Radical Notes
Journal
Archive for December, 2007
Posted by ravikumar December 19, 2007 at 11:53 am in International Relations, Economy
Rick Wolff
Capitalism is. The leftists who target neoliberal globalization denounce privatization, free markets, unfettered mobility of capital, and government deregulations of industry. They propose instead that national or supra-national governments control and regulate market transactions and especially capital movements, increase taxes on profits and wealth, and even own and operate industry. “All in the interests of the people,” they say, democratically.
Yet Marx’s critique of capitalism never focused on government regulations, interventions, and state-owned industries. They were never his solutions for the costs, injustices, and wastes of capitalism. Instead, Marx targeted and stressed capitalism’s “class structure” of production. By this he meant how productive enterprises were internally organized: tiny groups of people (boards of directors) who appropriated a portion — the “surplus” — from what the laborers produced and the enterprise sold. Marx defined such surplus appropriation as “exploitation.” And, as Marx said, capitalist exploitation can exist whether those appropriators are corporate boards of directors (private capitalism) or state officials (state capitalism).
Marx opposed capitalism’s exploitative class structure of production on political, ethical, and economic grounds. He preferred a communist alternative where productive workers functioned as their own board of directors, collectively appropriating and distributing the surpluses they produced. Equality and democracy, he argued, required the abolition of exploitation as a necessary condition of their realization.
Capitalism as a system has always and everywhere gone through phases, repeated swings between two alternative forms. Private capitalism is the neoliberal, “laissez-faire” form: government intervention in economic affairs is minimized, and individuals and businesses interact largely through voluntary market exchanges. The other form is state-interventionist, “social democratic,” welfare-state capitalism: government manages the economy by regulating what the private capitalists can do or by sometimes even taking over their enterprises to turn business decisions into government decisions.
Every few decades, in every capitalist country, whichever of these two forms has been in place runs into serious economic difficulty. Workers lose jobs, incomes decline, enterprises fail, and so on. The cry arises that “something must be done.” Those feeling the least pain and making good money prefer to let the existing form of capitalism correct itself. Those hurting the most and losing money demand more drastic change. When this second group prevails politically, the existing form of capitalism is ended and the other installed. A few decades later the same drama is played out in reverse.
When a booming private capitalism in the US hit a stone wall in 1929, the country shifted over into welfare-state capitalism. When the 1960s and 1970s produced crises in that welfare-state capitalism, the country shifted over to private capitalism (neo-liberalism). Now, after thirty years of globalized private capitalism yield proliferating difficulties, too many leftists have joined the chorus that sees the only solution in yet another swing back to welfare-state capitalism. The legacy of Coolidge and Hoover was overthrown by FDR’s chorus. The legacy of the New Deal was overthrown by Ronald Reagan’s chorus. The Reagan-Bush legacy may now be overthrown by Clinton, Obama, et al. Such phased reversals between capitalism’s two forms occur nearly everywhere, varying only with each country’s particular conditions and history.
As forms, private and state capitalism are oscillating phases of the capitalist system. When one phase cannot solve its problems, the solution has been a shift to the other phase. Thus, crises of capitalism have so far avoided provoking the alternative solution of a transition out of capitalism. Yet that transition was precisely Marx’s goal. He aimed to persuade workers that oscillations between state and private capitalism were not the best solutions to capitalism’s failings, at least not for workers.
Many leftists today catalog the awful results of 25 years of neoliberal dominance: economic and social crises punctuating ever deeper inequalities of wealth, income, and power across and within most nations. They cite the burst investment bubbles, unsustainable debt explosions, collapsed credit markets, threats of recession, crumbling social services, unsafe commodity production, and so forth. They propose “solutions”: governments — national or maybe now supranational — must be recalled by a democratic upsurge to their proper role. Governments should limit, control, regulate, or replace private capitalist enterprises in the interests of the people.
This way of thinking repeats the left’s mistakes in the 1930s. Then, when private capitalism had imploded into the Great Depression, deteriorating conditions turned most Americans against the likes of Republican Herbert Hoover and toward Democratic FDR. A new era of government economic intervention took the name, Keynesian economics. However, New Deal Keynesianism always left in place the private boards of directors of the capitalist corporations that dominated the US economy. Those boards remained as the receivers of the surplus produced by their workers — the corporations’ “profits.” They used those profits to grow the corporations, to make still more profits, to pay higher salaries to top officers, to influence politics, and so on.
