The recent (Sept. 25) congressional elections in Venezuela once again put the regime of President Hugo Chavez in the world news. The outcome of the elections was mixed. While Chavez’s United Socialist party of Venezuela (PSUV) won 96 seats compared to 63 for the main opposition (MUD), the PSUV only won 48% of the popular vote vs. MUD’s 47%, with a split-off from the PSUV winning the remainder of the popular vote and gaining three seats in the congress.

Venezuela’s “Bolivarian Revolution” and Chavez’s “socialism of the 21st century” once again merit further analysis in light of these results. Chavez was elected as president in 1998. While the great majority of workers and peasants voted for him, his organized base was mainly a layer of mid-level military officers; he lacked a workers’ political party on which he could rest.

Major Reforms

Once in office, Chavez carried out a series of major reforms, including building health clinics in poor neighborhoods throughout the country, establishing a chain of low-cost supermarkets for poor people and establishing a mass literacy program. Poverty was reduced by 47% and extreme poverty by 70%. Much of the profits from Venezuela’s oil wealth were used for these programs, rather than simply putting them in the pockets of Venezuela’s capitalist class.

As a result of this, Chavez engendered the undying hatred of Venezuelan “oligarchy”, who attempted a coup in 2002. This hatred, coupled with the hostility of US capitalism, helped push Chavez further to the left, but the main factor was the rise of a workers’ movement there. In a matter of just a year, this movement built an entirely new and more radical labor federation (the National Workers Union – UNT). They occupied several major plants and took them over as worker-run cooperatives.

Worker-Owned Cooperatives

Chavez supported these take-overs by giving the cooperatives state loans. In fact, these co-ops have become a central part of the Chavez economic model for “socialism of the 21st century” as he calls it. In 1998, when he took office, there were 762 co-ops in Venezuela with 20,000 members. Many of these were more credit unions than worker-owned cooperative work places. By mid-2006 there were 108,000 co-ops with 1.5 million members with half in the service sector and a third in production. As reports, “cooperativism is on the march in Venezuela on a scale and at a speed never before seen anywhere.” ( In part, the drive for cooperatives is fuelled by the capitalist crisis, which has led to the closing of factories and other productive facilities. As Labor Minister Maria Cristina Iglesias said, cooperativization, especially of idle factories occupied by their workforces, promotes “what has always been our goal: that the workers run production and that the governments are also run by the workers.”

It is very understandable why this is such an attractive direction for many workers. Workers in a co-op do not feel the direct oppression of the boss. They don’t see somebody else (the boss and the owner) getting rich off of their labor. They feel they own and control their means of production.

However, the experience of Zaida Rosas should be borne in mind. Rosas works in a worker-owned cooperative textile plant in Caracas. She and her co-workers voted to take a monthly salary of $117 per month vs. the minimum wage of $188 per month. They took this sharply reduced pay in order to be able to repay the government loan that enabled them to establish the co-op in the first place. In other words, worker co-ops are faced with the immense handicap of lack of start-up capital.

However, there is an even deeper problem. The driving force in the Venezuelan economy is the capitalist “free” market. The worker-owned co-ops must dance to that tune. If the Venezuelan and world capitalist economy goes into crisis, then so will the cooperatives.

Then there is the issue of the effects on the consciousness of the workers themselves. Seeing themselves as the owners of their business, they must struggle to keep that business afloat. They must consume themselves with thoughts of where they can find cheaper sources of materials, where they can find new markets for their products, etc. This tends to replace considering how they can get other workers to join a struggle against the capitalist system itself. Even supporters of worker-owned co-ops like Michael Albert of Z magazine wrote of the effect of workers in a co-op “trying to out-compete old firms in market-defined contests may [be to] entrench in them a managerial bureaucracy and a competitive rather than a social orientation.”

Alongside the workers’ cooperatives has gone the issue of nationalization under workers’ control and management. Unfortunately, from the time of the election of Chavez (in 1998) to the end of 2008, the percentage of privately-owned industry has actually increased from 64.7% 70.9%. In addition, at least in the past, Chavez has opposed the idea of workers’ control and management of such basic industries as the oil industry.

Class Struggle

It is not as if the co-op movement in Venezuela has completely overwhelmed the class struggle. There is, for instance, the example of the Mitsubishi workers in Anzoategui Province who struck in January of 2009 and occupied their plant to protest the firing of dozens of contract workers. The strikers were demanding that these workers be hired as full time direct employees of Mitsubishi. Two of these strikers were killed in a police assault, but this was covered up by the Chavista state government.

