James Petras: Venezuelan Referendum: A Post-Mortem


Richard Moore

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Venezuelan Referendum: A Post-Mortem and its Aftermath

By Prof. James Petras

Global Research, December 5, 2007

Venezuela¹s constitutional reforms supporting President Chavez¹s socialist 
project were defeated by the narrowest of margins: 1.4% of 9 million voters. The
result however was severely compromised by the fact that 45% of the electorate 
abstained, meaning that only 28% of the electorate voted against the progressive
changes proposed by President Chavez. While the vote was a blow to Venezuela¹s 
attempt to extricate itself from oil dependence and capitalist control over 
strategic financial and productive sectors, it does no change the 80% majority 
in the legislature nor does it weaken the prerogatives of the Executive branch. 
Nevertheless, the Right¹s marginal win does provide a semblance of power, 
influence and momentum to their efforts to derail President Chavez¹ 
socio-economic reforms and to oust his government and/or force him to reconcile 
with the old elite power brokers.

Internal deliberations and debates have already begun within the Chavista 
movement and among the disparate oppositional groups. One fact certain to be 
subject to debate is why the over 3 million voters who cast their ballots for 
Chavez in the 2006 election (where he won 63% of the vote) did not vote in the 
referendum. The Right only increased their voters by 300,000 votes; even 
assuming that these votes were from disgruntled Chavez voters and not from 
activated right-wing middle class voters that leaves out over 2.7 million Chavez
voters who abstained.

Diagnosis of the Defeat

Whenever the issue of a socialist transformation is put at the top of a 
governmental agenda, as Chavez did in these constitutional changes, all the 
forces of right-wing reaction and their (Œprogressive¹) middle class followers 
unite forces and forget their usual partisan bickering. Chavez¹ popular 
supporters and organizers faced a vast array of adversaries each with powerful 
levers of power. They included:

1) numerous agencies of the US government (CIA, AID, NED and the Embassy¹s 
political officers), their subcontracted Œassets¹ (NGO¹s, student recruitment 
and indoctrinations programs, newspaper editors and mass media advertisers), the
US multi-nationals and the Chamber of Commerce (paying for anti-referendum ads, 
propaganda and street action);

2) the major Venezuelan business associations FEDECAMARAS, Chambers of Commerce 
and wholesale/retailers who poured millions of dollars into the campaign, 
encouraged capital flight and promoted hoarding, black market activity to bring 
about shortages of basic food-stuffs in popular retail markets;

3) over 90% of the private mass media engaged in a non-stop virulent propaganda 
campaign made up of the most blatant lies ­ including stories that the 
government would seize children from their families and confine them to 
state-controlled schools (the US mass media repeated the most scandalous vicious
lies ­ without any exceptions);

4) The entire Catholic hierarchy from the Cardinals to the local parish priests 
used their bully platforms and homilies to propagandize against the 
constitutional reforms ­ more important, several bishops turned over their 
churches as organizing centers to violent far right-wing resulting, in one case,
in the killing of a pro-Chavez oil worker who defied their street barricades.

The leaders of the counter-reform quartet were able to buy-out and attract small
sectors of the Œliberal¹ wing of the Chavez Congressional delegation and a 
couple of Governors and mayors, as well as several ex-leftists (some of whom 
were committed guerrillas 40 years ago), ex-Maoists from the ŒRed Flag¹ group 
and several Trotskyists trade union leaders and sects. A substantial number of 
social democratic academics (Edgar Lander, Heinz Dietrich) found paltry excuses 
for opposing the egalitarian reforms, providing an intellectual gloss to the 
rabid elite propaganda about Chavez Œdictatorial¹ or ŒBonapartist¹ tendencies.

This disparate coalition headed by the Venezuelan elite and the US government 
relied basically on pounding the same general message: The re-election 
amendment, the power to temporarily suspend certain constitutional provisions in
times of national emergency (like the military coup and lockouts of 2002 to 
2003), the executive nomination of regional administrators and the transition to
democratic socialism were part of a plot to impost ŒCuban communism¹. Right-wing
and liberal propagandists turned unlimited re-election reform (a parliamentary 
practice throughout the world) into a Œpower grab¹ by an 
Œauthoritarian¹/¹totalitarian¹/¹power-hungry¹ tyrant according to all Venezuelan
private media and their US counterparts at CBC, NBC, ABC, NPR, New York and Los 
Angeles Times, Washington Post. The amendment granting the President emergency 
powers was de-contextualized from the actual US-backed civilian elite-military 
coup and lockout of 2002-2003, the elite recruitment and infiltration of scores 
of Colombian paramilitary death squads (2005), the kidnapping of a 
Venezuelan-Colombian citizen by Colombian secret police (2004) in the center of 
Caracas and open calls for a military coup by the ex-Defense Minister Baduel.

