Chávez: ‘Galbraithiano’

Chávez: ‘Galbraithiano’

As Venezuela and the rest of Latin America repair the damage of two decades of free-market orthodoxy, John Kenneth Galbraith is a major inspiration.


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.”

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