Social Change in Venezuela

By Alex Serafimov
Interstate - Journal of International Affairs
2011, Vol. 2010/2011 No. 1 | pg. 2/2 |

III - Cooperatives

According to the International Cooperative Alliance (ICA), cooperatives are an ‘autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democraticallycontrolled enterprise.’38 It was codified in the 1999 Constitution that the state would ‘promote and protect’ cooperatives, described by some commentators as being ‘at the center of Venezuela’s new economic model’.39 The Constitution sees cooperatives as ‘key economic actors within the nation’s social economy, portrayed as tools for economic inclusion, participation (article 70), and state decentralization (article 184)’.40 The state began to encourage cooperativisation through: (1) the help of scholarships to train in cooperativisation, production and accounting through the new Ministry of Popular Economy (MINEP); (2) aid in transforming conventional businesses into cooperatives; and (3) credit for start-ups.41 To give an example of the increase of the prevalence of cooperatives in Venezuela, when President Chávez took office in 1999 there were just 762 legally registered cooperatives with about 20,000 members in the country.42 In contrast, by 2008 there were 62,879 cooperatives with 873,000 members making Venezuela the leader in South America in the prevalence of cooperatives.43

However, not all Venezuelan cooperatives are created equal. As Elvy Monzant, from the University Cecilio Acosta de Maracaibo (and cooperative member), noted the majority of people employed44 are in what he terms ‘Classical Cooperatives’, that is those with traditional, hierarchical decisionmaking structures. Alongside these are what he calls ‘Innovative Cooperatives’ which are more participatory alternatives coming closer to the ICA ideal, as are ‘Co-managed and Alliance Cooperatives’ which encourage worker management, and ‘Spontaneous Cooperatives’, formed without any state help by communities perceptive of the “cooperatives boom” in Venezuela. These are also based on ‘solidarity and participatory economics.’45 Furthermore, one large network of cooperatives has shown that hierarchical structures are not fixed and that Venezuelan cooperatives can be subject to transformative change from their members. Starting out with hierarchical management, this network of cooperatives went through a process of “flux” over several decades until almost all administrative and managerial decisions are now made through consensus in meetings attended by all members, and members’ job roles are regularly rotated to stave off hierarchy.46

However, Rosa Luxemburg explained in her work Reform or Revolution, that cooperatives are ’small units of socialised production within capitalist exchange’, not a systemic alternative.47 Cooperatives do not challenge the economic status quo by their economic practice (they still operate on a ”market” basis of supply and demand, profit and competition), and over time even have the ability to devolve into conventional enterprises, or collapse, if they begin to hire wage labour. Indeed, at its peak 268,000 cooperatives were set up in Venezuela. However, the majority of these (77 per cent) became inactive. They failed, according to Monzant, because many were conventional, hierarchical businesses set up as cooperatives only to qualify for loans or government contracts. Compounded with this, they were missing what Monzant called the ‘cultural transformation’ that would drive them; they hired employees and most workers were subcontracted, not qualifying as “real” cooperativists.48 However the over 60,000 functioning cooperatives and their rate of growth still place Venezuela at the forefront of South American cooperativisation.

However, even though most Venezuelan cooperativists work in hierarchical cooperatives, there are still thousands of people taking part in participatory economic experiments in the ‘Innovative’ and ‘Spontaneous’ cooperatives. They add weight to the argument that democracy in the workplace, not just in political life, is practicable, while robustly challenging the hierarchy of conventional businesses and ideas about how labour should be carried out. Finally, challenges exist in diversifying cooperatives into the mainstays of industry where they lack influence, and an encouragement and expansion of the ‘Innovative’ cooperatives, if they are to be a transformative influence in Venezuelan society as a whole. As Rosa Luxemburg continued, as long as cooperatives are ‘excluded from the most important branches of capital production’, such as petroleum or machine construction, they ‘cannot be seriously considered as the instrument of a general social transformation’,51 even if the current government, and many cooperativists, may see them as such. Both of these points hold true for Venezuela where cooperatives do not cover the major industries, such as oil, the country’s largest export, with only 8.3 per cent of Venezuelan cooperativists working in industrial manufacture.52 Yet, the greatest importance of cooperatives in Venezuela, as elsewhere, is to be found not in their economic practice, but in how they demonstrate that democracy in the workplace is practicable.

