Americans
have been trained by decades of Cold War propaganda to look for any
confirmation that ‘socialism means poverty.’ But in the case of
Venezuela and other states not governed by the free market, this
cliche simply doesn’t ring true.
by Caleb
T. Maupin
The
political and economic crisis facing Venezuela is being endlessly
pointed to as proof of the superiority of the free market.
Images and
portrayals of Venezuelans rioting in the streets over high food
costs, empty grocery stores, medicine shortages, and overflowing
garbage bins are the headlines, and the reporting points to socialism
as the cause.
The Chicago
Tribune published a Commentary piece titled: “A socialist
revolution can ruin almost any country.” A headline on Reason’s
Hit and Run blog proclaims: “Venezuelan socialism still a complete
disaster.” The Week’s U.S. edition says: “Authoritarian
socialism caused Venezuela’s collapse.”
Indeed,
corporate-owned, mainstream media advises Americans to look at the
inflation and food lines in Venezuela, and then repeat to themselves
clichés they heard in elementary school about how “Communism just
doesn’t work.”
In reality,
millions of Venezuelans have seen their living conditions vastly
improved through the Bolivarian process. The problems plaguing the
Venezuelan economy are not due to some inherent fault in socialism,
but to artificially low oil prices and sabotage by forces hostile to
the revolution.
Starting in
2014, the Kingdom of Saudi Arabia flooded the market with cheap oil.
This is not a mere business decision, but a calculated move
coordinated with U.S. and Israeli foreign policy goals. Despite not
just losing money, but even falling deep into debt, the Saudi
monarchy continues to expand its oil production apparatus. The result
has been driving the price of oil down from $110 per barrel, to $28
in the early months of this year. The goal is to weaken these
opponents of Wall Street, London, and Tel Aviv, whose economies are
centered around oil and natural gas exports.
And
Venezuela is one of those countries. Saudi efforts to drive down oil
prices have drastically reduced Venezuela’s state budget and led to
enormous consequences for the Venezuelan economy.
At the same
time, private food processing and importing corporations have
launched a coordinated campaign of sabotage. This, coupled with the
weakening of a vitally important state sector of the economy, has
resulted in inflation and food shortages. The artificially low oil
prices have left the Venezuelan state cash-starved, prompting a
crisis in the funding of the social programs that were key to
strengthening the United Socialist Party.
Corruption
is a big problem in Venezuela and many third-world countries. This
was true prior to the Bolivarian process, as well as after Hugo
Chavez launched his massive economic reforms. In situations of
extreme poverty, people learn to take care of each other. People who
work in government are almost expected to use their position to take
care of their friends and family. Corruption is a big problem under
any system, but it is much easier to tolerate in conditions of
greater abundance. The problem has been magnified in Venezuela due to
the drop in state revenue caused by the low oil prices and sabotage
from food importers.
The
Bolivarian experience in Venezuela
Americans
have been trained by decades of Cold War propaganda to look for any
confirmation that “socialism means poverty.” A quick, simplistic
portrait of the problems currently facing Venezuela, coupled with the
fact that President Nicolas Maduro describes himself as a Marxist,
can certainly give them such a confirmation. However, the actual,
undisputed history of socialist construction around the world,
including recent decades in Venezuela, tells a completely different
story.
Hugo Chavez
was elected president of Venezuela in 1999. His election was viewed
as a referendum on the extreme free market policies enacted in
Venezuela during the 1990s. In December, when I walked through the
neighborhoods of central Caracas, Venezuelans spoke of these times
with horror.
Venezuelans
told of how the privatizations mandated by the International Monetary
Fund made life in Venezuela almost unlivable during the 1990s.
Garbage wouldn’t be collected. Electricity would go off for weeks.
Haido Ortega, a member of a local governing body in Venezuela, said:
“Under previous governments we had to burn tires and go on
strike just to get electricity, have the streets fixed, or get any
investment.”
Chavez took
office on a platform advocating a path between capitalism and
socialism. He restructured the government-owned oil company so that
the profits would go into the Venezuelan state, not the pockets of
Wall Street corporations. With the proceeds of Venezuela’s oil
exports, Chavez funded a huge apparatus of social programs.
After
defeating an attempted coup against him in 2002, Chavez announced the
goal of bringing Venezuela toward “21st Century Socialism.”
Chavez quoted Marx and Lenin in his many TV addresses to the country,
and mobilized the country around the goal of creating a prosperous,
non-capitalist society.
In 1998,
Venezuela had only 12 public universities, today it has 32. Cuban
doctors were brought to Venezuela to provide free health care in
community clinics. The government provides cooking and heating gas to
low-income neighborhoods, and it’s launched a literacy campaign for
uneducated adults.