Each sector of the right-wing led counter-reform coalition focused on distinct 
and overlapping groups with different appeals. The US focused on recruiting and 
training student street fighters channeling hundreds of thousands of dollars via
AID and NED for training in Œcivil society organization¹ and Œconflict 
resolution¹ (a touch of dark humor?) in the same fashion as the 
Yugoslav/Ukrainian/Georgian experiences. The US also spread funds to their 
long-term clients ­ the nearly defunct Œsocial democratic¹ trade union 
confederation ­ the CTV, the mass media and other elite allies. FEDECAMARAS 
focused on the small and big business sectors, well-paid professionals and 
middle class consumers. The right-wing students were the detonators of street 
violence and confronted left-wing students in and off the campuses. The mass 
media and the Catholic Church engaged in fear mongering to the mass audience. 
The social democratic academics preached ŒNO¹ or abstention to their progressive
colleagues and leftist students. The Trotskyists split up sectors of the trade 
unions with their pseudo-Marxist chatter about ³Chavez the Bonapartist¹ with his
Œcapitalist¹ and Œimperialist¹ proclivities, incited US trained students and 
shared the ŒNO¹ platform with CIA funded CTV trade union bosses. Such were the 
unholy alliances in the run-up to the vote.

In the post-election period this unstable coalition exhibited internal 
differences. The center-right led by Zulia Governor Rosales calls for a new 
Œencounter¹ and Œdialogue¹ with the Œmoderate¹ Chavista ministers. The hard 
right embodied in ex-General Baduel (darling of sectors of the pseudo-left) 
demands pushing their advantage further toward ousting President-elect Chavez 
and the Congress because he claimed ³they still have the power to legislate 
reforms²! Such, such are our democrats! The leftists sects will go back to 
citing the texts of Lenin and Trotsky (rolling over in their graves), organizing
strikes for wage increasesŠin the new context of rising right-wing power to 
which they contributed.

Campaign and Structural Weakness of the Constitutional Reformers The Right-wing 
was able to gain their slim majority because of serious errors in the Chavista 
electoral campaign as well as deep structural weaknesses.

Referendum Campaign:

1) The referendum campaign suffered several flaws. President Chavez, the leader 
of the constitutional reform movement was out of the country for several weeks 
in the last two months of the campaign ­ in Chile, Bolivia, Colombia, France, 
Saudi Arabia, Spain and Iran) depriving the campaign of its most dynamic 

2) President Chavez got drawn into issues which had no relevance to his mass 
supporters and may have provided ammunition to the Right. His attempt to mediate
in the Colombian prisoner-exchange absorbed an enormous amount of wasted time 
and led, predictably, nowhere, as Colombia¹s death squad President Uribe 
abruptly ended his mediation with provocative insults and calumnies, leading to 
a serious diplomatic rupture. Likewise, during the Ibero-American summit and its
aftermath, Chavez engaged in verbal exchange with Spain¹s tin-horn monarch, 
distracting him from facing domestic problems like inflation and 
elite-instigated hoarding of basic food stuffs.

Many Chavista activists failed to elaborate and explain the proposed positive 
effects of the reforms, or carry house-to-house discussions countering the 
monstrous propaganda (Œstealing children from their mothers¹) propagated by 
parish priests and the mass media. They too facilely assumed that the 
fear-mongering lies were self-evident and all that was needed was to denounce 
them. Worst of all, several ŒChavista¹ leaders failed to organize any support 
because they opposed the amendments, which strengthened local councils at the 
expense of majors and governors.

The campaign failed to intervene and demand equal time and space in all the 
private media in order to create a level playing field. Too much emphasis was 
placed on mass demonstrations Œdowntown¹ and not on short-term impact programs 
in the poor neighborhoods ­solving immediate problems, like the disappearance of
milk from store shelves, which irritated their natural supporters.

Structural weaknesses There were two basic problems which deeply influenced the 
electoral abstention of the Chavez mass supporters: The prolonged scarcity of 
basic foodstuffs and household necessities, and the rampant and seemingly 
uncontrolled inflation (18%) during the latter half of 2007 which was neither 
ameliorated nor compensated by wage and salary increases especially among the 
40% of self-employed workers in the informal sector.

Basic foodstuffs like powdered milk, meat, sugar, beans and many other items 
disappeared from both the private and even the public stores. Agro-businessmen 
refused to produce and the retail bosses refused to sell because state price 
controls (designed to control inflation) lessened their exorbitant profits. 
Unwilling to Œintervene¹ the Government purchased and imported hundreds of 
millions of dollars of foodstuffs ­ much of which did not reach popular 
consumers, at least not at fixed prices.

Partially because of lower profits and in large part as a key element in the 
anti-reform campaign, wholesalers and retailers either hoarded or sold a 
substantial part of the imports to black marketers, or channeled it to upper 
income supermarkets.

Inflation was a result of the rising incomes of all classes and the resultant 
higher demand for goods and services in the context of a massive drop in 
productivity, investment and production. The capitalist class engaged in 
disinvestment, capital flight, luxury imports and speculation in the 
intermediate bond and real estate market (some of whom were justly burned by the
recent collapse of the Miami real estate bubble).

