Is Maduro taking Chavismo down the pragmatic path? An interview with Steve Ellner (part 1)

Steve Ellner

 Steve Ellner addresses a forum on Chavismo in Caracas, Venezuela.

Steve Ellner is a well-known analyst of Venezuelan and Latin American politics and is a retired professor at the Universidad de Oriente. He has published scores of journal articles and over a dozen books, his last being the edited Latin America’s Radical Left: Challenges and Complexities of Political Power in the Twenty First Century, published by Rowman & Littlefield.

This interview by Evaristo Marcano was originally published in Spanish in and

Evaristo Marcano: In an article of yours posted in New Left Project, you speak of the pragmatic and populist policies of presidents Hugo Chávez and Nicolás Maduro. But these terms often lend themselves to confusion. The Venezuelan opposition attributes the economic difficulties currently facing Venezuela to the policies adopted by President Chávez from the outset of his government, and calls them “populist” and “pragmatic.” Opposition leaders claim that these policies represent a veritable “original sin” that inevitably led to the problems we now face. Is there any truth to this argument?

Steve Ellner: The terms populism and pragmatism have many connotations (particularly in Spanish) and some are contradictory. But when the opposition talks of both, they are referring to what can be called “crass populism” and “crass pragmatism.” The policies implemented by Chávez were anything but crass.

E.M. Give me an example of the pragmatic policies to which you are referring.

S.E. If the word pragmatic means realistic, Chávez acted pragmatically during and after the general strike (or lockout) of 2002-2003 when the government allied itself with businesspeople who refused to support the strike effort. Politically, Chávez had all the reason in the world to act against FEDECAMARAS. Since its founding in 1944, FEDECAMARAS claimed that it could not assume political positions, and for that reason refused to defend the democratically elected government of Rómulo Gallegos at the time of the November 1948 coup (as Samuel Moncada demonstrates in his book Los huevos de la serpiente), and refrained from opposing the dictatorship of General Marcos Pérez Jiménez until the final months of his regime. But during the presidential campaign of 1998, the organization’s spokespeople openly opposed Chávez’s candidacy. Pedro Carmona, for example, warned that if Chávez won in December, he would abolish the democratic system, and at the same time praised the other presidential candidates (see El Universal, August 15 1998, page 2-2). Then, in 2002, FEDECAMARAS – more than the anti-Chavista political parties and labor leadership – was the main actor in the attempts to overthrow the democratic government.

E.M. What did the friendly relationship with the dissident businesspeople mean in practice?

S.E. Chávez’s announcement shortly after the general strike of “not one dollar more for the coup supporters” signaled the beginning of a policy of favoring businesspeople who had broken with FEDECAMARAS over those who had supported the strike. As a result, a group of emerging businesspeople, some of whom were of Arab origin, began to assume an important role in the economy. The most prominent nouveau riche member was the transportation magnate Wilmer Ruperti, who had imported gasoline with tankers he rented from the Russians during the general strike, at a moment when national oil production almost reached zero. Another pro-chavista businessman, Miguel Pérez Abad, presides over Fedeindustria and is a member of the PSUV and has political ambitions. Pérez Abad and other pro-chavista businesspeople articulate the interests of the private sector at the same time that they defend the government. For example, they maintain that Venezuela’s entry as a full member of MERCOSUR represented a major government success that opened great opportunities for Venezuelan business in foreign markets. Furthermore, they point out that the government succeeded in increasing national production but that the purchasing power of Venezuelans has also increased, and therefore it is necessary to loosen bureaucratic procedures in order to facilitate imports. The pro-chavista businesspeople regularly attend the meetings and assemblies called by the government, and their public statements generally contrast with the neoliberal discourse of FEDECAMARAS. In short, the alliance with the emerging business sector has met with certain success on the political front.

Nevertheless, the political thinking of the emerging businesspeople does not always coincide with that of the government. Take, for example, the case of Alberto Cudemus, who as candidate for president of FEDECAMARAS on two occasions advocated friendly relations with the government and then withdrew from the organization. Thanks to contracts for the supply of pork to the state’s food distribution network, Cudemus became the most important businessman in that area. Nevertheless, in 2014 Cudemus embraced neoliberal precepts when he criticized the Law of Just Prices on grounds that it represented a throwback to the interventionist concepts of the 1960s. He also attributed the Venezuelan economy’s productive deficiencies to the Organic Labor Law of 2012, which was drafted by a commission headed by Maduro, at the time Venezuela’s foreign minister. Subsequently, Maduro, now as the nation’s president, attacked Cudemus whose positions on economic policy appeared to coincide with those of FEDECAMARAS president Jorge Roig. The case of Cudemus demonstrates the limitations of the strategy of alliances with the emerging private sector.

E.M. You say that the policy of favoring a group of emerging businesspeople was a relative success on the political front. And on the economic front?

