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Squeezing in socialism
03-26-2009, 05:28 AM,
Squeezing in socialism
Squeezing in socialism
The financial crisis has three cross aspects –low oil prices, a government reluctant to talk and an orthodox socialist model. Is it the perfect storm?

Workers and trade unions are on the alert in the face of a wave of expropriations and nationalization resulting in lost labor benefits (File photo)

There are two currents inside Chavezism. One the one hand, there is a radical trend led by President Hugo Chávez and intended to control the means of production. On the other hand, there is a more democratic trend that advocates a shared model, where private property is allowed and respected, living together with other forms of social property bolstered by the government.

The latter current, incipient for the time being, lacks a person to embody it. However, it is timidly making a twofold statement. Firstly, a significantly supported democratic opposition has been acknowledged. Secondly, talks need to be held with valid interlocutors of the opposition and labor and business sectors to address, in principle, the most impending matters in the country which equally affect everyone.

Ex Venezuela’s Vice-President José Vicente Rangel and other former senior officials who undoubtedly continue having clout inside Chavezism espouse the second way of thinking.

At a time of economic and social crisis in the country, these two trends are not fighting for power, because Chávez continues being the undisputable leader of the process. However, the life and economic wellbeing of all Venezuelans will depend on the prevailing thesis at the end of the day.

The orthodox way
President Chávez has spoken loud and clear. "The new economic model should be based on social ownership of the land, on social ownership of industries, on social ownership of the means of production. We must understand it!" And he has added, "We have not planned any deal at all with the oligarchy."

José Vicente Rangel thinks otherwise. "I consider that both the government and the opposition ought to give Venezuelans a less strained alternative, aimed at breaking with polarization and laying the foundations to a national life back to normal." For his part, José Albornoz, of pro-government PPT party, reasoned about the crisis: "Upcoming difficult times cannot be solved by the government only."

Chávez is not alone. State-run TV channel 8 and hundreds of agencies engaged in ideological propaganda under the government umbrella back the inconvenience of seeking for a dialogue. "Not a drop of water for the enemy!" And Chávez has said that the opposition is not really half the country. Those who talk about it are labeled as "reformists" or accused of coming to terms with capitalism.

The point is that behind ideological confrontation, the government policy of nationalization and control, in addition to falling oil prices, is wreaking havoc in the economy.

Growing conflicts
The real country made up of workers, employees or storekeepers is fighting for survival; asking for the fulfillment of collective bargaining agreements; protesting layoffs, and facing the threats coming from President Chávez himself.

Based on a case study conducted by professor Victorino Márquez, head of the chair of Labor Law at the Andrés Bello Catholic University (UCAB), in February there was a surge of 14 percent in labor conflicts, that is 59 events compared with 45 in January. Most of them were recorded in state-run agencies.

Human rights NGO Provea reported for 2007-2008 the largest number of protests and mobilizations in the past 10 years. Most of the 1,763 recorded conflicts were caused by labor and housing problems.

The point at issue is that nationalized companies and the public sector face an inflationary scenario estimated at 40 percent in 2009. Such a fact cannot be hidden, because high production costs, due to inefficiency and corruption, cannot be kept forever in companies that work in the red.

With oil prices at USD 40 a barrel, the government is unable to subsidize loss-making businesses. Therefore, President Chávez has asked workers for sacrifices, because, he conceded, state resources are not enough to meet the labor requirements. This same problem will emerge in nationalized companies when trying to sell regulated goods behind production costs.

President Chávez has taken a decisive stance and, appealing to his leadership, has told workers: "Whoever stops a state-run company is against the head of state."

The conundrum now is a looming economic crisis with three cross trends –low oil prices, a country where there is no dialogue and an orthodox socialist model that is undermining the domestic production capacity.

Translated by Conchita Delgado

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