RIP: My Hugo Chavez Rant

My Hugo Chavez Rant has been in mind for a long time. I never wrote it because I only wanted to rant once, and the rant just kept growing because the news kept getting crazier and nuttier. Reading Venezuelan news is borderline sadistic. I kept putting off my one Chavez article until something changed about the “Bolivarian Revolution.” This month marked that change with the death of Hugo Chavez.

If you’re completely in the dark about what’s been going on in Venezuela for the last 15 years, watch the Frontline documentary, The Hugo Chavez Show.

To help kick off the definitive article I read Blogging the Revolution by Francisco Toro and Juan Nagel. “Quico” Toro founded the web’s best English-language Venezuela blog Caracas Chronicles and also publishes for the Washington Post, The Atlantic and other outlets. I’ve followed Caracas Chronicles ever since.reading this one on prison gladiators for the New York Times blog, Latitude. I love it because it’s the daily grind in Venezeuela from an economist’s point of view.

The book is a summary of the most important posts from the last 10 years. Here’s the introduction by Guillermo Aveledo:

[T]he blog’s trio has tackled a myriad of different and, sadly, recurring issues: political encroachment and squabbles, economic and policy fallacies, sovereign debt, pollution, crime and security, drug trafficking, beauty queens, prison conditions and riots, labour issues, historical foibles, and so on.

Reading the book changed my rant entirely. Otherwise it would’ve been a crude rehash of what’s appeared on The Economist Americas page over the years. The two Caracas Chronicles guys, on the other hand, are exiles inside the culture but outside the borders. They have a unique perspective unclouded by short-term hysteria or desperation to remove Chavez, yet not gringos ignorant of the country’s quirks. Take your undestanding of chavismo to the next level with Blogging the Revolution (buying through that link supports Expat Chronicles).

One thing that never made sense to me was how Chavez could consolidate power so much in his second term. I’d accepted the theory that the Venezuelan elite had invested too much in the projects that benefited the upper class, and Chavismo is what happens when the pendulum swung towards the poor. But still, how do so many Venezuelans allow such economic incompetence?

You have to understand the petrostate.

The petrostate is a mechanism that turns oil money into political power – or, more precisely, control of the state’s oil money into control of the state’s oil money into control of the state – in a self-perpetuating cycle.

The way you do that is by building a huge patronage network. It’s Tammany Hall politics on a national basis …

Success in life depends … on your ability to get your hands on a piece of the [government] resource pie.

This outlook comes to dominate people’s relationship with the state. The state comes to be seen as an inexhaustible source of money. People come to believe that whatever problem they have, the state can and should solve it …

Within the petrostate mental model that’s what the state is for and governments are to be judged by how well they deliver on that promise …

Throughout the 40s, 50s, 60s and into the mid-70s, the petrostate model yielded a huge improvement in Venezuelans’ living standards. Infrastructure got built, people got jobs, and each generation could reasonably expect to live better than the one before. The country got universal schooling, free universitites, hospitals, public housing, sewers, phones, roads, highways, ports, airports, and all kinds of markers of modernity decades before other Latin American countries had them …

Venezuela was an island of democracy and stability in a continent torn apart by Marxist insurgents and coup-plotting generals …

The massive influx of oil dollars in the 70s shifted public morals in this country. Amidst the abundance of oil dollars, graft became accepted in a way it had never been before. The perception was that only a pendejo, a simpleton, would miss out on the opportunities for easy riches that profilerated in those days for the well-connected. A culture of easy-going racketeering, of matter-of-fact robbery, penetrated deep into the Venezuelan psyche. We’ve never managed to shake it …

Chavez’s peculiar contribution to the [petrostate model] has been to cut out the middlemen. In the old system, each client’s relationship was with the patron immediately above him. But the chavista patronage system only has two levels: the president and everyone else. These days, the relationships that underpin the system happen are televised; they are mediated rather than personal – the charismatic leader’s bond with each of his followers is unique …

In that light, you’d think Chavez improved government efficiency. But then you have to keep in mind that sugar disappeared from store shelves this year, a classic market shortage.

