It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Gang violence leaves at least 150 dead in Haiti's capital this week, UN says
The death toll from gang violence in Haiti this year rose to over 4,500 after 150 people were killed in the capital of Port-au-Prince over the past week, United Nations human rights chief Volker Turk said on Wednesday. Amid rampant violence and persistent political instability, Turk said the latest "upsurge" in violence is a "harbinger of worse to come"
Soaring violence in Port-au-Prince since last week has left at least 150 people dead, bringing the number of deaths in Haiti this year to over 4,500, the United Nations said Wednesday.
"The latest upsurge in violence in Haiti's capital is a harbinger of worse to come," UN rights chief Volker Turk warned in a statement.
"The gang violence must be promptly halted. Haiti must not be allowed to descend further into chaos."
Violence has intensified dramatically in Port-au-Prince since November 11, as a coalition of gangs pushes for full control of the Haitian capital.
Well-armed gangs control some 80 percent of the city, routinely targeting civilians despite a Kenyan-led international force that has been deployed to help the outgunned police restore some government order.
"At least 150 people have been killed, 92 injured and about 20,000 forced to flee their homes over the past week," Turk's statement said.
In addition, "Port-au-Prince's estimated four million people are practically being held hostage as gangs now control all the main roads in and out of the capital".
Monica Juma, Kenya's presidential national security advisor, said on Wednesday that her nation backs calls from Haiti for the United Nations to consider turning the current international security mission into a formal UN peacekeeping mission.
Juma told a UN Security Council meeting on Wednesday that Kenya, believed a formal peacekeeping mission could bring more resources to confront an escalating gang conflict.
The current mission has deployed just a fraction of troops pledged by a handful of countries and less than $100 million in its dedicated fund.
The Haitian capital has seen renewed fighting in the last week from Viv Ansanm, an alliance of gangs that in February helped oust former prime minister Ariel Henry.
Turk said that at least 55 percent of the deaths from simultaneous and apparently coordinated attacks in the capital resulted from exchanges of fire between gang members and police.
He also highlighted reports of a rise in mob lynchings.
Authorities said Tuesday that police and civilian self-defence groups had killed 28 gang members in Port-au-Prince after an overnight operation as the government seeks to regain some control.
Last year, in a gruesome chapter of the vigilante reprisals, a dozen alleged gang members were stoned and burned alive by residents in Port-au-Prince.
The UN rights office said the latest violence brought "the verified casualty toll of the gang violence so far this year to a shocking 4,544 dead and 2,060 injured".
The real toll, it stressed, "is likely higher still".
In addition, an estimated 700,000 people are now internally displaced across the country, half of them children, it said.
Turk warned that "the endless gang violence and widespread insecurity are deepening the dire humanitarian crisis in the country, including the impacts of severe food and water shortages and the spread of infectious diseases".
This was happening "at a time when the health system is already on the brink of collapse", he said, adding that "threats and attacks on humanitarian workers are also deeply worrying".
"Gang violence must not prevail over the institutions of the State," he said, demanding "concrete steps ... to protect the population and to restore effective rule of law".
Feb 15, 2005 — The development of capitalism in the 18th and 19th Centuries saw not only bourgeois revolutions but the revolt of slaves and the most successful ...
Karl Marx GOTHIC CAPITALI$M The Horror of Accumulation & The Commodification of Humanity Gothic Capitalism The Horror of Accumulation and the
Wednesday, November 20, 2024
Doctors Without Borders halts operations in Haiti's capital amid threats from police
Doctors Without Borders (MSF) said on Tuesday that it is stopping operations "until further notice" in the Haitian capital Port-au-Prince due to an increase in violence and threats to its staff from members of the Haitian police. The suspension would begin on Wednesday, MSF said.
Doctors Without Borders (MSF) said on Tuesday that it is stopping operations across the Haitian capital Port-au-Prince and its wider metropolitan area due to an escalation in violence and threats to its staff from members of the Haitian police.
The suspension would last from Wednesday “until further notice”, said MSF.
MSF said in a statement that since a deadly attack on one of its ambulances last week, police had repeatedly stopped its vehicles and directly threatened their staff, some with death and rape threats.
“We are used to working in conditions of extreme insecurity in Haiti and elsewhere, but when even law enforcement becomes a direct threat, we have no choice but to suspend our projects,” MSF’s Haiti mission chief Christophe Garnier said.
A spokesperson for Haiti’s national police declined to comment.
MSF, whose presence grew in Haiti in the wake of the devastating 2010 earthquake, is one of the main providers of quality free healthcare in the Caribbean nation and operates key services such as a trauma center and a burn clinic.
The U.N. estimated last month that just 24% of the Port-au-Prince metropolitan area’s health facilities remain open, while those outside the capital face an influx of displaced people jeopardizing their ability to provide essential care.
MSF cited four separate incidents of police threats and aggressions, including from an armed plain clothed officer it said threatened to start executing and burning staff, patients and ambulances as of next week.
The medical aid group treats on average 1,100 outpatients, 54 children in emergency situations and more than 80 sexual and gender-based violence survivors each week, MSF said, as well as many burn victims.
Garnier added that while MSF remained committed to the population it could only resume services if it receives guarantees of security and respect by armed groups, members of self-defense groups and law enforcement.
Earlier on Tuesday, police reported that over two dozen suspected gang members were killed after residents joined police to fight off attempted overnight attacks in a resurgence of “bwa kale” - a civilian vigilante movement that seeks to fight off armed gangs that control most of the capital and are fuelling a worsening humanitarian crisis.