During the
George W. Bush administration, oil prices were the highest they had
ever been. The destruction of Iraq, sanctions on Iran and Russia,
strikes and turmoil in Nigeria — these events created a shortage on
the international markets, driving prices up.
Big oil
revenues enabled Chavez and the United Socialist Party to bring
millions of Venezuelans out of poverty. Between 1995 and 2009,
poverty and unemployment in Venezuela were both cut in half.
After the
death of Chavez, Nicolas Maduro has continued the Bolivarian program.
“Housing Missions” have been built across the country, providing
low-income families in Venezuela with places to live. The Venezuelan
government reports that over 1 million modern apartment buildings had
been constructed by the end of 2015.
The problems
currently facing Venezuela started in 2014. The already growing
abundance of oil due to hydraulic fracturing, or fracking, was
compounded by Saudi Arabia flooding the markets with cheap oil. The
result: massive price drops. Despite facing a domestic fiscal crisis,
Saudi Arabia continues to expand its oil production apparatus.
The price of
oil remains low, as negotiations among OPEC states are taking place
in the hopes that prices can be driven back up. While American media
insists the low oil prices are just the natural cycle of the market
at work, it’s rather convenient for U.S. foreign policy. Russia,
Venezuela, Ecuador, and the Islamic Republic of Iran all have
economies centered around state-owned oil companies and oil exports,
and each of these countries has suffered the sting of low oil prices.
The leftist
president of Brazil, Dilma Rousseff, has already been deposed due to
scandal surrounding Petrobras, the state-owned oil company which is
experiencing economic problems due to the falling price of oil.
Although much of Brazil’s oil is for domestic consumption, it has
been revealed that those who deposed her coordinated with the CIA and
other forces in Washington and Wall Street, utilizing the economic
fallout of low oil prices to bring down the Brazilian president.
The son of
President Ronald Reagan has argued that Obama is intentionally
driving down oil prices not just to weaken the Venezuelan economy,
but also to tamper the influence of Russia and Iran. Writing for
Townhall in 2014, Michael Reagan bragged that his father did the same
thing to hurt the Soviet Union during the 1980s:
“Since
selling oil was the source of the Kremlin’s wealth, my father got
the Saudis to flood the market with cheap oil. Lower oil prices
devalued the ruble, causing the USSR to go bankrupt, which led to
perestroika and Mikhail Gorbachev and the collapse of the Soviet
Empire.”
The
history of socialist construction
Prior to the
1917 revolution, Russia was a primitive, agrarian country. By 1936,
after the completion of the Five-Year Plan, it was a world industrial
power, surpassing every other country on the globe in terms of steel
and tractor production. The barren Soviet countryside was lit up with
electricity. The children of illiterate peasants across the Soviet
Union grew up to be the scientists and engineers who first conquered
outer space. The planned economy of the Soviet Union drastically
improved the living standards of millions of people, bringing them
running water, modern housing, guaranteed employment, and free
education.
There is no
contradiction between central planning and economic growth. In 1949,
China had no steel industry. Today, more than half of all the world’s
steel is produced in China’s government-controlled steel industry.
Cuba has
wiped out illiteracy, and Cubans enjoy one of the highest life
expectancies in Latin America.
When the
Marxist-Leninist governments of Eastern Europe collapsed in the early
1990s, economists like Jeffrey Sachs of Columbia University, who can
be counted among capitalism’s “true believers,” predicted rapid
economic growth. Since the 1990s, conditions in what George W. Bush
called the “New Europe” have become far worse than under
socialism. The life expectancy has decreased and infant mortality has
risen. Human and drug traffickers have set up shop. In endless polls,
the people of Eastern Europe repeatedly say life was better before
the defeat of Communism.
Russia’s
recovery from the disaster of the 1990s has come about with the
reorientation of the economy to one centered around public control of
its oil and natural gas resources — much like Venezuela. The Putin
government has also waged a crackdown on the small number of
“oligarchs” who became wealthy after the demise of the Soviet
Union. Once strong state to control the economy was re-established,
Russia’s gross domestic product increased by 70 percent during the
first eight years of Putin’s administration. From 2000 to 2008,
poverty was cut in half, and incomes doubled.
Neoliberal
capitalism has failed
It is only
because these facts are simply off-limits in the American media and
its discussions of socialism and capitalism that the distorted
narrative about Venezuela’s current hardships are believed.
