Venezuela: Not What You Think

In the case of Hugo Chavez and the Venezuelan Bolivarian Revolution, the mainstream media and politicians in the United States have elevated their game of demonizing all who oppose US foreign policy and business interests to a higher level of absurdity than usual.  According to the mainstream media, the only newsworthy stories in Venezuela are one sided diatribes lifted from the discredited, opposition-owned media in Venezuela.  For example, we read about Chavez shutting down opposition TV stations.  We hear that Chavez is rewriting the Venezuelan Constitution so he can be President for life.  Chavez is a dictator, QED.

All the badly outgunned, alternative media in the US can do is try its best to rebut the bias in the storylines defined by the mainstream media.  The tiny fraction of Americans who visit the alternative media discover that Chavez has submitted a proposal to change the Venezuelan Constitution in a number of ways, one of which is to eliminate term limits on the office of President.  All changes will first have to be approved by the democratically elected Venezuelan National Assembly, and then also approved in a popular referendum before they become law.  Only Americans who search out the alternative media discover that Hugo Chavez was elected President by a comfortable margin in 1998, survived an opposition-sponsored recall in 2004, and most recently was re-elected in December 2006 with more than 60% of the vote.  International observers certified all three elections as fair and square.  George Bush, on the other hand, was selected President by a partisan Supreme Court after losing the popular vote in 2000, and won re-election only because enough black voters in Ohio were disenfranchised by a partisan Republican official to keep the Buckeye State in the Republican column in 2004.  Few observers believe Bush could survive a recall election today, but of course this basic element of democratic rule is not permitted by the US Constitution.  Nonetheless, the only storyline ninety-nine percent of Americans hear remains: Hugo Chavez is a dictator and George Bush is the democratically elected leader of the free world.

Similarly, only the small fraction of Americans who access the alternative media learn that RCTV was not shut down because it campaigns openly against the government — which it has for nine years.  Instead, when its license came up for renewal, its application was denied because it had violated 200 conditions of its licensing agreement — many violations having to do with its role in helping to organize a military coup that nearly toppled the duly elected President of the country.  Moreover, the station continues to broadcast on a cable network, and the opposition in Venezuela still broadcasts on more major TV channels than there are channels sympathetic to the government.  In stark contrast, the alternative media in the US cannot be viewed on any major channel.  Consequently the vast majority of Americans receive all their news from a mainstream media which never questions whether the US has any right to dominate other nations, but only debates the wisdom of alternative strategies for doing so, and would never dream of questioning the desirability of an economic system dominated by their corporate owners.  Nevertheless the storyline most Americans hear remains: Freedom of the press is dead in totalitarian Venezuela, but alive and well in the democratic United States.

It is important to distinguish between whether mainstream coverage of issues like amendments to the constitution and the TV license is biased, whether there are grounds for reproaching the Venezuelan government, and whether the policies are wise.  Clearly the mainstream media has failed to report relevant facts and their coverage has been grossly unfair.  From what I know, the procedure that led to non-renewal of the TV license was unobjectionable, and the proposed constitutional amendment will be decided by a thoroughly democratic process.  So while there are ample grounds for reproaching mainstream media coverage in the US, as far as I can see there are no grounds for reproaching the Venezuelan government in either case.  However, this does not mean the policies are necessarily wise.  Those in Venezuela who argue that the revolutionary government would be hammered by the imperial press in any case are surely correct.  On the other hand, that does not mean either initiative is good policy, independent of the news coverage it receives.  Moreover, giving one’s enemies an easy chance to focus on a negative storyline seems unwise — unless the policy has important benefits.