Feb 15, 2005 — The development of capitalism in the 18th and 19th Centuries saw not only bourgeois revolutions but the revolt of slaves and the most successful ...
Karl Marx GOTHIC CAPITALI$M The Horror of Accumulation & The Commodification of Humanity Gothic Capitalism The Horror of Accumulation and the
Friday, November 08, 2024
If Trump Can Be Believed, His Return to the White House Could be a Good Thing…at least Internationally
A left view of the election from an expat in the UK
by Dave Lindorff / November 8th, 2024
TRUMP VOTER IN New Hampshire
Cambridge, UK — As the voting results started coming in here from Virginia at 4 am (GMT, which is five hours later than Eastern Time in the US), I went to bed, having seen enough to know that Kamala Harris’s crash campaign for the White House was failing.
I knew what was coming. I’d experienced it four times already. In 1968 I watched Richard Nixon, the notorious House version of Commie-hunter Sen. Joe McCarthy rouse what he dubbed the “Silent Majority” of right-wing white bigots and pro-Vietnam War super-patriots and defeated Hubert Humphrey (an earlier VP who the Democratic party chose as their nominee when their incumbent president after, Lyndon Johnson decided not to seek re-election).
There was a sense of hopelessness on the left the morning after Nixon’a election.
It happened again in 1980, with the surprise win by Republican Ronald Reagan, who defeated incumbent Jimmy Carter. That morning, I got up early and went down to Broadway from my 11th-floor apartment on Manhattan’s Upper West Side. Walking down the largely empty sidewalk like a zombie, I passed a few people headed the other way, their faces looking similarly shell-shell shocked, until a neighborhood friend, John Hess, a spritely, gray-bearded retiree N.Y. Times staffer, bounded up to me cheerfully. “Isn’t it great?” He said with a smile. “The Republicans also took the Senate!”
“What’s so great about that?” I asked, astonished that this radical leftist journalist would say such a thing.
“Because,” he explained, “If the Democrats control Congress, Reagan can’t blame all his disasters on them. Now he won’t have the ability to blame anyone but himself!”
Actually, in the event, Reagan managed to serve out two terms, and even accomplished some positive things including negotiating with House Majority Leader Democrat Tip O’Neill a rescue of the underfunded Social Security program and ending the Cold War and (at least temporarily) the nuclear arms race with the Soviet Union.
Then, of course, there was the Supreme Court which in 2000 stole the election for George W Bush by halting the vote counting in Florida, where it was clear that Democratic Vice President Al Gore, who had already won the popular vote, would also have won the state and its Electoral College total. Instead, the feckless top court gave the White House to Bush and Dick Cheney.
And finally there was the night Donald Trump stunned the pundits and himself by winning the White House and defeating Democrat Hillary Clinton in 2016.
So waking up Wednesday morning to see that Trump would be president for another nightmare four-term had for me a definite “Groundhog Da” feel to it — but without the guy-gets-girl happy ending to it).
Actually, this time Trump 2.0 is worse than those four earlier Republican wins. This time the Republican president will have solid control of both houses of Congress, with a Senate so overwhelmingly Republican that it will be able to pass almost any piece of legislation without Democrats blocking it, and will likely remain in Republican hands for Trump’s full term. This time around, the Supreme Court too is solidly controlled 6-3 by hard-right justices, and Trump has made it clear that every cabinet office and every government agency will be run by “loyal’ lackeys of his choosing, with even civil service employees either replaced or cowed into submission — including at such normally independent agencies as the Pentagon, CIA, Justice Department and EPA. Even the late irrepressible John Hess would have had a hard time finding a bright side to this Election Day outcome.
Nonetheless I’m going to give it a try.
First a reality check: What we see in the 2024 election result is that a majority of Americans — men and women, rich and poor, white and people of color, educated and uneducated, religious and atheist — are either ready to gamble on a self-involved sociopathic, racist and misogynist criminal billionaire with anger issues or are too concerned with just getting by with their daily lives to to worry about elections that never seem to change their lives for the better or that even make them harder. Analysis of the voting shows that a huge percentage of late voting younger people went for Trump. And a tidal wave of women voting for Harris didn’t materialize. More women voted than men, as usual, but plenty of them went for the pussy-grabbing rapist Trump. Trump also did better with Black men than he did in 2016 and 2024 and significantly improved his tally among Latinos (or as he calls them “Hispanics”). In the end Harris’s larger share of women voters was the same as Trump’s larger share of men, making the predicted gender war a wash-out.
Here in the UK, where I am living for the next nine months, I can see what the results of such so-called populist voting trends can be. British voters in 1979 elected a hard-right Prime Minister named Margaret Thatcher and allowed her and her Conservative Party to set off a seismic shift of the country’s politics away from social democracy and a rather classical conservatism into a two-party Neo-liberal dystopia where both parties accepted the notion that capitalism, unfettered markets, and a coddled business elite managing things was the best option for society.
This narrowed political playing field has led over the ensuing decades to a long period British economic doldrums, and to a turning away by Brits from the rest of Europe, as resentment and hostility towards outsiders, including eastern Europeans, and especially people from Africa, Asia and the Caribbean — all of them willing to work for less and to leave countries that had it even worse — availed themselves of the lack of borders across Europe to flock to the UK. This latter phenomenon led to the narrow victory of a referendum that resulted inBritain’s removing itself from the European Union. Called Brexit, this abrupt anti-immigrant “secession” has wreaked havoc on the nation’s economy and living standards, as well as the operation of key services like the country’s once vaunted National Health System.
