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1/28/10

The Paradox of Chavez

The news coming out of Venezuela lately has been of a country racked by a series of scandals; these include: the temporary closure of certain television channels for not showing presidential speeches—this was done because these stations had over thirty-percent Venezuelan content and the communications law states that those stations must show the speeches or face sanction, ergo, it fit well within Hayek’s notion of a just law, as it apply to all equally—; blackouts are becoming more common as a severe drought is starting to undermine the state’s capacity to deliver power and water; Venezuela is still one of the only states in Latin America that is still in recession; the emergence of a dual exchange rate to incentivize exports and industrialization, and dis-incentivize imports—with the exception of certain vital imports, i.e., food, however, this is expected to lead to even higher levels of inflation; etc. With all of this, many ‘business-analysts’ are suggesting that Venezuela is a black hole from which capital does not return, thus, investment should not be going in. This logic is exemplified by the proceeding quote from Mike Percy, Dean of the Business School at the University of Alberta (neoliberal):

"In Venezuela, you can put (money) in, but the odds are, you're not getting it back" he said.*

However, recently ENI S.A., a multinational petroleum company from Italy, and PDVSA, the national oil company (NOC) of Venezuela, intends to invest in $18 billion to develop oil from the world’s biggest reserve of oil, the Orinoco Belt. As the article from Mercopress elucidates:

The Eni/PDVSA agreement involves 18 billion US dollars worth of projects to pump and refine oil from the Orinoco Belt in central Venezuela. The venture expects to pump 240,000 barrels a day after spending 8.3 billion USD to develop the Junin 5 block... Eni also plans to build a 9.3 billion USD, 350,000 barrel-a- day refinery to convert crude oil from the existing Petromonagas project in the Orinoco into higher-value products. Italy’s Eni will hold 40% of the venture and PDVSA the rest.

Never-mind the investments that are planned from Petrobras from Brazil, Gazprom from Russia—“A preliminary joint venture deal on the Junin 6 block was signed in September between state-run Petroleos de Venezuela, or PDVSA, and a consortium of Russian oil firms, including Lukoil Holdings and Gazprom OAO...The Junin 6 block could eventually produce 450,000 barrels a day of heavy crude, and would require investment of some $30 billion, Venezuelan officials have said”**—, and CNOOC from China—“With China, Venezuela looks to develop the Junin 4 block, a $16 billion project with a potential to produce 400,000 barrels a day. The statement said Venezuela is looking to build an electricity-generating plant with China in the Orinoco to be used for refineries.”**

If, as Mr. Percy implies, investing in Venezuela is a metaphorical black hole for capital, why do major producers invest in Venezuela? On the flip side, is Chavez really anti-capitalist, why is he courting so much foreign capital? There are a lot of mixed messages coming out of Chavez. Chavez has stated that he doesn’t want to “expropriate everything”, claiming such claims are “not true.”*** However, Chavez has recently proclaimed himself to be a “Marxist”****, certainly this is ‘contradictory consciousness’ at its height, or is it?

Firstly, I do not think that Chavez is actually anti-capitalist, regardless of what he says or the Western media say. Chavez represents a new, post-1989, ersatz-radical left, one that has come to terms with capitalism—certainly with a more humane face—, but not with American ‘imperialism’. The real enemy for Chavez is not capital, the fundamental conflict is not internal to the polity or the system—as evidenced by his quote that he does not want to “expropriate everything”—, but rather it is external, the United States. Therefore, Chavez is actually playing from the rightist playbook by defining the enemy as external, an external that disrupted the natural ‘course’ of the Bolivarian revolutionary society. Yes, the United States does represent, signify capitalism, but it is not capitalism itself.

However, due to some ‘cunning of reason’, maybe—I emphasize the maybe— Chavez has no choice but to be a capitalist in order to destroy capitalism. Venezuela is not a developed country, by anyone’s account; it has an artificially high per capita income due to the rents extracted from the oil industry. Historically speaking, counter-hegemonic projects have only emerged in the developing world, e.g., Russia, China, Venezuela, etc. Thus, they have been characterized by multiple relations that Marx did not expect a future socialist society would have to face, i.e., underdevelopment, dependency, imperialism, dualistic economies, etc. Chavez is actually pursuing a policy that Soviet Russia and China wanted to or have pursued. As explained by Perry Anderson, in his recent article entitled “Two Revolutions”,

As a fully independent state, in tight command of its territory, it could be confident of its ability to control flows of alien capital by political power, much as Lenin had once hoped to do in the days of NEP; and, with a continuing grip on the strategic—financial and industrial—heights of the economy, of its ability to dominate or manipulate domestic capital.