S.E. From an economic viewpoint, the alliance with the emerging business sector has had dubious results. The disappointing outcome was put in evidence by the financial crisis of 2009, which implicated some emerging businesspeople who dated back to the general strike of 2002-2003 and who were arrested by the Chávez government, at the same time that it expropriated over thirteen banks. The most prosperous of them was the transportation magnate Ricardo Fernández Barrueco with a fortune estimated at over one billion dollars and whose principal firms were confiscated. During his three-year detention, Fernández defended neoliberal arguments. According to him, Chávez promoted national industry during his early years in office, but after declaring himself a socialist in 2005 adopted interventionist policies that undermined national production and led to the financial calamity of 2009. The CADIVI scandal of 20 billion dollars also involved some of the emerging businesspeople, but also the traditional private sector as well as multinationals.

E.M. What you outline here is contrary to the traditional strategy that was embraced by the pro-Soviet communist movement of an alliance with the so-called “progressive bourgeoisie” in third-world countries.

S.E. In the era of the Popular Front against fascism in the 1930s and even in subsequent decades, that strategy made sense, although the progressive role of the so-called national bourgeoisie was greatly exaggerated. But in the era of globalization, beginning in the 1980s, the national bourgeoisie in Latin American nations is no longer “national.” In addition, far from playing the role of a “comprador” bourgeoisie with managerial or administrative functions, the Latin American bourgeoisie includes some of the richest men on earth, such as Carlos Slim and the deceased Lorenzo Zambrano of Mexico, Alvaro Noboa of Ecuador, the deceased Julio Mario Santo Domingo of Colombia, Andrónico Luksic of Chile and Gustavo Cisneros. Now the bourgeoisie as a whole is more intricately tied to global capitalism than in the past.

E.M. How does this transformation affect revolutionary strategy?

Chávez called for a “strategic alliance” with the so-called “productive businesspeople,” but the idea was criticized by some analysts on the left, such as Luis Bilbao (see his Venezuela en revolución: el renacimiento del socialismo, page 196). Nevertheless, the truth is that neither Chávez nor Maduro, who also talks of “productive businesspeople,” really have had in mind a “strategic alliance,” which signifies a high degree of trust between both parties and common long-term goals. What is really at stake is what I would call a “tactical alliance” with much more limited objectives. For example, when the government engaged in a dialogue with representatives of FEDECAMARAS last year, in the context of the proposed “peace dialogue,” the objective was to deal with the violence generated by the protests known as the “guarimba,” and now the objective is to overcome the current problems of inflation, scarcities and unwieldy distribution of goods.

Indeed, Chávez recognized the fragility of any understanding with the private sector. He pointed out that the Venezuelan bourgeoisie was “transnationalized” with a rentier mentality and was less willing to assume risks than its counterparts in other countries in the continent. Several years before the price of the dollar skyrocketed in late 2012, Chávez accused the bourgeoisie of inflating the prices of imported products for the purpose of swindling CADIVI. In order to overcome the problem he called for state takeover of imports (see,

E.M. Is there any support within Chavismo for a strategic alliance” with private sector allies?

Luis Miquilena supported the strategy. As head of finances in the chavista presidential campaign of 1998, he established relations with economic groups of different sizes, both Venezuelan and foreign, such as Spain’s Banco Bilbao Vizcaya (owner of Banco Provincial), as well as the current opposition businessman Tobías Carrero. In addition, Alejandro Armas, who belonged to Miquilena’s faction and headed the Finance Commission of the National Assembly, was accused of being tied to financial interests. Not surprisingly, the first Minister of Hacienda, Maritza Izaguierre, remained only five months in her position. Indeed, a point of honor of the chavista movement is that after Izaguierre, no representative of the private sector occupied positions in charge of the formulation of economic policy, as indeed occurred in the case of nearly all Ministers of Hacienda, Planning (Cordiplan), Finance and the president of the Central Bank. Furthermore, Chávez’s electoral triumph in 1998 was due in large part to the generalized belief among voters that not only politicians but also businesspeople were responsible for corruption in Venezuela. This fact was demonstrated empirically by U.S. political scientist Leslie Gates in her book Electing Chávez.

E.M. What happened after Miquilena left the chavista movement in 2002?

Aurora Morales, who directed the department of ideological formation of the Movimiento Quinta República (MVR), told me in an interview that Miquilena’s thesis of a strategic alliance with representatives of the private sector was defeated within the party after he left the chavista camp in 2002. Nevertheless, in the following years the same position was defended, though less explicitly, by Luis Alfonso Dávila, who headed a chavista current that some Chavistas called a “rightist” faction. Dávila was also defeated in the MVR’s internal elections in 2003 and then abandoned the movement.

