Wednesday, October 03, 2007

Hugo Chavez and Galbraith

Chávez: 'Galbraithiano'


The Nation
October 15, 2007

Last year, the New York Times reported that Hugo
Chávez, in his speech before the United Nations--the
one in which he called George W. Bush the Devil and
urged Americans to read Noam Chomsky--expressed regret
that he hadn't had a chance to meet the linguist before
he died. A call to Mr. Chomsky's house, the Times
writer quipped, found him very much alive. The Times,
though, had to issue a quick correction when, upon
review of the original Spanish, it became clear that
Chávez was referring not to Chomsky but rather to John
Kenneth Galbraith, who had indeed passed away a few
months before.

There is something more than a little ironic about this
incident, where the press, in a rush to ridicule the
controversial Hugo Chávez, lost John Kenneth Galbraith
in translation, for it is exactly the Harvard
economist's brand of New Deal social democracy, itself
long expunged from public discussion, that would allow
for a more honest consideration not just of Chavismo
but the broader Latin American left of which it is a
vital part.

Chávez has described himself as a "Galbraithiano" and
says he started reading the economist, whose books have
been available in Spanish in Latin America since the
1950s, as a teenager. Long before he began referring to
Chomsky and other currently better-known political
thinkers, he cited Galbraith to explain his economic
policies; at the beginning of his presidency, in 1999,
for example, he urged a gathering of Venezuelan
industrialists to support his mild reform program,
quoting Galbraith to warn that if they didn't, the
"toxins" generated by "extreme economic liberalism"
could "turn against the system and destroy it."

Galbraith is celebrated not just by Chávez but by a
wide range of reformers, including Ecuador's new
president, Rafael Correa, himself an economist. This
popularity reflects a growing enthusiasm for the state
regulation of the economy that Galbraith prescribed. As
Latin America struggles to remedy the damage caused by
two decades of failed free-market orthodoxy--which has
produced dismal growth rates and widespread social
turmoil and misery--politicians are rehabilitating key
macroeconomic principles unthinkable a decade ago.
Argentina, for example, has generated the region's most
impressive growth by lowering interest rates,
maintaining a competitive currency exchange rate,
enacting price controls to stem inflation and driving a
hard bargain with international creditors, thus wiping
out two-thirds of the country's external debt and
freeing up state revenue for social spending and

Galbraith has attracted admirers in Latin America not
just for his macroeconomics but for his critique of
corporate monopolies. His belief that corporations are
political instruments with the incentive and ability to
corrupt democracy resonates today in a region where
much of the economy is controlled by foreign firms and
where corporate TV (which Galbraith believed had little
to do with free speech and everything to do with
manufacturing consumer demand) has become a bulwark of
elite privilege. Galbraith's solution was to use the
state to set up a system of what he called
"countervailing power," enacting aggressive union
protection, unemployment insurance, subsidies, welfare
and minimum wage guarantees to counter monopolies and
force a more just distribution of national wealth.

In Latin America, a similar version of democratic
developmentalism held sway in the early 1940s.
Reformers from across the political spectrum believed
the region's oligarchy to be an obstacle to
modernization and thought the best way to weaken its
deadening grip was to empower those in its thrall. But
the cold war cut short this democratic experiment, as
Washington threw its support behind reactionary allies
in order to insure continental stability.

Developmentalism continued into the 1970s but under the
auspices of either authoritarian or military regimes,
which responded to demands for a more equitable share
of power and wealth with increasing repression,
culminating in the wave of terror that swept the
region, from Chile to Guatemala, in the 1970s and '80s.
This violence, which in many countries decimated the
left, made possible the radical free-market economics
that reigned throughout Latin America during the last
two decades of the twentieth century.

The re-emergence of the Latin American left signals a
revival of democratic developmentalism, but with a key
difference. While in the 1940s reformers sought to
extend political power through unions and peasant
associations vertically linked to parties or leaders,
today they rely on a diverse, horizontal array of "new
social movements" to counter their countries' extreme
concentration of wealth and political power--Brazil's
Movimento dos Trabalhadores Rurais Sem Terra, for
example, or Bolivia's Movimiento al Socialismo, less a
political party than a coalition of social movements,
or Ecuador's powerful indigenous groups.

But it is Venezuela that has the most advanced
partnership between a state reclaiming the right to
regulate the economy and a diverse array of
antineoliberal social movements. What sets Chavismo
apart from past populist experiments in Latin America
is its heterogeneity. It is impossible to spend any
time in urban barrios, among co-op members, community
media and other cultural activists, or in the
countryside with peasant organizers and not be
impressed with their diversity of interests, civic
investment and commitment to building a more humane

The countervailing power of left civil society
organizations--many existed before Chávez's ascendance;
some were founded afterward--has turned Venezuela into
a vibrant democracy and is key to understanding not
just the government's survival in the face of a series
of formidable antidemocratic assaults but its evolving
program, as many of its initiatives come not top-down
but from the grassroots. Last December a respected
Chilean polling firm found that in Latin America only
Uruguayans held a more favorable view of their
democracy than Venezuelans.

The question Venezuela faces is how to institutionalize
this relationship between a fortified executive and an
empowered citizenry while protecting individual rights
and limiting corruption. Debates are under way over a
series of constitutional reforms, to be voted on in a
national referendum in December, that attempt to do
just that. While the international media have focused
on a proposal to remove presidential term limits, other
initiatives would greatly strengthen community
councils, created two years ago as the building blocks
of Venezuela's "participatory democracy," in charge of
a range of local issues, from education and healthcare
to sanitation and road repair. While critics see the
councils as another mechanism for Chávez to strengthen
his power, the Washington Post writes that in "the
neighborhoods, it's hard to find anything but bubbling

Could Chavismo devolve into old-style authoritarianism?
Of course. But the record so far indicates otherwise.
For all his rhetorical excess, Chávez has presided over
an unprecedented peaceful social revolution, doubling
his electoral support in the process. Save for Chile's
Popular Unity government--which never received nearly
as much approval at the polls as Chávez's Bolivarian
experiment has--it is hard to think of another instance
where such a profound reordering of political and
economic relations has been ratified so many times at
the ballot box. This is a remarkable accomplishment,
for revolutions, by their nature, tend to generate
crises that drain away much of their initial support,
producing cycles of violence and repression.

This achievement is rarely reported on in the US media.
Chávez often repeats an observation by one of his
favorite economists to bring home the point. "Never
before," the Venezuelan president quotes Galbraith as
saying, "has the distance between reality and
'conventional wisdom' been as great as it is today."


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