Friday, 19 April 2013

Hugo Chavez, Margaret Thatcher: Two Ideologies, Two Deaths, Two Legacies

By Alan MacLeod

Hugo Chavez and Margaret Thatcher, two great statespeople of our age, representing fundamentally opposing world views, have died. Their deaths have sparked passionate sentiment, for and against. Doubtless, history will remember them as two great figureheads in world politics.

Just as contrasting as their ideologies were, was the reaction to their deaths, from both the media and the public. In a New York Times Obituary, Simon Romero described Chavez as “astute and manipulative”, and accused him of “strutting about like a strongman”. In the UK, the Guardian went on the offensive, claiming “the debate continued as to whether Chavez could fairly be described as a dictator, but a democrat he most certainly was not”, seeing as he “assidously fomented class hatred”.

The Times' reaction to Thatcher's death could hardly have been more different: “The world has lost one of the great champions of freedom and liberty”. Praise was more muted in Britain, mostly going down the “great and controversial figure” line.

This contrasted with the reactions from the public themselves. Across Venezuela there were mass public scenes of grief, with few openly revelling in the death of the President. There was even a candlelight vigil for Chavez in London. A month later, long-planned street parties erupted in towns and cities that residents claimed Thatcher had destroyed.

The two represent the two primary ideologies of the age: neoliberalism and 21st century socialism. Thatcher's neoliberalism, known by many names, free-market economics, Reaganomics, the Washington Consensus, Neoconservatism, traces its philosophical roots to the work of objectivist philosopher, Ayn Rand. In a 1959 interview Rand gave a summary of her position. “Man's highest moral purpose is the achievement of his own happiness...I challenge the moral code of altruism, the precept that man's moral duty is to live for others.” 

Going further, she stated to a shocked interviewer that, “I consider helping others evil” and that “love should be treated as a business deal.” Her ambitious goal was to revolutionize human relations. Shunned by academia, she found an audience in the business community, where her central messages struck a chord. Thatcher echoed Rand's vision when she insisted that “there is no such thing as society, only individuals”.Their philosophy was summed up in the three words by the movie, Wall Street: greed is good.

Rand's effect on the business community was explored in Adam Curtis' excellent documentary trilogy, All Watched Over by Machines of Loving Grace.

Neoliberalism's economic basis is in the work of Milton Friedman and Friedrich Hayek. Friedman was close to both Thatcher and Ronald Reagan. Often discussed but rarely defined, for World Bank economist John Williamson, its key features are:

  • Fiscal discipline
  • A redirection of public expenditure priorities toward fields offering both high
    economic returns and the potential to improve income distribution, such as primary health care, primary education, and infrastructure
  • Tax reform (to lower marginal rates and broaden the tax base)
  • Interest rate liberalization
  • A competitive exchange rate
  • Trade liberalization
  • Liberalization of inflows of foreign direct investment
  • Privatization
  • Deregulation (to abolish barriers to entry and exit)
  • Secure property rights.

Critics argue that these policies have the effect of transferring control of the economy from institutions which, in theory at least, have the well-being of society as their primary goal to entities only concerned with profits. Under neoliberalism, humans have no inalienable rights, only what they achieve on the markets. Thus, rights enshrined in the United Nations Charter, such as the right to water, to healthcare and an adequate standard of living, are outdated, “a letter to Santa Claus”, in the words of Jeane Kirkpatrick, former US Ambassador to the UN.

While Rand is scornful of religion and established morality, many socialists see it as a crucial part of their beliefs. Tony Benn, former candidate for leader of the British Labour Party, Thatcher's bête noir, and vocal supporter of Chavez, states that his socialism comes from the book of Genesis:

Chavez defined his 21st century socialism at the World Social Forum in 2006:

But Chavez was quick to distance the movement from previous failed attempts and from dogmatic ideologies of the past:

Today, more than 360 million Latin Americans live under left-wing governments dubbed the “Pink Tide” in the West. They are not homogeneous, they range from the eco-socialism of Morales in Bolivia, to Ecuador's radical young economist, Correa to the Workers' Party and Lula in Brazil, but basic principles of equality and integration unite them. Critics claim a reliance on state leads to corruption and inefficiency, and that enforced collective action is an attack on the pure liberty of the individual. 

