A couple of months before Latin America followed Wall Street into the whirlpools, Venezuela was experimenting with a curious, unnoticed and utterly revolutionary version of financial meltdown. "It is our resolve to keep on helping Argentina", beamed President Hugo Chávez as he placed his signature on the dotted line. The $1 billion of Argentine state debt that he bought were added to a previous $6 billion, purchased since 2005.
From the skulking concrete of Venezuela's central bank, the bonds passed at lightning speed, sprinkling profits as they went: from the state to grossly overpaid brokers, to private banks and onto big investors, each time with the exchange rate into local currency climbing and the dollar value falling. At journey's end, an act of solidarity had sent Argentina's debt ratings into casualty.
As Venezuela's yearly electoral season approaches - this time in regional and local elections, to be held on 23 November 2008 - the bullish feats of Hugo Chávez's last year, from Russian naval exercises in the Caribbean to the expulsion of Human Rights Watch, sit alongside the stunned relics of a political flash-flood. The debt purchases are on hold, and cooperatives are out of fashion. Food prices, once controlled, have steamed upwards. And the great political force unveiled by Chávez in the hour of his zenith, the Partido Socialista Unido de Venezuela (United Socialist Party of Venezuela / PSUV), is entering the poll facing a threat from the opposition in at least six states out of the twenty-three being contested, and from dissident chavistas in at least three more. At times, the president's enormous pedagogical patience with the faithful wears thin.
"Revolutionary discipline!" he insisted early in November before a red-shirted crowd in the state of Miranda as he got into campaign stride: ticking off the indolent canvassers, seizing their electoral lists, and phoning the voters himself.
The pollsters, however, point to a trend that has deepened since the middle of 2007. Chávez's hard core of loyalists, once close to half the country, has withered to around 20% of Venezuela's electorate. In between the devoted and the enemy stretch an ever widening ground of neutrals and "soft" chavistas, fearful of Venezuela's oligarchy but uncertain how much revolution they can take.
Losing the vote on constitutional reform in December 2007 in the hillside warrens of Petare or the district of Libertador signified the end of the Caracas bastions, worn down by food shortages, crime and low-level corruption. The movement's intellectual elites foresaw and welcomed a time of consolidation; Chávez duly granted their wish, proclaiming the need to "review, rectify and recharge" (the three r's, as they are known). For once, it seemed, the great man would sit back and entertain a debate for the eyes and ears of the world on what socialism in a time of plenty can mean.
Silence followed. There has been no internal debate, nor has the action stopped. Ideological fissures and impulses tremble across Venezuela every day: new state takeovers worth around $12 billion, twenty-six decree-laws on almost every realm of policy signed on 31 July, massive arms purchases from Russia. Every day the government follows Ezra Pound's injunction to "make it new", even if the direction taken remains blurred, indecipherable, drowned in jargon and anti-imperial theorising. Meanwhile, as oil falls beneath $70 a barrel, the magic figure at which Venezuela can sustain its spending according to former central-bank governor Maza Zabala, the edifice is starting to look decidedly shaky.
In mid-summer, weeks after the package of decree-laws was passed at the stroke of Chávez's pen, passers-by outside a metro station in Caracas could hear a saleswoman's pitch, off-setting the deadening hot midday sun. "New law on transport" she plaintively called at the pedestrians as they shuffled from sunlight to the dark hollows of the underground. "New law on social security, new law on the popular economy, new law...." The television screens run by the state drummed the message home: "In a revolution, the people's happiness is the law."
"Let the people decide"
For his critics, the about-turns of the last year simply mark an acceleration of Chávez's political hallmark - his ability to shift from the bonhomie of moderation to autocratic stampede in a matter of seconds. "One side of his brain is Girondin, and the other is Jacobin" observes the acerbic critic Teodoro Petkoff (see Jon Lee Anderson, "Fidel's Heir", New Yorker, 23 June 2008). Chávez's free-thinking promise on his creation of the PSUV has likewise swerved violently. "Enough of the little finger, the finger and almost always my finger", he told the adoring crowd in December 2006, "let the people take the decisions." One of the first creations in the party's structure, however, was its discipline committee.
