Re: Rakesh's musing on Venezuela ("Left-wing Communism ...")

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Mon May 31 2004 - 05:40:09 EDT

At 11:27 PM +0100 5/28/04, Paul Bullock wrote:
>I interpolate a few answers to your questions below. However you should know
>that the points made are also those made by the  Venezuelan Government which
>has been carryiong out detailed investigations into the theft of national
>assets by the previous board of  PdVsa.
>Paul Bullock.

Not sure whether the Mommer royalty system will bring in more revenue
to the state than the old profit sharing deals; moreover, you don't
deny that Chavez has been pretty easy on imperialist capital as well.
I guess you are saying that concessions had to be made because of the
power of imperialist capital in the form of oil service companies
over a hapless third world state. Fine but concessions they are. The
royalties are supposed to be harder to evade than profit sharing
given ability of imperialist capital to cook the books, e.g. transfer
profits out. Mommer asserts this, but I don't see how it has been
proven either in theory or practice.

And even if the state is able to take a greater share of the devil's
excrement (rent, surplus profit) through the use of royalties,  it
will probably be mostly dissipated in corruption and unproductive
consumption. Corruption and unproductive consumption mark the the
history of rentier states, afflicted by Dutch disease. What is the
reason to think Chavez's Venezuela will be any different? His
authoritarian regime seems to have eliminated several checks against

Not sure Chavez's 'investments' will be better than PDVSA's in
refineries which at least guaranteed a market for Venezuelan oil (I
don't see how this was a subsidy to the American consumer since the
Venezuelan owned CITGO was not selling the final product below market
price.) Just as Chavez's decision to restrict output seems to have
wreaked havoc on the domestic oil industry so may a decision to
withdraw from downstream operations abroad (the Kuwaitis have been
praised for investing downstream since it has allowed them to capture
markets, rents, profit, etc). The problems of the oil industry could
then not be blamed on conspirators and strikers.

Moreover, when oil prices collapse so probably will Chavez's much
exaggerated poverty programs; anyways he has not done very much at
all considering how high spot and future prices have been (at least
if Sonntag is correct, which you do not dispute).

Chavez certainly has not presented a model generalizable to non
rentier states. His fight against savage neo liberalism--such that it
is--does not point the way forward for Latin America. That however is
not true of the example of workers who occupied factories in

  Marxism is not a theory for the defense of landlord or rentier
states against imperialist capital. Perhaps dependency theory is. I
think we should resist dragging Marx's name through the mud of a
chaotic, ideologically confused, arbitrary and  authoritarian regime,
wanting more devil's excrement to live off of. Even if imperialism is
opposed to it.