Unfortunately, the fact that only a tiny fraction of the American public are ever exposed to balanced coverage of the Venezuelan stories defined by our mainstream media is only one problem.  A larger problem is that practically nobody in the United States ever hears anything about truly newsworthy stories in Venezuela.  Stories about exciting new political and economic initiatives that are dramatically reducing poverty and challenging popular myths about the abilities of ordinary people to make good political and economic decisions for themselves go virtually uncovered in the United States.1

I speak fluent Spanish, have lived and worked in Latin America on two occasions, and have traveled extensively in Latin America for over forty years.  One of the few Latin American countries I had never visited before a year ago was Venezuela.  I have now made two trips to Venezuela in the past nine months at the invitation of the Centro Internacional Miranda.   I was in Caracas for one week in October 2006 — before the December 2006 presidential elections that provided Chavez with a popular mandate to pursue a more aggressive socialist agenda.  During that visit I met with officials in the Planning Ministry and faculty and students in the Planning Ministry school.  I had long discussions with people at the Miranda Center working on projects in critical pedagogy, participatory budgeting, new models of production, human development through popular participation, new forms of political participation, and new models of socialism for the twenty-first century.  I also visited health clinics, subsidized food distribution centers, community radio stations, and adult education centers in poor neighborhoods in Caracas.  During a two-week visit in July 2007 I visited the rural state of Lara as well as Caracas.  In Caracas I participated in numerous seminars and meetings at the Miranda Center, attended an adult education class at the new Bolivarian University, met again with officials in the Planning Ministry and students in the Planning Ministry school, met with officials in the new Ministry for the Communal Economy, and visited with workers in a “recuperated” factory and activists in a “nucleus of endogenous development.”  In Lara I attended meetings of three rural communal councils, a meeting of spokespersons from ten other rural communal councils, a meeting of spokespersons from all the communal councils in the town of Carora, and talked with citizen directors of a communal bank.  I also met with the mayors of Carora (state of Lara) and Libertador (state of Carabobo) who pioneered participatory budgeting initiatives in their municipalities.  What follows is an account of some stories I believe many Americans would find truly newsworthy.

Economic Progress

Like most Latin American economies, the Venezuelan economy deteriorated during the 1980s and most of the 1990s.  From 1998 to 2003 real per capita GDP continued to stagnate while the Chavez government survived two general strikes by the largest Venezuelan business association, a military coup, and finally a devastating two month strike by the state owned oil company.  However, after Chavez survived the opposition sponsored recall election, annual economic growth was 18.3% in 2004, 10.3% in 2005, and 10.3% in 2006, and the unemployment rate fell from 18.4 % in June 2003 to 8.3% in June 2007.  Moreover, most of the growth was in the non-oil sectors of the economy, as the oil sector barely grew during 2005 and 2006.  While this impressive growth would not have been possible without the rise in international oil prices, it also would not have been possible had the Chavez government not ignored the warnings of neoliberal critics and pursued aggressive expansionary fiscal and monetary policies.

At the height of the oil strike the poverty rate rose to 55.1% of households and a startling 62.1% of the population.  However, by the end of 2006 the poverty rate had declined dramatically to 30.6% of households and 36.3% of the population, which compares favorably with a pre-Chavez rate of poverty in 1997 for households of 55.6% and for individuals of 60.9%.  While much of this decrease in poverty was due to strong economic growth, it was also due to a dramatic increase in social spending by the Chavez government.  Social spending per person by the central government increased by an average of 19% per year from 1998 to 2007.  However, this does not include social spending by the state-owned oil company.  If social spending by PDVSA is included, there was an increase of 35% per person per year since 1998.  The most dramatic increase in social spending was in the area of health care.  In 1998 there were over 14,000 Venezuelans for each primary healthcare physician, and few physicians worked in rural or poor urban areas.  By 2007 there was one primary healthcare physician for every 1,300 Venezuelans, and many of the new physicians were working in clinics in rural areas and poor barrios that had never had physicians before.2  There are also now 16,000 stores in poor areas throughout the country selling staples at a 30% discount on average.