The attitude towards the conditions that underlie the government's ten-year existence - the inclusion of the poor, the refoundation of the political system - verges on the insolent. In Venezuela, but also in Argentina, and to a disturbing extreme in Nicaragua, the triumphant left seems to be growing careless towards the integrity of its project. Bold reforms and domestic stand-offs have given way to a closed circle of self-supporting rhetoric, while the gritty details of state management are skated over in favour of euphoric announcements. Private pensions worth $30 billion are nationalised in Argentina for reasons that are unclear. In Venezuela, business "hoarders" are persecuted, 270 allegedly corrupt candidates are struck off the electoral lists, and the military is put on alert should the opposition win the state of Zulia.
As the state stepped in to rescue high capital around the world, Chávez made clear that his methods would be different. "Bankers can forget about us doing the same. I'll take over the banks, I'll expropriate them."
None of this should downplay what has been achieved in welfare or poverty- reduction, or in building communities that are now organised enough to express their irritations where no one gave a damn before. But unease stalks supporters' minds. In the editor's suite of Últimas Noticias, Venezuela's biggest-selling daily, traditional chavista sympathies are being sorely tested. The paper is immersed in local life, in potholes and murders, but its editor, Eleazar Díaz Rangel shrugs his shoulders, and seems unsure as to where the state is heading.
"No one knows how the three r's have been achieved. There's no general assessment of the errors and what changes to make. But it is clear that the person trying to recharge (reimpulsar) the process is Chávez."
For Juan Carlos Monedero, a Spanish associate of Chávez's leading think- tank, the Centro Internacional Miranda, the bases of a decent state and public life are still being laid in an oil-drenched society. But even he recognises the depth of concern: there is, "a metastasis of Caesarism", of total control of every detail of state by one solitary man. "It's time to make internal discussion a democratic requisite, to multiple dissidences", he wrote after the December 2007 referendum defeat. Yet none of this has happened. The prevailing note of the time is intellectual paralysis and political writhing. The question is why.
Power and betrayal
General Raúl Isaías Baduel is widely regarded as a privileged observer of this process. In the founding myth that Hugo Chávez has propagated of his rise to power, Baduel is there - one of the four soldiers who took a revolutionary oath in 1982 under the Samán de Güere, the tree where Simon Bolívar is said to have rested before routing the Spaniards in 1821. Twenty years later, Baduel led the campaign to rescue Chávez from a coup, commanding the helicopters that brought the exile back to Caracas. Until 2007, few had shown such unbending loyalty.
In an office given to him by a public-relations executive, Baduel is setting out on the next, uncertain stage of his career - that of insider turned antagonist. Hunched in his blazer, recovering from a cold, the general recounts the troubles he has just had: pincered between two cars a few weeks before, his vehicle was shot at four times. "I could see the hand of a foreign government", he says.
In July 2007, Chávez sacked Baduel as defence minister. Relations between the two had long soured: "In 2005, I began to perceive deviations in the project that began under the Samán de Güere." Baduel's tone deepens as he finds words to express the abomination. "It became ever clearer that we were facing a project called 'socialism of the 21st century', which was never properly defined, which was only the repetition of basic slogans empty of content, and which was aimed at sustaining the única y personalísima (nothing but the personal) ambition of President Chávez to become life-president of a Venezuela that grows ever poorer."
Chávez, having been saved from the opposition's battering-rams, has arguably transformed empathy with the poor into self-identification with the people, and finally into conviction that he himself incarnates the general will - that his next caprice is in fact history's iron law. It is not that simple, of course; while Fidel Castro once represented himself as a kind of host of the Cubans' will, Chávez sings, coddles and back-slaps. He is funny. But his absolute power is also lonely, paranoid, and surrounded by an echo-chamber of sycophants.