Bureaucrats & Opportunists

This leads to another problem for the workers’ movement in Venezuela: The continued power of the bureaucracy in the government. Chavez did not come to power based on a workers’ organization – a workers’ political party; he was based on an organized layer of mid-level military officers. It has proven extremely difficult to build a worker-controlled political base to seize control. Even Chavez’s PSUV is reported to be riddled with bureaucrats and opportunists.

Capitalist State

On top of this is an even deeper question: Is it possible to build any sort of socialism (of the 21st century or any other sort) through the old capitalist state? The experience of Venezuela is proving once again that it is not. The Venezuelan capitalist class – along with their senior partner, US capitalism – built the Venezuelan state to enforce their rule. The “divisions of power”, the establishment of different bureaucracies which are insulated from the control of the working class – this makes it impossible for the workers to directly control their own society. Moreover, the military still hovers over all of society as a hawk over the plains where various prey animals live.

Yet Chavez is in power as the head of this state and came to power through the normal bourgeois channels. To an extent, he rests on the very capitalist state that enforces the economic system that he opposes. Try as he might, it is a very open question whether he will ever be able to break with this state, because he is a captive of his own past.

Foreign Policy

It is said that foreign policy is simply the extension of domestic policy. Chavez’s foreign policy is instructive. He strongly attacks US imperialism and is attempting to combat it, especially in Latin America where he is attempting to set up a Latin American trade zone. He apparently has a strategy of using Venezuelan oil wealth to develop all of Latin America while simultaneously spreading the influence of Venezuela. He has linked up with other regimes that are in opposition to US capitalism, including that of Achmedinijad in Iran, whom Chavez has strongly supported.

Meanwhile, Chavez seeks to build support within the workers’ movement and the socialist movement internationally. In November of 2009, he called for a new socialist international – a “Fifth International”. Since then, however, he has apparently failed to carry out any concrete steps towards establishing this international. This call, and then the failure up to now to act on it, illustrates the contradiction in which Chavez finds himself.

There is no doubt that Chavez is a brilliant and courageous person. When he raised the issue of socialism in Venezuela, he did not do so due to the popularity of socialism amongst the masses; on the contrary, he played an important role in introducing the issue into the Venezuelan workers’ movement. However, the issue is not what sort of personality any particular leader is, nor what are his or her intentions; the issue is what are the pressures on that leader. In Chavez’s case, he has apparently been unable to fully rid himself of the pressures of his original base. He and the movement around him have not been able to build an alternative to the capitalist state – the alternative of workers’ councils. His call for “endogenous (internal) development”, coupled with the reliance on worker co-ops and the foreign policy and continued grip of the bureaucracy are reminiscent at best of “socialism in one country.”

Thus it is that the workers movement in Venezuela finds itself somewhat stymied, somewhat frustrated. One wing has apparently tended to be subsumed in the running of their own businesses, meaning that a direct confrontation with private ownership of the means of production is pushed into the background. Another wing finds itself attacked by the capitalist state and the very bureaucracy which has such influence within the Chavista camp. The recent elections results must be understood in this context. Some international supporters of Chavez have continually warned of the threat of a new coup. This is certainly possible. Equally a threat, however, is the possibility that the bureaucracy expresses itself through the policies of Chavez himself. This would mean a turn to the right by Chavez and even the suppression of the workers’ struggle at the national level.


While supporting many of the instincts that lead workers to form worker-owned cooperatives, socialists should also point out the weaknesses of this drive. In the last analysis, these co-ops are not controlled by the workers; they are controlled by the vagaries of the “free” market and the interests of international, privately-owned capital that dictates to this market. In addition, in the last analysis, socialism and a worker-controlled society will never be won through the capitalist state. As workers move to struggle, they inevitably build centers to organize and spread their struggles. These workers’ centers of struggle – workers’ councils – should be built as the alternative to the capitalist state. This can be done in connection with building such centers of struggle within the PSUV – against the bureaucrats and opportunists there as well as against a foreign policy that cuts off the Venezuelan workers from their sisters and brothers in such countries as Iran.

In this way, the capitalist counter-attack in Venezuela can be reversed and a genuine socialist revolution built, one which can be at the center of an all-Latin American and all-world workers’ movement and a world socialist revolution.