IV - Regional Cooperation

Venezuela has also been instrumental in formulating and hosting regional organisations which aim towards political and economic self-determination in the region and acting as a bulwark against the influence of the IMF, the World Bank and free trade agreements. The first of these is the Bolivarian Alliance for the Peoples of Our America (ALBA), described by one commentator as ‘perhaps the most important initiative’ in combating neoliberalism in the region.53 It currently encompasses eight countries from South and Central America and the Caribbean including Venezuela, Bolivia, Cuba, Ecuador and Nicaragua. ALBA is an international organisation advocating ‘a new model of integration for Latin America’ based on socio-political and economic cooperation which attempts to ‘offset the power of U.S.-friendly, market orientated regional organizations’.54 One way it is accomplishing this goal is by adopting its own trading currency (in 2009), the SUCRE (The Unitary System of Regional Compensation),55 symbolically named after Antonio José de Sucre, a South American independence hero. The SUCRE is an attempt to displace the US dollar in the region and will eventually become a hard currency itself.56 ALBA also has a principle ‘[t] o develop basic industries so that ALBA member states can become economically independent’.57

Another principle is to promote workers’, students’ and social movements58 and one important way it has done this is through the creation of the ALBA Council of Social Movements as a part of its organisational structure. This Council coordinates some of the largest social movements in the region including those of indigenous peoples, alongside two other Councils, the presidential and ministerial. Two of the social movements currently involved include Via Campesina,59 the international peasant movement, and the Landless Workers’ Movement (MST),60 some of the largest on the continent.61 This allows for ‘grassroots participation in decisionmaking’ in the body at the highest levels through direct involvement in planning and administration.62

These social movements have had real influence, for example making the issues of land redistribution, free healthcare, free education and food security part of official ALBA policy. There is however, some mistrust between social movements and ALBA, with social movements seeing it as a primarily state-based initiative, despite its efforts to include them in an ‘oversight’ role.63 However, one incident showed that social movements seemingly do have influence within ALBA. After Venezuela proposed the building of an oil pipeline to Argentina through rainforest, a Venezuelan social movement aligned with the Zapatista movement in Mexico succeeded in pressuring the government into putting the plans on hold.64 Furthermore, ALBA also ‘commits’ member states to advance participatory democracy in their own countries.65

In economic cooperation, there is The Bank of the South (BancoSur), which has been conceived of and driven personally by President Chávez since his election.66 According to previous Venezuelan Finance Minister Rodrigo Cabezas, the Bank of the South’s ‘lending priorities’ will be for regional integration, reducing the asymmetries between and within South American states and providing finance for development.67 Explicitly in opposition to conventional International Financial Institutions, The Bank of the South will have a “no conditionality” policy in regards to its loans. Also, proponents of the Bank of the South place national and regional development and “South-South” investment ahead of integration into global markets.68 This is significant because moving away from conditionality-based finance symbolises a break with the policies of neoliberalism in the region. As Nobel Prize winning economist Joseph Stiglitz noted, ‘one of the advantages of having a Bank of the South is that it would reflect the perspectives of those in the south’.69 This indeed appears to be the case. As The Guardian’s South America correspondent put it, the Bank of the South acts to ‘wean the region off Washington-dominated prescriptions and help to deliver economic independence’.70

Formally established in 2007, The Bank of the South will likely be operational sometime in 2011.71 It has been inactive mostly due to political debates over its direction; with Brazil preferring a more market based approach, and Venezuela and Ecuador leaning towards a more progressive structure.72 Politically, the Bank of the South has strong support from social movements who feel that they will eventually become influential enough to affect its policy in meaningful ways.73 ALBA, meanwhile, also has its own source of finance in the Bank of ALBA, which has an explicitly equalising mission in ’seeking to eradicate economic asymmetries’ across the bloc, and like The Bank of the South, does not impose loan conditions.74

What appears, is a country taking a leading role in strengthening ties with its regional partners on a mutually beneficial basis. At the same time, it is taking steps to directly include civilian groups in the decision-making of international bodies, and making moves towards achieving economic sovereignty through development within the continent instead of depending on its northern neighbours. Overall, ALBA is the only regional or international bloc which attempts to include the direct input of its citizens in its processes, and ‘the very fact’ that the Bank of the South has been set up is a robust challenge to dominant International Financial Institutions.75