It is not by chance that an anti-neoliberal agenda has developed in Latin America. It was in the "Empire's Workshop" where Thatcher and Friedman's ideas were first implemented. After overthrowing President Allende, a democratic Marxist who had stood for many of the same things Chavez did, dictator General Pinochet invited protégés of Friedman and Hayek to Chile. There, they had free reign to carry out their ideas, thanks to the General's brutal suppression of the population. The result was not dissimilar to the West today: soaring unemployment and poverty, falling industrial production and purchasing power falling to just 40% of what it had been in 1970 (Grandin, Empire's Workshop, p.170), coupled with a rise in wealth and power of a small section at the top of society.

Hayek recommended Chile as a model for Thatcher to follow. She agreed Chile to be an “economic miracle”, but lamented that Britain's “democratic institutions and the need for a high degree of consent” made “some of the measures” taken “quite unacceptable”. (Grandin, p.172)

Likewise in Venezuela, President Carlos Andres Perez, on instruction from Friedman's students, imposed a sweeping austerity “packet” on Venezuela, privatizing state-owned assets and removing price controls on oil, plunging the population into poverty, to the point where ordinary Caracas residents spent more than 25% of their income on bus fares (Jones, Hugo! p.116). This despite running on an anti-neoliberal ticket, calling the bankers and economists “genocide workers in the pay ofeconomic totalitarianism” during his election campaign.

Desperate Venezuelans began rioting for food, but their protest soon became one against the system itself. The government acted quickly. The military was called in, surrounded the poor quarters of the city, and commenced three days of war against its inhabitants. The L.A. Times' Bart Jones speaks of Red Cross workers being gunned down in the street, “mass graves” being filled with “mutilated corpses”, “tied up corpses” with “bullets in the back of their heads” and children being gunned down as the armies fired indiscriminately into shanty towns (Jones, pp. 121-124). Perhaps 3,000 were killed, a similar number to the Tienanmen Square crackdown, in a country with a population more than 40 times smaller.

So it was not in Seattle, but in Caracas where the first direct protest against neoliberalism occurred, and it was the outrage at the brutal suppression of the people which spurred Chavez onto the political stage. Latin America is ten to twenty years ahead of the West, in economic terms. After decades of brutal neoliberal austerity, an alternative has emerged and fought back. Similar ideas have begun to appear in the West, thanks to the Occupy Movement, which swept America and Europe last year. Those in the West have much to learn from the region, even if it is what not to do.

The Guardian released a piece on the legacy of Margaret Thatcher. It showed a 65% increase in British poverty, from 13 to 22% of the population. Inequality, as measured by the GINI index, rose from .253 to .339. The planned destruction of the manufacturing industry led to record high unemployment. The irony of Thatcherism is that her policies have left far more people dependent on the welfare state than previously.

In contrast, even Thatcher's allies at the World Bank admit that Chavez managed a 50% decrease in poverty, and a 65% decrease in extreme poverty. Their figures show too that unemployment fell from 14.5% in 1999 to 7.6% in 2009. Venezuela's inequality has dropped from .487 in 1998 to .392 in 2009. Today, it is the most admired country in Latin America. A similar story is being played out in other Latin American countries.

For all this, Thatcher was remarkably successful in shifting the political discourse to the right. Her policies of privileging business led to record corporate profits and increased concentration of media ownership. Socialists like Tony Benn were pushed to one side and Tony Blair became leader of a “New Labour”, largely indistinguishable from the Conservatives. When asked what she thought was her greatest achievement, Thatcher responded “Tony Blair and New Labour”. Benn agreed, ruefully.

The concentration of money has led to the rightward shift of the media, too. The “free-market” has led to independent media bought up or swamped by massive conglomerates. Media outlets are increasingly beholden to corporations for advertising. Today, questioning neoliberalism is heresy, leading to even supposedly left-of-centre newspapers wondering if we should be “worried by the rise of the populist left in Latin America”. It is becoming increasingly hard to hide the successes of countries of Latin America in solving age old problems by bucking the supposed iron rules of neoliberal economics. But the media continues to try. The New York Times bemoans Chavez's “irresponsible handouts”, while the Washington Post insists he remains in power only by “showering the poor with gifts”. What are these gifts? The Telegraph finally enlightens us: “lavishing state funds” on projects like operations to restore sight to the blind and soup kitchens. Such is the aversion to the state in Western intellectual culture that providing even basic food and medicine, in accordance with the UN Declaration of Human Rights, are serious transgressions on freedom. 