Welfare-state capitalism in the US imposed taxes, regulations, and limits on — and mass employment alternatives to — those private corporations. But by leaving their boards of directors in place as the receivers and dispensers of corporate profits, the welfare state signed its own death warrant. The boards of directors had the desire and the means to undo the welfare state. It took them a while to change public opinion and build a rich and powerful movement led by business to achieve their goals. In the Reagan administration and since, enabled by a crisis of the welfare state in the 1960s and 1970s, they succeeded in switching the US and beyond back to a phase of private capitalism we call “neoliberal globalization.”
Understandably, many people cannot see beyond capitalism’s two phases or the debates, struggles, and transitions between them. But leftists who see no further — who criticize neoliberal globalization and advocate a warmed-over welfare-state Keynesianism — have abandoned Marx’s critical anti-capitalist project. They have become just another chorus for yet another oscillation back to the welfare state form of capitalism.
The working classes need and deserve better than that, now more than ever.
Rick Wolff is Professor of Economics at University of Massachusetts at Amherst. He is the author of many books and articles, including (with Stephen Resnick) Class Theory and History: Capitalism and Communism in the U.S.S.R. (Routledge, 2002) and (with Stephen Resnick) New Departures in Marxian Theory (Routledge, 2006). He contributes regularly for Monthly Review.
Posted by ravikumar December 12, 2007 at 9:22 am in Education, India
Ravi Kumar**
Policies and programmes are not constituted outside the governing principles of the system, which in today’s case is mindless urge for profit seeking. For instance, it cannot be denied how committedly the Indian state pursues the agenda of private capital. The ’social sector’ is the most grievously hurt victim of this onslaught. The recent debates and policies in favour of privatisation of higher education and the emphasis of the Planning Commission or the United Progressive Alliance Chairperson (the ruling alliance) on the need to encourage participation of private sector in education are some of the most recent and vital contexts within which any decision of the state in education needs to be read.
While reading the context what also becomes necessary is the need to unravel the farcical employment of certain concepts such as ’social justice’ by the state. It has been amply clarified by the Government of India statistics itself that over 70% of Indians live on Rs.20 or below per day. This reflects in a certain sense the condition of the Indian masses and the debate on justice needs to consider this as a constituting variable of its understanding. Hence, the government would argue that precisely because of such profound marginalisation, apart from those based on caste, etc., that ’schemes’ to uplift the downtrodden masses are required. But then, and quite ironically, it also pursues a relentless agenda of privatisation, which inevitably converts education into a commodity as any other in the market and creates a situation of exclusivity for some and denial for millions. The social justice remains only rhetoric. Then, the big question remains whether the majority of Indians can purchase this commodity of education? Answer will be negative. Therefore, if social justice means making education accessible to all or if it means equipping everyone to compete in market then it has to be seen as something contesting marketisation of education.
Another aspect of this context is the absence of democratisation. Dialogue is one of the vital constituents of democracy and it can be identified at two levels – horizontal as well as vertical. Despite all rhetoric of participation and decentralisation, the way things happen in India it can be identified only with vertical dialogue. The Government one day feels that the curriculum should be revised, so it begins a process, which involves the ‘intellectuals’ concentrated in and around the power centre. The school curriculum as well as higher education curriculum is transformed in the similar manner. In the name of dialogue, seminars in various cities are organised and thereby a ‘consensus’ is reached. Would these ‘dialogues’ would have same responses if debated across over 500 DIETs (District Institute of Educational Training) or across as many Village/Block Education Committees (VEC, BEC)? It still remains something that the ‘intellectual-administrators’ need to work upon. Such a process would have not only generated a horizontal dialogue but also a process of ‘conscientisation’ on some of the most vital issues including religious sectarianism. The horizontal dialogue would have allowed withering of notions such as someone from the metropolitan centre of Delhi is necessarily better equipped to understand the educational deprivation of Dalits in a Bihar village through the active participation of the local VEC or BEC members on these issues. It is about ending hierarchies, including the thoughts of those who are intentionally kept out of policy making and implementation. But we tend to avoid debates and critical gestures made at our thoughts and actions because it does not serve ‘our purpose’. If the common man is included in these dialogic processes s/he may start questioning the schools trying to introduce courses on BPO trainings or universities having courses on ’stock’ or ‘tourism’ or why fundamental research is relegated to second plane. One needs to build upon these contexts if one wants to truly grasp the recent development in higher education.
