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.

Photo: Miles Cole
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Labour's populism for the middle classes

Jeremy Corbyn has consolidated a bourgeois capture of the party begun by Tony Blair.

With the rise of Jeremy Corbyn a mutant strain of populism has become an integral part of British politics. Commentary on the general election and its dramatic upshot has focused on Theresa May’s disastrous campaign and the hubris of her now departed senior advisers. But what finally defeated the Conservatives was that, along with practically everyone else, they underestimated the power of Corbyn’s message. As the advance of the far right has stalled in Europe and with Donald Trump adrift in Washington, the peaking of populism has been announced almost daily, especially by the Financial Times. The rise of a far-left version in Britain went largely unappreciated.

Corbyn’s campaign had more than a little in common with Trump’s experiment in engineering popular emotions and perceptions. The ecstatic mass rallies, the indifference to fact shown in the Labour leader’s repeated denials of his meetings with terrorists and of the reflexive anti-Semitism that pervades much of the movement he has created, the belief of his supporters that the media are conspiring against him and the poisonous Twitter abuse of his critics are clear parallels. But this is not a protest from despairing communities left to moulder in abandoned zones of economic desolation. It is populism for the middle classes, serving the material and psychological needs of the relatively affluent and the well-heeled.

Labour’s success in taking Kensington in west London will be remembered as a defining event. That Corbyn could seize a safe Tory seat in one of the richest constitu­encies in the country is testimony to an extraordinary shift. It is also the culmination of a transformation in Labour that has been under way for many years. Corbyn has solidified a bourgeois capture of the party begun by Tony Blair. Public-school Stalinists and Debrett’s-pedigreed Trotskyites have long been familiar figures in the upper reaches of the left, just as they are today. What is new is Corbyn’s marriage of radical leftist ideology with a systematic appeal to middle-class interests. Nowhere is this better expressed than in Labour’s manifesto promise to abolish student tuition fees (which would cost the country as much as £12bn) and reintroduce maintenance grants, while declining to unfreeze welfare benefits on the grounds that reversing Tory cuts would be (as Emily Thornberry put it in May) “unaffordable”. Rather than addressing the desperate lack of opportunities for working-class children, who may never make it to university, Labour has successfully courted the middle-class youth vote.

Labour’s embourgeoisement is an important reason for Corbyn’s success. For Blairites, this can only be bitterly ironical. Peter Mandelson’s stupefaction at the election result showed him struggling to grasp how the modernisation of Labour he masterminded could have such paradoxical consequences. Extending Labour’s reach beyond its working-class base was one of the keys to Blair’s electoral successes.

The goal was to return Labour to power by aligning the party with neoliberal economic policies and the large numbers of those who for a time were benefiting from them. The project was continued by Gordon Brown, and until the financial crisis it worked fairly well. At that point a shiver of doubt went through the body politic. Movements such as Occupy became more prominent. Inequality was back on the political agenda. Another Great Depression had been avoided, but the effect of near-zero interest rates was an inflation of asset prices that left the rich even richer. At the same time, many people found their incomes stagnant or falling in real terms, but their discontent failed to find effective political expression. Because of his inability to communicate to a mass audience and failure to target the beneficiaries of his policies, Ed Miliband’s move to the left came to nothing.

Corbyn’s opportunity to mobilise the anti-capitalist mood came by accident, as an unintended consequence of Miliband’s decision (supported by Blairites) to include the party’s mass membership as voters in leadership contests. The upshot was an organised takeover of the party by hard-left forces, the paralysed impotence of its parliamentary wing and Corbyn’s unchallengeable dominance today. Labour has been modernised, but not in the way Mandelson intended. Whether by serendipity or by design, Corbyn has brought together some of the most vital forces on the contemporary scene: the anti-capitalist radicalism of young people who are innocent of history, a bourgeois cult of personal authenticity and naked self-interest expressed as self-admiring virtue. Nothing could be more exotically modern than Corbyn’s hybrid populism.

Media obsession with the performance of the two main party leaders has obscured this larger picture. It is true that Corbyn acquired a charismatic fluency in the course of the campaign, whereas Theresa May appeared inflexible and lacking in empathy. The result was close enough for this dif­ference to matter – especially as so much had been made of May’s leadership qualities. But the strategic positioning of the two parties has more enduring significance. May and her advisers aimed to create a working-class conservatism by harvesting former Ukip voters and exploiting the alienation of Labour’s old base from a metropolitan, liberal consensus. By offering more stringent control of immigration, and shelter from globalisation through an active industrial strategy, she believed that Labour’s old fortresses could be stormed. If there was such a thing as a May project, this was it.

***

Reconciling the anarchic productivity of the market with social cohesion is the political dilemma of the age, and there is no reason to think that it is, even in principle, properly soluble. May’s manifesto had the merit of at least acknowledging the problem. But the electoral arithmetic on which her strategy depended was over-simple. The Labour vote was stickier than expected, and in some constituencies the party may have benefited from Ukip’s collapse. Much criticised for his equivocations on Brexit, Corbyn turned out to have read the public mood astutely. Support for Remain had shrunk substantially, but few voters were chiefly exercised by Brexit. When he refused to put it at the heart of his campaign, Corbyn outsmarted May’s advisers and strategists. In turn, he helped bring about a move back towards something like a two-party system.