Just this past July, British voters, frustrated with a country and government where “nothing works anymore,” turned out the Conservatives after 15 straight years of Tory rule and handed a landslide win to the Labour Party and its new Prime Minister Keir Starmer. How that new government will fare in its effort to right the ship of state and its stagnating economy, given the incredible decades-long disinvestment and privatization it is hoping to reverse, remains to be seen.
I suspect the US, under a second Trump administration, this time emboldened by a political realignment at least as profound as was Thatcher’s 1979 win in the UK, will soon be similarly strip-mined and privatized.
The one bright spot, however, if President-re-elect Trump, a shameless liar, can be taken at his word, would be if he actually were to brings an end to the decade of US military aid political brinksmanship in pushing Ukraine to break away from neighboring Russia’s sphere of influence and to join NATO, the US-led anti-Russian alliance created way back at the start of the Cold War of he 1950s. Trump says, quite logically, that US efforts to pull Ukraine into NATO, a mutual protection pact whose very existence is an existential threat to Russia, and the Ukraine government’s now ten-year old armed conflict with first its ethic Russian minority and then, when Russia responded by invading Ukraine, with Russia, a leading nuclear power, has led to a war in which Ukraine’s military is largely underwritten by US arms and financial banking interests. It is a war that the US knows poses a high risk of provoking a devastating and potentially world-ending nuclear conflict between ther world’s two nuclear superpowers.
During the just concluded election campaign, Trump promised to bring an end to that bloody military conflict immediately before even waiting for his second inauguration in January. He has also promised to end the one-sided slaughter of Palestinians in Gaza, though without specifying how.
I am no fan of Trump, but I have to say should he successfully cut short those two bloody conflicts, or even ends the Ukraine war while at least not making things worse in Gaza, his new presidency would be off to a great start. He should follow that up by returning the US to the treaty relationship on nuclear weapons that his Republican predecessor Ronald Reagan worked out with former Soviet and Russia leader Mikhail Gorbachev, which effectively, if all too briefly, ended the two countries’ nuclear standoff and raised humanity’s hopes for an end to nuclear weapons altogether. Trump should also follow through with his prior effort to pull the US out of NATO, which long ago morphed into a cover for and participant in US global military actions around the world and simply serves as an excuse for ploughing over a trillion dollars a year into the coffers of the US arms industry.
Martin Luther King, a year to the day before the day in 1968 that he was assassinated (my birthday) he gave a speech at the Riverside Church in New York titled Beyond Vietnam:A Time to End the Silence.” In it he correctly identified the US, at that time conducting a bloody aggressive war in Indochina, as being “the greatest purveyor of violence in the world.” It has remained so, Indeed its endless wars and “interventions,” have reportedly killed well over 6 million people, mostly civilians, around the world in the eight decades since WWII.
Trump knows this and has talked of pulling US forces back from the hundreds of places they are based in foreign lands (though that idea was at one point linked by him to the idea of using them against American dissidents here at home — NOT a Great idea!).
He should pull them back and decommission them.
Trump has said on a number of occasions that he does not want wars — that as a businessman, he wants the US to do business with other nations, on a level playing field. That is a great sentiment, and it’s one that his base, those MAGA voters, some of whom I know and have had conversations with,. Trump should be held to that promise, and should downsize the US military to a size appropriate to a country that is not facing any threat of invasion and that stops meddling militarily in other countries and maintaining bases around the globe. That is a position a lot of Trump’s MAGA backers agree with.
For now though, all we have from President-elect Trump are promises like “I’m not going to start wars, I’m going to stop wars,” and unless acted upon these cannot be taken seriously. But that said, I have to say the words themselves are welcome, and it’w a promise that I’ve never heard the likes of coming from any other president-elect of either party.. (Okay, Richard Nixon claimed during his first presidential race that he had a “secret plan’ for ending the war in Vietnam, but that “plan” turned out to be to massively carpet-bomb North Vietnam using B-52s. expand the war into Laos and Cambodia and to ship more US combat troops into the country. Once elected, he kept the war going until he resigned from office in disgrace.)
We on the left are facing an existential crisis with Trump’s election victory but also an opportunity
Supporting the Democrats and their chosen candidate Kamala Harris as a tactical move to preserve freedom to organize and to protest was clearly unsuccessful as her poorly performed campaign did worse than Hillary Clinton did against Trump eight years before. Indeed, she lost not just in the Electoral College tally but in the popular vote, which Clinton at least won. The Democratic Party has been shown once again to be a pathetic joke as a political opponent. Sen. Bernie Sanders, who won a resounding re-election to the Senate in Vermont, identified right before Harris’s concession speech on Thursday, the party’s problem: It is owned by billionaires and moneyed consultants wedded to corporate interests, and is dismissive or even hostile to the interests of the working class.
But the pathetic showing of third party candidates in this, as in prior elections, has shown that building a third party is also a fool’s errand in a country where the political system is structured to prevent them.
That leaves us with the option of building a large movement outside of political parties focussed around broad popular issues that would bring working-class people together common goals like peace and demilitarization, significantly raising the minimum wage, improving and protecting Social Security, making Medicare universal for all ages, passing the Equal Rights Amendment and protecting every women’s right to control her own body and health and seriously addressing the climate crisis.
Trump has made it clear that he wants unrestrained power, without the hindrances of a Constitution or a Congress composed of members who might think for themselves and perform their intended constitutional role as a check and balance on the Executive Branch. Trump’s history of lying, criminality, racism and misogyny and his willingness to appeal to American citizens’ basest instincts are well known. But we are stuck with him. He cannot be defeated in the courts because he has a bunch of sycophants packing the Supreme Court and in the lower level federal courts. Impeachment cannot happen and is a waste of time and effort. The weakened Congressional Democrats can no longer even put on a impeachment committee hearing this time.