Despite Thatcher insisting that “there is no alternative”, Latin America is providing a model for a different future. A silent battle for heaven and Earth is being waged. And we all must choose sides. Which one are you on? Choose wisely, because the fate of the 21st century will be decided on which one of these ideologies prevails.

Monday, 1 April 2013

Why was Hugo Chavez so Popular? A look at the Numbers

Reading the newspapers, we see that Hugo Chavez was an authoritarian demagogue. A “would-be dictator”, no less. Why then, did he and his party win 15 of 16 elections and referenda in just 14 years, while maintaining consistently high approval ratings from the Venezuelan public? In short, why was he so popular?

There are a wide range criticisms that one can make about the Chavez administration, although many of them have been debunked in a previous post. This piece, however, will not catalog them. This piece will analyse the policy decisions which have generated sustained support for the Chavez administration, using data from readily-accessible, unimpeachable international sources, such as the World Bank, the United Nations Development Program and Latinobarometro, a Chilean polling organization that is cited frequently in the New York Times, the Wall Street Journal and the Economist. This is to make sure there can be no questioning the data's validity. It is also important to note that Venezuelan sources usually show even bigger improvements. Unlike most people who write about Venezuela, I don't want you to just believe me, I want you to check up on me and scrutinise my figures, which is why links to the figures are provided. However, in order to judge the Chavez administration, some context is needed beforehand. 

Venezuela Before Chavez

Despite producing more than $300 billion of oil wealth between 1958 and 1998, the equivalent of 20 Marshall Plans, the majority of Venezuelans were living in shocking slums (McCaughan, M. The Battle of Venezuela, pp. 29-32). By the 1990s, quality of life indicators for ordinary Caracas residents were slightly below Port-Au-Prince, Haiti. Between 1970-1997, workers' incomes declined by 50%, while poverty doubled between 1984-1991. There was widespread repression, with the previous 3 presidents all using censors and all suspending constitutional guarantees. The two main political parties, almost indistinguishable in ideologies, shared the oil wealth between them, blocking out any third parties. Just in case, they rigged elections anyway, as 89% of Venezuelans believe.

 The LA Times' Bart Jones commented that Andres Velasquez, the man who came 4th in the 1993 election may have received the most votes (Jones, B. Hugo!, p. 184). Inflation reached 103% and there was considerable repression, like the infamous Caracazo massacre, where Jones describes “mass graves” filled with “mutilated corpses” of all ages, “tied up corpses” with “bullets in the back of the head” and Red Cross workers gunned down in the street (Jones, Hugo!, p.124).


This is the big one. It is often mentioned in passing in the press, but never explored. Let's do so. According to the World Bank, poverty has halved in 10 years, while extreme poverty has dropped by around 2/3. Here they are juxtaposed with Brazil, a country lauded for its achievements in poverty reduction. Given Venezuela's population, that equates to around 9 million people (1/3 of the entire population) pulled out of poverty.

 Both the United Nations Development Project and the World Bank agree that unemployment dropped from over 11% to under 8%.

Child malnutrition has dropped by 2/3. Fully 1.2 million children were malnourished when Chavez came to power.

 Venezuela's GDP per capita has increased, as has GNI per capita. Even taking into account the high inflation, GDP has risen.

In Foreign Affairs, the flagship US political science journal, Bernardo Alvarez shows that DataAnalysis published a report which found a 445% income increase among the poorer classes of Venezuela and a 194% increase for the upper classes, due to the huge economic boom driven by the state. However, these measures only take into account financial improvements. It is to non-financial improvements we now turn.


The Chavez administration has accomplished the task of creating a universal healthcare system from out of the ground. Health expenditures per person have tripled.