The Government¹s half-way measures of state intervention and radical rhetoric 
were strong enough to provoke big business resistance and more capital flight, 
while being too weak to develop alternative productive and distributive 
institutions. In other words, the burgeoning crises of inflation, scarcities and
capital flight, put into question the existing Bolivarian practice of a mixed 
economy, based on public-private partnership financing an extensive social 
welfare state. Big Capital has acted first economically by boycotting and 
breaking its implicit Œsocial pact¹ with the Chavez Government. Implicit in the 
social pact was a trade off: Big Profits and high rates of investment to 
increase employment and popular consumption. With powerful backing and 
intervention from its US partners, Venezuelan big business has moved politically
to take advantage of the popular discontent to derail the proposed 
constitutional reforms. It¹s next step is to reverse the halting momentum of 
socio-economic reform by a combination of pacts with social democratic ministers
in the Chavez Cabinet and threats of a new offensive, deepening the economic 
crisis and playing for a coup.

Policy Alternatives

The Chavez Government absolutely has to move immediately to rectify some basic 
domestic and local problems, which led to discontent, and abstention and is 
undermining its mass base. For example, poor neighborhoods inundated by floods 
and mudslides are still without homes after 2 years of broken promises and 
totally inept government agencies.

The Government, under popular control, must immediately and directly intervene 
in taking control of the entire food distribution program, enlisting dock, 
transport and retail workers, neighborhood councils to insure imported food 
fills the shelves and not the big pockets of counter-reform wholesalers, big 
retail owners and small-scale black marketers. What the Government has failed to
secure from big farmers and cattle barons in the way of production of food, it 
must secure via large-scale expropriation, investment and co-ops to overcome 
business Œproduction¹ and supply strikes. Voluntary compliance has been 
demonstrated NOT TO WORK. ŒMixed economy¹ dogma, which appeals to Œrational 
economic calculus¹, does not work when high stake political interests are in 

To finance structural changes in production and distribution, the Government is 
obligated to control and take over the private banks deeply implicated in 
laundering money, facilitating capital flight and encouraging speculative 
investments instead of production of essential goods for the domestic market.

The Constitutional reforms were a step toward providing a legal framework for 
structural reform, at least of moving beyond a capitalist controlled mixed 
economy. The excess Œlegalism¹ of the Chavez Government in pursuing a new 
referendum underestimated the existing legal basis for structural reforms 
available to the government to deal with the burgeoning demands of the 
two-thirds of the population, which elected Chavez in 2006.

In the post-referendum period the internal debate within the Chavez movement is 
deepening. The mass base of poor workers, trade unionists and public employees 
demand pay increases to keep up with inflation, an end to the rising prices and 
scarcities of commodities. They abstained for lack of effective government 
action ­ not because of rightist or liberal propaganda. They are not rightists 
or socialist but can become supportive of socialists if they solve the triple 
scourge of scarcity, inflation and declining purchasing power.

Inflation is a particular nemesis to the poorest workers largely in the informal
sector because their income is neither indexed to inflation as is the case for 
unionized workers in the formal sector nor can they easily raise their income 
through collective bargaining as most of them are not tied to any contract with 
buyers or employers. As a result in Venezuela (as elsewhere) price inflation is 
the worst disaster for the poor and the reason for the greatest discontent. 
Regimes, even rightist and neo-liberal ones, which stabilize prices or sharply 
reduce inflation usually secure at least temporary support from the popular 
classes. Nevertheless anti-inflationary policies have rarely played a role in 
leftist politics (much to their grief) and Venezuela is no exception.

At the cabinet, party and social movement leadership level there are many 
positions but they can be simplified into two polar opposites. On the one side, 
the pro-referendum dominant position put forth by the finance, economy and 
planning ministries seek cooperation with private foreign and domestic 
investors, bankers and agro-businessmen, to increase production, investment and 
living standards of the poor. They rely on appeals to voluntary co-operation, 
guarantees to property ownership, tax rebates, access to foreign exchange on 
favorable terms and other incentives plus some controls on capital flight and 
prices but not on profits. The pro-socialist sector argues that this policy of 
partnership has not worked and is the source of the current political impasse 
and social problems. Within this sector some propose a greater role for state 
ownership and control, in order to direct investments and increase production 
and to break the boycott and stranglehold on distribution. Another group argues 
for worker self-management councils to organize the economy and push for a new 
Œrevolutionary state¹. A third group argues for a mixed state with public and 
self-managed ownership, rural co-operatives and middle and small-scale private 
ownership in a highly regulated market.

The future ascendance of the mixed economy group may lead to agreements with the
Œsoft liberal¹ opposition ­ but failing to deal with scarcities and inflation 
will only exacerbate the current crisis. The ascendance of the more radical 
groups will depend on the end of their fragmentation and sectarianism and their 
ability to fashion a joint program with the most popular political leader in the
country, President Hugo Chavez.

The referendum and its outcome (while important today) is merely an episode in 
the struggle between authoritarian imperial centered capitalism and democratic 
workers centered socialism.

Disclaimer: The views expressed in this article are the sole responsibility of 
the author and do not necessarily reflect those of the Centre for Research on 

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