Venezuela: Statement of Lucha de Clases on the devaluation of the Bolivar

On Friday, February 8, the Minister of Planning and Finances Jorge Giordani and the President of the Venezuelan Central Bank Nelson Merentes, spoke at a press conference to announce the devaluation of the Bolivar from 4.3 to the US dollar to 6.3.

Regarding this decision the Lucha de Clases (Class Struggle) Marxist current of the PSUV declares:

1) Our strongest repudiation of the hypocritical reaction of the oligarchy and its political representatives that have criticised the measure presenting it as a “red austerity package”. The inheritors of the Punto Fijo regime have no authority to speak about “austerity packages”. In power they introduced several capitalist neo-liberal adjustment packages against the working people, including the infamous Carlos Andres Perez package that led to the peoples’ uprising of February 27, 1989. Had they won the October 7 presidential elections they would have implemented a package of measures against the working class and the poor people, including the destruction of the misiones social programs, widespread cuts against education and health care, attacks on pensions and wages, etc. To them we say: “you will not be back!”

2) At the same time we should critically analyse the economic decisions of the Bolivarian government on the basis of the following fundamental criteria: which social class do they benefit? Do they contribute to advance towards socialism, the stated aim of the Bolivarian revolution, or not?

3) The devaluation of the Bolivar is a measure that has been imposed by the very logic of the capitalist system and the domination of the owners of the means of production and financial capitalists over the economy. It cannot therefore be considered a socialist measure.

4) The introduction of currency exchange controls on the part of the national government in 2003 was an attempt to curb the massive flight of capital, the investment strike and the generalised sabotage of production on the part of the national and multinational bourgeoisie, particularly during the bosses lock out and criminal sabotage of the oil industry in December 2002 – January 2003.

5) However, much like other similar measures that have been taken (regulation of prices of basic food stuffs, rent controls), the attempts to regulate the worst aspects of the capitalist system do not solve the main problem: the ruling class always manages to evade controls through legal, semi-legal and openly illegal means. In reality, all they achieve is the dislocation of the “normal” mechanisms of the capitalist system, without replacing them with a rational and democratic economic plan in the interest of the majority.

6) Faced with currency exchange controls, the bourgeoisie responds with a black market and speculation – a parallel dollar exchange. Faced with price controls, the bourgeoisie responds with hoarding, profiteering and withdrawing basic products from the market place. If the price of white rice is regulated, the bourgeoisie produces flavoured rice. If the state institution CADIVI gives dollars to capitalists at the official exchange rate so that they can import materials for production, the capitalists will divert divert these dollars to the black market, making substantial profits while at the same time they sell the finished products at prices based on the black market exchange rate.

7) The idea that the devaluation will benefit the State, because it will receive more Bolivars for each dollar it receives in payment for oil exports, is extremely short-sighted. Faced with the sabotage of production and the investment strike of the ruling class, the state has become a large-scale importer of all sorts of basic and food products, which it then sells at subsidised prices through the state-owned Mercal and PDVAL distribution chains. What the state earns by getting more bolivars from the sale of oil, it will lose by paying in dollars for the importation of basic products to satisfy the home market.

8) In reality the national and multinational bourgeoisie has been waging a noisy campaign demanding devaluation since president Chávez announced he had to undergo surgery in Cuba in December. In the same way they continue to wage a campaign demanding the liberalisation or increase in the prices of the basic food products which are currently regulated.

9) At the end of the day, devaluation inevitably leads to higher prices for the final consumers in a country which is heavily dependent on the import of consumer goods and raw materials and parts for manufacturing, assembly and even for agriculture – that is, inflation for working class families.

10) The capitalist system “works” on the basis of guaranteeing maximum profit for the private owners of capital and the means of production. Well-intentioned appeals to businessmen to invest in production or to sell at a “fair price”, will not work. As long as capitalism exists, capitalists will only invest if they are certain they can obtain a reasonable profit margin, and if they can make more profit by speculating, they will.

11) The only way to break with this perverse logic is precisely to break with the laws that govern the capitalist economy. The Owners of the Valley[1] , the 100 families and monopoly groups, national and foreign, which still control the basic levers of the Venezuelan economy (banks, companies and distribution chains) and use this control to sabotage the democratic will of the majority, must be expropriated. In the words of the revolutionary leader of the Federal War, Ezequiel Zamora: “what should be sequestrated are the assets of the rich, as they use them to wage war against the people, they should be left only with their shirts”. We are talking about the expropriation of the big capitalists, the 1% of the population, neither of individual property nor small businesses of the 99% of the population which do not represent a fundamental factor of the economy and which are suffocated by the big banks and monopolies.

12) Only in this way would it be possible to plan, in a democratic manner and under workers’ control, the enormous productive potential, the human, technical and material resources, which the Venezuelan economy possesses, in the benefit of the overwhelming majority of the population. Thereby guaranteeing the social conquests of the revolution, spreading, enlarging and consolidating them.

13) Reformists and bureaucrats will tell us that this is not possible. Some will argue that such measures would provoke the resistance of the bourgeoisie and imperialist aggression. Are they not already attacking us? Are the capitalist media not already lying and manipulating? Has imperialism not attacked the revolution since the very beginning? There are only two possible ways to prevent the bourgeoisie and imperialism from attacking us: one, by reaching deals and compromises with the class enemy and thereby putting an end to the revolution. Two, by taking sharp and firm socialist measures to complete the revolution and arming the people through workers’ and peasant militias. This would also generate a wave of sympathy and support amongst the workers and the peoples’ of the world which are currently themselves suffering the consequences of the capitalist crisis.

14) Others will argue that it is too soon, that the level of consciousness of the workers and the people does not allow for it. To them we ask: who saved the revolution on April 13, 2002, during the coup? Who defended the president during the opposition guarimba riots in 2004 and the recall referendum? Who took over factories and PDVSA oil company installations during the bosses lock-out? Who struggled for the renationalisation of SIDOR? It was the working class and the revolutionary people that on every single occasion have defended the Bolivarian revolution at all crucial junctures, often against and despite the bureaucracy and the reformists.

  • Against hoarding and speculation – expropriation of the means of production and jail sentences for those responsible
  • No agreements, no conciliation – forward to socialism
  • Nationalisation of the means of production under democratic workers’ control
  • Against the anarchy of capitalism – for a democratic plan of production in the interest of the majority

Source: Lucha de Clases (Venezuela)


[1] Los Amos del Valle, a reference to the 20 families which ruled the Valley of Caracas since the XVII century, as described in the novel with the same title by Francisco Herrera Luque