The recent decision of UGC (See “To bring in Uniformity, UPA orders university curriculum upgrade”, The Indian Express, December 6, 2007) to bring ‘uniformity’ in education not only raises serious pedagogical issues but also has ramifications for the liberal ethos of higher education. These ramifications will be primarily in form of curtailing the creative potential of teachers and students, mechanising the process of teaching-learning as well as, ultimately, making the system subservient to the needs of the market.
Traditionally universities have represented a kind of dichotomy. While they have worked within the framework of state, they have also been centres of dissent and rebellion. Whether it was the students’ movement of 1968, the students’ upheaval of 1970s in India, or later on many issues, universities have time and again demonstrated their vibrant democratic ethos. The recent decision of the Government demolishes this foundational ethos of higher education. It is already playing pranks with the Indian population by putting forth rhetorics of social justice along with large scale privatisation of higher education, thereby taking education out of reach of most of Indians.
By not consulting the higher education institutions on such an issue the Government has persisted with its practice of top-down mechanism in policy making and implementation. Such a practice diminishes possibilities of dialogue, which can be one of the true instruments against undemocratic socio-political tendencies. Rather such instances become precedences to institutionalise sectarianism in education system.
The initial reports indicate towards the danger of making courses subservient to market in name of linking the life inside and outside the college. However, the danger, as indicated by recent trends in school education, is that in the name of making courses ‘relevant’ and ‘professional’ they are modified or deleted to suit the needs of market. The element of critical inquiry, identifying, for instance, the relationship between such courses and the interests of capital also constitute an aim of higher education. Are we going to emphasise on such as aspects as well in our revision of courses? Secondly, are we not deliberately fostering a hierarchisation of courses in this process on basis of certain criteria such as its job prospects etc.? The creative potential of the student as well as the teacher takes a backseat in these exercises.
Every region has a distinct socio-economic and cultural ethos which demands specific curriculum and pedagogy. Will a student coming out of a private schooling system or from the metropolis require similar curriculum and pedagogic methods as a student of a village government school from a backward region to get integrated with the global economy? Perhaps, no. Such initiatives and the people attached with them need to rethink and reflect on the aims of higher education. And, lastly, how they reconcile the requirements of the private capital with the aims of higher education to infuse a sense of criticality and creativity will remain a major challenge.
**Teaches sociology at Jamia Millia Islamia, New Delhi
*This is an expanded version of a response published in The Economic Times, 12th December 2007
Posted by Radical Notes December 9, 2007 at 4:01 am in India
Shahina
23 Years have passed since the world’s worst industrial disaster occurred in this North Indian city on the night of December 3, 1984. Bhopal continues to experience the trauma of that mishap with a chemical waste dump in the Union Carbide factory compound over a couple of decades ago contaminating air and water in the city. The debate and dispute over who should bear the cost of cleaning up the area, which runs into millions of dollars, still goes on.
Half-a-million people were exposed to the lethal gas, more than 22,000 have died to date and 150,000 continue to be chronically ill. The criminal trial against the 13 accused, including the fugitive Warren Anderson, the then Chairman of Union Carbide Corporation (UCC), is still in progress in the lower court. A great number of judicial proceedings regarding issues such as the removal of the hazardous chemical waste, claim for adequate compensation and aid for medical treatment are moving at snail’s pace in the judicial magistrate court, Bhopal. The unending agony is passing on from generations to generations. Anyone who revisits the whole disaster and its aftermath is apt to lose her faith in the very system of democracy.
Shajahan-e-Park in the heart of the city has never remained deserted on a Saturday since 1989, the year in which Bhopal Gas Peedith Mahila Udyog Sanghatan, the organization gas of victims, had been formed. BGPMUS is the largest organization in Bhopal fighting for the cause of the victims. Around 25,000 people who live in the premises of the factory belong to the organization. Every Saturday, hundreds of victims gather at Shajahan-e-Park and share their grievance.