Building the Social Economy

Reforms First: For eight years the Chavez government went out of its way not to threaten the private sector.  Despite relentless hostility and numerous provocations from the Venezuelan business association and the privately owned media, there were few nationalizations and the state sector did not grow appreciably.  While the government did launch a serious land reform, the program proceeded more cautiously than government rhetoric and landowner complaints would lead one to expect.  Instead, Chavez concentrated on redirecting profits from the state owned oil company to social programs to benefit the poor, and financing development of what the government called the “social economy.”  In addition to increasing spending dramatically on healthcare and food subsidies, the government launched a massive program of adult education.  Millions of poor Venezuelans have now overcome illiteracy, and hundreds of thousands have received primary diplomas and secondary degrees studying in store-front schools named Mision Robinson I (literacy), Mision Robinson II (primary), and Mision Rivas (secondary).

But none of this addressed the high rate of unemployment and the most pressing economic needs of those who had voted Chavez into office.  The business sector was hostile to the Chavez government from the outset and oscillated between economic sabotage and capital flight.  So the private sector could not be relied on to increase investment, production, and employment.  Nor was extensive nationalization an attractive option because Chavez wanted to avoid provoking the business community unnecessarily, and there was a shortage of competent officials who were also politically trustworthy to run more state enterprises.  Moreover, neither Chavez nor his closest associates were enamored of the “state socialist” model.  So increasing employment by expanding the state sector was also not seen as a desirable option.  Determined not to renege on electoral promises to better economic conditions for his supporters as many populists in Latin America have in the past, Chavez launched a massive program to create worker-owned cooperatives in both rural and urban areas.

Cooperatives: New worker-owned cooperatives not only provided much needed jobs producing much needed basic goods and services, they also featured what was soon to become a hallmark of Bolivarian socialism — popular participation at the grassroots level.  When Chavez was first elected President in 1998, there were fewer than 800 legally registered cooperatives in Venezuela with roughly 20,000 members.  In mid-2006 the National Superintendence of Cooperatives (SUNACOOP) reported that it had registered over 100,000 co-ops with over 1.5 million members.3  Generous amounts of oil revenues continue to provide start-up loans for thousands of new cooperatives every month, and the Ministry for the Communal Economy continues to spearhead a massive educational program for new cooperative members.  However, the ministry provides more than technical assistance regarding technology, accounting, finance, business management, and marketing.  It also teaches participants about cooperative principles, economic justice, and social responsibility.

Participatory Budgeting: Even before the December 2006 referendum provided Chavez with a popular mandate to deepen the social revolution, the government had moved ahead to add participatory budgeting and local economic development initiatives called “nuclei of endogenous development” to the educational Misiones, subsidized food stores, and worker cooperatives comprising the social economy.  Three international experts on participatory budgeting in other countries were part of the Miranda Center work team during my visit in July.  Richard Franke (USA) shared his research on the history of participatory budgeting in Kerala India, and Marcos Arruda (Brazil) and Daniel Schugurensky (Canada) shared their research on participatory budgeting in Brazil with those developing the program in Venezuela.  What was clear to all of us was that while the practice of participatory budgeting may be more advanced in Kerala and Brazil where decades of experience have helped people learn how to deal with important practical problems like how to combine technical expertise about public work projects with popular determination about priorities, the prospects for participatory budgeting in Venezuela are much greater.

A hostile national government in India limits how far the left united front government in the state of Kerala can take the program there.  And unfortunately the Lula government in Brazil has done little to build other elements of a “solidarity economy” to compliment participatory budgeting, and even damaged the reputation of participatory budgeting by using it to administer austerity measures.  In Venezuela, on the other hand, the President and Congress are now fully supportive of participatory budgeting and busy building complementary components of a full-scale “social economy.”  In Venezuela, participatory budgeting is viewed by many not merely as a better way to make decisions about local public goods, but as part of a process to democratize all aspects of economic life.  Not surprisingly some local officials have resisted participatory budgeting because it challenges their traditional powers and privileges.  Others, like the mayors of Carora and Libertador who turned all municipal revenues over to neighborhood assemblies to use as they saw fit, have embraced the program as well as the changes it brings to the role of mayor.

