Some comments on the February NE Venezuela report

The Activist - Volume 17, Number 3 – April 2007
By Doug Lorimer (Sydney branch)

At the February 12 National Executive meeting I stated that while I agreed with the general political line of the report that was orally presented by Comrade Stuart Munckton, particularly as summarised in the "conclusion" section (and thus voted accordingly), I had reservations about some of the points made and formulations used in the report. Most of these reservations have been eliminated after reading the printed version of the report (Activist Vol. 17, No. 2). Nevertheless, there are a few passages in the report that I think need further clarification:

Formation of the working people's government

1.        What is our position? We have used the position, first adopted at the DSP National Committee meeting in November 2004, of an embryonic workers and peasants state. Key to this is the formation of a workers and peasants' government through the struggles around the [April 2002] coup and the [December 2002 oil industry] lockout. Also, the armed forces, through the defeat of the coup, were broken from the capitalist class and have become a tool of the revolution.

The middle sentence in this paragraph encompasses two different views on the theoretical-historical question of when (and therefore how) the working people's government came into being in Venezuela - the view that it came into being in the course of the successful worker-soldier struggle against the April 2002 US imperialist-backed military coup, and Comrade Munckton's (still tentatively held) view that it came into being as a result of the defeat of the capitalist PVDSA management's December 2002-January 2003 oil industry lockout.

The former view was first presented by Comrade Coral Wynter, in the July-December 2003 issue of Links (No. 26):

The mass mobilisation of workers and the positive role of the army that led to the return of President Chavez on April 13, 2002 was a turning point in the evolution of the Chavez government. The spontaneous uprising of the barrios around Caracas radically changed the relationship of forces between the working class and the capitalists to the advantage of the former. This was a defining moment, which changed a bourgeois executive presidency into an embryonic workers and peasants' state...

As a result of the changed class nature of the state, since April 2002 the Chavez government no longer had to accept blackmail and sabotage from the bourgeois civil servants but could increasingly rely on the organisation of the workers, peasants and soldiers in the form of the misions. The misions were a new concept needed by the new government to carry out its social programs.

It is also the view that I presented in my February 2006 reply (Activist Vol. 16, No. 2) to Comrade Kiraz Janicke's December 2005 PCD article on Venezuela, in which I argued that:

The concept of a "working people's government" (or a "workers' and peasants' government") does not simply mean a government that seeks to act in the interests of the working people, of the working class, the semi-proletarian urban and rural masses, and the exploited sections of the petty-bourgeoisie. It is a government that arises out of the revolutionary struggle of the working masses and that, basing itself on their mass mobilisations, begins to replace the institutions of capitalist state power with new institutions of state power that suppress the resistance of the capitalist class to the implementation of measures that advance the interests of the working people...

The revolutionary mass mobilisation of the poorest sections of the working class, the semi-proletarian urban masses and the pro-Chavez officers and soldiers against the right-wing coup carried out by the leading figures of the bourgeoisie (including the bourgeois generals) with the backing of the US imperialist government, fundamentally altered the relationship of class forces in Venezuela to the advantage of the working masses and the detriment of the capitalist class. The armed forces split along class lines, with the majority siding with Chavez against the US-backed bourgeois counter-revolutionary coup.

While the personnel making up the Chavez government was not fundamentally changed as a result of the mass insurrection, the government was able from then on to base itself on armed forces purged of pro-capitalist officers and a greatly radicalised mass base (including among the pro-Chavez army officers and soldiers), much more conscious of the fundamental antagonism between working people's interests and those of the capitalist oligarchy. The post-insurrection Chavez government had come to power as a result of "the struggles of the masses", supported "by workers' bodies that are capable of fighting" (the pro-Chavez majority of the armed forces) and was capable of "disarming the counter-revolutionary bourgeois organisations" (by purging the armed forces of their bourgeois officers) and "smashing the resistance of the bourgeois counterrevolution" (which it did very effectively during the bosses' strike of December 2002-January 2003).

Comrade Munckton agrees that class character of the Venezuelan military forces was fundamentally changed as a result of the successful struggle against the April 2002 coup but he is unsure if we can also say the same thing about the class character of the Chavez-led government. In the printed version of his workshop talk to this January's DSP educational conference (Activist Vol. 17, No. 1), he makes the point that, "We can discuss whether this occurred decisively with the defeat of the coup or with the lock-out, with my feeling being the lock-out although I am open to be convinced. It is a secondary question as the most important thing is we recognise it has come into being."

