Venezuela’s Chávez and the August 15 Referendum—Myths and Realities

by James Petras

The author, a former professor of sociology at Binghamton, New York, “owns a 50-year membership in the class struggle,” is an adviser to the landless and jobless in Brazil and Argentina, and is co-author of Globalization Unmasked (Zed). This article, dated September 2, 2004, was first posted on the web site of CounterPunch magazine. It has been edited for Labor Standard. Click here for additional information. The author can be reached here.

Between right-wing frustration and left-wing euphoria, little has been written about the complex and contradictory reality of Venezuelan politics and the specificities of President Chávez’s policies. Even less discussion has focused on the division between ideological Washington and pragmatic Wall Street, between the politics of confrontation and conciliation, and the convergences and divergences between Venezuela and the rest of Latin America. Both the right and left have substituted myths about the Chávez government rather than confronting realities.

Myth 1Chávez is an unpopular president who the right-wing opposition is capable of defeating in the [August 15] referendum.

But the right wing and its backers in Washington miscalculated on several counts. First, the weakest moment of the Chávez government was right after the PVDS executive lock-out (the managers’ strike in the publicly owned oil industry, December 2002-February 2003), when oil prices were much lower, the economy was devastated, social welfare programs of the government were underfunded, and grass roots political organizations were weak. By the time the referendum took place (August 2004), one and a half years later, socio-economic and political conditions had dramatically changed. The economy was growing by 12%, oil prices were at record highs, social welfare expenditures were increasing, their social impact was highly visible and widespread, and the mass social organizations were deeply embedded in populous neighborhoods throughout the country.

Clearly the initiative had passed from the right to the left, but both the U.S. [government] and its opposition collaborators [in Venezuela] were blind to the realities. Having lost control over the state petroleum industry and allocation of funds as a result of the failed lockout in early 2003, and having lost influence in the military after the failed coup of April 2002, the opposition possessed few resources to limit the government’s referendum campaign and no leverage for launching a post-referendum “civic-military” coup.

Myth 2—According to the right-wing analysts, the referendum was based on the issue of Chávez’s personality, his “charisma” and “autocratic” style.

In reality the referendum was based on class/race divisions. Non-opposition trade union leaders indicated that over 85% of the working class and working poor voted for Chávez, while preliminary reports on voting in affluent neighborhoods and circumscriptions showed just the reverse, over 80% voting for the referendum. A similar process of class/race polarization was evident in the extraordinary turnout and vote among poor Afro-Venezuelans: The higher the turnout, the higher the vote for Chávez, as an unprecedented 71% of the electorate voted. Clearly Chávez was successful in linking social welfare programs and class allegiances to electoral behavior.

Myth 3Among both the right and the left there is a belief that the mass media control mass voting behavior, limit political agendas, and necessarily lead to the victory of the right and the domestication of the left.

In Venezuela the right controlled 90% of the major television networks and print media and most of the major radio stations. Yet the referendum was crushed by an 18% margin (59% to 41%).

The results of the referendum demonstrate that powerful grass roots organizations built around successful struggles for social reforms can create a mass political and social consciousness that can easily reject media manipulation. Elite optimism about “structural power”—money, media monopoly, and backing by Washington—blinded the [right-wing elite] to the fact that conscious collective organization can be a formidable counterweight to elite resources. Likewise, referendum results refute the argument put forth by the center-left that they lose elections because of the mass media. The center-left justify embracing neoliberalism to “neutralize” the mass media during elections. They refuse to recognize that elections can be won despite mass media opposition if previous mass struggle and organization have created mass social consciousness.

Myth 4—According to many leftist journalists, Chávez’s victory reflected a new wave of popular nationalist politics in Latin America.

Evidence to the contrary is abundant. Brazil under Lula has sold oil exploration rights to U.S. and European multinational corporations, provides a contingent of 1,500 troops (along with Argentina, Chile, etc.) in Haiti to stabilize Washington's puppet regime imposed through the kidnapping of President-elect Aristide. Likewise in the other Andean countries (Ecuador, Peru, Bolivia,and Colombia) the elected regimes propose to privatize public petroleum companies, support ALCA [the Free Trade Area of the Americas; English-language initials, FTAA] and the Plan Colombia, and pay their foreign debts. The Broad Front in Uruguay promises to follow Brazil’s neoliberal policies. While Chávez promotes the regional trading bloc MERCOSUR, its major members Brazil and Argentina are increasing their trade relations outside the region.

In effect there is a bloc of neoliberal regimes arrayed against Chávez’ anti-imperialist policies and mass social movements. To the extent that Chávez continues his independent foreign policy his principle allies are the mass social movements and Cuba.

Myth 5The defeat of the referendum was a major tactical defeat of U.S. imperialism and its local vassals.

But a defeat of imperialism does not necessarily mean or lead to a revolutionary transformation, as Chávez’s post-referendum appeals to Washington and big business demonstrate. More indicative of Chávez’s politics is the forthcoming $5-billion-dollar investment agreement with Texaco-Mobil and Exxon to exploit the Orinoco gas and oil fields. The euphoria of the left prevents them from observing the pendulum shifts in Chávez’s discourse and the heterodox [mix of] social welfare and neoliberal economic politics he has consistently practiced.

