June 9, 2006

Gangland stuff

Thinking about the way Venezuela is perceived abroad, perhaps what's hardest to convey is the way gangland tactics have colonized the regime. Europeans, used to thinking about politics as a struggle for control over the institutions that make and apply laws, can't begin to fathom the extent of their collapse in Venezuela. Their understanding of "politics" has no room for the aggressive pursuit of state loot we're seeing. And I'm not talking about mere corruption here. Because the opposition keeps framing the issue in corruption terms, but the word badly mischaracterizes the problem - if it was just corruption, it wouldn't be so bad.

It isn't, though: it's out and out gangsterism.

Corruption, in itself, need not be a social disaster. Italy, Greece, Brazil and even South Korea show that it's possible for an economy to grow consistently over decades, creating a massive middle class, even with a lot of corruption in the system. Once institutionalized in a stable way, corruption can be made compatible with long term growth and social development.

In Italy, the Christian Democrats institutionalized an elaborate system for distributing corruption rents between insiders - longstanding officials in key posts within the party acted as gate-keepers to the loot, harmonizing the interests of the various party factions and bringing a measure of order and predictability to the looting. Mexico's PRI institutionalized a system of 6-year "turns" for various factions to get their hands on the goodies, with the understanding that each new government would cover up for the last. Both systems lasted for decades, and both were compatible with growing incomes and rising living standards.

Every corrupt regime that stands the test of time realizes sooner or later that no amount of money is enough to satisfy every player's craving for state rents if everyone's scrambling for the loot at the same time, because it's never in a parasite's interest to kill the host organism. To make the system work, to make the system last, you need some informal institutionalization. You have to establish a stable set of unwritten "rules of the road" for corrupt officials and wannabes to bring a measure of predictability and stability to their actions. You need some widely-shared understandings of the Dos and Don'ts - if the standard kickback is going to be 10% of the contract's value, you need to apply that consistently, both to give the payers a measure of predictability and, more importantly, to make sure that no faction in the regime feels like it's getting a worse deal than any other.

Much of it is about regulating relations between top-level crooks and the class of aspiring bandits a step down from them on the organizational ladder. A stable corrupt system has to have a way to reassure second-tier thieves that, if they go along and get along, if they follow the implicit rules without raising a fuss or trying to jump the queue, they will, in time, get their shot at being first-tier pillos with access to the really big bucks. Without an implicit, stable seniority system, there's no way to control the competition for spoils between factions.

Even chickens understand that they need a pecking order.

What's new and scary about kleptobolivarianism is that there seems to be no stable pecking order, no institutionalized system for regulating and stabilizing the looting. Without it, the scramble for loot all too easily succumbs to gangland logic.

The Luis Velasquez Alvaray scandal provides a startling glimpse of chavismo's serious difficulties in institutionalizing corruption. Even in the upper echelons of the kleptocracy, you can never feel quite safe in your position. At any time, some other faction could make a play for your faction's racket. You may be getting obscenely rich, but you have to sleep with one eye open.

In such circumstances, your only insurance is to be more aggressive than the other guy. To steal more, faster in order to secure your position before you find yourself in trouble. To stash away enough compromising material on the other guy to make sure you can blackmail him in case he decides to go after you - (hell, LVA said explicitly that that was his game!) And, increasingly, to be willing to turn to violence if that's the only way your short-term interests can be secured.

Only problem is that if every faction starts following this logic at the same time, the result is pretty much anarchy. We end up with what we're seeing more and more: gangland stuff.

In this sense, the Danilo Anderson murder really was a watershed moment in Venezuela's recent history - an event whose full impact we are only now starting to appreciate. More and more, I think that the laughably amateurish cover-up was not merely a matter of incompetence. That somebody high up wanted to send a message - you can and will be killed if you cross me - and could only send it effectively if everyone in the country could SEE that the murder had been covered up. There's just no other explanation I can fathom for the opera buffa starring Giovanny Vasquez de Armas.

Because we can sit here and argue for months. But the reality is that the top, say, 3,000 people in the regime, they know. They know exactly who killed Danilo Anderson, and they more or less know why. They got the message. They understand that in the absence of any stable mechanism to institutionalize the looting, disputes will end up getting settled at the point of a gun. Just ask Luisa Coronel, Francisco Ameliach's assistant.

So this is what it's come to. The opposition keeps talking about corruption, but the reality is that corruption, in the old sense, is something for Venezuela to aspire to these days. It sounds morbid, but a system for looting state resources in an orderly fashion would be far preferable to what we're getting now.