V - Conclusion: Successes and Challenges

Venezuela, if we look deeper than its controversial leader, has seen significant developments in its social, democratic and economic spheres. Through including the population in decision-making from the local to the international level, especially the previously excluded and disenfranchised, it has educated, emboldened and politicised a new generation wanting to participate and hold their government to account. At the same time, although opponents fear a concentration of power in the executive, the state is relinquishing increasing amounts of its own power downwards as a central part of its political and economic project. As the driving force behind the Bolivarian Alliance for the Peoples of Our America and the Bank of the South, Venezuela has created socially conscious alternatives to development and cooperation in the place of the market orientated impositions of the IMF, World Bank, the Free Trade Area of the Americas and others. In using the profits from oil sales to fund wide-ranging social welfare programmes it has cut poverty by half,76 and extreme poverty by 72 per cent, amongst other social gains.77 Most importantly, it has demonstrated that development can be made with redistributions of existing wealth in even a generally poor country; and that lifting many out of poverty can allow them a fuller engagement with politics. However, the so-called “Bolivarian movement” cannot relax. It must allay the fears and criticisms of its opponents, and must continue to expand the executive powers of the Communal Councils (and Communes), while at the same time being wary of the dangers of bureaucratic resistance to these processes. It must encourage worker management and expand it to larger industry if the cooperative movement is to be as transformative as some commentators hope. Furthermore, as a movement of the poor, it must improve its relations with the aspirant middle class, who remain sceptical.

To sum up, radical and long-term social change is occurring in Venezuela, illustrated best by the experiments in democratic and economic participation that signify a shift in the locus of power in the country. If its innovative projects prosper and continue to grow, they will further demonstrate that civilian groups are indeed able to hold and exercise real power, without being guided or “defended from themselves”, a concept tacitly central to representative democracy.78 This could have a wideranging influence and be encouraging for those who feel excluded from the democratic process in their countries, see representatives as corrupt or unaccountable and feel that their economic system is inequitable.79 This is where the greatest impact of these changes comes from; their ability to challenge existing, rarely questioned conceptions of the role of the citizenry in the running of a country and its economy, and their input in international affairs.