Most of them have something new to speak about as they are still exposed to the noxious chemical waste. This meeting has been going on for over a couple of decades regularly as an expression of the political will and perseverance they uphold. Not many examples can be cited from the history of independent India for such an unyielding struggle for justice. It is an amazing rare kind of fire that these people have harbored within them for decades.
Dow Chemicals, another American multinational company which took over Union Carbide India Limited (UCIL) in 2000, has virtually declared that they are beyond the rule of law in India, refusing to bear any responsibility for what had happened in Bhopal and expressing their unwillingness to clean up the area. There are reports that Dow Chemicals has agreed to remedy the situation partly. However, they have obtained a stay order from any such liability. And, as long as the stay order remains in force, there is very little meaning in being ‘generous to bear the cost partly’.
The people living in the affected areas, including J P Nagar, are struggling through abject poverty and ill health. Most of the people we met are still suffering from more than one disease, the names of which they are unable even to spell out. In most cases, the doctors have consistently refused to certify that they are suffering from the ongoing contamination of air and water around the chemical waste dump in the factory. As a result, they are denied of all kinds of aid by the Government. The journey through the streets of J P Nagar, the area worst hit by the gas leak, leaves a deep scar in one’s mind.
Sixty five-year-old year old Jameelabi, bed ridden for years, has received neither adequate compensation nor any aid of treatment. Her weak skinny body carries 36 diseases, according to a relative’s account. But the doctor has certified none of them as being the result of pollution. Her family is unable to even specify what they are and the scientific names. Jameelabi’s husband and daughter-in-law were killed in the gas leak and what she got in return was a paltry sum of Rs. 50,000. The active leadership role in the struggle for justice helped Mohammed Hafees to overcome the agony of the grim fate of his wife Aliyabi. The severe mental shock she had on the day resulted in a nervous break down from which she has not recovered. Frequently, she would lose her presence of mind, yell and try to run away from her home. Hafeesbhai, who led us to J P Nagar colony, is an active worker of BGPMUS. In each and every house around the factory, a martyr lives reminding you how a state deceived its people through gross denial of justice.
The chemical dump, consisting of 5,000 tonnes of toxic chemical waste including Alpha Naphthol and other kinds of pesticides, came into being when the Government ordered an inspection of the factory. The inspection revealed that 5,000 tones of toxic chemical waste had been stored at a warehouse in the factory. That was in 1994, a decade after the disaster! The Madhya Pradesh State Pollution Control Board (MPSPCB) appointed a committee to prepare a report on how to remove the waste in a scientific manner. The Committee visited the site in May 1995 and recommended the shifting of the hazardous wastes to a safer site within the factory premises. The Committee also stressed the need for exploratory studies to evaluate various treatment and disposal alternatives. Meanwhile, the MPSPCB also approached the Chief Judicial Magistrate, Bhopal, for permission to shift the tarry residues to a safer place within the factory premises as suggested by the committee. The Court asked the CBI to review the matter. The CBI then approached the Ministry of Environment and Forests for their view. The Ministry constituted another Expert Committee which later observed that any attempt to shift the chemical remains may lead to massive environmental damages. The committee found that drums and bags which carried the waste were badly damaged and that the possibility of breaking of the bags could not be ruled out which might result in the spillage of the hazardous waste. They also observed that the residues after melting were spreading on the floor and outside the shed as well.
The committee estimated that a huge sum of money would be needed to clean up the area. In the wake of the report, the Government of India filed a plea in the High Court of Madhya Pradesh demanding that Dow Chemicals be instructed to bear the expenses of the cleaning process. The Central government also demanded an amount of 100 million dollars as advance payment for the same. Admitting the plea, the Court issued notice to Dow Chemical. But they successfully managed to get stay order which literally rendered them free from the responsibility of cleaning up the area till date. The court proceedings are still on in the usual slow pace, reminding one how apt the dictum of justice delayed being justice denied is.