The book drives home, more than the gringo media ever did, that jaw-dropping corruption and inefficiency is nothing new in Venezuela. It wasn’t new to Chavez. It was built in for generations.

The next great point from the book, which isn’t confined to Venezuela, are the three primary schools of thought in Latin America (paradigms, if you will):

J.M Briceño’s “The Labyrinth of the Three Minotaurs” presents itself as a critical theory of Latin American culture in historical perspective …

[The three separate, mutually incompatible strains of Latin American thought] are the Western Rationalist discourse, the Mantuano (or Hispanic colonial) discourse, and the Savage discourse.

The European rationalist discourse is “structured by instrumental reason” along with science and technology. It sees social change as driven by laws, rules, and science. It stands alongside a pre-modern European discourse, the Mantuano discourse, that owed directly to Spain’s chivalric age, centered on a kind of medieval Catholicism that takes submission to hierarchy and the nobility of birth as its central values. At the other extreme, we have the savage discourse, which emerges from the “wounds” from the conquest of pre-European cultures and the transfer of African cultures into the Americas. It is steeped in nostalgia for a non-Western way of life, and views the European rationalist discourse as foreign, strange, and representative of oppression …

In Briceño Guerrero’s view, both the left and the right are strains within the Western Rationalist discourse. They may be radically at odds with one another – surely they are – yet they share the same basic faith in reason, in rational analysis, as the key to understanding and changing social reality … [Karl Marx and Adam Smith] may disagree on almost everything, but they share a faith in instrumental rationalism as a privileged method for ascertaining reality.

Chavismo does not … In a fundamental way, chavismo cannot be placed on a right-left axis without massively distorting both it and the axis. In fact, Chavismo not only falls outside that axis, it represents a rejection of the axis, a revolt of the epistemological order that sustains it …

Chavez’s political appeal is based on the emotional bond his rhetoric creates with an audience that profoundly resents its historic marginalization … Chavez validates the savage discourse, reflects it, affirms it, and ultimately embodies it …

The expression of will is reality enough, and no point of contact between it and the reality outside the discourse is needed. This is more than the opposition pundit-ocracy can handle. They cannot imagine, let alone understand, that millions of excluded Venezuelans actively want the nation’s affairs to be run on the basis of a savage (non-western/anti-rational) discourse, that they crave leaders who adopt such a stance, and that they are thrilled to reward Chavez with their votes because, not despite, his rejection of rationalism, of the demand for word and world to match …

Chavez’s only concern is to preserve his romantic vision of himself as a fearless leader of the downtrodden in their fight against an evil oligarchy. If the facts don’t happen to fit that narrative structure, then that’s too bad for the facts.

I’d never seen the idea of the Savage Discourse phrased so eloquently. If I read this years ago, countless situations in Latin American politics and argument would’ve made so much more sense.

I previously wrote about the Spanish Legacy and classism, but never considered the savage element in Latin logic. I dumped everything together when there are three different forces in total. If you think about it, every Latin American politician falls into one of the three discourses – Western Rationalist, Spanish Legacy, or Savage – despite their orientation towards right or left.

Western Rationalists can be conservative or liberal, but they’re generally people who studied law or economics at gringo universtities. They’re well regarded by the gringo media and develop reasonable political platforms based on data. They include Juan Manuel Santos, Enrique Peñalosa, Pedro Pablo Kuczynski, and Alejandro Toledo.

The perfect Spanish Legacy candidate would be incarecerated ex-President of Peru Alberto Fujimori and ousted Bogota mayor Samuel Moreno. Chavez has Spanish Legacy influence as well (he’s not pure Savage) given he used government money to buy influence in a clear patrón style of cronyism. Spanish Legacy candidates are difficult to spot because they obviously don’t run on platforms of authoritarianism, clientelism, nepotism, or elitism. They say what’s politically convenient to get elected, and what they do counts them as Spanish Legacy politicians.