With a mass movement we can pressure Trump and his Congressional supporters to do what they promised. If they go back on those promises, we can work to peel away those people who just voted for him as a “change disrupter,” especially as they begin to discover he really doesn’t give a damn about them.
Meanwhile we need to do the hard work of organize]ing wide support for resisting Trump’s worst ideas — the ones that will harm the defenseless and that will grievously contribute to climate change. For example, we need to support a campaign to protect undocumented people living in the USA from brutal arrest, detention and forced deportation, especially in cases that break up families. We clearly need to build a mass movement to protect programs like Social Security, Medicaid and Medicare. A key here is that most of Trump’s own voting base depend on those programs and on the Affordable Care Act. Trump and his advisers know this. This is why Trump vowed during his campaign not to cut them. He needs to be held to that promise. And we need to call out every Trump effort to worsen climate change by the reversal of what climate saving measures have been introduced, and by trying to sack or silence those civil service employees responsible for measuring or ameliorating climate change.
Trump, by making this false promises he won’t keep in order to win the election has handed us what we need to organize this same people.Email
Dave Lindorff has written for the NY Times, Nation, FAIR, Salon, London Review of Books and Rolling Stone. Dave cofounded the LA Vanguard, ran the LA Daily News county bureau and was a BusinessWeek Asia correspondent. He currently writes a Substack: ThisCantBeHappening!. Read other articles by Dave.
Tuesday, November 05, 2024
Imperialist sanctions, crony capitalism and Venezuela’s Long Depression: An interview with Malfred Gerig
Malfred Gerig is a sociologist from the Universidad Central de Venezuela (Central University of Venezuela) who directs the Political Economy of Venezuela research program at the Caracas-based Centro de Estudios para la Democracia Socialista (Centre of Studies for Socialist Democracy). He is the author of La Larga Depresión venezolana: Economía política del auge y caída del siglo petrolero (Venezuela’s Long Depression: Political economy of the rise and fall of the oil century) In this extensive interview with Federico Fuentes for LINKS International Journal of Socialist Renewal, Gerig situates the impact of United States’ sanctions on Venezuela and the rise of Venezuela’s crony capitalism within the context of the nation’s “Long Depression”.
Some blame sanctions for the economic crisis in Venezuela. Others point to economic mismanagement by the government of President Nicolás Maduro. But you pinpoint 2013 as the start of what you term a “Long Depression”, which precedes the sanctions and any shift in government policies. Why?
The first thing to understand about Venezuela’s economy is that this crisis is the result of how capital accumulation occurs in Venezuela, along with the way it was inserted into the world capitalist economy during Venezuela’s “ oil century” and [what Italian economist Giovanni Arrighi terms] the US’ systemic cycle of accumulation.
Venezuela was inserted into the world economy as an oil supplier. As a result, it became a rentier country, because its state claims sovereignty over this natural resource and collects an international rent or payment for use of its property. This generates a pattern of national capital accumulation known as rentier capitalism, which is a sui generis national capitalist economy as its metabolisation of capital is dependent on the surplus that the state captures from the world capitalist economy.
I have divided this period of [Venezuela’s oil century] into two main stages. The first was the boom stage, which ran from the start of this insertion in 1914-17 until the 1970s. For most of this period, Venezuela was the world’s leading oil exporter. Its economy expanded at an accelerated rate, taking it from the most backward economy in South America to first in terms of Gross Domestic Product (GDP) per capita.
Venezuela: GDP per capita (1890-2020)
But the 1970s marked the start of a crisis period that emerged out of abundance. The crises of rentier capitalism perfectly fit within French physician and economist Clément Juglar maxim: “The only cause of depression is prosperity.” This prosperity came as a result of the 1973 oil crisis and concurrent rise in oil prices, along with the first Carlos Andrés Pérez government’s oil nationalisation and “Big Push” project for rapid industrialisation.
After a crisis at the end of the 1970s, the 1980s began with another crisis. This one has a specific date — February 18, 1983, known as “Black Friday” — when for the first time since the 1930s, a substantial devaluation of the local currency occurred. That date marked a point of rupture and the start of an economic crisis that is yet to end.
The ’80s and ’90s were a period of deep crisis and social marginalisation. By the turn of the century, the social conditions most Venezuelans found themselves in were alarming.
These are the social conditions out of which the pro-poor Bolivarian Revolution lead by former president Hugo Chávez emerged in the late ’90s...
Yes, the Bolivarian Revolution emerged above all with a proposal to invest Venezuela’s oil income in alleviating people’s needs and then transform Venezuela’s economy and its role within world capitalism.
It is worth noting that every Venezuelan government since the 1930s has had its own project for “Sowing Oil”. That is, using the external income generated from oil for national development. Some believed the best way to do this was by satisfying human needs, others thought it required a process of forced industrialisation; but all, more or less, had the same idea. The Bolivarian Revolution was no exception.
It also has to be said that the Bolivarian Revolution benefited from a period I call the “golden age”, which occurred from 2003-04 to 2012. During these years, two major systemic events occurred, which pushed up oil prices: the War on Terror and the US’ crusade to reshape geopolitics in the Middle East; and the rise of East Asia, in particular the boom in oil demand generated by China’s growth. These two phenomena combined to push oil prices up and briefly paper over the crisis.