The toxic legacy of Bhopal leaves a permanent black mark in the history of CBI also. The investigation by CBI, which lost its way somewhere in the middle of the process, has never been invigorated. The CBI approached the Government of India for permission to carry out a comparative study of the safeguards by UCC in its institute in Virginia and the Bhopal plant as well. But the appeal along with the order for further enquiry was buried for ever under the infamous settlement order of the Supreme Court of India in 1989. Ironically the settlement order came a few hours after the Government of India had received clearance from the US Government to carry out the study.
In 1992, the CJM Court, Bhopal issued an order to the Government of India instructing it to take necessary steps for the extradition of Warren Anderson who has been declared a fugitive by the lower court. It was a victory for the victims’ organizations which had fought for years demanding the extradition of Warren Anderson. The Government, instead of carrying out its Constitutional responsibility to obey the apex court order, left the file untouched for years. Only after a decade in 2003 did the Government forward a plea to the US Government for the extradition of Warren Anderson, a year after the Government of India was informed by The US Government that extradition is not possible. The Government, which is always lenient to the west, has never expressed the courage to review the matter. In fact the Government was forced to initiate steps for extradition due to the pressure mounted by the victims’ organizations and the severe criticism from the Assurance Committee of Parliament. The committee tabled its report in December 2002 blaming the Government for the criminal negligence in the matter. Previous to this report by the committee, the C B I had moved a plea in Supreme Court seeking reduction of the charges against Anderson. It was perhaps the most shameful instance of the CBI appearing for a criminal who had cheated Indian judiciary for years! Soon after a series of dramas enacted for extradition, the file was closed for ever.
The fight by the people of Bhopal is still on. The victims’ organizations are handling a number of cases in different courts seeking compensation, adequate medical care, removal of the hazardous chemical waste, proper punishment for the accused and so on. Day by Day the air, water, soil and vegetables around are being contaminated by the spillage of lethal chemical remains from the factory. A study has revealed that even human breast milk is contaminated. The study conducted by ‘Srishti , a Delhi based non governmental organization and People’s Science Institute marks that human breast milk sample collected from the area showed higher concentration of volatile organic compounds and Benzene hexa chloride. Both the organizations in the wake of their study observe that the presence of carcinogenic toxics, which are bio concentrated in the milk, poses serious threat to the health of an entire new generation. A survey carried out by CRS (Centre for Rehabilitation Studies) in 2003, shows that the morbidity rate in affected areas is quiet high compared to that of in the unaffected areas. According to their survey, the morbidity rate in the gas-affected areas was 19.71 per cent of the population. Prevalence of respiratory diseases also was very high in the gas hit Ares. It is estimated that at least about 150,000 gas-victims in Bhopal are continuing to suffer from various gas-related ailments even twenty three years after the disaster.
They are on the path of struggle for justice. No judgements, no retrogressive policies could turn them away. Every Saturday they gather at Shajahan-e-Park, irrespective of caste and religion. They console each other, share their grievances and update themselves regarding the dangers lurking around to shatter their struggle. When we left from Shajahan-e-Park, waves of slogans from the people followed us.
“LADENGE, HUM JEETENGE…
LOOTNE VAALE JAAYENGE…
NAYA JAMANA AYEGA…”
Posted by Radical Notes December 5, 2007 at 9:41 am in Latin America
James Petras
Venezuela’s constitutional reforms supporting President Chavez’s socialist project were defeated by the narrowest of margins: 1.4% of 9 million voters. The result however was severely compromised by the fact that 45% of the electorate abstained, meaning that only 28% of the electorate voted against the progressive changes proposed by President Chavez.
While the vote was a blow to Venezuela’s attempt to extricate itself from oil dependence and capitalist control over strategic financial and productive sectors, it does no change the 80% majority in the legislature nor does it weaken the prerogatives of the Executive branch. Nevertheless, the Right’s marginal win does provide a semblance of power, influence and momentum to their efforts to derail President Chavez’ socio-economic reforms and to oust his government and/or force him to reconcile with the old elite power brokers.
Internal deliberations and debates have already begun within the Chavista movement and among the disparate oppositional groups. One fact certain to be subject to debate is why the over 3 million voters who cast their ballots for Chavez in the 2006 election (where he won 63% of the vote) did not vote in the referendum. The Right only increased their voters by 300,000 votes; even assuming that these votes were from disgruntled Chavez voters and not from activated right-wing middle class voters that leaves out over 2.7 million Chavez voters who abstained.