In the recent past, the thesis of a strategic alliance with the productive business sector has been defended by Temir Porras, who was a vice-minister of foreign relations and executive secretary of FONDEN prior to leaving the government. Porras advocated a policy of fomenting national capitalist production in order to reduce imports. This recipe recalled import substitution policies of a half a century ago. At the same time, he proposed a “pragmatic strategy.” In an article he published in Rebelión in June of last year, Porras asked “Who can deny that pragmatism is an extremely necessary virtue in the complex circumstances in which we live?” He added “a pragmatic Maduro is what we very much need.” Indeed, he used the words “pragmatism” and “pragmatic” no less than ten times in the article. For Porras and others, pragmatic policies are designed to guarantee stability and the consolidation of the advances achieved since 1998. Needless to say, stability and consolidation are desirable, but as banners they can put the brakes on the deepening of the process of change. Once stability is privileged at the cost of struggle and belief in the centrality and inevitability of conflict is abandoned, the resultant abatement of popular zeal leads to reverses.

E.M. How does the “tactical alliance” that you refer to manifest itself at the local level?

S.E. The same policy of alliances was applied at the local level. The reasoning was as follows: After various attempts to overthrow the government, and after the violence and disturbances generated by the guarimba, and with an opposition that does not recognize the legitimacy of those in power, it is necessary to take into account that the situation in Venezuela is not normal. Chávez’s announcement of “not one dollar more for the coup supporters” signaled a policy at the local level of avoiding the granting of contracts to groups that supported the coup and the general strike. The argument was: Why should the government authorize contracts to someone who is going to use part of their profit to support subversive movements? This line of thinking demonstrates the degree to which political polarization has enveloped the nation. In any case, the acceptance of this criterion requires mechanisms to guarantee transparency in the granting of contracts. The “social controllership” needs to be institutionalized and specifically it is essential for state authorities to turn over public works plans to respective community councils.

E.M. If the government is allied with an emerging business sector, why did FEDECAMARAS agree last year to participate in the “peace dialogue”?

S.E. The decision to penalize the businesspeople belonging to FEDECAMARAS due to their insurgent activity in 2002-2003 came as a heavy blow and helps explain the organization’s receptivity to the government’s proposal to engage in dialogue in 2014. FEDECAMARAS’ acceptance of the proposal, which took place in Miraflores, represented a triumph for President Maduro. It occurred at a moment when the leaders of the opposition grouped in the MUD rejected the proposal, thus signifying a rupture between the anti-chavista politicians and the business class, contrary to what happened in 2002. At the same time, the more conciliatory position of the government toward FEDECAMARAS during the guarimba was a recognition on the part of the chavista leadership that the emerging business sector was not capable of converting itself into a productive force that could replace traditional economic groups. More recently, Maduro’s announcement in April that the government would not grant FEDECAMARAS preferential dollars was also effective, politically speaking. Several months later FEDECAMARAS chose as its president Francisco Martínez, who immediately called for an understanding between government and business, at the same time that he recognized the errors committed by his organization in the past. Nevertheless, a conciliatory posture does not signify a change on the economic front. FEDECAMARAS possibly decided to abandon the role of political opponent it had played in the past because it considered the economic front a more effective battleground.

E.M. Before beginning the second part of the interview dealing with populist policies, can you summarize the principal conclusions related to the relations between the chavista government and the private sector?

S.E. On the political front, the tactical or tacit alliance with businesspeople who have benefited from ties with the state has served to strengthen the government’s position in the face of an aggressive opposition, including FEDECAMARAS. But these business allies have not been completely trustworthy and have certainly not filled the economic expectations of the chavista leadership, and are very far from being consistently “productive.” This dilemma shows that a stage of consolidation and harmony on the road to structural change or socialism is unlikely. The road is necessarily full of contradictions, conflicts and struggles. It is necessary to prepare the people for this type of scenario and not sow excessive optimism that minimizes the challenges facing those attempting to achieve far-reaching change. A second conclusion is that a government committed to socialism but with a capitalist economy (or “structure”) cannot be immune to business pressure, even though businesspeople do not count on the presence of representatives of the economic elite in the highest spheres of the state (as they did in the case of the Fourth Republic). Nicos Poulantzas, the great Marxist state theorist described this dynamic metaphorically when he postulated that in spite of the commitments and loyalty of those in power, the state is a “relation” of the forces of society and more specifically the “condensation” of them (interview with Poulantzas in Marxism Today, July 1979, page 197). In other words, the state to a certain extent internalizes the interests of the private sector, even when none of its members hold important positions within the public sphere. This assertion leads to the following observation: If a socialist government does not deepen the process of change and open channels for popular participation and self-criticism, over time business influence will become institutionalized and revolutionary gains will run the risk of being dismantled.

Note: In the second part of the interview, Professor Ellner will examine the context of populist policies and their lessons for the revolutionary process.