But with the 2008 Global Financial Crisis, problems began to emerge in the Bolivarian Revolution’s macroeconomic model. This was followed by another major event that splits this story in two: the death of Hugo Chávez in 2013. His death generated a forced leadership change in the Bolivarian Revolution, amid a rapidly escalating economic crisis specialists knew would require drastic corrections.
Before we start talking about the Maduro government, I would like your opinions on whether economic policy mistakes were made during the Chávez government.
I would say three things about the Chávez government’s economic policy. The first is that its economic policy did not place enough special emphasis on the negative sides of oil. As oil prices began to rise, Chávez was obsessed with the belief that there was nothing pernicious about the country reproducing itself based on international rent. This was the same mistake that other governments made, such as the Andrés Pérez government in the 1970s. Oil is like that: when it is not there, you only see the bad side of it; but when oil prices are high and you can pay for everything or solve everything on the cheap, it becomes more difficult to see the problems.
I would also add two things that were a bad idea to maintain over time: the fixed exchange rate system and the external debt model. From 2002-03, the government adopted a fixed exchange rate system, or administration of foreign exchange, that in real terms was much less malleable than even the dollarisation of the economy. This generated a process of exchange rate overvaluation in which Venezuela had year-on-year inflation rates of about 30%, while the exchange rate remained pegged at a parity of $4.30. This generated a drive towards imports, and a greater demand for international rent to pay for those imports. All this put pressure on productive and industrial sectors to import instead of diversifying their exports.
Of course, there were benefits to the fixed exchange rate system: cheap imports, higher consumption levels, controlled inflation. But the fixed exchange rate system led to a path of dependence that generated economic interests among sectors of the government and business elites, particularly those capitalists involved with imports who ended up benefiting from this system, even though in theory they were the main enemy of Chávez’s project. The result was that Venezuela became even more dependent on oil exports.
Tied to the fixed exchange rate issue was the issue of external debt. Venezuela had enough inflowing foreign currency that it did not need to raise its external debt. But the government carried out a large-scale and poorly-executed program of external indebtedness, which ended up exploding after Chávez’s death.
This is related to the fixed exchange rate system because this made private foreign debt cheaper. As a result, a whole network of zombie [shell] companies were set up, which borrowed externally and paid that debt with cheap dollars obtained from the fixed exchange rate system. This had drastic repercussions on the national economy.
Venezuela: Total external debt and central government external debt (1996-2019)
That said, Chávez’s economic policy may have had its problems, but it led to GDP growth between 2004-08, when there was a two-year recession, before again seeing GDP growth until 2013. The 2008 crisis was not easy to solve, but it was solved. There were problems and difficulties; the issue of electricity generation, for example, was a major one. But it was an economic policy that never led to a mega-depression. It was a coherent policy that never excused itself in any way and always provided answers to technical questions. It was a policy where you knew what the figures were and where there was no lack of transparency.
So, when Maduro takes office in 2013, not only had the golden era that paper over the economic crisis ended, but this was now intertwined with a political crisis generated by a leadership change in the Bolivarian Revolution...
As I said, this model was already, as we say in colloquial terms, pasando aceite [dripping oil] since 2010-11. While the Venezuelan economy grew in 2013, investments suffered a shock. This is a key indicator of recession. Then in 2014, the Venezuelan economy went into a recession that ended up transforming into the worst depression ever seen in a Western country that was not at war. The Venezuelan economy shrank by about 80% of GDP. The result of this in social terms is the mass migration we have seen of Venezuelans who have had to leave the country and the levels of subhuman consumption, malnutrition, lost days of schooling and a host of other issues that the vast majority of the population finds itself in.
Venezuela: Total annual GDP at constant price in dollars (1990-2020)
Then the crisis clearly started before the sanctions imposed by the US?
We have to say two things. First, that this was not a question of bad economic policy, but profoundly serious structural contradictions in the economy. This was not about a bad government coming to power, but a bad government coming to power and having to deal with a very serious and long standing structural crisis.
Second, that the sanctions came on top of both these things — a very bad economic policy and a very serious crisis — and created a perfect storm. Amid this perfect storm, each factor fed off each other, culminating in a nuclear bomb of dispossession, social marginalisation, deteriorating conditions for production, and so on.
The reality is that many things, both political and economic, occurred before the sanctions were imposed. This idea that it was all the fault of the sanctions — which the government has tried to push, above all outside the country because domestically people know it is mainly Maduro government propaganda and blame passing — has gained international traction because it is mixed in with the question of US imperialism.
This is not the same as saying the sanctions are a trivial matter; they are absolutely serious. But when they are used as a weapon by the government to exonerate itself from responsibility for its economic policy and its handling of the crisis — which is largely to blame for this social, economic and political catastrophe — it does a disservice to truth and reality. It is one thing to take the sanctions and the grave social damage they have caused seriously; it is quite another thing to do what the government has done, which is to trivialise the sanctions and use them as an excuse, while in practice doing little about the social impact these sanctions have on suffering humans.
In your opinion, what has the US government sought with its sanctions?
It is worth recalling that the first sanctions started in 2015, but that these sanctions were not remotely comparable to the sanctions implemented in 2019. We have to distinguish between two different sanctions regimes: on the one hand, the comprehensive sanctions regime that starts in 2019; and on the other, the sanctions that came before that as part of a targeted sanctions regime. The targeted sanctions regime pursued a strategy of attrition, while the comprehensive sanctions regime sought a collapse of the Maduro government.