  1. Alianza Bolivariana para los Pueblos de Nuestra América (ALBA)
  2. Banco del Sur or Bancosur
  3. Žižek, S. First as Tragedy, then as Farce (London, Verso, 2009), p. 102.
  4. Raby, D. L. Democracy and Revolution: Latin America and Socialism Today (London, Pluto Press; Toronto, Between the Lines, 2006), p. 141.
  5. Raby, D. L. Democracy and Revolution: Latin America and Socialism Today (London, Pluto Press; Toronto, Between the Lines, 2006), p. 141.
  6. Raby, D. L. Democracy and Revolution: Latin America and Socialism Today (London, Pluto Press; Toronto, Between the Lines, 2006), p. 141.
  7. Hellinger, D. ‘Political Overview: The Breakdown of Puntofijismo and the Rise of Chavismo’, in Venezuelan Politics in the Chávez Era: Class, Polarization and Conflict, edited by Steve Ellner and Daniel Hellinger (London, Lynne Rienner Publishers, 2003), p. 31.
  8. Quoted in Gott, R. In the Shadow of the Liberator: Hugo Chávez and the Transformation of Venezuela (London, Verso, 2001), p. 53.
  9. Quoted in Gott, R. In the Shadow of the Liberator: Hugo Chávez and the Transformation of Venezuela (London, Verso, 2001), p. 53.
  10. Gott, In the Shadow of the Liberator, p.46.
  11. Grant, W. ‘Former Venezuela minister charged’. BBC News (online), 18 July 2009. Available at hi/americas/8157088.stm (Accessed 17 September 2011).
  12. Hellinger, ‘Political Overview’, pp. 31-2.
  13. Ibid., p. 150.
  14. Raby, Democracy and Revolution, pp. 158-9.
  15. Ciccariello-Maher, G. ‘Dual Power in the Venezuelan Revolution’. Monthly Review (online), 23 August 2011. Available at in-the-venezuelan-revolution (Accessed 17 September 2011).
  16. Hellinger, ‘Political Overview’, pp. 50-1; Raby, Democracy and Revolution, pp. 166-7.
  17. Hellinger, ‘Political Overview’, pp. 50-1; Raby, Democracy and Revolution, pp. 166-7.
  18. Le Grand, G. ‘Venezuela’s Communes; Not as Radical as You Might Think’. Council on Hemispheric Affairs (online), 24 September 2010. Available at venezuela’s-Communes-not-as-radical-as-you-might-think/ (Accessed 24 February 2011).
  19. Ellis, E. ‘Building community power’. Correo del Orinoco International (Caracas), 10 September 2010., p. 4. Available at uploads/2010/09/Web-COI28.pdf (Accessed 24 February 2011).
  20. Navarrete, P. and Ellner, S. ‘The community revolution’. Red Pepper (online), January 2010. Available at http://www. (Accessed 17 September 2011).
  21. All of these quotations are from the 2006 Communal Council Law, as cited in Ciccariello-Maher, ‘Dual Power’.
  22. Emphasis added, LeGrand, ‘Venezuela’s Communes’.
  23. Pearson, T. ‘184 Communes Currently in Formation in Venezuela’. (online), 8 February 2010. Available at (Accessed 24 February 2011).
  24. Ellis, ‘Building community Power’.
  25. Pearson, T. ‘Venezuelan National Assembly Passing “Popular Power” Package of Laws’. (online), 10 December 2010. (Accessed 24 February 2011).
  26. Reardon, J. ‘Venezuelan National Assembly Passes People’s Power “Law of Communes”. (online), 13 December 2010. Available at news/5858 (Accessed 24 February 2011).
  27. Quoted in Pearson, ‘Passing “Popular Power” Package’.
  28. Ibid.
  29. Reardon, ‘Passes People’s Power “Law of Communes”’; and Peñaloza, P. P. ‘National Assembly to be superseded by “communal parliament”, translated by Conchita Delgado. El Universal (online), 19 March 2010. Available at http://www. 19A3609731.shtml (Accessed 24 February 2011).
  30. Pearson, ‘Passing “Popular Power” Package’.
  31. Pearson, T. ‘The Insidious Bureaucracy in Venezuela: Biggest Barrier to Social Change’. (online), 17 May 2010. Available at http://venezuelanalysis. com/analysis/5370 (Accessed 17 September 2011).
  32. Quoted in Pearson, ‘Passing “Popular Power” Package’.
  33. Partido dos Trabalhadores
  34. LeGrand, ‘Venezuela’s Communes’.
  35. Pearson, ‘Passing “Popular Power” Package’.
  36. Navarrete and Ellner, ‘The community revolution’.
  37. LeGrand, ‘Venezuela’s Communes’.
  38. Quoted in Jensen, E. and Isaacs, A. ‘CECOSESOLA Cooperative: An Interview with Gustavo Salas Romer’. (online), 20 September 2009. Available at (Accessed 17 September 2011).
  39. Bowman, B. and Stone, B. ‘Venezuela’s Cooperative Revolution: An economic experiment is the hidden story behind Chávez’s ‘Bolivarian Revolution’’. Dollars & Sense (online), July 2006. Available at (Accessed 24 February 2011).
  40. Harnecker, C. P. ‘The New Cooperative Movement In Venezuela’s Bolivarian Process’. (online), 17 December 2005. Available at (Accessed 17 September 2011).
  41. Bowman and Stone, ‘Venezuela’s Cooperative Revolution’; and El Mundo, ‘Microcredits to generate 150.000 new jobs in 2004’. (online), 4 November 2003 Available at (Accessed 24 February 2011).
  42. Bowman and Stone, ‘Venezuela’s Cooperative Revolution’.
  43. Membership calculated by author from figures included in Maheshvarananda, D. ‘“Diagnosis and Perspectives of the Social and Solidarity Economy of Venezuela” by Elvy Monzant’. Prout Research Institute of Venezuela (online), 11 August 2011. Available at“diagnosis-and-perspectives-of-the-social-and-solidarity-economy-of-venezuela”-by-elvy-monzant/ (Accessed 17 September 2011).