I agree. Recognising that there is a working people's government in Venezuela is more important than having agreement on when and how it came into being. If we thought that there wasn't such a government in Venezuela, then we'd be concluding that Chavez still heads a bourgeois government and the task of winning governmental power still faces the workers and peasants of Venezuela. All of the assessments we've made of the state of the class struggle in Venezuela since the April 2003 NC plenum (at which we recognised that a "revolutionary government" existed that was "beginning to organise the Venezuelan working class as the country's ruling class") would have to be called into question, if not rejected as fundamentally flawed.

So, yes, within the primary political framework of recognising that there is such a government in Venezuela, reaching agreement on how (and therefore when) such a government came into being is a secondary theoretical-historical question, necessary for us to achieve clarity in our theoretical understanding of the process of development of the Venezuelan revolution.

On this issue, Comrade Munckton has yet to provide much written argumentation for why he does not think we can draw the conclusion that it was through the mass insurrection in April 2002 that the working people's government came into being in Venezuela. In his Activist article based on his January workshop presentation, he limits his explanation to the following statement: "After the defeat of the lock-out, the government based itself on armed forces no longer under the control of the capitalist class as well as the increasingly organised and radicalised (although this was still weak) working class,"

But wasn't this also the case, not only after but, during the struggle against the lockout. Indeed, didn't the members of Chavez's cabinet - when they regrouped without Chavez after the April 11, 2002, coup late on April 13 - seek to defeat the coup by basing themselves "on armed forces no longer under the control of the capitalist class'. i.e., the army personnel that opposed the bourgeoisie's coup and that revolted against the orders of the army high command, "as well as the increasingly organised and radicalised (although this was still weak) working class"? So what was qualitatively different in the relations between the Chavez government and the working people (including those in uniform) after the defeat of the bosses' lock-out in February 2003 compared to that relationship established as a result of the successful struggle against the April 2002 coup?

Cogestion and workers' control

2.        ... the struggle for workers to assert control over the capitalists, identified in our program and by the Comintern in 1922 as a key task of a workers and farmers' government, is still largely a task to be fulfilled. One sign of the scale of the struggle facing the revolution is the difficulty in tasking the struggle for co-management, around which there was enormous enthusiasm for taking forward in 2005, with one million workers marching under the slogan of 'without co-management there is no revolution' on May Day. However, the actual experience of co-management, which is not necessarily the same as workers' control but is one form that the struggle for workers' control has taken in Venezuela, has remained limited to small sections of the economy. Now, the intention of the government is to find a new way to push forward the struggle for the working people to exercise control over the economy, with the promotion of workers' councils.

It's true that the "struggle for workers to assert control over the capitalists ... is still largely a task to be fulfilled". While according to a November 2006 report on ("Workers in Control: Venezuela's Occupied Factories" by Marie Trigona), "it is estimated that 1200 business[es] and factories have been occupied by their workers after bosses and owners abandoned them", there are hardly any cases where workers' control has been implemented in functioning capitalist-owned and managed businesses.

In fact, the struggle to assert direct workers' control in operating capitalist-owned businesses will really only get started when Chavez enacts the law for the creation of workers' councils drafted by Communist Party of Venezuela (CPV) member David Velasquez. the newly appointed minister for people's participation and social development.

The February 1 People's Weekly World (the paper of the CPUSA) reported that CPV labour secretary Pedro Eusse told a January 15 news conference in Caracas that the proposed workers' councils will "assume political and economic functions for carrying out peoples' power in workplaces and in industrial areas". They will take on responsibility for "managing information on the administration, finances and production output of private, public and worker-operated companies, also those already or about to be expropriated", development of leadership skills essential for processes of production and supervision, and cooperation with local community councils and "other instruments of people's power".

However, saying that "co-management" (cogestion) is "one form that the struggle for workers' control has taken in Venezuela" does not clearly differentiate between cases in which this term has been used to designate experiments that approximate to the Marxist conception of workers' control - a "school for planned economy", as Trotsky put it in his Transitional Program, i.e., a preparatory step toward working-class administration of a post-capitalist economy, and those where the term "co-management" has been used to describe projects for the conversion of bankrupt or idle capitalist-owned businesses into worker-owned co-operatives.

In a September 2006 Venezuelanalysis article ("Five Worker-controlled Factories in Venezuela"), Sharat Lin notes that, "Under worker-state 'co-management' schemes, it was understood that the state will gradually reduce its equity share as revenues from factory production would enable workers to collectively increase their share capital over time."

The first such scheme was began in January 2005, when the bankrupt capitalist-owned paper company Venepal was taken over by the Chavez government "with an injection of $7 million in state funding" and reorganised as "a new worker-owned company" (Invepal) in which "equity ownership was divided between workers (51%) and the Venezuelan state (49%)".