There were a lot of sanctions prior to 2019 targeting top-level government officials over allegations of corruption, economic wrongdoing, and so on. The strategy here was not really about determining whether these public figures were involved in any crime, but to fragment the ruling elite. The US thought: “Here we have economic interests of actors who have investments in the US, who have deep connections to the international monetary system, who need to make transactions, and so on. When we sanction them, this will lead to the government fragmenting.” What happened was absolutely the reverse.
Prior to 2019, the Venezuelan government was also prevented from obtaining fresh currency through loans via sanctions imposed in 2017. However, by then — and contrary to the government’s belief — the problem facing the Venezuelan economy was not one of liquidity but of fundamentals. Any new debt was only ever going to be paid for by consumers and taxpayers, which is what ended up happening.
From 2019 onwards, a comprehensive sanctions regime was imposed, above all through sanctions on [the state oil company] PDVSA and the Central Bank [of Venezuela, BCV]. I have described these sanctions as a “weapon of financial destruction”. This sanctions regime was based on: disconnecting Venezuela from the international banking and SWIFT systems; disconnecting the BCV, and therefore Venezuela’s private banking system, from the international monetary system; and halting trade in strategic goods to limit the inflow of foreign currency. It represented a de facto severing of the country’s ties to the global economy.
It is worth asking why the sanctions implemented in 2019 did not end up causing more damage. The answer is because the Venezuelan economy was already destroyed. Venezuela was already six years into its Long Depression before the comprehensive sanctions regime came in. The comprehensive sanctions regime only came into effect in what I termed the “disaster stage” of the Long Depression, which was its third stage.
Venezuela: Annual percentage variation in GDP (1961-2020)
I want to return to this question of the different stages of the Long Depression, but before then I want to finish with the issue of the sanctions. What impact did the sanctions have in political terms if they failed to fracture the government or bring it down?
Sanctions had the political impact of changing the regime from within. The comprehensive sanctions regime pushed Venezuela’s rentier capitalism towards a neoliberalism with patrimonialist characteristics and a sui generis Venezuelan oil-based form of crony capitalism. The combination of an economic policy based on orthodox-monetarist measures and a neoliberal spirit — the two things are not the same — led to a regime change from within.
We saw a gradual rise in patrimonialism, which is nothing more than the privatisation of the state by civil servants and administrative cadres. The state becomes a private preserve and the state’s assets and means of administration become a means for civil servants to generate an income. This phenomenon already existed, but when orthodox-monetarist economic measures led to drastic cuts in public sector workers’ income, patrimonialism radically expanded as workers sought to use the tools that the system provided them with to generate an income that the system itself was taking away.
We saw that even the leitmotif of the government changed. This government no longer governs for the same people as the Chávez government. You could say that the Maduro government implemented bad economic policies between 2014-16, but perhaps it did so wanting to govern for the same people that Chávez governed for. But since 2016, and especially since 2018-19, the government no longer governs for the people; instead, the people have been made to carry the burden of the government’s economic policies and its neoliberalism with patrimonialist characteristics.
What has prevailed, especially from 2016 onwards, is capitalist realism. The dominant idea adopted by the ruling elite back then was that there was no other option but to embrace a kind of criollo [local] capitalism that could allow them to stay in power, but now with the support of certain sectors of society that they were historically at odds with, such as local capitalists. Today, Maduro’s government is a government that, to a large extent, has the support of local capitalists. As it lost the support of the people, the government replaced it with the support of these capitalists.
We could therefore say it was not so much a question of the sanctions leading to a loss of support for Maduro, as the sanctions being implemented because Maduro was already losing support....
I agree: Maduro’s loss of popularity was an incentive to implement sanctions. It is not the same to implement sanctions against a government that has strong popular support, as it is to implement them against a government that has faced four years of the worst economic crisis, that is facing a very serious food crisis where Venezuelans had nothing to eat and have to queue for everything, and so on.
The sanctions started in 2015 because that is when the catastrophic stalemate in terms of power started. That year the opposition overwhelmingly won the National Assembly elections. The lack of support for Maduro’s government was clearly exposed.
That is why the government has since applied what [US political scientist] Norbert Lechner calls “the strategy of a consistent minority” by tilting the political playing field in its favour to remain in power. Since 2015 it has gone down an authoritarian path, which has had different facets. This path ultimately led it to the recent elections on 28 July, when the government took this authoritarianism to a new level.
Many on the left believe the sanctions were imposed on the Bolivarian Revolution as some kind of moral punishment. I do not know if that was the case, but if this was true, the best antidote Chávez had against such weapons of moral punishment was maintaining formal and real democracy. He never gave anyone an excuse to implement sanctions or any kind of strategies of geopolitical encirclement and regime collapse.
Why then do you think the US has started to ease sanctions if the government has become even more authoritarian and has even less support?
The answer has to do with the geopolitical effects of Russia’s invasion of Ukraine [which has pushed up oil prices]. And that the US government is reaping the rewards of these sanctions by having set up an oil exchange program — because the US is not paying for Venezuela’s oil. Under this program, the OFAC [Office of Foreign Assets Control] basically has sovereignty over Venezuela’s oil via remote control.
That is why the US government grants a licence to Chevron, which pays PDVSA with debt forgiveness. In theory, PDVSA receives no fresh currency; what it receives in exchange is a discount on the debt it owes Chevron. There may also be some other benefits for Venezuela; for example, the exchange rate system may benefit from Chevron selling foreign currency in the exchange market as part of its operations in the country.
But in practice, the Venezuelan state’s sovereignty over its oil has been completely suspended. In the past 100 years, the US has never had as much control over Venezuela’s oil as it does right now.
