Intelligent talk on Venezuela...

[Peace Patriot]

"Building a Society From Below"

Cambridge, MA - Michael Albert of Z Magazine and Prof. Noam Chomsky of the Massachusetts Institute of Technology spoke to an audience of over 200 at a panel on Building a Society from Below in Cambridge, Massachusetts in the United States. They were joined by Gregory Wilpert of Venezuela Analysis and Julio Chávez, former mayor of the Torres municipality of Venezuela. The event was sponsored by the Boston and New York Consulates of the Bolivarian Republic of Venezuela.

Available as audio here: http://www.openmediaboston.org/node/588

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I am posting this as a relief from the flood of anti-Chavez corpo-fascist 'news' monopoly bullshit that has been posted at DU lately. This is the kind of discussion we SHOULD BE having about our own society in the context of the Bolivarian Revolution which has inspired an historic leftist democracy movement throughout Latin America--what Chomsky calls "the most exciting place in the world right now." We NEED an intelligent discussion--during this grave crisis in our own society--of our own revolutionary history (especially, as Chomsky discusses, our labor history), and we need to ask questions like, what kind of society do we want to build from below and what are its building blocks? (as the first speaker, Mike Albert, the ed of Z magazine, discusses).

They say very little about Chavez or the Chavez government, or even Venezuela. Michael Albert drew a laugh when he said he was in Caracas--which he has visited a couple of times--at a newspaper stand, and couldn't find an article that wasn't bashing Chavez. Even an article on baseball found a way to bash Chavez. He uses this as an example of allowing corrupt power systems to continue--whether it is in a factory taken over by the workers, or an entire revolution--which will undo all your work for justice and democracy, if you do not apply general principles of justice and democracy to the way you organize the factory, or to fundamental news/opinion systems in a country. Free speech is not 2% of the people owning the means of communication, staffing it with people of the same view, and cramming this down everybody's throats every day. Freedom of speech must be widened and democratized.

Chomsky later talks about the many factory worker and community newspapers of the early labor movement in the US. Chomsky says the ideas from our labor history are just under the skin of Americans, just below the surface, and are emerging again in a continuum of revolutionary struggle. He mentions in particular the belief of the Northern soldiers (and also of Lincoln) during the civil war that "wage labor" is tantamount to slavery. They were considered virtually the same thing.

A stimulating discussion, with lots of food for thought--positive, creative, forward-looking. A relief from the boring, repetitive, anti-Chavez PR flaks who aren't inspired by the poor majority achieving political power, and don't want anybody else to be.

[EFerrari]

1. Latin America is the most exciting place in the world right now for democracy.

Thanks for the link, Peace Patriot. On weekends if I'm not working, I surf the archives at CSPAN. (In fact, just finished a great presentation by one of Rihard Wright's biographers: http://www.c-spanvideo.org/program/166849-1)

I'll go listen.

[Braulio]

2. However, Venezuela is in trouble

My analysis shows Venezuela is in deep trouble. I don't think you understand the process it is undergoing, but the figures are and information flowing from that country show it's headed for big trouble. There are several reasons, and I don't want to expand too much on it, but the problem is rooted in poor governance. In other words, the people around Chavez aren't the swiftest characters when it comes to economic management and decision making efficiency.

One good example is the way they have insisted on using currency controls and keeping the exchange rate fixed even though Venezuela's inflation rate is the second highest in the world (after Zimbabwe's). Currency controls mean currency black markets, and the Venezuelan black market shows a very large difference between the "official rate" and the "black market rate".

Recently, government cash flow has been reduced by the slow economy, low oil prices, and PDVSA's inefficiency, so they've chosen to sell government funds via a "grey market. This is intended to dampen inflation, but government overspending is so large, inflation is predicted to accelerate next year. Inflation, of course, destroys savings, which means most Venezuelans don't save - they spend their money as soon as they can. Since the government is selling bonds at a fast pace, this in turn means the national savings rate is very negative - ie Venezuelans are going into big time debt at a fast pace. If we look at the trend, a Bolivar devaluation is going to happen, but by delaying it as they have the Venezuelan government has increased the pain the people will suffer once the Bolivar devalues.

[Downwinder]

3. The whole planet is in trouble.

Inflation is under control in the US, the dollar has just depreciated by 10% against the euro in the last year.

[Braulio]

4. I suggest you pick up the Economist

The Economist magazine is a good read if you want to understand what's happening. US dollar depreciation is caused by a BALANCE OF TRADE plus a GOVERNMENT DEFICIT problem. The US dollar depreciation versus the euro is a bounce from excess flows into the US dollar as a result of lack of confidence in European economies. Now that the crisis is ending, the fear factor is over, and cash is flowing back to the euro - as it should. Long term, the US has to balance its trade and government deficits, but they lack the political will to do so. Ending their wars overseas and cutting the military budget would really help, but that's going to be a tall order.

Regarding Venezuela, the problem is worse, because they suffer from about 30 % inflation which is predicted to increase to 40 or even 50 % next year. This is caused by excess government spending, fueled by printing money and very high flows of cash from bond sales. They also have decreasing national capacity in all sectors, because the official exchange rate is so far off course. When the local currency is priced too high, as it is in Venezuela, local producers can't compete with imports.

In other words, the Chavez government policy is killing off national industry and agricultural capacity in the private sector - and their "socialist enterprises" are badly managed or highly subsidized vaporware, which means they don't produce nearly what the private sector could. This is a common phenomenom in "socialist" economies, they produce less, and are very inefficient (consider Cuba's case, they have good land, water, and people, but they import food because their socialized agricultural system sucks).

If you refer to the economist magazine, you'll see their projection for Venezuela's GDP is -3 % GDP in 2009, and -3.4 % GDP in 2010 (adding them, it's -6.4 %) . Mexico was hit really bad by the crisis, but their projection is -7.1 % in 2009, and +3 % in 2010 (adding them it's -4.1 %). Other countries show the same trends, they reacted to the crisis, their actions caused a little more pain this year, but the cumulative effect is better. Venezuela, by avoiding the moves they should have made, is predicted to have a lousy economy for 2009, 2010, and likely 2011.