Communal Councils: After the referendum in December 2006, a major campaign to organize and empower communal councils was launched as a new step toward building the social economy.  The Ministry of Participation and Social Development, MINPADES, worked to establish the initial components of the social economy.  In 2004 the Ministry for the Popular Economy, MINEP, was created to help build new components of the social economy.  When the government decided to create communal councils in every neighborhood, MINEP was strengthened and renamed the Ministry for the Communal Economy, MINEC.  After lengthy debate, it was decided that communal councils should be comprised of twenty to fifty households in rural areas and two-hundred to four-hundred households in urban areas.  Since communal councils are the building blocks of a whole new political structure in Venezuela, it may seem odd that sometimes they are comprised of fewer than fifty families in rural areas.  The small size was chosen to ensure that every family, even in rural areas where small villages are often distant from one another, would have a real chance to participate in the most fundamental political decisions that affect them.

All the rural communal councils we visited in the state of Lara had decided that housing was a high priority.  Each went through the difficult process of deciding which families would get new houses since there was not enough to provide new houses for all.  We asked the members what criteria they used.  We asked about nepotism.  We asked what happened to families who were disappointed and disagreed with the decisions.  While answers varied, the major criterion taken into consideration was need — the state of a family’s existing housing and the number of children.  While all tried to reach consensus, in some of the communal councils votes were taken, and in some cases those who were disappointed threatened to leave.  A major difference between councils was how far they stretched their housing budget by providing materials locally, reducing the number of rooms, or providing labor.  In one case, a council member was a builder himself who was able to oversee much of the building by community members, thereby stretching the housing budget the farthest.  The builder did not receive one of the new houses because, we were told, his house was predictably in decent repair.  He said he was not disappointed because he was confident he would receive a new house next year, or the following, after others whose houses were in worse repair got theirs.  In another council the disappointed family who had threatened to leave was talked out of it, in part because they thought they had a good chance of getting a house the following year.

Other projects varied a great deal.  One communal council built a facility to raise chickens — against the advice of a government agronomist who thought they would be better off upgrading their facilities for goat herding.  We asked who would work in the new communal chicken farm, how they would be paid, and how profits would be shared.  It was clear from their answers that all of that remained to be thought through, although everyone agreed that not all would be expected to work in the communal chicken business since some had paying jobs outside the community that nobody expected them to give up.  Several councils had mud roads paved over so people would be able to get out to a main road during the rainy season.  One built a health clinic.  Both these projects required coordination with outside agencies.  Council spokespeople lobbied the municipality to pave more of their mud roads and only used communal council funds to pay for the remainder.  The Ministry of Health had to be consulted about staffing the clinic.  One communal council decided to build a community building for meetings and festivals.

The meetings we attended were well attended — with representation from over half of the households.  That was frequently not the case initially, as facilitators — often municipal employees who had previously worked in educational Misiones — had to help communities organize a second meeting after attendance was poor at the first meeting.  Choosing more convenient meeting times, passing out more flyers, and knocking on more doors was often necessary, but making clear residents would forego significant funds unless they created a communal council eventually led to functioning communal councils in every community in the municipality.  Every communal council had elected a vocero, or spokesperson, and a suplente, or substitute spokesperson, for each theme decided by the communal assembly (for example, health, recreation, electricity, etc.).  Of the roughly two hundred spokespersons we met in rural communal councils and urban communal councils in the town of Carora, a disproportionate number were poor women of color with several children.  Most of them had only recently become politically active.  Almost all of them were strongly Chavista.  A disproportionate number of facilitators in the municipality were younger women from working-class families who had some college education, who were also strongly pro-Chavez.  One spokesperson we interviewed extensively was a middle-aged white man who appeared to be the wealthiest person in his community and was active in an opposition political party.  His neighbors were fully aware of his political allegiance, which few of them shared, but expressed complete trust in his integrity and described him as the person in the community who was best at getting things done.  For his part, he expressed strong support for participatory budgeting and communal councils for which he credited Chavez and the Chavista mayor of Carora.  But he said he had no intention of quitting his opposition political party or becoming a Chavista himself.