Returning to the Maduro government’s economic policy. You said that by 2018-19, the Maduro government was already clearly a government that no longer governed for the people and referred to three periods within the Long Depression. Could you elaborate on this?
The Long Depression that started in 2013 has three major periods. The first, between 2013-15, is what I call the “period of crisis”. In this period, government economic policy was characterised by inaction: the dominant idea within the government was that there was no crisis and that it could carry on doing the same thing and obtaining the same results.
Initially it even denied there was a crisis, to the point that to talk about questions of technical economic issues, macroeconomics, investment, consumption, etc at the time meant you were a “neoliberal”. Instead, everything was a result of the “economic war” — a conspiracy theory involving everyone from imperialism to the local corner shop owner. There was a complete disregard for questions of basic economics.
This period saw the collapse of the currency exchange market, which generated a very important supply shock to the Venezuelan economy, given its deep dependence on imports. Most of the industrial sectors still active at the time were very dependent on imports. As a result, these sectors contracted.
So, the main characteristics of this period of crisis were a supply shock, the collapse of the exchange rate, and what I call, borrowing from Marx, the impossibility of reconverting money into capital. This was because production was unable to continue at the same scale due to these shocks to the currency market and imports.
Venezuela: Imports per inhabitant at constant price in dollars (1990-2020)
Then we had the oil price shock in 2015. The government once again concocted a conspiracy theory that this was all part of imperialism’s strategy. In reality, it was our partners — OPEC and Saudi Arabia — who sought to keep oil competitive with shale gas. This oil price shock generated what everybody was already expecting: a very serious debt and fiscal crisis in Venezuela.
That is when the first major disastrous economic policy decision was taken: to continue the strategy of paying foreign debt. The government decided to halt imports in order to pay the foreign debt, using the argument that imports meant giving dollars to capitalists to enrich themselves. Sure, to a large extent that was true; but giving dollars to capitalists also means importing food, industrial inputs, etcetera.
As part of this strategy, the government paid US$100 billion in foreign debt. To put that figure in context, at one point Venezuela’s economy was $40 billion; that is, the government paid off an amount of foreign debt twice the size of Venezuela’s economy. The shock that this generated on imports led to a second major supply shock, taking the country’s economic depression to a new level.
This policy also generated another deep shock to production, which pushed Venezuela into a profound humanitarian and food crisis between 2016-17 as agro-industrial and food import sectors totally collapsed. This was the second phase of the Long Depression: the “period of collapse” between 2016-18.
In this phase, the government tried to apply its first chaotic macroeconomic stabilisation program, based on paying foreign debt and cutting imports in order to improve conditions. It was completely naive on the part of the government to think that dressing up to impress international finance would lead to an influx of fresh currency and thus solve the serious structural problems afflicting the Venezuelan economy. Particularly, as I insist, when the problem facing the Venezuelan economy was not one of liquidity but of fundamentals.
The main consequence of this program of being a “good payer” of foreign debt and import cuts was that it became intertwined with a deficit management strategy to facilitate paying foreign debt through the sale of PDVSA debt bonds via the Central Bank. This represented a form of Quantitative Easing (QE) on steroids amid a collapsing economy. It led to one of the worst periods of hyperinflation in Latin America’s history.
This triggered a new phase in the crisis, as GDP began falling by double digits. As with similar experiences in history, this hyperinflation was caused by the debt crisis and political-institutional collapse. With the government still pursuing a strategy of cutting imports to pay debt, Venezuelan households were burdened with the debt payments and their wealth collapsed due to hyperinflation.
This is the third phase, the “period of hyperinflation”, where hyperinflation became a social phenomenon of such harrowing dimensions that people basically forgot all the other economic problems. Hyperinflation absolutely changed society. This is also the period in which the government began, in mid-2018, to implement the orthodox-monetarist program it still maintains.
We cannot even really call it an adjustment program; it is a stabilisation program designed to reduce inflation without taking into account the serious impacts the program would have on economic activity and society.
The program’s main pillar was a draconian cut to public spending, which in 2018 was about 48.4% of GDP, while revenue amounted to 17.4% of GDP, leading to a fiscal deficit of 31%. Under this new program, spending was first reduced by 27 percentage points in 2019, then reduced again to about 10% of GDP in 2020.
Venezuela: Budget income, expenditure and total balance according to IMF (1990-2021)
This orthodox-monetarist policy also included other pillars, in particular a financial squeeze that sent Venezuelan society back to the financial stone age by implementing a legal reserve requirement on banks that at one point reached 93% of reserves. The aim was to cut off secondary sources of money creation. This meant that the level of household credit in 2019 was only 2.2% of GDP. Amid hyperinflation, households could not even use credit cards to take advantage of negative real interest rates to buy the goods they needed. Companies that wanted to invest or continue producing had to use their own capital as they could not get bank loans.
There was also a very serious wage squeeze, as adjustment programs of this nature require a shock on consumption and demand. This was largely achieved through a wage squeeze, especially in the public sector, which covers administrative staff and civil servants but also pensioners as Venezuela has a public pension system. Pensioners today receive the legal minimum wage, which has hit rock bottom: about $2.30 a month. Destroying wages was a means for solving the government’s fiscal problems on the expenditure side rather than the income side, while also destroying demand amid collapsing supply.
Changes were also implemented to the currency exchange market, leading to a unification of exchange rates. The Maduro government had continued with differential exchange rates for about six years. This meant that if you converted the minimum wage at the official exchange rate, it was equivalent to about $11,000 a month — a complete fantasy. No one knows if people were buying dollars at the official rate, but if they were — which is almost certainly the case — it is not hard to see how this created extravagant conditions for mass looting.