As a result, child mortality has continued to drop. The number of public doctors rose 1,100%, from just 1628 for the entire nation in 1998 to 19,571 in 2007. These doctors had given 225 million free consultations by 2007 (Cannon, B. Hugo Chavez andthe Bolivarian Revolution, p. 93). 51,000 forgotten Venezuelans were given operations to restore their sight.


Voter turnout in the 2012 elections was over 80%, higher than any US election in history. Under Chavez, nearly two and a half times as many people vote as in the 1990s. (1998 turnout: 6.3million, 2012 turnout: 14.8million). Jimmy Carter and the Nobel Peace Prize-winning Carter Center recently stated “the election processin Venezuela is the best in the world.” The European Union Election Observation Mission agreed, saying “the system developed in Venezuela is probably the most advanced in the world to date”. Canadian NGO, the foundation for Democratic Change gave the Venezuelan election 78/100 (very satisfactory). It gave the 2012 US Presidential elections 54.5/100(unsatisfactory). One year pre-Chavez, only 11% of Venezuelans claimed elections were clean. By 2006, 2/3 believed they were.

Venezuela has by far the largest number of political parties in Latin America, and their confidence in them is the joint-highest in the region. This is in contrast to a 1990 poll which found only 4% approval of parties. (Buxton, J. Case Studies in Latin American PoliticalEconomy, p. 177)

In 2002, 80% of Venezuelans believed  that “my vote influences policy.”

In 2009, Venezuelans were asked to rate their democracy, on a scale of 1-10, by far the most popular answer was 10. In fact, Venezuelans believe there is about as much freedom of speech in Venezuela as the Spanish do in Spain.

Women's Rights

Venezuela was an uber-machismo society (think Mad Men). The new Constitution was written with gender neutral words. Housewives' work is officially recognised as work and housewives get paid by the government to work. The women's bank was set up to provide loans to women. There has been a 300% increase in the amount of female representatives in parliament. Venezuelan women enjoy the third longest paid maternity leave in the world, after Norway and Canada. It is a long way from a feminist's dream. But it has considerably improved.


Venezuela's economy has more than tripled in size since Chavez took office. Venezuela's stock market is the highest-performing in the world.

Venezuelans are among the most optimistic about their economy in Latin America. Contrary to what you might have heard, Venezuelan inflation has plummeted since Chavez took office- down from 103% one year pre-Chavez to just 18.6% this year.

This despite a large increase in spending power in ordinary Venezuelans. How are they doing this? They must be racking up huge debts, right? Wrong again.


Thanks to MissionRobinson, more than 1.5 million forgotten Venezuelans have learned to read and write for the first time (Jones, B. Hugo!, p. 8). Despite its modest population, Venezuela has the 5th largest student body in the world, having tripled to 2 million in 2010 (7% of population) (S Brouwer, Revolutionary Doctors, p. 147) University education is free in public universities. Nearly half a million street children are now in school and dropout rates are very low.


According to the GINI index, in 1998, Venezuela was the most unequal country in the most unequal region in the world. In contrast to the USA where inequality is rising, inequality has dropped from 0.49 to 0.39 and is now the lowest in Latin America.


Venezuela has taken the lead in integrating Latin America. Organizations like the Bank of the SouthCELAC, Unasur and ALBA have been formed to help integrate Latin American nations. CELAC is an anti-imperialist union of co-operation which includes all the countries of the Western Hemisphere except the United States and Canada, who were not invited. The President of Bolivia stated that CELAC's purpose is

"a weapon against imperialism. It is necessary to create a regional body that excludes the United States and Canada. ...Where there are U.S. military bases that do not respect democracy, where there is a political empire with his blackmailers, with its constraints, there is no development for that country, and especially there is no social peace and, therefore, it is the best time for prime ministers of Latin America and the Caribbean to gestate this great new organization without the United States to free our peoples in Latin America and the Caribbean."

Venezuela is, by a considerable margin, the most admired country in Latin America. In 1996, it was only the 6th.

Most of these highly accessible facts are easily available online, in English. Yet almost none of them have appeared in the US media. The question is why? That is a question that would require an essay in itself.

For all the achievements, serious and pressing problems persist in the police force, with violent crime and drugs, with unemployment, housing, public services and general infrastructure. With Chavez's death, it is now up to whomever succeeds him to deal with these persistent problems.