For Agustín Blanco Muñoz, the political scientist who interviewed Chávez on many occasions in the 1990s, the circle around Chávez has boiled down to half a dozen figures. These include powerful leaders and minister, such as Miranda state governor Diosdado Cabello, finance minister Ali Rodríguez and former vice-president José Vicente Rangel; some, such as Rodríguez, the lynchpin of victory over the general strike in 2002-o3, are brilliant strategic minds. But these are working partners, not the whisperers in Chávez's ears.
The story of his intimate allies, on the other hand, is one of betrayal. Of the three fellow soldiers at the oath-taking of Samán de Güere, one is dead and the other two are turncoats. Luis Miquilena, former head of the constituent assembly in 1999, recently warned that Chávez is "loyal to the traditions justifying totalitarian dictatorship." According to the most respected biography of the president, dozens of friends and allies have turned away, citing their exasperation at Chávez's thirst for power.
Creating a "new man"
Yet it is Venezuela's political moment that has made Chávez into such a towering figure of the regime. The collapse of the opposition and of intermediate democratic institutions, the vertiginous circuits of community-to-president communication, and the establishment of an amorphous mass movement - processes that the president has followed as well as pushed - have created a huge gap between leader and followers. Into this space, no powerful dissident can last for long: there is no platform, no institution, and most importantly, no independent source of resources that is not derived from the oil state (see "Venezuela: a revolution in contraflow", 10 February 2006)
Díaz Rangel's observations in this respect are telling. The call to debate made by Chávez fell flat on its face, but not because a paranoid president snuffed out the effort. "Ideological differences exist, but they are not discussed. Why? Because the centre is Chávez, and it's impossible to chafe the president due to the enormous power that he has compared to everyone else."
Instead, the factions within chavismo prefer to battle for their share of the petroleum pie. Here, the disputes can be vicious even as their content is threadbare. Thus Venezuela, supposedly a "low-intensity democracy" or "quasi-dictatorship", is fielding over 8,000 candidates in the coming elections, from 786 political groupings. "This is not an election", quips Blanco Muñoz, "it's an electoral bender."
Half an hour through clogged traffic from the central bank, a virulent form of internal criticism can nevertheless be found. On the inclines of Sarria, a lower-middle-class suburb of mechanics and thick bundles of hanging cable, discontent with food shortages or crime has mutated into doctrinal purity. The demand is not for a new government, but a "new man".
In a roomy house next to a petrol station, Concepción Alzuru and colleagues in Radio Libre Negro Primero, one of 270 community stations across the country, work to animate the revolution by covering the activities of dozens of community councils and party battalions. Tall and serene, Alzuru is something of a star: his fluid and utterly confident diagnosis brooks no half-measures. "What we have here is 100% democracy," he says. "That said, there are people who are not revolutionaries but who live from the revolution. The next step will involve everyone becoming less egocentric. In many ways, this government has been too subtle."
Shaking up the state
The gap between the realities of state and the demands of the base has grown unerringly large. At their juncture, Chávez has revelled in his political mastery, while finding it increasing hard to satisfy both elements: that of a patronage-dependent, ineffective state and political structure, of the sort that sends Argentine bonds into a spin, and that of a radicalised and expectant base.
For Blanco Muñoz, the new solution to this, the essential structural dilemma of chavismo, is now being tested: "state capitalism". "The idea is to have a strong state, but give it an inverse meaning by putting wealth in the hands of the majority. But we know what this means - the creation of an enormous bureaucracy that simply becomes the new structure of privilege."
The emergence of this class - of bond-brokers, state contractors, governors and military officers - is already well advanced. Since early 2007, reams of evidence pointing to the historical failure of the corporate state in Venezuela have been ignored, no more so than in the takeover of Santander bank's local subsidiary (announced on 31 July 2008), which lifted the Venezuelan state's presence in the banking sector to over 20% without any particular renewal of interest in oversight.
As Víctor Salmerón, economic editor of the national daily El Universal observes, the path towards public owned banking has already been trodden: seven of them collapsed between 1960 and 1993. "The only bank in the country which is making losses at the moment is the state-owned Banco Industrial de Venezuela", he says. "But then, these banks are handled according to political criteria. If you want to finance land reform in Barinas state, then that's where you'll find the money."