Savage Discourse politicians would be the obvious Hugo Chavez, Rafael Correa, and Evo Morales, who oppose “imperialism” for the sake of opposing gringos and whose economic moves cause headscratching. You generally won’t see one of these elected to national leadership outside countries with serious resource wealth (case in point: Venezuela, Ecuador, Bolivia).

The Savage Discourse is wildly popular with disenfranchised Latin Americans. Anything rational or based on science and economics is suspicious, especially if it comes from Gringolandia. Defying the gringos is a value in itself, regardless of the results or any “truth.”

I’ve been thinking more and more about the lack of intellectual seriousness in chavismo, about its active hostility to specialist knowledge in general, and to economic knowedge in particular.

I think econophobia is at the heart of chavismo and of its popular appeal, its arrogance, its basic anti-rationalism and also its tendency to authoritariansim. Chavez holds specialist knowledge in deep, deep contempt …

It’s not even that chavistas are wrong in the causal claims they make. It’s that they don’t feel the need to put forward causal arguments at all. In their place, we get denunciations of greed and glorifications of solidarity – gut-level appeals to raw emotion – as the sole basis for economic policymaking. Public good, private bad. Collective good, individual bad. That’s as sophisticated as Chavonomic reasoning gets …

There is an undeniable whiff of improvisation in everything the government is doing.

Not only are the Caracas Chronicles guys freakishly intelligent, they’re also funny. Here’s an elegant critique of the lack of reason in the chavista Savage Discourse:

There is some sort of widely shared but never clearly stated understanding of what-causes-what in economic life that accounts for the baffling fact that people who blame inflation on “speculators” aren’t immediately laughed out of the room, out of their careers, and out of any possibility of holding a role in public life …

I’ve never really been able to get my mind around what exactly chavistas – and Venezuelans in general – have in mind when they blame inflation on speculators. It’s a view so primitive, so childish, so trivial to debunk, that you really have to pinch yourself to believe you still have to argue against it …

For speculation to account for inflation, it’s not one or two portus who have to be speculatively trying to see if they can make some extra cash – it’s every portu, marking up the price not just on one product, but on goods in general …

For reasons clear to exactly no one, though, the possibility of this form of “speculation” simply never enters the Venezuelan public sphere … In chavenomics, speculation only ever puts upward pressure on prices, never downward pressure.

“Speculators”, in the chavista formulation, are a very queer breed of “capitalist” indeed: one gripped by an obsessive, single-minded mania to raise prices at all places and all times, regardless of what the competition is doing. In other words, a speculator in the chavista mold is somebody willing to lose money to indulge his price-raising obsession, or at any rate someone unwilling to cut prices even when doing so would make him more money …

And then, as I’m sitting there tossing and turning at four in the morning, that lurking question just won’t go away. Is it really imaginable that the people who run our economy, people like Finance Minister Jorge Giordani and BCV chief Nelson Merentes, don’t understand the first-semester economics outlined in this post? Or is it that they do understand it, but have chosen to pretend not to in a bid to further their careers?

Francisco Toro and Diego Cristobal aren’t opposition nuts. They oppose Chavez, no doubt. But despite what you’ve read so far, they’re not as critical of Chavez as I’ve found the gringo media to be. They’re critical of the opposition, and their critique helped me understand why chavismo will stay in power via Nicolas Maduro.

Also, contrary to the impression you get from gringo media regarding the power consolidation and propagandizing under Chavez, Toro and Cristobal argue in the book that Chavez is not a totalitarian:

To make a proper totalitarian leader, you have to balance off your willingness to mangle the truth with an equal dose of cruelty and violence – Chavez just can’t strike that balance, because he’s just not comfortable enough using violence to achieve political ends …

Chavez grasped all along that there was no point in jailing masses of people, censoring newspapers and generally playing the highly damaging role of repressive ogre when he had enough cash on hand to co-opt the coopt-able and bankrupt the rest. It’s a trick the Chavez regime has mastered with chilling speed, and one that has allowed it to avoid the reputation costs of repression without really having to compromise its increasingly tight grip on society …

[Totalitarianism’s] aim is not just to silence all sources of political dissent. Its goal is to dominate the totality of each and every thought and activity of each and every citizen each and every day …

The Caracas Chronicles guys give us a different way to think of democracy in Venezuela:

Competition for electoral support has come to color just about everything that happens in the country. You see democratic dynamics playing out day in and out, in the thousand little ways that both chavismo and the opposition curry favor with voters, from the populist-goodie giveaways (not just by the national government), to the billboards trumpeting the name of every Podunk politician who ever filled in a pothole anywhere in the country, to the relentless endless propaganda … everywhere really. This is just not the way actors behave in a political system where what normal people think doesn’t matter.

