"But I heard the poor are doing much better than they were before, and they really love him," they'll say to me, struggling to grasp how an apparently sane person could fail to grasp the romance, the heady excitement of seeing a popularly elected leader fighting back against the years of Washington Consensus crap imposed on Latin America by the neoliberal elite.
I've been down this road many times before, and I know the conversation that follows won't be easy, because the misunderstandings about Venezuela are deep.
For one thing, most Americans remain under the impression that Venezuela is, basically, a Latin American country. It isn't. We are, first and foremost, a petrostate. - a place where the government gets to pump massive amounts of money more or less directly out of the ground.
Nothing about Venezuela makes sense until you've worked out the deep implications of that one, basic fact. Deep down, Venezuela has much more in common with Algeria, Iran, or Russia than with Colombia, Brazil or Cuba.
For starters, we experience the oil cycle upside down.
Take the 1970s. Folks in the US remember them as the bad times: gas shortages, inflation, unemployment and the general, society-wide funk that came to be known as the age of malaise. Your oil crisis, though, was our oil boom: we remember the 70s as the time we hit the jackpot, an age when a huge amount of free money suddenly flooded the country, setting off a collective spasm of high-intensity shopping the likes of which Venezuelans had never seen before. (Needless to say, our president was intensely popular back then, too!)
The flip side came in the 90s, when Americans enjoyed an economic boom made possible, among other things, by dirt cheap energy, which, on our end, led to a string of bank failures and a decade-long recession that left the country in the mood for radical change.
At the start of this decade, the pendulum swung again, bringing yet another oil boom which you'll recall mostly in the form of the murderous prices you were paying at the pump last summer. From our end, though, the last five years have been a time when the gods of global energy decided to smile upon Venezuela again, sending the government on a breathless spending spree, and setting off yet another country-wide consumption boom, with unemployment falling, wages rising, and smiles all around.
The twist is that, this time, the oil bonanza happened with a self-described Marxist revolutionary in power, a guy who claims to be locked in a mortal fight with global capitalism but leads a state run by a gaggle of platinum-card toting socialists.
All of which has contributed immeasurably to the weird sense of dislocation of Venezuela in the last few years, an era of revolutionary slogans painted on the sides of massive new shopping malls where the people whose job it is to administer the Revolutionary Bolivarian Socialist state think nothing of plunking down a couple of thousand dollars for a plasma-screen TV before heading off for a bit of lunch in an LA-style sushi bar where obscenely overpriced bits of fish flown in from the other side of the globe get washed down with $4 bottles of Corona.
It's this oil fueled spending boom that accounts for the popularity of the Chavez regime, and there's nothing progressive about it. All the boom-time spending ended up sloshing all around the Venezuelan economy, where it set off a dynamic the world had surely never seen before: a kind of Marxist Trickle-Down Economics. In the end, for all the rambling ideological speeches, the Chavez boom is just a tweaked rerun of the 70s for us, with vastly different ideological muzak but social and political consequences that are pretty much the same.
The irrelevance of Chavez's ideology to his popularity comes into sharpest relief when seen in international context. In fact, just about every petro-state has seen its government's popularity spike over the last five years, whether those governments are marxist (like ours), nationalist (as in Russia), Islamic (think Iran) or, even, genocidal (Sudan). The political economy of petro-spending binges doesn't actually hinge on the ideological label a governments prefers to slap on its own lapel: in the end, oil goes out, money comes in, stuff gets imported, jobs are created, people get happy, leaders get popular.
It is a fact that Chavez has been far less repressive than his hyper-radical rhetoric might lead you to fear. To me, though, the measure of Chavez's tolerance has been the scale of the oil revenue stream. Chavez grasped all along that there was no point in jailing masses of people, censoring newspapers and generally playing the highly damaging role of repressive ogre when he had enough cash on hand to co-opt the co-optable and bankrupt the rest. It's a trick the Chavez regime has mastered with chilling speed, and one that has allowed it to avoid the reputation costs of repression without really having to compromise its increasingly tight grip on society.
Now, though, the credit has crunched and the oil market's gone off a cliff. Venezuelan oil, which was selling for $129 a barrel just five months ago, fetched just $31 at the end of last week. The revolutionary elite is now having to face wrenching spending choices. Suddenly, not every labor union's wage demands can be met, not every interest group's aspirations can be underwritten, and the feel-good factor the oil boom once generated is dissipating with alarming speed.
For years now, what traditional autocrats achieved with the gun and the gallows, Chavez has been achieving with his bulging pocketbook. That's not going to be possible for much longer. The quiescent, satisfied society of the Marxist trickle-down era risks being replaced with something much more fractious, where interest groups fight one another for their share of a fast shrinking resource pie and none of the shortcuts for batting down dissent are available. It's a situation Chavez has never had to face, and the temptation to maintain control through force will be strong. Very strong.Will Chavez resist it? Stay tuned...
December 15, 2008
Petrostates for Beginners
Quico says: Cross posted from HuffoLand...