>----- Original Message -----
>From: "Rakesh Bhandari" <rakeshb@STANFORD.EDU>
>Sent: Wednesday, May 26, 2004 5:23 AM
>Subject: Re: [OPE-L] Rakesh's musing on Venezuela ("Left-wing Communism
>>  I sent this already but it seems not to have made it to the list.
>>  Slightly amended, here it is again.
>>  >Rakesh,
>>  >
>>  >Our paper has carried a series of articles on Venezuela explaining
>>  >the class basis of Chavez's actions in the context of a life and
>>  >death struggle for the mass of Venezuelans  against US imperialism.
>>  >This is not a fixation with Chavez but a taking of sides with the
>>  >vast majority of humanity against imperialism.  Please read the
>>  >material, the latest article can be found at
>>  >
>>  >
>>  >Other articles can be found in earlier issues on the same website.
>>  >
>>  >Le Monde Diplomatique is also an excellent source of material on
>  > >Venezuela if you prefer a more bourgeois publication. See April 2004
>>  >issue for a detailed summary of the latest developments in Venezuela.
>>  >
>>  >
>>  >
>>  >What facts do you object to and do you have the evidence showing
>>  >that they lack objectivity.
>>  >
>>  >David Yaffe
>>  >
>>  David,
>>  is the criticism that before Chavez the PDVSA tried to sell too much
>>  oil, break its OPEC quota and thus depress the oil price? That is, it
>  > did not act within the putative OPEC cartel? What were the
>>  consequences of Chavez's earlier decisions to restrict supply?
>*******The first point is that the PDVSA Director was simply looting
>Venezuela either by directing revenues out of the country, which then
>demanded more money to follow to maintain turnover in the the Refineries
>built, or directly subsidising overseas consumers ie in the USA through its
>own gas station chain ( no messing around with longwinded and indirect world
>market condiotions, or 'debates' over rent!!), and subsidising a substantial
>gang of self interested managers/ directors who were going hell for leather
>for privatisation. Its quite simple. The Venzuelan Government is stopping
>all this.
>Is the second criticism that PDVSA should just be in the business of selling
>>  oil and should not purchase refineries abroad?
>********* No 'should' is involved. The point is that the refineries were
>only profitable through the sale of crude oil to them by Venezuela below
>market rates. This is clearly a transfer to out of State operations whose
>accounts were then concealed from the new Government itself. The argument
>shows how imperialism looted  Venezuela's State revenue stream  in this
>particular industry, at that time.****************
>Is the proof that
>>  PDVSA was before Chavez in the hands of the imperialists two fold: it
>>  sold too much oil and it used profits to buy refineries?
>*********The article clearly states that the oil was being contracted at
>virtually 0% royalty rates through specific commercial; vehicles.. I don't
>quite understand the  incomprehension expressed in your questions.********
>>  Your paper also charges that pre Chavez PDVSA sold below market price
>>  to the refineries which it partially owned. Which price is this
>>  below? Can't we assume all long term and heavy customers get some
>>  price below spot and futures prices? How unusual was this deal really?
>>  Finally, this article does not comment on what kinds of deals Chavez
>>  has struck with foreign companies in various down stream operations.
>>  It seems that he was very generous to them.
>*********The fact is that the newspaper has pointed out the real
>difficulties of a state so dependent on foreign capital, that is the nature
>of imperialist control . See FRFI 167 on the 2002 coup defeat, on the web
>site , which briefly discusses the contradictions
>in the reform process  up to 2002. Or again in FRFI 168. What is essential
>is that the dominant industries not only remain nationalised but are run in
>the interests of the workers. The attempted coups, military and then
>economic ( the lockout you called a strike), have the central purpose of
>privatising. A proper study of what is happening in Venezuela is essential
>before we draw any conclusions, on the assumption of course that we are
>actually opposing imperialism *****************
>  The NYT report may be
>>  hogwash, but there is no comment on it.
>>  And finally finally your paper has not yet investigated Chavez's
>>  policy on a broad range of workers' issues.
>******* This is a pointless open ended criticism that takes us no
>>  All this said, and I shall repeat, Chavez has every right to suppress
>>  forcefully any attempt at a right wing coup against his electorally
>>  validated government.
>*****I'm sure he'd be delighted you approve**********
>>  Please clarify.
>>  Rakesh
>>  >
>>  >
>>  >At 07:54 24/05/04 -0700, you wrote:
>>  >
>>  >>>Rakesh's energy re Venezuela is spent on one individual Chavez, Chavez,
>>  >>>and then again Chavez, not what U.S. imperialism is doing in the
>>  >>>in Venezuela; not on the day-to-day maneveurs of the opposition; not on
>  > >>>the day-to-day actions of supporters or qualified supporters of the
>>  >>>government.  In the final analysis Chavez is not that important.
>>  >>>
>>  >>
>>  >>
>>  >>And later Paul Z writes:
>>  >>
>>  >>>   One thing I'm confident of: the opposition blames Chavez for
>>  >>>anything and are as fixed on Chavez as Rakesh.
>>  >>>
>>  >>
>>  >>Oh, no, I am not fixated on Chavez. As I see it, you, Michael, Paul B
>  > >>and David Y are fixated on him as a revolutionary leader and  hero of
>>  >>the working class and poor.
>>  >>
>>  >>
>  > >>  Paul Z then writes:
>>  >>
>>  >>>
