Chavez: Lessons for SA

by Apr 10, 2013Death of Hugo Chavez, Special Features

Lessons-for-SAFidel Castro said of Chavez, “If you want to know what kind of man he was, look who was crying at death and who was celebrating”.

The torrential hatred directed at Chavez from the metropoles of global power is hardly surprising. Perhaps more than any other, the movement he led in Venezuela was responsible for shattering the triumphalism of those who had declared that history had ended in the unfettered rule of the market. In just more than a short decade the Bolivarian Revolution quelled the aporia of much of the international Left by showing that one of the most unequal, elite dominated economies in the world could be transformed, from the bottom up, to deliver a much better life for the mass of the population – at the expense only of unchained profit.

Venezuela’s social achievements in the last years stand so tall as to be incapable of being ignored even by the most partial of detractors. Since the 2002 oil-strike both unemployment and poverty have halved. A massive expansion of social spending, in part funded by preventing oil wealth from being hived off in corporate coffers, has provided quality free services, education social safety to millions. As such, Venezuela’s Gini co-efficient declined more than any other Latin America nation making the country among the most equal in the region at 0.4. Over the same period SAs Gini crept upwards reflecting widening disparities both within and between races.

But by a cacophonous chorus of the media we are told to scorn these global trend-bucking achievements because, well, they came at the “expense of the economy”. To the extent that these doom-narratives are ever substantiated by economic data it is a singular focus on inflation. And true: inflation in Venezuela is very high, often exceeding 20% over the last decade.

Compare this to South Africa where de-facto inflation targeting by the reserve bank as part of self-imposed structural adjustment succeeding in bring CPI down to very “respectable” levels – consistently below 10%. Of course to get there, the interest rate was pinned to extremely high levels resulting in a real rate averaging 10-12% – often double the average non-financial profit rate. As a result real investment collapsed to half its historic levels.

The Venezuelan tale omits that before Chavez inflation was on a steady upward trend peaking at 100% in 1996. Inflation subsequently was still high, but then so it was in South Korea during its miracle years of 7% per capita GDP growth (inflation there was around 20% in the 60s and 70s). Inflation in and of itself, we ought to remind our conservative preachers – means little. It’s only interesting to the extent that it affects economic outcomes that do mean something – most importantly by reducing investment due to price instability, or eroding the buying power of those on fixed incomes – especially wage earners and pensioners. But growth in post oil-strike Venezuela was a healthy 4.3% – three times the pre-Chavez decade. In contrast to South Africa, workers and the poor in Venezuela were protected from the worst effects of inflation by free services, subsidized goods through the Mission Mercal and constantly rising real wages (now the highest in the region).

This tendency to treat economic variables as ends in themselves is the strongest symptom of the intellectual malaise produced by neoliberalism. So convinced have we become that growth is to be the sole benefactor of human development that any attempt to meet social goals directly is regarded a dangerous populism. It’s the same pattern of thinking that underpins the popular notion in South Africa that wages are a regrettable ‘cost’ to the economy and their increase above inflation repulsive.

This fetishization of set of variables that are to be the magic ingredients for growth gives rise to a practice of economic reporting that is decontextualized and at worse meaningless. Thus we are repeatedly told, alarmingly, that debt in Venezuela has doubled since 2003! But as Mark Weisbrot, perhaps the most sane economist reporting on the country reminds us, since there is inflation and an economy grows, debt is normally (always) measured against a denominator. In Venezuela it is projected to be 51.3% of GDP for 2012, nothing special really. Similarly the fiscal deficit is larger than many places but hardly portentous of economic collapse, at around 7.3% of GDP.

The truth is that there is that there is no story of economic calamity to be told about Venezuela, though there is a desperate need to construct one to rescue the fiction that “there is no alternative” to pro-capital policy.

The more honest of his detractors may admit this, but tend then to declare the exceptionalism of Chavez’s successes by some or other reference to “Petro-socialism”. It’s certainly true that Venezuela’s massive oil wealth had a strong role in determining the character of Chavez’s political-economic program. It created many opportunities – to fund ambitious social spending – but also challenges – having imparted the distortionary effects of the “resources curse” to the Venezuelan economy.

But the presence of oil makes the achievements of the Chavez era no less remarkable – an honest assessment must weigh against a history of stagnating or declining human development prior to his presidency and against the failure of many nations with similar endowments to make the same progress. Nor does it prove any exceptionalism: Venezuela is now surrounded by a “Pink Tide” of Latin American nations that are challenging economic orthodoxy and delivering material gains to their people.

In fact oil, because it a source of the power and militancy of Venezuelan capitalists and their foreign backers, makes all the more salutary the main achievement of the movement which Chavez led: which was not to innovate an alternative economics but to establish the political space for it to be implemented.

And a considerable achievement it was in the Wild West conditions of class conflict that prevail in that country – a former jewel in the very backyard of the American Empire. Chavez’s early period in office was a far cry from the radicalism that was to mark his later years but was nonetheless enough to prompt one the most overt and clumsy recent inflexions of US imperialism, in the form of a sponsored military coup in 2002. The coup was repulsed by an overwhelming mobilization of the poor and working class that was to provide the basis for Chavez’s left turn from social democracy to 21st Century Socialism.

Chavez was neither the architect nor the puppet master of the Bolivarian Revolution. His personal legacy lies in providing the political leadership that sought not to subjugate or canalize the self-activity of the masses but to foster and institutionalize it – reshaping the political life of Venezuela with new forms of radical participatory democracy.

It was the continued direct involvement of the masses in their own destinies and that of the country that has ensured the survival of the Bolivarian process in the face of capitalist opposition that was hardly subdued by the failure of the 2002 coup. A recent Wikileak revealed a 2006 email by the US ambassador that outlined detailed to plans to, inter alia, “penetrate Chavez’s political base”, “divide Chavismo” and “isolate Chavez internationally”. Chavez’s use of state media to defend his administration has been a particular target of liberal invective, which tends not to mention that the state controls only a miniscule fraction of the presses and airwaves that are dominated by an overwhelmingly hostile corporate media.

All of this holds many lessons for a movement that nominally aims at the same ends – all partners of the Tri-Partite Alliance lavished ample praise on the deceased leader – but have so far made none of the same gains in a political environment that is arguably far more auspicious for social transformation.

During the transition period, South Africa had comparable levels of mass mobilization and organization to those witnessed in during the 2002 coup against Chavez. But the strategy of socialist leaders in the Alliance has been to continually displace this in favour of top down “social contracts” and deployments within the ruling party and state.

The refreshing debate within the Alliance opened by NUMSAs withering criticism of the NDP has at times focused on this strategy and questioned the role of Marxists who claim to be conducting the organs of the state from within, but play little role in shaping the class forces that can actually challenge its domination by capital.

The example given by Chavez and the Bolivarian Revolution will inevitably figure centrally in these debates.

The Democratic Left Front and the Friends of Cuba Society are hosting a celebration of the life of Chavez and a discussion on the prospects for 21st Century Socialism in South Africa. The event will take place on Wednesday the 10th of April at 6pm at the Mowbray Town Hall. It will feature inputs from struggle veteran Ronnie Kasrils and the Venezeulan Ambassador to South Africa Prof Antonio Montilla-Saldiva; and cultural events by the Cape Town Cultural Collective. The celebration is free and all are welcome.

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