President Chávez’s policy has always followed a careful balancing act between rejecting vassalage to the U.S. and local oligarchic rentiers on the one hand and trying to harness a coalition of foreign and national investors, [together with the] urban and rural poor, to a program of welfare capitalism. He is closer to Franklin Roosevelt’s New Deal than Castro’s socialist revolution. In the aftermath of each of the three political crises—the failed civil-military coup [of April 2002], the debacle of the oil executives lockout [of December 2002-February 2003], and the defeat of the recall referendum [August 2004]—Chávez has offered to dialogue and reach a consensus with the media barons, big business plutocrats, and U.S. government, on the basis of the existing property relations, media ownership, and expanded relations with Washington.

Chávez’s commitment to centrist-reformist policies explains why he did not prosecute owners of the mass media who had openly called for the violent overthrow of his government and also why he took no judicial action against the association of business leaders (FEDECAMARAS) who incited military rebellion and violent attacks on the constitutional order. In Europe, North America, and many other regions, democratically elected governments would have arrested, and prosecuted these elites for acts of violent subversion.

President Chávez has constantly reiterated that the property, privileges, and wealth of the elites are not in question.

Moreover, the fact that these elites have been able to engage in three unconstitutional efforts to overthrow the regime, yet still retain their class positions, strongly suggests that President Chávez still conceives of their playing an important role in his vision of development based on private-public partnership and social welfare spending. After five years of [the Chávez] government and after three major “class confrontations,” it is evident that, at least at the level of the government, there has been no rupture in property or class relations and no break with foreign creditors, investors, or oil clients. Within the fiscal framework of foreign debt payments, subsidies to private exporters, and low-interest loans to industrialists, the government has increased the allocation of state spending for social programs in health, education, housing, micro-enterprises [small business], and agrarian reform.

The Venezuelan government can maintain this balance between big business and the poor because of the high prices and revenue from petroleum exports. Like President Roosevelt [and Colonel Juan Perón in Argentina in the 1950s], Chávez’s positive social welfare programs attract millions of low-income voters, but do not affect money income levels, nor create large-scale employment projects. Unemployment is still in the vicinity of 20 percent, and poverty levels still remain over 50 percent. Comprehensive social spending has positively affected the social lives of the poor but has not improved their class position. Chávez is both confrontational and radical when his rulership is threatened and conciliatory and moderate when he successfully overcomes the challenge.

Myth 6—[All capitalist forces are united against Chávez.]

The left and right have failed to recognize a divergence of tactics between an ideological Washington and a pragmatic Wall Street. The U.S. political class (both Republicans and Democrats, the Presidency and Congress) have been actively threatening, intervening, and supporting destructive lockouts, violent coups, and a fraudulent recall referendum to oust Chávez.

In contrast the major U.S. and European oil companies and banks have been engaged in stable, sustained, and profitable economic relations with the Chávez government. Foreign creditors have received prompt and punctual payments of billions of dollars and have not spoken or acted in a fashion to disrupt these lucrative transactions. Major U.S.-based multinational oil companies project between $5 billion and $20 billion in new investments in exploration and exploitation. No doubt these MNCs [multinational corporations] would have liked the coup to succeed in order to monopolize all Venezuelan oil revenue, but perceiving the [political] failures of Washington, they are content to share part of the oil wealth with the Chávez regime. The tactical divergences between Washington and Wall Street are likely to narrow as the Venezuelan government moves into the new conciliatory phase toward FEDECAMARAS and Washington. Given Washington’s defeat in the referendum, and the big oil deals with key U.S. multinationals, it is likely that Washington will seek a temporary “truce” until new, more favorable circumstances emerge. It will be interesting to see how this possible “truce” will affect Venezuela’s critical foreign policy.

Myth 7The main thrust of the current phase of the Chávez revolution is a moral crusade against government corruption and a highly politicized judicial system tightly aligned with the discredited political opposition.

For many on the left, the radical content of the “No” vote campaign was rooted in the proliferation of community-based mass organizations, the mobilization of trade union assemblies, and the decentralized democratic process of voter involvement based on promises of future consequential social changes in terms of jobs, income, and popular political power.

Moralization campaigns (anti-corruption) are commonly associated with middle class politics designed to create “national unity” and usually weaken class solidarity. The left’s belief that the mass organizations that mobilized for the referendum will necessarily become a basis for a “new popular democracy” has little basis in the recent past (similar mobilizations took place prior to [and during] the failed coup and during the bosses’ lockout). Nor do government-sponsored moralization campaigns attract much interest among the poor in Venezuela or elsewhere.

Moreover, the focus of the Chavista political leaders is on the forthcoming elections for parliament, not in creating alternative sources of governance. The left’s facile projection of popular mobilization into the post-referendum period creates a political mythology, which fails to recognize the internal contradictions of the political process in Venezuela.


The massive popular victory of the “No” vote in the Venezuelan recall referendum gave hope and inspiration to hundreds of millions in Latin America and elsewhere that U.S.-backed oligarchies can be defeated at the ballot box. The fact that the favorable voting outcome was recognized by the OAS, Carter, and Washington is a tribute to President Chávez’s strategic changes in the military, guaranteeing the honoring of the constitutional outcome.

At a deeper level of analysis, the conceptions and perceptions of the major antagonists among the right and the left however are open to criticism. The right can be criticized for underestimating the political and institutional support for Chávez in the current conjuncture; and the left, for projecting an overly radical vision on the direction of politics in the post-referendum period.

From a “realist” position, we can conclude that the Chávez government will proceed with “New Deal” social welfare programs while deepening ties with major foreign and domestic investors. Chávez’s ability to balance classes, leaning in one direction or the other, will depend on the continued flow of high returns from oil revenues. If oil prices drop, hard choices will have to be made—class choices.