Within the state, the experience of working under President Chávez is likewise that of sudden, spasmodic change - of the same battle between dependence on and impatience with the existing machinery. In the foreign ministry, where the breach between the inherited pro-Washington diplomatic corps and the new anti-imperial, Bolivarian mission is evidently vast, agitation is constant (see Julia Buxton, "Hugo Chávez and Venezuela: questions of leadership", 21 November 2008).
One senior adviser to foreign minister Nicolás Maduro, a member of Chávez's close circle, admits he is exhausted: apparently the president is fond of reading official documents at night and demanding instant action. "His priority is politics over economics. As a result, political activity overwhelms our technical capacity - we have to create new structures to respond to new needs as we go, whether it is with Unasur [The South American Union] or Petrocaribe [the oil aid programme for the Caribbean, estimated to be worth $2 billion in 2007]".
"As the Cubans say, structural changes produce areas of anarchy", he adds. "Of course, the difference in Cuba was that they could use their weapons."
The new opposition
When everything is political and the Jacobin faction dominates, the historian of the French revolution François Furet observed, enemies are always waiting. "Like mythological thought, the objective universe is invested with subjective wills, which means culprits and scapegoats."
The Venezuelan opposition has long served as the culprit and the scapegoat, the local branch of empire and the enemy within. It is of course the class-based polarisation generated by the opposition in the coup and general strike of 2002 and 2003 that has enabled all criticism to be treated as a conspiracy to subvert the government. Since those days, however, chavismo has seized control of all state institutions, and the opposition has reached in defence for Chávez's own constitution (adopted in December 1999).
A diminutive blue version of this document is brandished ferociously by Leopoldo López, mayor of the Caracas suburb of Chacao. One of the 270 candidates barred from running for public office for nine years - in his case on a corruption charge dating from 1997 that has never reached a court of law - this 37-year-old stalks the mayor's office with a rabid grimace. Photogenic, dynamic and extraordinarily nimble in his convictions, López is apparently the country's most popular politician, a fact that may have influenced the comptroller-general's ruling.
For López, the constitution is the lodestone for Venezuela's future. Like many citizens, he wishes the revolution would stop there. "The problem is not with the new institutions, but with the appalling execution of policy, the corruption, the lack of balance between the public powers..... Only when three things occur will the institutional scaffolding work: when it is depoliticised, demilitarised and stripped of ideology."
The growing body of the new opposition rightly scents that here, in the middle ground of those supporting the chavista impulse but disregarding its manic excesses, lies the way back to government. Baduel, for his part, is not standing in this poll, but seemingly remains ready for the great presidential contest in 2012, with a similar message of balanced government and the armed forces as his key backers. "No less than 80% of the men and women in the armed forces are increasingly concerned over where the institution is going", he insists. On his table three prominent books illuminate the compass of his thinking: a tome on social policy, a homage to Bolívar and James Redfield's new-age humdinger, The Celestine Prophecy.
Should Chávez lose six or seven of the twenty-two provinces being contested in the 23 November election, he will find himself faced with a reinvigorated opposition at a time of dwindling oil revenues. Although he has pledged to order the tanks onto the streets and crush the political intruders, enlightened chavistas are hopeful that he may use the opportunity to cultivate the very same middle ground. "A period will begin in which all political actors will have to show their maturity", argues an optimistic Monedero. "The opposition will have to show they are sincere in terms of their promise to defend the constitution. And chavismo, for its part, will be obliged to open up to more internal debate."
In short, the first conflict-ridden decade will be over, and the construction of a new political identity in Venezuela complete. Or alternatively, the militarisation of the movement that began in 2005, and has spread arms to the community base through the national reserve and other militias along with a rhetoric of violent class antagonism, could be called on to meet its manifest destiny. It would be an act of the most extreme folly, the spasm of an expiring presidency, and the result of a terrible dearth of sound advice. In short, it will be the test of the central unresolved conundrum of the president's rule: is it the man or the movement that is in charge?
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