Activists, Politicos, and Experts: While it is important to focus on what is happening on the ground, and what activists in different parts of the social economy are thinking, one should not ignore the influence of politicians and ministries that affect the social economy.  More than anyone else, of course, Chavez has the greatest effect on the political agenda in Venezuela and especially on initiatives in the social sector.  My impression from his speeches, and from what senior fellows at the Miranda Center who are familiar with his thinking have told me, is that Chavez is both the leader of the entire Chavista movement, but also the leader of its radical wing.  Over the past nine years Chavez has frequently led the charge to deepen the process of social change — often through new initiatives in the social economy.  In this respect the role played by Chavez has been similar to the role Mao played in China during the 1950s and 1960s when he was both the head of government and the party, but also the leader of the left-wing faction within the CCP.4  What we might call the “Chavista camp” is an amalgam of small left parties and groups that initially included some small centrist and center-left parties as well — all predating his election — and a much larger diverse group of activists politicized by different campaigns and programs launched by his government.  Although there is now an attempt underway to create a unified Venezuelan socialist party comprised of all who typically refer to themselves simply as “Chavistas,” one of the defining features of the last nine years has been the absence of a unified socialist political party driving the political process — for better or worse.5

While somewhat arbitrary and imprecise, it is useful to distinguish between two different tendencies within this diverse and loosely knit “Chavista” camp.  The vision of the more moderate tendency includes left-Keynesian policies combined with further welfare reforms, but does not extend beyond a market system with a “mixture” of private and public enterprise.  Since one of the two opposition parties representing the oligarchy, Accion Democratica, is officially a social democratic party and member of the Socialist (formerly Second) International, one has to be careful when using the term “social democrat” in Venezuela.  But elsewhere this moderate tendency within the Chavista camp would be described as solidly social democratic, and mostly unmarred — at least so far — by retrogressive “third wave,” or “New Democrat” tendencies.  These moderates within the Chavista camp are generally less optimistic than those in the more radical tendency about the ability of ordinary Venezuelans to make good decisions for themselves, and therefore tend to be more skeptical about how well what we might call “power to the people” as opposed to “serve the people” initiatives will work.

The guiding vision of the more radical tendency in the Chavista camp reaches far beyond a mixed economy guided by left-Keynesian policies and humanized by a substantial welfare state.  Most in the radical tendency describe what they are part of as the “Bolivarian Revolution,” and call their guiding vision “twenty-first century socialism.”  Because these terms are unique to Venezuela, they offer little help to those of us outside trying to understand what they mean.6  Those in the radical tendency see what is happening as a revolution because they see it as a profound social transformation and dramatic change in power relations among social groups.  They also believe this revolutionary transformation should continue until popular self-rule has been achieved in every area of social life.  These “Bolivarian revolutionaries” call their vision “socialist,” but they do not emulate any models of socialism developed by those who called their societies socialist in the twentieth century.  For example, while they see Cuba as their closest ally, pay homage to Cuba for its lonely but steadfast opposition to US imperialism for half a century, and admire all that Cuban socialism has achieved for the Cuban people, they do not see Cuba, much less any other “socialist” country, as the model of socialism they aspire to.  In particular, they make clear that their vision of a twenty-first century socialist economy is quite different from the Cuban economic system and the economic systems in all other countries that call or called themselves socialist.  Instead, Bolivarian revolutionaries are socialist in the sense that they are committed to achieving what they believe those who have called themselves socialist dating back to the nineteenth century have all aspired to — an economy qualitatively distinct from capitalism, where production is for use not profit, and where workers and consumers plan their own activities democratically and equitably.