When
discussing the merits of capitalism and socialism, American media
usually restricts the conversation to pointing out that socialist
countries in the third world have lower living standards than the
United States, a country widely identified with capitalism. Without
any context or fair comparison, this alone is supposed to prove the
inherent superiority of U.S.-style capitalism.
If the kind
of neoliberal “free trade” advocated by U.S. corporations was the
solution to global poverty, Mexico, a country long ago penetrated
with the North American Free Trade Agreement, would be a shining
example of development, not a mess of drug cartels and poverty. The
same can be said for oil-rich countries like Nigeria, where exports
are massive but the population remains in dire conditions.
The
governments of Bangladesh, Honduras, Guatemala, Indonesia, and the
Philippines have done everything they can to deregulate the market
and accommodate Western ”investment.” Despite the promises of
neoliberal theoreticians, their populations have not seen their lives
substantially improve.
If one
compares the more market-oriented economy of the U.S., not to
countries in the global south attempting to develop with a planned
economy, but to other Western countries with more social-democratic
governments, the inferiority of the “free market” can also be
revealed.
The U.S. is
rated 43 in the world in terms of life expectancy, according to the
CIA World Factbook. People live longer in Germany, Britain, Spain,
France, Sweden, Australia, Italy, Iceland — basically, almost every
other Western country. Statistics on the rate of infant mortality say
approximately the same thing. National health care services along
with greater job security and economic protections render much
healthier populations.
Even as the
social-democratic welfare states of Europe drift closer to the U.S.
economic model with “austerity cuts,” the U.S. still lags behind
them in terms of basic societal health. Western European countries
with powerful unions, strong socialist and labor parties, and less
punitive criminal justice systems tend to have healthier societies.
The American
perception that socialism or government intervention automatically
create poverty, while a laissez faire approach unleashes limitless
prosperity, is simply incorrect. Despite the current hardships, this
reality is reflected in the last two decades of Venezuela’s
history.
A
punishment vote, not a vote for capitalism
The
artificially low oil prices have left the Venezuelan state
cash-starved, prompting a crisis in the funding of the social
programs that were key to strengthening the United Socialist Party.
It is odd
that the mainstream press blames “socialism” for the food
problems in Venezuela, when the food distributors remain in the hands
of private corporations. As Venezuelan political analyst Jesus Silva
told me recently: “Most food in Venezuela is imported by private
companies, they ask for dollars subsidized by the government oil
sales to do that; they rarely produce anything or invest their own
money.”
According to
Silva, the economic sanctions imposed on Venezuela by the U.S., in
addition to the oil crisis, have made it more difficult for the
Venezuelan government to pay the private food importing companies in
U.S. dollars. In response, the food companies are “running general
sabotage.”
“Venezuela’s
economy depends on oil sales. Now that oil prices are dropping down,
the challenge is to get other sources of economic income,” he
explained. “Meanwhile, the opposition is garnering electoral
support due to the current economic crisis.”
When the
United Socialist Party and its aligned Patriotic Pole lost control of
Parliament in December, many predicted the imminent collapse of the
Bolivarian government. However, months have passed and this clearly
has not taken place.
While a
clear majority cast a voto castigo (“punishment vote”) in
December, punishing the government for mismanaging the crisis, the
Maduro administration has a solid core of socialist activists who
remain loyal to the Bolivarian project. Across Venezuela, communes
have been established. Leftist activists live together and work in
cooperatives. Many of them are armed and organized in “Bolivarian
Militias” to defend the revolution.
Even some of
the loudest critics of the Venezuelan government admit that it has
greatly improved the situation in the country, despite the current
hardships.
In December,
I spoke to Glen Martinez, a radio host in Caracas who voted for the
opposition. He dismissed the notion that free market capitalism would
ever return to Venezuela. As he explained, most of the people who
voted against the United Socialist Party — himself included — are
frustrated with the way the current crisis is being handled, but do
not want a return to the neoliberal economic model of the 1999s.
He said the
economic reforms established during the Chavez administration would
never be reversed. “We are not the same people we were before
1999,” Martinez insisted.
The United
Socialist Party is currently engaging in a massive re-orientation,
hoping to sharpen its response to economic sabotage and strengthen
the socialist direction of the revolution. There is also talk of
massive reform in the way the government operates, in order to
prevent the extreme examples of corruption and mismanagement that are
causing frustration among the population.
The climate
is being intensified by a number of recent political assassinations.
Tensions continue to exist on Venezuela’s border with the
U.S.-aligned government of Colombia. The solid base of socialist
activists is not going to let revolution be overturned, and tensions
continue to rise. The Maduro and the United Socialist Party’s main
task is to hold Venezuela together, and not let the country escalate
into a state of civil war.
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