Thus, within under-developed socialist states, they have little choice to be in favour of capitalist relations to develop their economies. However, as China now shows, this idealism of being able to ‘control capital’ without ‘becoming capital’ is a losing strategy. Indeed, the fetishism with ‘growth’ and ‘development’ may be the achilles heel of socialism. Indeed, China has become the ideal capitalist state, because it is obsessed with growth. What socialism has done historically, because it has been limited to underdeveloped countries, is actually introduce capitalism with a strong-centralized state that is independent of imperialist pressures. Creating the conditions for highly successful capitalist development, but the cost is the loss of the socialist project in the meanwhile. This can be explained by Zizek on the historic failure of Mao’s ‘Cultural Revolution’:

What Mao did was to deprive the transgression of its ritualized, ludic character by taking it seriously: revolution is not just a temporary safety valve, a carnivalesque explosion destined to be followed by a process of sobering up. His problem was precisely the absence of the "negation of the negation," the failure of the attempts to transpose revolutionary negativity into a truly new positive order: all temporary stabilizations of the revolution amounted to just so many restorations of the old order, so that the only way to keep the revolution alive was the "spurious infinity" of endlessly repeated negation which reached its apex in the Great Cultural Revolution.

This lack of a ‘positive order’, or the creation of a new hegemony and new social relations that allowed the rise of capitalism and its logics to reemerge, or arguably speaking, to merely reassert itself after a revolutionary lull. The project in Venezuela is twelve years old, we must see where it goes; indeed, if it even survives. In my opinion, it is going in the direction of Chinese-styled developmentalism, which to much of the modern left is the ‘best’ they can hope for.

Stay tuned...

*http://en.mercopress.com/2010/01/28/canada-confident-of-its-oil-potential-development-in-spite-of-venezuela)

**http://online.wsj.com/article/BT-CO-20100127 707060.html?mod=WSJ_World_MIDDLEHeadlinesAsia

***http://www.bloomberg.com/apps/news?pid=20601086&sid=aoTTUDfS0qNs
****http://en.mercopress.com/2010/01/28/tough-year-ahead-for-venezuelan-president-hugo-chavez

8 comments:

  1. As I see it, leftist projects are infected with an ab initio fatal flaw because they run counter to basic human nature; people will not have an incentive to work hard or develop new ideas if they are not going to benefit from the fruits of their labor. Look at the example of the USSR.

    Also Chavez's committment not to "expropriate everything" is reminiscent of Animal Farm's motto "all animals are equal, but some are more equal". How can any expropriation of private property be defensible?

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  2. @look-think-do

    Firstly, if you read my blog you will see that the idealist fallacy inherent within capitalist apologetics, humans are immutably selfish as the structuring principle, is a creation of a hegemonic operation that runs counter to most of human history. It is a historical fact that no other society in history has accepted this premise as a positive and structuring principle. Within capitalism, we are interpellated from the ISA that convince us that we are "naturally x", so when thats all you've been taught this "thought" becomes a material fact.

    The Soviet Union was the most successful economy in the world for over forty-years and no one can deny this. The collapse in the USSR were a result of structural issues, because the USSR did not actually change social relations all that much from capitalist relations, i.e., it was still a state-capitalist state that recreated the problem of growth fetishism that is supposed to be foreign to socialist alternatives to capitalism. My critique was completely ignored by you, it was that you cannot create systemic alternatives to capitalism without having met the preconditions set my Marx--here Trotsky was right--, that is what Lenin, Mao and Chavez are trying to do. The revolution would become universal, but it must happen in developed capitalist states in order to transcend capitalism.

    The exportation of private property is desirable, because it is based on the expropriation of the commons--Rousseau, Marx, Polanyi, McNally, etc. We have to stop the onslaught of property to protect society from the virus of capitalism and liberalism devouring our very way of life.

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  3. You will agree with the basic premise of marx that the labour power belongs or owned by labourer and that he has power over it to exchange with others including the state of employer/capitalist and that the origin of private property originates with this inaate power of person over his own labor and power to exchange with other for "value" and state to protect this power of exchange for equal value and to possess and enjoy the same.

    how does the chavez or china differ in this basic premise- leaving the political aspect of the mater i.e to control the market to protect the right to exchange the labour for equal value from other or expropriate some value out of it ?

    Am i wrong if I say that when you approve the chavez logic of Lenin's NEP,It is anti marxist idea? I am sorry to go to basics of marx economic and politial logic with you to understand the difference you make out in an american economy to chavez economy or chinese economy in fundamentals. How do you expalin the economic marx with political Lenin or Chavez?