"Revenues from production", Lin continued, "would be used by the workers to gradually buy out the state's share until the state retained only a symbolic 1 per cent 'golden' share."

This goes in the opposite direction from the socialisation of the ownership and management of industry, toward syndicalist capitalism. In my February 2006 reply to Comrade Janicke, I wrote: "This is probably why, as Comrade [Fred] Fuentes stated in his article in The Activist Vol. 15, No. 16, the Cubans in Venezuela have been saying that cogestion (where it is conceived of as turning factories into producers' co-operatives) is 'counterrevolutionary', i.e., anti-socialist."

This is also the view of class-conscious workers in Venezuela. Venezuelanalysis' Michael Fox reported on September 6 that at a discussion after the August 28 Caracas premiere of the documentary film 5 Factories, a worker from the state-owned CVG-Alcasa aluminium smelter remarked: "It appeared as though the workers themselves became the owners of the business Invepal, which means that they are actually heading towards capitalism, right?"

In an October 25 article on Venezuelanalysis. Steven Mather reported that at the previous weekend's annual Conference of Co-managed and Occupied Factories' Workers' Revolutionary Front (Freteco) in Caracas, "delegates from a group of workers fired by Invepal in Maracay" described "what can go wrong if the workers are forced to operate in the market and become 'owners.' Required by the government to prove himself in running the company, the newly elected [Invepal] president employed contracted management which then proceeded to hire contract workers whose conditions were much worse than the 'worker-owners.' The massive protests within the factory in reaction to this resulted in equally massive firings: 120 workers were fired in November 2005. They are still manning the barricades [picket lines] 11 months later."

Freteco, Mather reported, argues for the "full nationalisation of industry as a stepping stone towards 21st century socialism".

The most advanced experiment in workers' involvement in enterprise management in Venezuela has taken place at Alcasa, the large aluminium plant set up as a state-capitalist business in 1967. In January 2005, Chavez appointed former guerrilla fighter and avowed Marxist Carlos Lanz to head a new management team at Alcasa. The October 2006 International Viewpoint carried an interview with Rafael Rodriguez, a member of Lanz's management team, in which he presented a very different conception of "co-management" from that operating at Invepal. Rodriguez said:

We have never had the intention of implementing a social-democratic and reformist co-management as in Germany, but tactically we have adopted this name...

For us co-management at Alcasa has its meaning in the peaceful and progressive construction of socialism. As Marxists and Gramscians we want to construct a counter-hegemony. For that we have set up a centre for socio-political training, so that the workers are involved in the process. We have been called every kind of name, Communist catechism and so on. But little by little the workers have become involved in this training and several hundred now attend. Now, according to the subject, it's increasingly the workers themselves who provide the training...

[Alcasa] remains state-owned. We are not for the kind of co-management that distributes capital to the workers, or associates the workers with capital, or divides the shares among them. And in Venezuela the problem is not really that of private ownership. The state already possesses the essentials in this country: the majority of land, oil, the biggest companies... It is more a problem of the redistribution and restructuring of the state in a socialist sense. That's why we do not conceive of co-management as being confined to the company, for us it should extend to the entire social environment and to all the problems including the military question. But on this level we should say that we have not advanced very much.

When we came here, some have said to us "we have to fire all the leaders, all the directors". We replied "No, that is the last thing we will do". At PDVSA, after the employers' sabotage, they dismissed more than 2,000 managers at one fell swoop and that has created big difficulties for them to this day. If we had done the same thing and installed committed but untrained Chavistas in all the leadership posts that would have been a catastrophe.

We wanted a process from below, elections in each workshop, in each work group of "spokesperson delegates". A system of direct election, control and accountability, revocability, rotation of tasks and so on.

At the first meeting that we organised 26 workers came (out of 2,700 at the company). We worked by every means to convince, meetings, leaflets, newspapers, debates and so on. After a few months the workers saw it was in their interest to participate, to "take power" in the company. And then, we proceeded to elections at the management level.

The leadership team was considerably enlarged; for each former leader, we elected three new ones. Then there are 300 spokesperson delegates elected at the rank and file level by the workers. Today each department has its "administrative council" with spokesperson elected in each team where all the problems of production are planned and discussed.

When there is a problem to settle an assembly of workers in the department is called. We proceed in the same way at the level of the company as a whole. At the central meeting the directorate submits its plans to the representatives of the workers and the latter raise their problems. It's no longer the director alone who decides, he must take account of the will of the workers.