  44. The exact figures are 680,000 cooperativists in classical, 31,000 in innovative, 48,000 in co-managed and alliance, 52,000 in state-promoted and 62,000 in spontaneous cooperatives. There are 882 classical, 402 innovative, 3,023 co-managed and alliance, 8,832 state-promoted and 27,798 spontaneous cooperatives. There are also 21,058 communal banks, which are attached to each Communal Council. (This figure must be higher as they are compulsory and there are now around 30,000 Communal Councils.) See ibid.
  45. Maheshvarananda, ‘”Diagnosis and Perspectives”’.
  46. Jensen and Isaacs, ‘CECOSESOLA Cooperative’.
  47. Luxembourg, R. Reform or Revolution: Chapter VII Co-operatives, Unions, Democracy. Available from: [accessed December 9 2010].
  48. See Maheshvarananda, ‘”Diagnosis and Perspectives”’.
  49. Luxembourg, Reform or Revolution.
  50. Bowman and Stone, ‘Venezuela’s Cooperative Revolution’.
  51. Luxembourg, Reform or Revolution.
  52. Bowman and Stone, ‘Venezuela’s Cooperative Revolution’.
  53. Hattingh, S. ‘ALBA: Creating a Regional Alternative to Neo-liberalism?’ MR Zine (online), 7 February 2008. Available at (Accessed 24 February 2011).
  54. Madrid, R. L., Hunter W. and Weyland, K. ‘The Policies and Performance of the Contestatory and Moderate Left’, in Leftist Governments in Latin America: Successes and Shortcomings, edited by Kurt Weyland, Raúl L. Madrid and Wendy Hunter (New York, Cambridge University Press, 2010), p. 169.
  55. Sistema Único de Compensación Regional
  56. Pearson, T. ‘Venezuela and Ecuador Consolidate Bilateral Agreements, SUCRE Currency System’. (online), 18 January 2011. Available at (Accessed 17 September 2011).
  57. Hattingh, ‘ALBA’.
  58. Carlson, C. ‘ALBA Summit Creates New Model for Latin American Integration’. (online), 30 April 2007. Available at (Accessed 17 September 2011); and Hattingh, ‘ALBA’.
  59. ‘The Peasant’s Way’
  60. Movimento dos Trabalhadores Rurais Sem Terra
  61. Hattingh, ‘ALBA’.
  62. Carlson, ‘ALBA Summit Creates New Model’.
  63. Hart-Landsberg, M. ‘Learning from ALBA and the Bank of the South: Challenges and Possibilities’. Monthly Review (online), 22 August 2011. Available at (Accessed 17 September 2011).
  64. Hattingh, ‘ALBA’.
  65. Hattingh, ‘ALBA’.
  66. MercoPress, ‘American leaders sign agreement creating South Bank’. MercoPress (online), 27 September 2011. Available at (Accessed 24 February 2011).
  67. Bank Information Center. ‘Bank of the South’ (Washington: Bank Information Center, 2007, pp. 7-8. Available at (accessed 17 September 2011).
  68. Bank Information Center, ‘Bank of the South’, pp. 4, 8.
  69. Quoted in Carrol, R. ‘Nobel economist endorses Chávez regional bank plan’. The Guardian (online), 12 October 2007. Available from oct/12/venezuela.banking (Accessed 24 February 2011).
  70. Carrol, ‘Nobel economist endorses Chávez’.
  71. According to Chairman of the board of directors of Ecuador’s Central Bank,Diego Borjas. Correo del Orinoco International, ‘Bank of the South to initiate operations this year’. Correo del Orinoco International (Caracas), 20 May 2011, p. 5. Available at http://www. COI64.pdf (Accessed 17 September 2011).
  72. Hart-Landsberg, ‘Learning from ALBA’.
  73. Hart-Landsberg, ‘Learning from ALBA’.
  74. Janicke, K. ‘Summit of the Bolivarian Alternative (ALBA) Concludes in Venezuela’. (online), 27 January 2008. Available at Summit of the Bolivarian Alternative (ALBA) Concludes in Venezuela (Accessed 17 September 2011).
  75. Romero, M. J. and Bedoya, C. A. ‘The Bank of the South: the search for an alternative to IFIs’. Bretton Wood Project (online), 26 September 2008. Available at http://www. (Accessed 17 September 2011).
  76. The Bolivarian Republic of Venezuela Permanent Mission to the United Nations [Bolivarian Republic], ‘Statement by Ambassador Jorge Valero, Vice-Minister for North America and Permanent Representative of the Bolivarian Republic of Venezuela to the United Nations, High-Level Plenary Meeting On the Millennium Development Goals’ (New York: Bolivarian Republic, 2010). Available at summit2010/debate/VE_en.pdf (Accessed 24 February 2011); and Weisbrot, M., Ray, R. and Sandoval, L. ‘The Chávez Administration at 10 Years: The Economy and Social Indicators (Washington, D.C.: Center for Economic and Policy Research, 2009), p. 3. Available at documents/publications/venezuela-2009-02.pdf (Accessed 24 February 2011).
  77. Ibid.
  78. ‘Now there are two “functions” in a democracy: The specialized class, the responsible men, carry out the executive function, which means they do the thinking and planning and understand the common interests. Then, there is the bewildered herd [the majority of citizens], and they have a function in democracy too. Their function in a democracy, [Walter Lippmann] said, is to be “spectators,” not participants in action. But they have more of a function than that, because it’s a democracy… once they’ve lent their weight to one or another member of the specialized class [in an election] they’re supposed to sink back and become spectators of action, but not participants. That’s in a properly functioning democracy.’ Chomsky, N. Media Control: The Spectacular Achievements of Propaganda, 2nd edn. (New York, Seven Stories Press, 2002), pp. 16-17.
  79. The global Occupy Movement and the indignados of Spain are very good examples of such feeling.

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