From 2018 onwards, the currency exchange market was liberalised. A regime of inter-bank trading desks and successive micro-devaluations were implemented, leading to a gradual dollarisation of society. As dollarisation rose, society had a currency it could now use as a means for exchange, for storing value and as an accounting unit. The bolivar today only functions as a means of exchange, it no longer serves the other two functions that all other currencies have. Prices are marked in dollars because that is the currency that functions as the unit for accounting for all economic activities: for the family when calculating its weekly or monthly expenses; for a large company, etc.
Aspects of this program provided some economic breathing space, but only because the economy had shrunk to such a small scale. By the time this macroeconomic stabilisation program was applied, the economy was much easier to manage. The government could stabilise without any large external financing program, precisely because the economy was so extremely small.
Were there alternative policies that could have been implemented?
There are always alternatives, especially to such a catastrophic policy in terms of impacts on production and society. The government’s policy was basically to activate what Karl Polanyi called “the Satanic Mill” and seek economic stabilisation through social destruction.
In fact, when we seek comparisons to Maduro’s macroeconomic stabilisation program, we see that it most closely resembles the first stabilisation programs implemented in Latin America — in Chile, Uruguay, Argentina — rather than the less orthodox programs implemented in Bolivia or Brazil’s Plan Real. In other words, Maduro’s program is not only more orthodox than the orthodoxy of today but even that of the ’90s.
So, indeed, other things could have been done. The most important of these was understanding that the level of destruction wrecked on the Venezuelan economy had reached such a level that solutions required supply-side economic policies; that is, economic policies that drastically increased investment, generated employment, raised wages, etc.
There were also many alternatives in terms of protecting society from what the government was seeking to do. Instead, society was left to fend for itself because, by that time, all the social assistance programs implemented during the Chávez period and the first years of the Maduro government had been totally dismantled. When the avalanche of social dislocation began, society had nothing with which to protect itself. This is important to stress.
In your book, you argue that this Long Depression has been accompanied by a crisis of government legitimacy. How has the government responded to this crisis?
I characterised this crisis of legitimacy, which above all begins in 2016, as a catastrophic stalemate. That year marks its start because the National Assembly is very important for economic governance. But the strategy of the incoming National Assembly — in their own words — was to remove the president within six months. In response, the government sought to protect itself and govern without the National Assembly.
This led the government down an authoritarian path with different phases, up until the July 28 presidential elections when it took it to another level. Since 2016, Maduro’s government has progressively adopted what Max Weber called a “politics of power for power’s sake”; that is, it abandoned its historical project and the social support base that it governed for and became a government of cliques, a government whose sole purpose was to stay in power.
However, it is important to reject any moralistic reading according to which there are good guys and bad guys in this story. Since 2016, the formal set of rules of Venezuelan democracy have been de facto broken by both sides: the government and the opposition have consecutively attacked this set of rules, in a process by which each move by one side only ever led to a further escalation of attacks against not only the rules of representative democracy, but more importantly protagonist democracy.
The formal hollowing out of popular sovereignty that took place in the July 28 presidential election really began many years before, when both sides of the political class turned against this sovereignty and against providing solutions for the people amid the crisis.
How then can we characterise the government, in political terms, after the 28 July elections?
I characterised this government as an absolutely patrimonialist government that lacks both popular and legal legitimacy, as well as any legitimacy based on legacy. One of the worst political mistakes this government made was to destroy the political capital, or legacy, bequeathed to it by Chávez, precisely because it opted to govern for another sector of society: mainly themselves.
It is a completely authoritarian government with absolutely nothing left-wing about it. It is a government that would love to come to an arrangement such as occurred between [former US secretary of state] Henry Kissenger and [former Egyptian military ruler] Anwar El-Sadat, for example. In fact, it has been seeking this for years, but has failed largely because it continuously places its own obstacles in this path.
There is an idea outside Venezuela that this government represents, to use an old phrase, a “fortress under siege”. That idea is used to legitimise its violation of human, social and economic rights. Such violations are seen as fine because the government remains a besieged fortress supposedly fighting imperialism, at least on the surface.
But this is ridiculous. The Venezuelan people are not an object whose raison d'être is as background actors in some fictitious anti-imperialist storyline. The Venezuelan people are a subject that must be allowed to find a way to express and defend their own interests and sovereignty. This, in my opinion, is the position that the global left must take: above all, taking the side of Venezuela’s dispossessed classes.
We Venezuelans, especially those of us on the left, have been very disappointed with the views of a certain section of the international left. It seems that the suffering of the Venezuelan people, of the families that have had to separate, of the political prisoners, of the people who have had to give up on their life dreams etc, matter little to them amid their completely abstract view of the situation. To simplify the situation in such a way as to believe that there is a left-wing government fighting against imperialism is to sweep under the table all this human suffering. That does not seem ethically correct.
In summary, we have a patrimonialist government that has built a form of crony capitalism, which benefits a social minority based on the dispossession of the majority. It is a government that implements ultra-orthodox economic policies. It is a government pervaded by capitalist realism, according to which there is no alternative to crony capitalism and authoritarianism.
The Bolivarian Revolution under Maduro has become a catastrophe. The Venezuelan people, in line with their republican and national-popular traditions, will no doubt be the ones who resolve this mess. But, today, this government stands opposed to everything good about Venezuela, to our republican traditions and, above all, to our national-popular interests.