One is tempted to describe these radicals in the Chavista camp as libertarian socialists because of their insistence on the centrality of worker and community self-management, and their rejection of any models of socialism where it is absent.  But this would be misleading in important respects.  Few Bolivarian Revolutionaries seem to trace their intellectual origins to libertarian socialism.  Nor do many of them share the libertarian socialist critique of Marxism-Leninism.  While Bolivarian Revolutionaries do not believe any who called themselves socialist in the twentieth century succeeded in achieving socialism as they envision it, most of them appear to believe it was the intent of socialists in Marxist-Leninist parties who achieved state power to do so, even if they failed to find the means, or got lost along the way.  They also have a different perspective on reforms than many twentieth-century libertarian socialists.  They see their Bolivarian Revolution as an evolutionary revolution — feeling its way toward new social relations and new human values — rather than as an abrupt reversal of class rule derived from a change in control over the means of production.  As best I can tell, most Bolivarian revolutionaries also regard reforms in what is still predominantly a capitalist economy as positive steps in the revolutionary process.  Libertarian socialists have often been inclined to view reforms within capitalism negatively, as distractions deployed by the enemies of “real” social change to forestall revolutionary momentum.

My ability to gauge the thinking of “experts” working in ministries involved with the social economy is limited.  It is based on a few conversations I was able to have with officials in the Planning Ministry and the Ministry for the Communal Economy, on reactions to presentations I made at both ministries, and on my review of the curriculum students are studying at the Planning Ministry school.  I was constantly surprised and invariably pleased by what these “experts” were thinking.  At the beginning of my first visit, at the risk of never being invited back, I decided to take advantage of my opportunity to address the vice ministers, faculty, and first class of students at the Planning Ministry school to challenge the traditional conception of socialist planning.  I began my talk by saying that if they thought their job was to make better and better plans, I thought they were wasting their time at best, and having a negative effect at worst.  After an embarrassed silence, I went on to say that instead I thought the job of people working in the Venezuelan Planning Ministry was to help workers in cooperatives and consumers in communal councils and assemblies plan how to cooperate more effectively among themselves.  To my surprise my audience agreed.  Moreover, they said they understood this meant they rejected the foundation underlying previous conceptions of socialist planning, and had, in effect, accepted a new prime directive: “Do not plan for others, facilitate planning by others.”  Since I was invited back, I have had several opportunities to confirm that people at the Planning Ministry were not merely humoring a rude foreigner during my first visit.  I have also studied the curriculum and read the texts being used to train those who will soon be key personnel in the Planning Ministry.  It is completely different from standard curricula on national planning and reflects the perspective of “facilitator” rather than “plan maker.”

At the new Ministry for the Communal Economy, the people I met seemed equally clear about what their job was.  They are busy creating the basic elements of a social economy — self-managed worker cooperatives, communal councils, and communal assemblies.  They are busy teaching the elected leaders of these cooperatives, councils, and assemblies that they must work with one another on the basis of mutual respect and solidarity rather than treat one another as antagonists in commercial exchanges.  And finally, they are trying to help cooperatives, councils, and assemblies find practical ways to plan their interrelated activities fairly and efficiently among themselves so the market system can be replaced within the social economy.  The fact that nobody before has ever succeeded in helping large numbers of autonomous groups of workers and consumers plan their joint activities democratically, equitably, and efficiently themselves does not seem to daunt those I met at MINEC.  They are sceptical of formulaic proposals and believe answers for how best to do this will emerge from trial and error over time.  But they seem convinced it can and will be done.

