Chávez: 'Galbraithiano'

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Chávez: 'Galbraithiano'
by GREG GRANDIN The Nation
[from the October 15, 2007 issue]

Last year, the New York Times reported that Hugo Chávez, in his
speech before the United Nations--the one in which he called George
W. Bush the Devil and urged Americans to read Noam Chomsky--expressed
regret that he hadn't had a chance to meet the linguist before he
died. A call to Mr. Chomsky's house, the Times writer quipped, found
him very much alive. The Times, though, had to issue a quick
correction when, upon review of the original Spanish, it became clear
that Chávez was referring not to Chomsky but rather to John Kenneth
Galbraith, who had indeed passed away a few months before.

There is something more than a little ironic about this incident,
where the press, in a rush to ridicule the controversial Hugo Chávez,
lost John Kenneth Galbraith in translation, for it is exactly the
Harvard economist's brand of New Deal social democracy, itself long
expunged from public discussion, that would allow for a more honest
consideration not just of Chavismo but the broader Latin American
left of which it is a vital part.

Chávez has described himself as a "Galbraithiano" and says he started
reading the economist, whose books have been available in Spanish in
Latin America since the 1950s, as a teenager. Long before he began
referring to Chomsky and other currently better-known political
thinkers, he cited Galbraith to explain his economic policies; at the
beginning of his presidency, in 1999, for example, he urged a
gathering of Venezuelan industrialists to support his mild reform
program, quoting Galbraith to warn that if they didn't, the "toxins"
generated by "extreme economic liberalism" could "turn against the
system and destroy it."

Galbraith is celebrated not just by Chávez but by a wide range of
reformers, including Ecuador's new president, Rafael Correa, himself
an economist. This popularity reflects a growing enthusiasm for the
state regulation of the economy that Galbraith prescribed. As Latin
America struggles to remedy the damage caused by two decades of
failed free-market orthodoxy--which has produced dismal growth rates
and widespread social turmoil and misery--politicians are
rehabilitating key macroeconomic principles unthinkable a decade ago.
Argentina, for example, has generated the region's most impressive
growth by lowering interest rates, maintaining a competitive currency
exchange rate, enacting price controls to stem inflation and driving
a hard bargain with international creditors, thus wiping out
two-thirds of the country's external debt and freeing up state
revenue for social spending and investment.

Galbraith has attracted admirers in Latin America not just for his
macroeconomics but for his critique of corporate monopolies. His
belief that corporations are political instruments with the incentive
and ability to corrupt democracy resonates today in a region where
much of the economy is controlled by foreign firms and where
corporate TV (which Galbraith believed had little to do with free
speech and everything to do with manufacturing consumer demand) has
become a bulwark of elite privilege. Galbraith's solution was to use
the state to set up a system of what he called "countervailing
power," enacting aggressive union protection, unemployment insurance,
subsidies, welfare and minimum wage guarantees to counter monopolies
and force a more just distribution of national wealth.

In Latin America, a similar version of democratic developmentalism
held sway in the early 1940s. Reformers from across the political
spectrum believed the region's oligarchy to be an obstacle to
modernization and thought the best way to weaken its deadening grip
was to empower those in its thrall. But the cold war cut short this
democratic experiment, as Washington threw its support behind
reactionary allies in order to insure continental stability.

Developmentalism continued into the 1970s but under the auspices of
either authoritarian or military regimes, which responded to demands
for a more equitable share of power and wealth with increasing
repression, culminating in the wave of terror that swept the region,
from Chile to Guatemala, in the 1970s and '80s. This violence, which
in many countries decimated the left, made possible the radical
free-market economics that reigned throughout Latin America during
the last two decades of the twentieth century.

The re-emergence of the Latin American left signals a revival of
democratic developmentalism, but with a key difference. While in the
1940s reformers sought to extend political power through unions and
peasant associations vertically linked to parties or leaders, today
they rely on a diverse, horizontal array of "new social movements" to
counter their countries' extreme concentration of wealth and
political power--Brazil's Movimento dos Trabalhadores Rurais Sem
Terra, for example, or Bolivia's Movimiento al Socialismo, less a
political party than a coalition of social movements, or Ecuador's
powerful indigenous groups.

But it is Venezuela that has the most advanced partnership between a
state reclaiming the right to regulate the economy and a diverse
array of antineoliberal social movements. What sets Chavismo apart
from past populist experiments in Latin America is its heterogeneity.
It is impossible to spend any time in urban barrios, among co-op
members, community media and other cultural activists, or in the
countryside with peasant organizers and not be impressed with their
diversity of interests, civic investment and commitment to building a
more humane society.

The countervailing power of left civil society organizations--many
existed before Chávez's ascendance; some were founded afterward--has
turned Venezuela into a vibrant democracy and is key to understanding
not just the government's survival in the face of a series of
formidable antidemocratic assaults but its evolving program, as many
of its initiatives come not top-down but from the grassroots. Last
December a respected Chilean polling firm found that in Latin America
only Uruguayans held a more favorable view of their democracy than
Venezuelans.

The question Venezuela faces is how to institutionalize this
relationship between a fortified executive and an empowered citizenry
while protecting individual rights and limiting corruption. Debates
are under way over a series of constitutional reforms, to be voted on
in a national referendum in December, that attempt to do just that.
While the international media have focused on a proposal to remove
presidential term limits, other initiatives would greatly strengthen
community councils, created two years ago as the building blocks of
Venezuela's "participatory democracy," in charge of a range of local
issues, from education and healthcare to sanitation and road repair.
While critics see the councils as another mechanism for Chávez to
strengthen his power, the Washington Post writes that in "the
neighborhoods, it's hard to find anything but bubbling enthusiasm."

Could Chavismo devolve into old-style authoritarianism? Of course.
But the record so far indicates otherwise. For all his rhetorical
excess, Chávez has presided over an unprecedented peaceful social
revolution, doubling his electoral support in the process. Save for
Chile's Popular Unity government--which never received nearly as much
approval at the polls as Chávez's Bolivarian experiment has--it is
hard to think of another instance where such a profound reordering of
political and economic relations has been ratified so many times at
the ballot box. This is a remarkable accomplishment, for revolutions,
by their nature, tend to generate crises that drain away much of
their initial support, producing cycles of violence and repression.

This achievement is rarely reported on in the US media. Chávez often
repeats an observation by one of his favorite economists to bring
home the point. "Never before," the Venezuelan president quotes
Galbraith as saying, "has the distance between reality and
'conventional wisdom' been as great as it is today."

Greg Grandin is the author of Empire's Workshop: Latin America, the
United States, and the Rise of the New Imperialism (Metropolitan). He
teaches history at NYU.