Diagnosis of the Defeat
Whenever the issue of a socialist transformation is put at the top of a governmental agenda, as Chavez did in these constitutional changes, all the forces of right-wing reaction and their (‘progressive’) middle class followers unite forces and forget their usual partisan bickering. Chavez’ popular supporters and organizers faced a vast array of adversaries each with powerful levers of power. They included: 1) numerous agencies of the US government (CIA, AID, NED and the Embassy’s political officers), their subcontracted ‘assets’ (NGO’s, student recruitment and indoctrinations programs, newspaper editors and mass media advertisers), the US multi-nationals and the Chamber of Commerce (paying for anti-referendum ads, propaganda and street action); 2) the major Venezuelan business associations FEDECAMARAS, Chambers of Commerce and wholesale/retailers who poured millions of dollars into the campaign, encouraged capital flight and promoted hoarding, black market activity to bring about shortages of basic food-stuffs in popular retail markets; 3) over 90% of the private mass media engaged in a non-stop virulent propaganda campaign made up of the most blatant lies – including stories that the government would seize children from their families and confine them to state-controlled schools (the US mass media repeated the most scandalous vicious lies – without any exceptions); 4) The entire Catholic hierarchy from the Cardinals to the local parish priests used their bully platforms and homilies to propagandize against the constitutional reforms – more important, several bishops turned over their churches as organizing centers to violent far right-wing resulting, in one case, in the killing of a pro-Chavez oil worker who defied their street barricades. The leaders of the counter-reform quartet were able to buy-out and attract small sectors of the ‘liberal’ wing of the Chavez Congressional delegation and a couple of Governors and mayors, as well as several ex-leftists (some of whom were committed guerrillas 40 years ago), ex-Maoists from the ‘Red Flag’ group and several Trotskyists trade union leaders and sects. A substantial number of social democratic academics (Edgar Lander, Heinz Dietrich) found paltry excuses for opposing the egalitarian reforms, providing an intellectual gloss to the rabid elite propaganda about Chavez ‘dictatorial’ or ‘Bonapartist’ tendencies.
This disparate coalition headed by the Venezuelan elite and the US government relied basically on pounding the same general message: The re-election amendment, the power to temporarily suspend certain constitutional provisions in times of national emergency (like the military coup and lockouts of 2002 to 2003), the executive nomination of regional administrators and the transition to democratic socialism were part of a plot to impost ‘Cuban communism’. Right-wing and liberal propagandists turned unlimited re-election reform (a parliamentary practice throughout the world) into a ‘power grab’ by an ‘authoritarian’ / ’totalitarian’ / ’power-hungry’ tyrant according to all Venezuelan private media and their US counterparts at CBC, NBC, ABC, NPR, New York and Los Angeles Times, Washington Post. The amendment granting the President emergency powers was de-contextualized from the actual US-backed civilian elite-military coup and lockout of 2002-2003, the elite recruitment and infiltration of scores of Colombian paramilitary death squads (2005), the kidnapping of a Venezuelan-Colombian citizen by Colombian secret police (2004) in the center of Caracas and open calls for a military coup by the ex-Defense Minister Baduel.
Each sector of the right-wing led counter-reform coalition focused on distinct and overlapping groups with different appeals. The US focused on recruiting and training student street fighters channeling hundreds of thousands of dollars via AID and NED for training in ‘civil society organization’ and ‘conflict resolution’ (a touch of dark humor?) in the same fashion as the Yugoslav/Ukrainian/Georgian experiences. The US also spread funds to their long-term clients – the nearly defunct ‘social democratic’ trade union confederation – the CTV, the mass media and other elite allies. FEDECAMARAS focused on the small and big business sectors, well-paid professionals and middle class consumers. The right-wing students were the detonators of street violence and confronted left-wing students in and off the campuses. The mass media and the Catholic Church engaged in fear mongering to the mass audience. The social democratic academics preached ‘NO’ or abstention to their progressive colleagues and leftist students. The Trotskyists split up sectors of the trade unions with their pseudo-Marxist chatter about “Chavez the Bonapartist’ with his ‘capitalist’ and ‘imperialist’ proclivities, incited US trained students and shared the ‘NO’ platform with CIA funded CTV trade union bosses. Such were the unholy alliances in the run-up to the vote.
