Yes, Venezuela has a lot of oil, and fortune has lately smiled upon the Bolivarian Republic by bestowing upon it high oil prices (low inventories, supply disruptions due to political tensions in oil-producing nations, US buildup of strategic reserve, rising demands for oil due to China's economic growth, refinery bottlenecks, fewer discovery of big reserves that can be exploited at low cost, speculation, etc. -- cf. <http://montages.blogspot.com/2004/05/two-three-or-many-oil-wars.html>).
The existence of oil in the nation's soil doesn't necessarily means that the Hugo Chávez government can control its production or profit from oil revenues or spend them for the benefit of the Venezuelan poor. Far from it, the Venezuelan government's heavy dependence upon oil revenues -- "Venezuela depends on oil for 80% of its export earnings, 50% of its government revenue, and 30% of GNP' ("Venezuela's Economy Shows Strong Signs of Recovery after Lock-out/Strike," September 27, 2003, <http://www.venezuelanalysis.com/news.php?newsno=1042>) -- was a point of its vulnerability rather than strength before overcoming the December 2002-January 2003 lockout of PDVSA.
The Chávez government has the capacity to exploit high oil prices now only because it first survived the capitalist offensive that threatened to shut down oil production in late December 2002 and early January 2003, developed the consciousness of workers and poorer masses in the informal sector through the struggle of running the oil company without its managers and technicians, restored the production level, and took full control of the company's management, substantially nationalizing the thitherto only nominally nationalized enterprise.
In short, capital's responses to a left program can be overcome, if the social force establishing it anticipate and counter them effectively. Michael A. Lebowitz writes about the importance of anticipating capital's responses and incorporating what to do to counter them into a left-wing strategy:
<blockquote>the failure of Keynesianism as theory was really the failure of an ideology -- social democracy. Within the Keynesian structure, there was always an alternative. The basic Keynesian equations in themselves say nothing about the structure of the economy; they don't distinguish between burying money and government investment, between activity which leads to the expansion of capitalist enterprises and activity which leads to the expansion of state enterprises. Although for Keynes the appropriate engine for growth was the capitalist one, a policy of expanding a state productive sector was always a theoretical option in order to drive the economy.
If the capitalist sector is the only sector identified for accumulation, however, then in theory and practice the implication is self-evident: a "capital strike" is a crisis for the economy. All other things equal, a government cannot encroach upon capital without negative-sum results. This has always been the wisdom of conservative economists.
Yet, it is essential to understand that the conclusions of the neoclassical economists are embedded in their assumptions -- and particularly relevant here is the assumption that all other things are equal. Consider two simple examples, rent control and mineral royalties.8 If you introduce rent controls (at an effective level), the conservative economist predicts that the supply of rental housing will dry up and a housing shortage will emerge. Likewise, he will tell us that if you attempt to tax resource rents (notoriously difficult to estimate), investment and production in these sectors will decline, generating unemployment. Both those propositions can be easily demonstrated-and they can also easily be demonstrated to be entirely fallacious with respect to the necessary conclusion.
Assumed constant in both cases is the character and level of government activity. Clearly, rent controls may reduce private rental construction -- but if the government simultaneously engages in the development of social housing programs (e.g., the fostering of cooperatives and other forms of nonprofit housing), there is no necessary emergence of a housing shortage. Similarly, taxing resource revenues may dry up private investment in mineral exploration but a government corporation established for exploration and production in this sector can counteract the effects of a capital strike. Obviously, all other things are not necessarily equal. Why should all other things be equal if a social democratic government rejects the logic of capital?
Thus, we need to be aware of the limits of the conservative economist's logic. However, that does not at all mean that these arguments can be ignored! Because what the conservative economist does quite well is indicate what capital will do in response to particular measures. It is an economics of capital. And, nothing is more naive than to assume that you can undertake certain measures of economic policy without a response from capital; nothing is more certain to backfire than introducing measures that serve people's needs without anticipating capital's response. Those who do not respect the conservative economist's logic, which is the logic of capital, and incorporate it into their strategy are doomed to constant surprises and disappointments.
Understanding the responses of capital means that a capital strike can be an opportunity rather than a crisis. If you reject dependence upon capital, the logic of capital can be revealed clearly as contrary to the needs and interests of people. When capital goes on strike, there are two choices, give in or move in. Unfortunately, social democracy in practice has demonstrated that it is limited by the same things that limit Keynesianism in theory -- the givens of the structure and distribution of ownership and the priority of self-interest by the owners. As a result, when capital has gone on strike, the social-democratic response has been to give in. (Michael A. Lebowitz, "Ideology and Economic Development," <em>Monthly Review</em> 56.1, May 2004,<http://www.monthlyreview.org/0504lebowitz.htm></blockquote>
What the Bolivarians did in response to capital's offensives was essentially the opposite of a typical social-democratic response that Lebowitz mentions: the Bolivarians took on the capital's offensives as opportunities -- instead of giving in, they moved in!
Doug wrote:
>Of course, these aren't exactly relevant to U.S. politics.
If American workers succeeded in beginning to implement a left program, they would confront fewer external constraints than Venezuelan, Brazilian, Argentine, and other workers had, though American workers, too, would have to anticipate capital's responses and incorporate what to do about them into their strategic thinking. First of all, though, they have to develop the sort of political party in which they can engage in strategic thinking about how to implement a left program, -- Yoshie
* Critical Montages: <http://montages.blogspot.com/> * Greens for Nader: <http://greensfornader.net/> * Bring Them Home Now! <http://www.bringthemhomenow.org/> * OSU-GESO: <http://www.osu-geso.org/> * Calendars of Events in Columbus: <http://sif.org.ohio-state.edu/calendar.html>, <http://www.freepress.org/calendar.php>, & <http://www.cpanews.org/> * Student International Forum: <http://sif.org.ohio-state.edu/> * Committee for Justice in Palestine: <http://www.osudivest.org/> * Al-Awda-Ohio: <http://groups.yahoo.com/group/Al-Awda-Ohio> * Solidarity: <http://www.solidarity-us.org/>