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  4. Marx's argument is that the labourer has labour power, but is coerced into selling his labour power to the capitalist, there is no choice. The capitalist, by monopolizing capital and dispossessing those who once had it, extracts from the labourer his/her full product without giving all of it back to the labourer, i.e., exploitation. Therefore, capitalism is a system where the labourer is alienated from his own labour power, due to the lack of control he has over said labour power. Socialism is when the workers themselves re-appriate capital and democratic determine how to organization production and allocate the surplus, therefore eliminating exploitation and alienation. Marx was, obviously, against private property. Private property does not originate from labour, but from force, the state. What you are describing is some Lockean notion, to Rousseau, Marx the very notion of private property goes against the interests of the common good and is a theft perpetuated on all of humanity in the interests of the few; even Adam Smith noted that the state exists to protect this fundamentally unjust system. What you are arguing is not a Marxist principle, it sounds more liberal/Lockean to me.

    When did I say that I agree with "Chavez's logic of Lenin's NEP"? Re-read my conclusion. I am sorry, but I think you will have to make your terms much more clear and to get rid of this artificial, liberal bifurcation (reification) between the "politics" and "economics".

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  5. I didnot say you "agreed" but said "approved" the Chavez,s logic of Lenin.s NEP.

    you say that Marx's argument is that the "labourer has labour power, but is coerced into selling his labour power to the capitalist, there is no choice".

    Do you mean to say that labour is the owner of his labour power when you admit the labour has the labour power? It is true, given the capitalist mode of production based on subordination of labor to capital and expropriation of surplus value, the argument is parly correct.

    but what do mean by capitalist in real world? let us say a worker who has his provident fund and pension fund invested in some venture to give him back the dividend and interest income proportionate to his contribution in a public limited company or state controled public / goverenment companies or a farmer who saved some income to be deposited in some bank to earn the interest income? where does this amount of interest , dividend acruing to the labour or farmer than from the aggregate total surpus value? can you charcterise them as capitalists or does socialism does away with worker and farmer effectively to own any such amount to be saved than the paper voucher given to them in lieu of their labour exchanged in any prodiutive unit? do you expect the labor subordinate to political state in the place of capitalist in socialist mode of production in which the whole product including the necessary labour time required to keep the life of a labor to survive i.e the inherent right to life also subordinated to political state of whatever character whether it be chinese, russian,or american type socialism? did this type of subordination in real life that marx intended in socialism?

    secondly, what does this mean when you said:

    "The capitalist, by monopolizing capital and dispossessing those who once had it, extracts from the labourer his/her full product without giving all of it back to the labourer, i.e., exploitation."

    What do you mean by extract from laborer the full product without giving all of it back to the labourer and by that perhaps you mean to say expropriatiing surplus value- loosely explitation-? Does the socialist state does away with extracting the surpus value from the laborer? and who the people who constitute the state? some devine personalities or natural human beings? to make a difference that labour is not subordinated to state in the place of capitalist?

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  6. "Am i wrong if I say that when you approve the chavez logic of Lenin's NEP"

    I am sorry but this sentence fragment can be interpreted in so many ways that yes, one could see it as if I were agreeing with the logic. I don't think Chavez even accepts this logic, at least consciously. I don't think that Chavez is a terrible intellectual thinker who even knows what he's doing, its more ad hoc than anything; for instance, if he was really a Marxist he wouldn't be thanking God for rain. What is happening in Venezuela, state-capitalism, is a consequence of underdevelopment and this points to a incommensurability between socialism and underdevelopment and the contradictory consciousness such a position brings.

    The rest of your argument is not relevant for this particular subject. When I write a blog on socialism and its implications, we can argue then more fully. Stay tuned!

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  7. The answer to why foreign companies would continue to invest is straightforward: they are gambling. There's only so much oil in the world, and with major corporations like Exxon and ConocoPhillips getting out of Venezuela it makes room for more minor players like ENI S.A. to stake their claim on one of the few places in the world that looks likely to keep producing for a good while yet. It's a risk, but then so are all investments.

    National companies of countries like Brazil and Russia are fairly secure because of their political influence: Chavez can't afford to piss off every country at once. Russia and Brazil are key in the potential future alternative to US hegemony that Chavez hopes to be a part of, so he cannot afford to alienate them.

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  8. @nakadaldalus

    I agree with you that it is a gamble, but no capitalist would invest if they didn't think there was secure chance for profit; no one throws away $18 billion. Therefore, they feel secure that Chavez will respect the contract. This points to my thesis, there is a codependency, as I stated with developing nations--that pretend to become socialist--and capital. My real point wasn't about the investment from capital, but rather the contradictions embedded in Chavez's discourse (marxist) and practice (exploitation of earth for profit). As Zizek notes, ideology is not what you think, its what you do.

    ReplyDelete

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