In the post-election period this unstable coalition exhibited internal differences. The center-right led by Zulia Governor Rosales calls for a new ‘encounter’ and ‘dialogue’ with the ‘moderate’ Chavista ministers. The hard right embodied in ex-General Baduel (darling of sectors of the pseudo-left) demands pushing their advantage further toward ousting President-elect Chavez and the Congress because he claimed “they still have the power to legislate reforms”! Such, such are our democrats! The leftists sects will go back to citing the texts of Lenin and Trotsky (rolling over in their graves), organizing strikes for wage increases…in the new context of rising right-wing power to which they contributed.
Campaign and Structural Weakness of the Constitutional Reformers
The Right-wing was able to gain their slim majority because of serious errors in the Chavista electoral campaign as well as deep structural weaknesses.
Referendum Campaign: 1) The referendum campaign suffered several flaws. President Chavez, the leader of the constitutional reform movement was out of the country for several weeks in the last two months of the campaign – in Chile, Bolivia, Colombia, France, Saudi Arabia, Spain and Iran) depriving the campaign of its most dynamic spokesperson. 2) President Chavez got drawn into issues which had no relevance to his mass supporters and may have provided ammunition to the Right. His attempt to mediate in the Colombian prisoner-exchange absorbed an enormous amount of wasted time and led, predictably, nowhere, as Colombia’s death squad President Uribe abruptly ended his mediation with provocative insults and calumnies, leading to a serious diplomatic rupture. Likewise, during the Ibero-American summit and its aftermath, Chavez engaged in verbal exchange with Spain’s tin-horn monarch, distracting him from facing domestic problems like inflation and elite-instigated hoarding of basic food stuffs.
Many Chavista activists failed to elaborate and explain the proposed positive effects of the reforms, or carry house-to-house discussions countering the monstrous propaganda (‘stealing children from their mothers’) propagated by parish priests and the mass media. They too facilely assumed that the fear-mongering lies were self-evident and all that was needed was to denounce them. Worst of all, several ‘Chavista’ leaders failed to organize any support because they opposed the amendments, which strengthened local councils at the expense of majors and governors.
The campaign failed to intervene and demand equal time and space in all the private media in order to create a level playing field. Too much emphasis was placed on mass demonstrations ‘downtown’ and not on short-term impact programs in the poor neighborhoods –solving immediate problems, like the disappearance of milk from store shelves, which irritated their natural supporters.
Structural weaknesses
There were two basic problems which deeply influenced the electoral abstention of the Chavez mass supporters: The prolonged scarcity of basic foodstuffs and household necessities, and the rampant and seemingly uncontrolled inflation (18%) during the latter half of 2007 which was neither ameliorated nor compensated by wage and salary increases especially among the 40% of self-employed workers in the informal sector.
Basic foodstuffs like powdered milk, meat, sugar, beans and many other items disappeared from both the private and even the public stores. Agro-businessmen refused to produce and the retail bosses refused to sell because state price controls (designed to control inflation) lessened their exorbitant profits. Unwilling to ‘intervene’ the Government purchased and imported hundreds of millions of dollars of foodstuffs – much of which did not reach popular consumers, at least not at fixed prices.
Partially because of lower profits and in large part as a key element in the anti-reform campaign, wholesalers and retailers either hoarded or sold a substantial part of the imports to black marketers, or channeled it to upper income supermarkets.
Inflation was a result of the rising incomes of all classes and the resultant higher demand for goods and services in the context of a massive drop in productivity, investment and production. The capitalist class engaged in disinvestment, capital flight, luxury imports and speculation in the intermediate bond and real estate market (some of whom were justly burned by the recent collapse of the Miami real estate bubble).
The Government’s half-way measures of state intervention and radical rhetoric were strong enough to provoke big business resistance and more capital flight, while being too weak to develop alternative productive and distributive institutions. In other words, the burgeoning crises of inflation, scarcities and capital flight, put into question the existing Bolivarian practice of a mixed economy, based on public-private partnership financing an extensive social welfare state. Big Capital has acted first economically by boycotting and breaking its implicit ‘social pact’ with the Chavez Government. Implicit in the social pact was a trade off: Big Profits and high rates of investment to increase employment and popular consumption. With powerful backing and intervention from its US partners, Venezuelan big business has moved politically to take advantage of the popular discontent to derail the proposed constitutional reforms. It’s next step is to reverse the halting momentum of socio-economic reform by a combination of pacts with social democratic ministers in the Chavez Cabinet and threats of a new offensive, deepening the economic crisis and playing for a coup.