A sum bigger than its parts: At present the social economy — made up of educational Misiones, healthcare clinics, subsidized food stores, worker cooperatives, nuclei of endogenous development, participatory budgeting, communal councils, and assemblies of communal councils — is the most rapidly growing sector of the Venezuelan economy and is the driving force behind the Bolivarian vision of twenty-first century socialism.  Its typical promoter in policy circles is a new breed of left intellectuals thoroughly convinced that ordinary people can make their own economic decisions and determined to devise means to help them do so.  Its typical face is a newly empowered, poor mother of color — and make no mistake, she is a force to be reckoned with!  It is in the social economy, not the state sector, that the future of Venezuelan socialism lies.  The state sector is in many ways disappointing.  Attempts to promote worker participation in state enterprises have been largely unsuccessful.  There have been no serious attempts to plan within the state sector, as state-appointed managers are expected to keep their individual enterprises out of the red — both economically and politically!  What one must hope for in Venezuela is that, as the new social economy deepens and grows, its values and institutions will eventually absorb not only the private sector but the state sector as well.

What I found particularly impressive was how clear Venezuelan revolutionaries are for the most part about how they want their social economy to function, and why it must differ from both a market system and the kind of bureaucratic planning common in twentieth-century socialist economies.  They have correctly identified the Achilles’ heel of centralized planning — failure to allow for self-management.  Every component of the new social economy is self-consciously designed to give “direct producers” and consumers control over the economic decisions that affect them.  There are no bureaucrats to tell workers in their cooperatives what to produce and how to produce it.  There are no politicians to tell residents of barrios what local public goods to prioritize in the participatory budgeting process.  The families in the new communal councils discuss and decide on their own spending priorities in open meetings, and spokespeople from communal councils decide on municipal spending priorities in communal assemblies.  Communal banks, whose officers are members of the communal councils that the banks serves, allow communities to make their own decisions about who among them most deserve loans and can make best use of available funds.  And nuclei of endogenous development are designed to organize local resources to meet local needs through local initiatives in ways that devotees of community-based economics in the developed capitalist world can only fantasize about.

But those building the social economy in Venezuela also reject the anti-social effects of commercial relations inherent in the market system.  From the very beginning, those working with the new cooperatives worried that market forces lead worker cooperatives to prioritize their narrow self-interest at the expense of community and social interests.  MINEP training programs for new members emphasized that cooperative values include serving the social interest.  The decision to encourage cooperatives to join nuclei of endogenous development was intended to build community ties, involve cooperatives in local planning initiatives, and help cooperatives see themselves as part of a larger community.  The vision for the social economy is clearly one where producers in worker councils, and consumers in communal councils, and communal assemblies plan their own activities and coordinate their interrelations among themselves equitably.

In his Alo Presidente program on September 14, 2003 devoted to the social economy, Chavez emphasized: “The social economy bases its logic on the human being,” and its purpose is “the construction of the new man, of the new woman, or the new society.”  Popular participation, equitable cooperation, and solidarity — the defining features of the social economy — also permeate the new Bolivarian Constitution.  Article 299 emphasizes the need to ensure “overall human development.”  Article 102 calls for “developing the creative potential of every human being.”  Article 62 declares that participation by people is “the necessary way of achieving the involvement to ensure their complete development, both individual and collective,” and calls for democratic planning and participatory budgeting at all levels of society.  Article 70 refers to “self-management, co-management, and cooperatives in all forms” as examples of “forms of association guided by the values of mutual cooperation and solidarity.”

Socialism for the Twenty-First Century

I was invited to work with the Miranda Center and speak at both the Ministry of Planning and the Ministry for the Communal Economy primarily because my chief research interest is how to make economic planning more participatory.  As traditionally studied this subject has two subfields: Most researchers focus their attention on how to broaden and deepen participation of members within a worker council or cooperative, or how to facilitate participation of consumers within a consumer or communal council.  A smaller group of us focus our main attention on how production and consumption units that are internally self-managed can coordinate their interrelated activities among themselves fairly and efficiently while preserving their autonomy.  A unique feature of a theoretical model of a participatory economy7 I helped design is a “participatory planning” procedure which solves this problem without resort to either markets or a planning bureaucracy.  The participatory planning procedure is designed to give worker and consumer councils autonomy of action while helping them discover and commit to an equitable and efficient division of labor among themselves — with as little time wasted in discussion and meeting as possible.  To what extent my research in this area proves useful to those building the social economy in Venezuela remains to be seen.

