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Venezuela Finally Turns Communist

By: Enrique Standish - Nov 29, 2013, 12:05 pm

EspañolWhen Hugo Chávez was running in his first successful presidential campaign, back in 1998, he was asked point blank in several television interviews whether or not he was a communist. His reply was identical to the one given by Fidel Castro to Princeton University students during his visit to the United States in 1959: “I am a humanist.” Years later, on consolidating total power in his own hands, Chávez again emulated Fidel and confessed to being “a convinced follower of Marxist-Leninist ideology.”

During his 14-year rule in Venezuela, Chávez followed a strategy of introducing socialism in stages. The first stage entailed obtaining total control of all institutions of the Venezuelan state. Thus, during the first four years, he concentrated his efforts in changing the Constitution, packing the Supreme Court, installing soviet-style political commissars in army units, and changing the national identity card and the electoral system to ensure his reelection through manipulation of voter-rolls. During this stage, Chávez was not interested in antagonizing the private sector or the business community. He had enough on his plate, and knew he could not tackle all enemies at once.

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Source: Mises.ca.

Just as Hitler’s final destruction of the Jewish middle class during Kristallnacht did not occur until five years after his ascension to power in Germany, in Venezuela, Chávez reassured the business community that he was not really interested in their demise. Throughout this period, “Chavismo” seemed very similar to Argentina’s “Peronismo.”

In September 2001, Chávez began his offensive for the “Second Stage of the Process for the Revolution,” as he called his march towards a totalitarian state. That month, he openly broke with the United States by calling the US bombing of Afghan targets “an act of terrorism equal to 9/11.” He then proceeded to pass 49 laws directed against the private sector. These laws eliminated private participation in the oil business, allowed for confiscation without payment of private lands, suspended constitutional guarantees for business owners, and established “military security zones” in major metropolitan areas — a de facto confiscation of prime real estate in Venezuela’s major cities. At the same time, he launched an all out attack against the country’s independent labor unions, persecuting and even imprisoning several prominent leaders.

These actions galvanized the opposition, as Chávez expected, and resulted in mass protests and two national General Strikes. He expected these reactions and was prepared for the challenge.

However, he miscalculated while he panicked during the mass protest and march of April 11, 2002. His order to members of his civilian armed militias to fire on unarmed demonstrators disgusted the officer corps that he had handpicked to run the Army. His own generals deposed him.

These same generals, though, quickly brought him back only three days later when the opposition’s chosen leader bungled in every imaginable way. As a result, the Second Stage of the Process succeeded. By the end of 2004, Chavez had embarked on an unstoppable march to acquire the “commanding heights” of the Venezuelan economy, destroyed the independent labor movement — its leaders were mostly imprisoned or had fled into exile — and gained control of most of the mass media outlets in the country.

Soon after, he faced significant problems with his image as a successor to Fidel Castro: large transnational corporations still had a major presence in key sectors of the Venezuelan economy, and the country’s revenues were completely dependent on oil sales to the United States. How could a budding 21st century Leninist achieve world fame if everyone knew that in his own country transnational corporations ran key sectors of the economy?

Thus, between 2008 and 2009, Chávez entered into the Third Stage of the Process. He nationalized the holdings of international corporations in all sectors considered essential by his Cuban advisers: telecommunications, mining, steel, construction materials, oil and oil services, energy generation, distribution and transmission, gas, agricultural services, and even glass companies. At the same time, Venezuela entered into a hugely expensive and disadvantageous agreement with China, with the sole purpose of diverting its oil exports from the United States to the Chinese market — thereby ending Venezuela’s dependence on the US market.

By the time of his death, Chávez had achieved most of what he had set out to do. A mediocre opposition, totally lacking a strategic vision, posed no problems. Moreover, as Chávez himself boasted several times, he had “infiltrated them to the core.” His aim was never to turn Venezuela into another Cuba. Chávez knew well that he needed the private sector to keep goods on the shelves and to avoid Venezuela becoming economically irrelevant in the way Cuba has become.

His relation to the Castro brothers was one of a comrade in arms and colleague. He needed the Cubans to provide security and repression expertise, and they needed him to keep the Cuban people fed. Chávez’s aim was to supplant Fidel as the new leader of the International Left, and he knew he needed a strong Venezuela to do that.

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Nicolás Maduro, successor within the Chavista regime. Source: Gobierno Bolivariano de Venezuela.

Since Chávez’s death, the situation has changed in Venezuela. Nicolás Maduro lacks Chavez’s brain-power and charisma and has become completely dependent on Cuban advice. The relationship with Cuba has also changed: Havana is an imperial capital, and Caracas is merely the viceroy’s seat of power. Maduro and his vice-president, Chávez’s son-in-law — a true Marxist fanatic with a degree from Cambridge University — know that merely tweaking electoral rolls and voting machines will not win them elections a-la Chávez. They need to enter the Fourth Stage and achieve the revolution now. The latest news out of Caracas is simply the attempt by Maduro’s and Chávez’s family members to keep hold of power despite their evident lack of popularity.

Thus, during the last few weeks, Maduro has decided to have his Kristallnacht. This time it is not the Jews that are persecuted, as in Hitler’s Germany (although Chavismo has always been openly anti-Semitic), but the entire business class of Venezuela — from small shop owners to executives from large companies. In the initial opening of Maduro’s declared “Economic War” against the business community, he accused all merchants of price gouging, and he forced shops to lower their prices by 70 to 30 percent.

Many citizens think it is immoral for a merchant to price his goods according to his rational expectations of what the exchange rate will be in the next few months, and not at the exchange rate artificially set by the government today. Only last January, the currency was devalued 48 percent, and yet the average consumer does not understand the concept of pricing to replacement cost. Thus, Maduro has achieved a great initial success. People are happy with his decision, only two weeks before Municipal elections take place. No one is thinking of what will happen in January when most of the shops do not reopen as they have been forced to liquidate their inventories below replacement values. No one, except Maduro and his vice-president, that is.

Last Friday, Maduro approved two laws that finally ended free markets in Venezuela. The first law, with the Orwellian name of “Law for the Protection of the Venezuelan Family and Control of Costs and Prices,” requires all businesses in Venezuela, large and small, to submit their price mark-ups for approval with the head of Venezuela’s newly created Economic Council (whose leader happens to be an army general). The second law creates a National Foreign Trade Center that will eventually become a monopoly that will handle all Venezuelan imports. Private companies will be allowed to operate only as local distributors and retailers of the National Foreign Trade Center.

In January, when Venezuelans discover that their cheap purchases of government-mandated, reduced-price goods produced the collapse of the private sector, the government will be ready with a Soviet-style rationing system. Already, black market operators are setting up shop in what promises to be a thriving business in Socialism for the 21st Century.

Venezuela has now become the continent’s second communist totalitarian state.

Enrique Standish Enrique Standish

Real name withheld for safety reasons within Venezuela.