In that sense, democracy is thriving in Venezuela …

It’s these contradictions that make the Venezuelan case so fascinating to watch at this point. Venezuela’s outlaw state is, today, more dependent on what its people think of it than at any time in the past. As the conditions of electoral competition grow more unfair, the competition intensifies rather than slackening. These are not normal-country dynamics – and really, I don’t think I know of any close parallel to this kind of system either in our history or elsewhere around the globe.

It’s really weird what’s happening in our country. Riveting, really.

A significant portion of the book contests the widely accepted theory of the 2002 coup against Chavez, which I had accepted without realizing it.

Watch the entire documentary, The Revolution Will Not Be Televised, on YouTube, which captures the narrative most people have adopted. It’s undeniably sympathetic to Chavez. But despite their bias, it’s undeniable fact that Bush administration officials met with the coup plotters beforehand. The CIA knew of a coup plot beforehand. Bush officials spoke to Chavez’s replacement on the day of his swearing in. And the White House’s worst was press secretary’s Ari Fleischer’s embarrassingly premature statement endorsing the coup. Despite all that, no evidence amounted to tangible US involvement. Approval, yes. But material support? No.

That’s been the adopted narrative. Our Venezuelan authors tell a version that would render The Revolution Will Not Be Televised to be a worse propaganda flick than Michael Moore himself could produce. In prefacing their detailed description of the 2002 coup events:

[W]ho ever heard of a Latin American coup where the coupsters “forget” to gain military control over the seat of government? One where they have no overall plan, no settled leadership, and end up improvising a strategy minute-by-minute as they go along? And who’s ever heard of a Latin American coup where the overthrown President had a specific, worked-out plan to provoke the crisis that eventually toppled him? …

To proceed, a background on Caracazo:

The effect of the 1989 riot – known as the Caracazo – had on Venezuela’s public life was in some ways analagous to 9/11 in the US, an event so deeply traumatizing it could be summoned just by its date: 27F. Until then, Venezuelans had seen themselves as different, more civilized, more democratic, better than their Latin American neighbors. Thirty-one years of unbroken, stable, petrostate-funded democracy had made us terribly cocky. In a sense, the riots marked Venezuela’s re-entry into Latin America. The country was no longer exceptional: just another hard-up Latin American country struggling to put its democracy on a stable footing.

The next passage explains how to recognize if an account of the 2002 Venezuelan coup is biased from the left: did they mention Plan Avila? If there is no mention of Plan Avila and the top generals’ refusal to carry it out, then your source is omitting an important part of the story:

At 10:30 am … Chavez personally ordered the activation of Plan Avila. Now, those two words will mean little to foreign readers, but they will send chills down the spine of any Venezuelan.

Plan Avila is an army-run contingency plan designed to quell serious disturbances in Caracas.

The plan had only ever been activated once before, during the massive looting that broke out on February 27th and 28th, 1989 … [T]he decision to deploy the army with orders to shoot looters on sight resulted in a bloodbath …

[T]he bulk of the evidence suggests that the decision to remove Chavez was made by the Venezuelan Army under quite unprecedented circumstances, and the decision to bring Chavez back was also made by the Venezuelan Army under quite unprecedented circumstances …

The real irony, considering the turn official rhetoric would take in the months and years to follow, is that only because April 11th wasn’t the product of a well-planned, carefully orchestrated conspiracy – that’s the main reason Chavez beat the coup.

