSUV).

The task of getting this new mass party up to speed is an uphill one, especially with a “Chavista” government in place that has no interest in promoting such a move, and the popular base alienated.

But unless Chávez – and the PSUV – win the regional and municipal elections scheduled for November 2008, Venezuela might well have a new president before the year is out.

In charge of the unenviable task to built a mass party in a few months and to win elections by the end of the year is none other than Jorge Rodríguez.

Dr Stephanie Blankenburg is Lecturer in International Political Economy in the Economics Department at the School of Oriental and Social Studies (SOAS), London. She is currently on secondment to Venezuela as an economic advisor and analyst. This article reflects her personal analysis and is unrelated to any government views or policies.

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Paul Mason: How the left should respond to Brexit

It's up to the labour movement to rescue the elite from the self-inflected wound of Brexit.

For the first time in a generation there is a tangible split between the Tory leadership and the business elite. Forget the 41 per cent poll rating, forget Theresa May’s claim to have moved towards “the centre”; the most important thing to emerge since the Tory conference is a deep revulsion, among wide sections of normally Conservative voters, at the xenophobia, nationalism and economic recklessness on display.

Rhetorically, May has achieved a lot. She quashed any possibility of a soft Brexit strategy. She ended 30 years of openness to migration. She scrapped the Tories’ commitment to balanced books by 2020 – though she neglected to replace this keystone policy with anything else. And she pledged to stop constitutional scrutiny over the Brexit process from Holyrood, Westminster or the courts.

Yet in reality she achieved nothing. May’s government is not in control of the crucial process that will define its fate – the Brexit negotiations. And on Scotland, she has triggered a sequence of events that could lead to the end of the UK within the next five years.

In the light of this, the left has to be refocused around the facts that have emerged since the referendum on 23 June. Britain will leave the EU – but it faces a choice between May’s hubristic nonsense and a strategy to salvage 30 years of engagement with the biggest market in the world. Scotland will hold its second referendum. Labour will be led through all this by a man who, for the first time in the party’s history, cannot be relied on to do the elite’s bidding.

Brexit, on its own, need not have caused a great shift in British politics. It is the new, visceral split between Tory xenophobia and the implicitly liberal and globalist culture in most boardrooms that makes this a turning point. It is a challenge for the left as big as the ones Labour faced in 1931, when the gold standard collapsed; or in 1940, when the reality of total war dawned. It represents a big opportunity – but only if we jolt our brains out of the old patterns, think beyond party allegiances, and react fast.

Let’s start with the facts around which May, Philip Hammond and Amber Rudd constructed their rhetorical body swerve at the Tory conference. Britain is £1.7trn in debt. Its budget deficit cannot be eradicated by 2020 because, even on the steroids of quantitative easing, growth is low, wages are stagnant and its trade situation deeply negative. Austerity, in short, did not work.

With sterling weakened, by next year we’ll begin to feel the pressure of imported inflation on real wages, re-creating the economic pain of 2011-12. On top of that, by attempting a “hard Brexit”, May has created damaging uncertainty for investment that no degree of short-term positivity can mitigate. Even if the range of outcomes only widens, investment will get delayed – and with May’s commitment to hard Brexit the range of outcomes will get significantly worse: 7.5 per cent lopped off GDP, according to a leaked Treasury assessment.

Civil servants believe Britain’s negotiating position is so weak that it will have to leverage its intelligence-providing services to Europe and concede “free movement of high-skilled workers”, just to persuade the French and the Germans to cut any kind of decent bilateral deal. Yet in the two years of brinkmanship that begin when Article 50 is triggered, the EU27 will have no reason whatsoever to concede favourable terms for bilateral trade. By adopting hard Brexit and hard xenophobia, Theresa May has scheduled a 24-month slow-motion car crash.

To orient the Labour Party, trade unions and the wider progressive movement, we need first to understand the scale of the break from normality. Labour already faced deep problems. First, without Scotland it cannot govern; yet many of its members in Scotland are so dislocated from the progressive Scottish national movement that the party is bereft of answers.