Policy Alternatives
The Chavez Government absolutely has to move immediately to rectify some basic domestic and local problems, which led to discontent, and abstention and is undermining its mass base. For example, poor neighborhoods inundated by floods and mudslides are still without homes after 2 years of broken promises and totally inept government agencies.
The Government, under popular control, must immediately and directly intervene in taking control of the entire food distribution program, enlisting dock, transport and retail workers, neighborhood councils to insure imported food fills the shelves and not the big pockets of counter-reform wholesalers, big retail owners and small-scale black marketers. What the Government has failed to secure from big farmers and cattle barons in the way of production of food, it must secure via large-scale expropriation, investment and co-ops to overcome business ‘production’ and supply strikes. Voluntary compliance has been demonstrated NOT TO WORK. ‘Mixed economy’ dogma, which appeals to ‘rational economic calculus’, does not work when high stake political interests are in play.
To finance structural changes in production and distribution, the Government is obligated to control and take over the private banks deeply implicated in laundering money, facilitating capital flight and encouraging speculative investments instead of production of essential goods for the domestic market.
The Constitutional reforms were a step toward providing a legal framework for structural reform, at least of moving beyond a capitalist controlled mixed economy. The excess ‘legalism’ of the Chavez Government in pursuing a new referendum underestimated the existing legal basis for structural reforms available to the government to deal with the burgeoning demands of the two-thirds of the population, which elected Chavez in 2006.
In the post-referendum period the internal debate within the Chavez movement is deepening. The mass base of poor workers, trade unionists and public employees demand pay increases to keep up with inflation, an end to the rising prices and scarcities of commodities. They abstained for lack of effective government action – not because of rightist or liberal propaganda. They are not rightists or socialist but can become supportive of socialists if they solve the triple scourge of scarcity, inflation and declining purchasing power.
Inflation is a particular nemesis to the poorest workers largely in the informal sector because their income is neither indexed to inflation as is the case for unionized workers in the formal sector nor can they easily raise their income through collective bargaining as most of them are not tied to any contract with buyers or employers. As a result in Venezuela (as elsewhere) price inflation is the worst disaster for the poor and the reason for the greatest discontent. Regimes, even rightist and neo-liberal ones, which stabilize prices or sharply reduce inflation usually secure at least temporary support from the popular classes. Nevertheless anti-inflationary policies have rarely played a role in leftist politics (much to their grief) and Venezuela is no exception.
At the cabinet, party and social movement leadership level there are many positions but they can be simplified into two polar opposites. On the one side, the pro-referendum dominant position put forth by the finance, economy and planning ministries seek cooperation with private foreign and domestic investors, bankers and agro-businessmen, to increase production, investment and living standards of the poor. They rely on appeals to voluntary co-operation, guarantees to property ownership, tax rebates, access to foreign exchange on favorable terms and other incentives plus some controls on capital flight and prices but not on profits. The pro-socialist sector argues that this policy of partnership has not worked and is the source of the current political impasse and social problems. Within this sector some propose a greater role for state ownership and control, in order to direct investments and increase production and to break the boycott and stranglehold on distribution. Another group argues for worker self-management councils to organize the economy and push for a new ‘revolutionary state’. A third group argues for a mixed state with public and self-managed ownership, rural co-operatives and middle and small-scale private ownership in a highly regulated market.
The future ascendance of the mixed economy group may lead to agreements with the ‘soft liberal’ opposition – but failing to deal with scarcities and inflation will only exacerbate the current crisis. The ascendance of the more radical groups will depend on the end of their fragmentation and sectarianism and their ability to fashion a joint program with the most popular political leader in the country, President Hugo Chavez.
The referendum and its outcome (while important today) is merely an episode in the struggle between authoritarian imperial centered capitalism and democratic workers centered socialism.