Here’s a thorough account of events from the NY Times. It’s consistent with how the coup is described in Blogging the Revolution. The book contains a much more detailed account.

Blogging the Revolution gives an on-the-ground look at Hugo Chavez’s Venezuela from the eyes of Venezuelan economists. You couldn’t get a better look.

Buy Blogging the Revolution by Francisco Toro and Diego Cristobal.
(Buying through that link supports Expat Chronicles)

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Here are some more fun quotes from the book.

Petrostate stuff:

For one thing, most Americans remain under the impression that Venezuela is, basically, a Latin American country. It isn’t. We are, first and foremost, a petrostate – a place where the government gets to pump massive amounts of money more or less directly out of the ground.

Nothing about Venezuela makes sense until you’ve worked out the deep implications of that one, basic fact. Deep down, Venezuela has much more in common with Algeria, Iran, or Russia than with Colombia, Brazil, or Cuba …

[T]he real issue wasn’t what oil dependence would do to our wallets; it was what it would do to our souls. Diversifying our economy was a means to an ened of inoculating our society’s moral fiber against the fecklessness and depravity that comes from unhinging consumption from hard work …

In a normal country, citizens are keenly aware that the wealth the state spends is wealth they created. The hackneyed gringo letter-to-the-editor writer’s catchphrase, “as a taxpayer, I …” captures it nicely. Citizens feel they own the state for the same reason they feel they own their toothbrush: they paid for it.

The petrostate turns this symbolic nexus on its head. The state doesn’t depend on the citizen for money; the citizen depends on the state for money … The citizen is perpetually placed in the role of supplicant, continually conscious that he needs the state much more than it needs him.

Chavista hypocrites, also known as the “robolución” (rob instead of rev):

This is a country where the people whose job it is to administer the Revolutionary Bolivarian Socialist state think nothing of plunking down a couple of thousand dollars for a plasma-screen TV before heading off for a bit of lunch in an LA-style sushi bar, where obscenely overpriced bits of fish flown in from the other side of the globe get washed down with $4 bottles of Corona.

It’s this oil-fueled spending boom that accounts for the popularity of the Chavez regime, and there’s nothing progressive about it.

Fun pre-Chavez bureaucracy quote:

In 1988, Venezuela had more public employees than Japan, but as the dark joke at the time went, “of course, in Japan they don’t get quality public services like we do here.”

On Chavez’s consolidation of power:

In the old system, the state had two fully independent institutions: A and Copei. It’s true, it’s regrettable that there were only two real institutions around, that the courts and the elections authorities and the nationalized companies and every other part of the state was subjugated to one party or the other. But at least there were two of them! …

In the chavista state, there is only one institution: Hugo Chavez. Note that I’m not talking about an abstraction – about “the presidency of the republic” – I’m talking about a man. When an important policy decision has to be made, the only deliberations that matter take place between his ears.

Why oil has risen to over 90% of national exports (overdependence):

In Parapara, agriculture is a bust. This is a direct consequence of government policies both at the macro and micro levels: unrealistic price controls, chaotic land grabs, and an over-valued exchange rate that makes it cheaper to import peppers and lemons than to grow them here.

Fun quote from Cristobal’s Chilean friend, talking about Chile (Spanish Legacy):

“In this country, GDP per capita could hit $20,000 per year, and people would still think like backwards Latin American assholes.”

On the over-factioned opposition to chavismo:

[E]ach would rather be a bigger fish in a small pond than a smaller fish in a bigger pond.

Savage Discourse:

Style is crucial. Chavez adopts a rhetorical pose of always speaking to his audience as their notional equal. He never pulls rank, never talks down to people, never condescends. Within the construct of his speech, he builds a sense of respecting his listener, of speaking to him on his level.

Impossible-to-understand description of the economic effect of the official, wildly overvalued Bolivar and government giveaways:

(Or, rather, they’re subsidizing the government’s access to the dollars that buy the yuan that denominate the swap for future oil shipments that buy the appliances – nothing is simple with these people!)

Buy Blogging the Revolution by Francisco Toro and Juan Nagel.

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