Next, the old relationship between the urban salariat and the ex-industrial working class has inverted. With a vastly expanded membership, Labour is the de facto party of the urban salariat. Its heartland is Remainia – the cities that voted to stay in Europe. Its electoral battlegrounds are now places such as Bury, Nuneaton, Corby and Portsmouth, where the “centre” (as measured by the Lib Dem vote) has collapsed, to be replaced by thousands of Green voters and thousands more voting Ukip.

This was the known problem on the eve of Brexit, though layers of Labour MPs and councillors refused to understand it or respond to it. The solution to it was, even at that point, obvious: Labour can only attract back a million Green voters and hundreds of thousands of Ukip voters in winnable marginals with a combination of social liberalism and economic radicalism.

The alternative, as outlined in the Blue Labour project of Maurice Glasman and Jon Cruddas, was an overt return to social conservatism. That cannot work, because it might win back some ex-Labour Ukip voters but could not inspire Labour’s new urban core to go on the doorstep and fight for it. On the contrary, it could easily inspire many of them to tear up their membership cards.

A new strategy – to combine social liberalism, multiculturalism and environmentalism with left-wing economic policies aimed at reviving the “communities left behind” – was, for me, always the heart of Corbynism. Jeremy Corbyn himself, whatever his personal strengths and weaknesses, was a placeholder for a political strategy.

Brexit, the attempted Labour coup and the Tory swing to hard Brexit have changed things all over again. And Labour’s leadership needs to move fast into the political space that has opened up. The starting point is to understand May’s administration as a regime of crisis. It is held together by rhetoric and a vacuum of press scrutiny, exacerbated by Labour’s civil war and the SNP’s perennial dithering over strategy to achieve Scottish independence. The crisis consists of the perils of hard Brexit combined with a tangible split between the old party of capital and capital itself. The elite – the bankers, senior managers, the super-rich and the ­upper middle class – do not want Brexit. Nor does a significant proportion of Middle Britain’s managerial and investing classes.




All this presents Labour with a series of achievable goals – as an opposition in Westminster, in London, as the likely winner in many of the forthcoming mayoral battles, and at Holyrood. The first aim should be: not just oppose hard Brexit, but prevent it. This entails the Labour front bench committing to an attempt to remain inside the European Economic Area.

The wariness – shared by some on the Corbyn side, as well as the Labour right – is born of the assumption that if you commit to the single market, you must accept free movement of labour. The party’s new spokesman on Brexit, Keir Starmer, expressed perfectly what is wrong with this approach: first it’s a negotiation, not a finished relationship; second, you start from the economics, not the migration issue.

Leaving the single market will be a macroeconomic disaster, compounded by a social catastrophe, in which all the European protections – of citizens’ rights, labour rights, consumer and environmental standards – will get ripped up. That’s why the Labour front bench must commit to staying inside the single market, while seeking a deal on free movement that gives Britain time and space to restructure its labour market.

John McDonnell’s “red lines”, produced hurriedly in the days after Brexit, embody this principle – but not explicitly. McDonnell has said Labour would vote against any Brexit deal that did not involve some form of single-market access, and preserve the City’s passporting arrangement, where banks are authorised to trade across an entire area without having to be incorporated separately in each country. Freedom of movement is not included in the red lines.

May, meanwhile, insists there will be no parliamentary scrutiny of the negotiating stance, or of the outcome. This position cannot stand, and overthrowing it provides a big, early target for Labour and the other opposition parties. They should use their constitutional influence – not only in Westminster but at Holyrood, Cardiff and the mayor-run cities, to bust open the Conservatives’ secrecy operation.

By declaring – formally, in a written pact – that they will refuse to ratify a Brexit deal based on World Trade Organisation tariffs, the progressive parties can destroy May’s negotiating position in Brussels overnight. Let the Conservative press accuse us of being “citizens of the world”, undermining the national interest. They will dig their own political grave even faster.