That Ukip lost its reason for existing once Brexit got under way was the theme of countless op-eds before the election. But the same logic applied, in lesser degree, to Tim Farron’s Liberal Democrats. Even before the election, it was apparent that a large new grouping of “Re-Leavers” had appeared, while support for reversing Brexit had slumped. Zac Goldsmith retaking Richmond Park and Kate Hoey increasing her majority despite a determined effort to oust her in Vauxhall showed Brexiteers prevailing in what had been strongly Remain constituencies. In contrast, the Lib Dems were damaged by Farron’s decision to shape their campaign around the demand for a second referendum. Though the party made a modest gain in seats (even as its vote share fell), Farron held on by a much-reduced majority and Nick Clegg lost the constituency he had held for 12 years. Because of their fixation on Brexit the Lib Dems remain where they have been for so many years, a bit player in national politics.

More than anything else, it is the spectacular setback suffered by the Scottish National Party that has produced the shift back to two-party politics. Nicola Sturgeon fought the election by trying to link Scottish independence with resistance to Brexit. Ignoring cautionary voices in her party, she displayed a hubris starker than any Theresa May showed. Roughly a third of SNP supporters voted Leave in the referendum, and many others have been disillusioned by the SNP’s record on domestic issues. By making a second independence referendum the central issue in the SNP’s campaign, Sturgeon has shortened her political career and posed a question about the need for the continued existence of her party. With her credibility damaged, Alex Salmond and Angus Robertson casualties of the election, and the push to independence indefinitely postponed, a new generation will have to redefine what the SNP means today.

The compelling leadership of Ruth Davidson was a decisive factor in the revival of Scottish Conservatism. Not only has she revived the party north of the border and buried any prospect of Indyref2 for the foreseeable future, she has, by adding 12 Conservative seats in the Commons, saved the Conservatives in Westminster from outright defeat and delivered the UK from any risk of Scottish secession. The new Scottish MPs could be as important in shaping the government’s approach to the EU as the ten Democratic Unionists to whom May has turned in cobbling together a minority government. Davidson favours what she calls an “open Brexit”, which might mean a version of a Norwegian-style model in which Britain joins the European Free Trade Association and the European Economic Area, ensuring access to the single market. The Democratic Unionist Party leader, Arlene Foster, pointed in a similar direction when she spoke of the need to keep the border with the south open and avoid a hard Brexit.

There have been suggestions that May could end up negotiating with Brussels to secure some such deal: the opposite of the stance on which she fought the election. But given her weakened position the advantage would lie with EU negotiators, who might be tempted to make punitive demands. At that point negotiations could break down, as May cannot risk losing the support of the Brexiteers who are keeping her in power.

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Of course, there may be a challenge to her leadership. Inevitably, Boris Johnson is being touted as someone with the human touch that May is seen to lack. But Johnson has dismissed all such talk as “tripe” – at least for the time being. A leadership contest in the current circumstances would be savage and rancorous, leaving the Conservatives dangerously weakened in another general election that would soon follow. Are they ready to risk another gamble in the near future with even higher stakes than before? They lost their majority for the same reason Labour moderates lost control of their party: they failed to take Corbyn seriously. To make the same mistake again would look like carelessness.

There must be many who still cannot imagine Jeremy Corbyn as prime minister. After all, Labour failed to win the election. May lost her wager, but in numbers of votes she matched Margaret Thatcher’s 1983 landslide (the electorate is now larger, of course). Corbyn edged closer to power, but many Labour MPs continue to think him unfit to be leader of his party, let alone the country. Yet it would be foolish to conclude that Corbyn will not enter Downing Street.

So far, his march towards power has been greeted with remarkable complacency. Believing it will enable a less disruptive Brexit, the markets have welcomed the humiliation he has inflicted on the May government. The smirking Cameroons have not been able to conceal their vengeful satisfaction. The property tycoons of Chelsea must be congratulating themselves on having seen off a threat to their children’s inheritances. And Remainers will be thrilled as the prospect of an all-out Brexit seems to have faded from view.

These could be brief and costly pleasures. Markets will start to panic if another election is called, and if Corbyn wins they will go into a tailspin. Capital flight will surely leave his government unable to finance its cornucopian schemes, which include expensive commitments to renationalise rail, mail and water companies. Though students will be cheering at the prospect of their burden of debt being lifted from them, the largesse they have been promised is ­unlikely to materialise. Labour would face the same pressure on public services that led the Conservatives to revise their policies on care homes, but in much-worsened fiscal conditions.

It is unclear that Labour, once in government, would opt for a soft Brexit. Corbyn has repeated the mantra about preserving access to the single market and putting jobs first. But the shadow chancellor, John McDonnell, has said that Labour accepts Britain must honour the EU referendum and may have to leave the single market. There is a hard-left tradition that dreams of a socialist Britain outside the EU, and while Labour may have won by attracting youthful Remainers, the millions of Labour supporters that voted Leave have not gone away.

A Corbyn government would be more divided on Brexit than that of Theresa May. The upshot could be that no deal is reached – a scenario not unlike that favoured by hard Brexiteers, but without any of the preparatory work that could make it viable. As house prices in London crumbled, the nabobs of Chelsea would find their cleverness had backfired. Hopeful Remainers and spiteful Cameroons would have the smile rudely wiped off their face.

At present, Corbyn is walking on water. Like Chauncey Gardiner at the end of Hal Ashby’s magical film Being There, who after leaving his walled garden enchanted the world with his unexpected wisdom and Zen-like calm, the Labour leader seems to defy the laws of gravity. Yet politics is not magic, and the mutant strain of populism he embodies cannot conjure away painful realities. If he finds himself facing the ordeals of power, Corbyn will quickly fall to Earth, along with much else in Britain.

John Gray is the New Statesman’s lead book reviewer. His latest book is The Soul of the Marionette: A Short Enquiry into Human Freedom.

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

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