>>  >>>Placing Chavez as government leader in context of a very wealthy,
>>  >>>extremist opposition could lead one to think that the opposition may
>>  >>>believe it has lost a lot from the current government.  Their acts
>>  >>>much louder than Rakesh's words from afar, who digs up, for this list,
>>  >>>article more than a year old that Chavez is nothing more than a
>>  >>>neo-liberal.
>>  >>>
>>  >>
>>  >>
>>  >>>
>>  >>>The Venezuelan government must be placed in context, just as we must
>>  >>>Aristide in context, Lula in context, Gandhi in context, etc.
>>  >>>
>>  >>
>>  >>And in each case (though least of all in Aristide's) it is important
>>  >>to understand how each prepares the ground for a right wing coup or
>>  >>even right wing formally democratic take over by engendering
>>  >>alienation, indifference and cynicism in those in whose respective
>>  >>names they  rule. There are several Brazilian members of OPE-L; it
>>  >>would be wonderful if they would discuss the complexities of Lula's
>>  >>government which  seems more complex than Chavez's. More North
>>  >>Americans speaking Spanish than Portuguese may be one reason why
>>  >>Chavez gets more attention than Lula despite what may be the latter's
>>  >>greater historical and regional and ideological importance.  At any
>>  >>rate, as I have said, Chavez should use force to suppress right wing
>>  >>coups and he should expose international right wing support of
>>  >>conspirators. But this does not mean that he is himself not cutting
>>  >>his own base from underneath him.
>>  >>
>>  >>
>>  >>I also don't see how this serves as a criticism of Sonntag or as
>>  >>support for his critics such as Lander who I believe serves in the
>>  >>govt. I introduced the article with the intent of eliciting specific
>>  >>criticism. Sonntag seems associated with the world systems school,
>>  >>and he was chosen to represent left criticism in a debate at UC
>>  >>Berkeley. What he says should be answered directly.
>>  >>
>>  >>
>>  >>>
>>  >>>Just yesterday I happened to speak with a woman who knows the daughter
>>  >>>one of five wealtiest in Venezuela who flies around at the touch of a
>>  >>>button.  We're talking about opposition with real hatred. We're talking
>>  >>>about Ku Klux Klan type-mentality, we're talking about racism at its
>>  >>>we're talking about money big-time, and we're talking about such people
>>  >>>wanting governmental power.
>>  >>>
>>  >>
>>  >>That does not invalidate the opposition from the left.
>>  >>
>>  >>>
>>  >>>As to the SIDOR strike, I happened to have visited that plant many
>>  >>>ago in a very memorable visit (including spending a night among its
>>  >>>workers migrating, at the time, from places like Spain).  I've have
>>  >>>trying to understand it now, but I'm not running to this list with
>>  >>>wholesale judgement of its current strike activity (although, frankly,
>>  >>>credentials to do so would exceed Rakesh's).
>>  >>>
>>  >>
>>  >>Many years ago would have been before the neo liberal restructuring
>>  >>of industrial relations, no? So how good are these impressions now?
>>  >>It would be like my saying that I was in Gary Indiana in 1948.
>>  >>
>>  >>>Unlike Rakesh, I would be
>>  >>>asking of people on the scene what's going on.
>>  >>>
>>  >>
>>  >>I can't ask people on the scene. So let's say managment can call on
>>  >>the National Guard as violent strike breakers. What does this say
>>  >>about the nature of Chavez's regime, that it does not have power over
>>  >>the National Guard?
>>  >>
>>  >>>   Maybe the workers are
>>  >>>angry with Chavez, but maybe not (Michael reports that no one in
>>  >>>is blaming Chavez personally; Michael may be in error, but maybe not,
>>  >>>if not, Rakesh obviously doesn't know what he is talking about). Maybe
>>  >>>workers are, rather, angry at their managment and also at their union
>>  >>>leadership.
>>  >>>
>>  >>
>>  >>It also seems that they wanted to Chavez to nationalize the industry
>>  >>and for the state to use its 40% ownership stake to improve
>  > >>conditions. But of course the workers are probably angry first and
>>  >>foremost at their own bosses and,  second, at their own leaders. Yet
>  > >>it does not seem to me that they have concluded that Chavez's state
>>  >>is a workers' state; indeed the state seems at best indifferent to
>>  >>their plight. And in this case it seems to have done worse. The only
>>  >>plus is that Chavez did not declare the strike illegal but given use
>>  >>of the National Guard it seems that it was de facto declared illegal.
>>  >>
>>  >>
>>  >>>  Does the
>>  >>>context of American military defeat in Iraq (but inability to so
>>  >>>acknowledge) mean that the American empire is ready to fall and thus
>>  >>>an opening to genuine and immediate socialism/communism in Venezuela?
>>  >>>
>>  >>
>>  >>
>>  >>US imperialism is not the only 'thing' holding that up.
>>  >>
>>  >>>If
>>  >>>not, what are progressive steps available within the actual Venezuelan
>>  >>>context?
>>  >>>
>>  >>
>>  >>Well it seems that SITOR got a raw deal.
>>  >>
>>  >>>  Is the current government taking none of those steps, or can we
>>  >>>acknowledge that they have taken some?  If some, could it move faster,
>>  >>>is it already moving too fast?
>>  >>>
>>  >>
>>  >>And isn't moving backward despite choking on a surfeit of oil wealth?
>>  >>
>>  >>Rakesh
>>  >>
>>  >>>
>>  >>>Paul z.
>>  >>>
>>  >>>Vol.21-Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's
>>  >>>RESEARCH IN POLITICAL ECONOMY, Zarembka/Soederberg, eds, Elsevier
>>  >>>**********************

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