In my opinion, all the essentials for a truly participatory, social economy are already in place in Venezuela — worker cooperatives, communal councils and assemblies, and participatory budgeting.  A strong political campaign encouraging popular participation, economic justice, and solidarity is in full swing.  And the search for practical ways for worker cooperatives, communal councils, and communal assemblies to coordinate their interrelated activities themselves — democratically, fairly, and efficiently — is on.  From what I saw during my visit, a great deal is being discovered about how to coordinate effectively with other units in the social economy by those who are making participation within worker cooperatives and communal councils a reality.  From what I heard, most involved in developing the social economy in Venezuela understand that traditional solutions to the coordination problem should be studied as negative, not positive, examples to learn from.  And from what I experienced, those involved on both the grassroots and ministerial levels in the first, great social experiment of the twenty-first century have open minds about how best to coordinate semi-autonomous groups in their social economy, and are asking all of the right questions about the pros and cons of different options.

There is no guarantee that all of this positive momentum will succeed, and one does not have to look hard to find reason for concern.  In the US, the foreign policy establishment, which includes the leadership of the Democratic Party, remains adamantly opposed to the Venezuelan alternative to neoliberalism.  Prior to the rise of Chavez, socialist political parties were not as strong in Venezuela as in some other Latin American countries, and therefore socialist ideology is still quite new to most Venezuelans.  The hostility of the oligarchy and opposition parties has not diminished, and it is possible that disagreements between the moderate and radical wings of the Chavista movement will create dangerous political moments in the next few years.  And finally, while much of what I saw and described above is extremely encouraging, the process of building the social economy has been very uneven.  While millions of Venezuelans have been deeply affected and undergone a profound political transformation, there are still millions who remain passive even if they have benefited materially from a government-sponsored program.  Socialism is by no means yet secured in Venezuela, and “all the right moves” is a lot to ask for.  But what is happening in Venezuela should make us all more confident than ever that “a better world is possible,” and millions of people in Venezuela are busy building it now.


1  I intend no criticism of alternative media coverage of Venezuela.  For the most part, the alternative media does the best it can given the restrictive conditions under which it operates.  In particular provides high-quality, professional coverage of Venezuela on a regular basis.

2  For an informative report on the new neighborhood clinics where healthcare and medicines are free and the emphasis is on preventative medicine, see a three-part series by Rebecca Trotzky Sirr on the Upside Down World web site:

3  For a description of the cooperative sector in Venezuela, see Betsy Bowman and Rob Stone, “Venezuela’s Cooperative Revolution,” Dollars & Sense, No. 266, July/August 2006, Camila Pineiro-Harnecker in MRZine,, and articles by C. Pineiro-Harnecker, S. Wagner, and F. Perez-Marti at  For an excellent account of the role the “social sector” played prior to 2005, see Michael Lebowitz, Build It Now: Socialism for the Twenty-First Century, Monthly Review Press, 2006, Chapters 5, 6, and 7.

4  I am not likening Chavez to Mao in any other way, and certainly not suggesting that Chavez is a “Maoist.”

5  A discussion of the pros and cons of attempting to organize a unified socialist party is beyond the scope of this essay.  The initial local meetings of the five million Venezuelans who signed up to join the new party were beginning during my visit in July.

6  On the other hand, because the terms are new and unique to Venezuela, they do help us avoid the mistake of thinking that the process and associated vision can be neatly pigeon-holed into familiar leftist categories from the past — which they cannot.

7  Michael Albert and Robin Hahnel, The Political Economy of Participatory Economics (Princeton University Press, 1991), and Robin Hahnel, Economic Justice and Democracy: From Competition to Cooperation (Routledge, 2005).

Robin Hahnel is a Professor of Economics at American University.

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