This conception of "co-management" is similar to the system of workers' management that exists in the state-owned enterprises in socialist Cuba (see Chapter 1. Industry: A Center for Decision Making, in Marta Harnecker's 1975 book Cuba: Dictatorship or Democracy).

Clearly, there are pro-socialist and anti-socialist "co-management" schemes in Venezuela, and it would be a mistake for us to ignore the fundamental differences between them.

Co-management in Cadafe

3.        In the electricity sector, the corrupt, pro-capitalist state bureaucracy were able to defeat co-management, despite a campaign waged by the unions who had the support of Chavez and the labour minister.

I presume this is a reference to the struggle in Cadafe, the state-owned electricity utility that produces 60% of Venezuela's electricity and employs 34,000 workers. In an article posted on the Trotskyist (Grantite) website in February 2006 ("Workers' Control and the Venezuelan Revolution"), Rob Lyon reported that in the wake of the defeat of the December 2002-January 2003 bosses' lockout, the Cadafe workers "wrote a series of concrete proposals for workers' control" but that only "some token measures and steps have been taken".

Lyon reported that on the five-member coordinating committee set up to "co-manage" Cadafe two positions "have been reserved for trade unionists who were appointed and not recallable. The president of the company does not need to heed the directives or instructions of this board.... The workers have fought for every inch of workers' control, and have now launched a struggle for real cogestion."

Referring to both Cadafe and PDVSA, Lyon wrote: "The workers in these two industries now face another argument from management who say that there should be no workers' participation or control in strategic industries."

It's certainly true that the post-lockout central management of PDVSA (headed by Ali Rodriguez and, since November 2004, by energy and petroleum minister Rafael Ramirez), has made this argument. But it would be absurd to describe PDVSA's current central management team as part of the "corrupt, pro-capitalist state bureaucracy". Why then should it be assumed that because it shares Ramirez's attitude to the introduction of "cogestion" into "strategic industries" the central management team at Cadafe (headed by Cadafe president and deputy energy and petroleum minister Nervis Villalobos) is part of the "corrupt, pro-capitalist state bureaucracy"?

It's not even that clear that the Cadafe central management team is completely opposed to the introduction of workers' participation in the management of the company. In a May 6, 2005, article on, Marta Harnecker reported that the "process of joint management had been finalized in Cadafe with the approval of the declaration of principles elaborated by the new executive board of directors" in April 2001.

Harnecker went on to report that the "process has advanced furthest at Cadela-Mérida, a Cadafe subsidiary in the Andean zone, where there has been joint participation among workers, business executives and the organised community. Carlos Sanchez, the president of Cadela was nominated by and elected by the majority of workers at this location."

"We have an excellent relation with him", Zida Gil, general secretary of the Cadela electric workers' union, told Harnecker. "He has supported many of the workers' initiatives, and what's more he has a great team. At times, of course, we do not share the same views, but then he invites us to converse, to debate. This is how things should be done. There are those who criticize us, they call us 'bosses', but I believe this criticism is incorrect, because in this process we all join hands: the president, board of directors, managers, professionals, technicians, workers, unions. We all strive toward the same goal of joint management. Therefore we have been successful."

Harnecker reported that at Cadela "united action by managers, workers and communities has reversed the critical situation that existed at the company. The service has improved, the profits are higher, and work has been granted to many cooperatives (more than 375 cooperatives by the end of 2004) instead of contracting services to private companies."

In his February 2006 article on the, Lyon also argued that, "A good example of workers' control is Cadela, a subsidiary of Cadafe in Merida which is run under a form of workers' cogestion."

In an article in this year's February 16 Scottish Socialist Voice reporting on Chavez's February 9 announcement that PDVSA would take majority control of the US-owned Caracas electricity provider EDC, Patrick O'Hare wrote:

The electricity company Cadafe (which provides electricity for most of the country except Caracas) has been experimenting with co-management for the last few years but workers were initially disappointed with a system where worker participation was limited to two places on a five-man coordinating committee, where ultimate decision-making still lay in the hands of an unelected president.

However in recent months, Cadafe has been trying to adapt to a different form of co-management, first implemented by its Andean branch Cadela, whereby the utility is managed jointly by workers, business executives and the community, and the company president is elected by the workers.

I haven't seen any other reports that Cadafe is moving to generalise the experience of "co-management" at Cadela to the rest of Cadafe. Nor, however, have I seen any reports that the Villalobos team has opposed the Cadela experiment. Unless Comrade Munckton has, I think it's bit rash, to say the least, for him to assume that they are part of the "corrupt, pro-capitalist bureaucracy".