In parallel, Labour needs to lead – intellectually, morally and practically – the fight for a coherent, pro-globalist form of Brexit. In order for this to embody the spirit of the referendum, it would have to include some repatriation of sovereignty, as well as a significant, temporary retreat from freedom of movement. That means – and my colleagues on the left need to accept this – that the British people, in effect, will have changed Labour’s position on immigration from below, by plebiscite.

In response, Labour needs to design a proposal that permits and encourages high beneficial migration, discourages and mitigates the impact of low-wage migration and – forgotten in the rush to “tinder box” rhetoric by the Blairites – puts refugees at the front of the queue, not the back. At its heart must be the assurance, already given to three million EU-born workers, that they will not be used as any kind of bargaining chip and their position here is inviolable.

Finally Labour needs to get real about Scotland. The recent loss of the council by-election in Garscadden, with a 20 per cent swing to the SNP, signals that the party risks losing Glasgow City Council next year.

It is a problem beyond Corbyn’s control: his key supporters inside Scottish Labour are long-standing and principled left-wing opponents of nationalism. Which would be fine if tens of thousands of left-wing social democrats were not enthused by a new, radical cultural narrative of national identity. Corbyn’s natural allies – the thousands of leftists who took part in the Radical Independence Campaign – are trapped outside the party, sitting inside the Scottish Greens, Rise or the left of the SNP.

The interim solution is for Scottish Labour to adopt the position argued by its deputy leader, Alex Rowley: embrace “home rule” – a rejigged devo-max proposal – and support a second independence referendum. Then throw open the doors to radical left-wing supporters of independence. If, for that to happen, there has to be a change of leadership (replacing Kezia Dugdale), then it’s better to do it before losing your last bastion in local government.

The speed with which Labour’s challenge has evolved is a signal that this is no ordinary situation. To understand how dangerous it would be to cling to the old logic, you have only to extrapolate the current polls into an electoral ground war plan. Sticking to the old rules, Labour HQ should – right now – be planning a defensive campaign to avoid losing 60 seats to May. Instead, it can and must lay a plan to promote her administration’s chaotic demise. It should have the ambition to govern – either on its own, or with the support of the SNP at Westminster.

To achieve this, it must confront the ultimate demon: Labour must show willing to make an alliance with the globalist section of the elite. Tony Blair’s equivocation about a return to politics, the constant noise about a new centrist party, and signs of a Lib Dem revival in local by-elections are all straws in the wind. If significant sections of the middle class decide they cannot live with Tory xenophobia, the liberal centre will revive.

The best thing for Labour to do now is to claim as much of the high ground before that. It must become the party of progressive Brexit. The worst thing would be to start worrying about “losing the traditional working class”.

The “traditional working class” knows all too well how virulent Ukip xenophobia is: Labour and trade union members spend hours at the pub and in the workplace and on the doorstep arguing against it.

All over Britain, the labour movement is a line, drawn through working-class communities, which says that migrants are not to blame for poor housing, education, low pay and dislocated communities. For the first time in a generation Labour has a leader prepared to say who is to blame: the neoliberal elite and their addiction to privatisation, austerity and low wages.

It was the elite’s insouciance over the negative impacts of EU migration on the lowest-skilled, together with their determination to suppress class politics inside Labour, that helped get us into this mess. An alliance with some of them, to achieve soft Brexit, democratic scrutiny and to defeat xenophobic solutions, must be conditional.

We, the labour movement, will dig the British ruling class out of a self-made hole, just as we did in May 1940. The price is: no return to the philosophy of poverty and inequality; a strategic new deal, one that puts state ownership, redistribution and social justice at the heart of post-Brexit consensus.

That is the way forward. If Labour politicians can bring themselves to explain it clearly, cajole the party apparatus out of its epic sulk and make a brave new offer to Scotland – it can work. But time is important. We are up against a corrosive nationalist bigotry that now echoes direct from the front page of the Daily Mail to Downing Street. Every day it goes unchallenged it will seep deeper into Britain’s political pores.

Paul Mason is the author of “PostCapitalism: a Guide to Our Future” (Penguin)

This article first appeared in the 13 October 2016 issue of the New Statesman, England’s revenge