1) The Venezuelan revolution is at the crossroads. Having twice defeated the counterrevolution, the revolution is faced with a new and furious offensive. This means that the counterrevolutionary forces are not reconciled to defeat. They are increasingly desperate, and their desperation makes them even more determined and violent. Moreover, they are combining legal and semi-legal methods of struggle (the “referendum” campaign), with preparations for armed struggle. The former is for the purpose of propaganda for foreign consumption and has a secondary significance. The latter constitutes the essence of their strategy. This is combined with a campaign of economic sabotage, the disruption of the food distribution chain and acts of rioting.

2) The arrest of Colombian paramilitaries in Venezuela indicates the existence of a well-prepared conspiracy to overthrow the government and assassinate Chavez. The dangers faced by the revolution are therefore very real. The time has therefore come to draw all the necessary conclusions and to take steps that will strike decisive blows against the counterrevolution.

3) Venezuelan society is now extremely polarised for and against the Bolivarian revolution, to the right and left. On the left stand the Venezuelan workers, peasants and poor people, who are fighting to defend the revolution and carry it forward. On the right stand the Venezuelan counterrevolutionaries, led by the bankers, landlords and capitalists, who have succeeded in dragging behind them a large part of the middle class. The gulf between the two antagonistic camps is enormous. It cannot be bridged. All attempts at compromise are futile.

4) US imperialism continues to encourage, support and finance the forces of the internal counterrevolution, hoping that they can do the dirty work for it. But it has correctly concluded that the internal opposition is too weak to succeed on the basis of its own forces. Therefore, Washington is preparing a campaign of terror, using Colombian paramilitary forces that work in conjunction with the internal counterrevolutionaries. This amounts to a declaration of war.

5) Sooner or later, matters will be solved by a decisive victory of one side or another. The revolution has not yet passed the point of no return. All the gains made by the masses under the Chavez government can still be liquidated. The movement can be thrown far back. That is what the counterrevolutionaries are fighting for, while the workers are fighting to defeat them. The question of power has not yet been settled. In the not too distant future the decisive battle will have to be fought and won.

6) Who are the counterrevolutionaries? They are the same bourgeois who ruled Venezuela for decades. They looted and ruined the country, while filling their pockets and bank accounts with the wealth created by the working people. They are the local office boys of US imperialism. They are the same rotten and corrupt politicians and bureaucrats against whom Hugo Chavez rebelled, expressing the will of the Venezuelan people.

7) The programme of the counterrevolution is a mixture of lies, fraud and hypocrisy. They claim to stand for “democracy” but overlook the fact that Chavez has regularly won convincing majorities in every election. They claim to stand for the rule of law, but constantly violate the law – to the point of staging a coup to overthrow the democratically elected government. They claim to stand for order, but are constantly creating disorder and chaos as a cloak for their counterrevolutionary intrigues. They claim to be patriotic Venezuelans but have sold their country to US imperialism and have their fortunes in bank accounts in Florida. Now they are actively supporting an invasion of Venezuela by foreign counterrevolutionary forces.

8) In the struggle between revolution and counterrevolution, the counterrevolutionaries have one great advantage: the control of key points of the economy. During the so-called strike (in reality a bosses’ lockout), the Venezuelan capitalists inflicted terrible damage on the economy. Total losses added up to over seven billion dollars. In addition to this, these so-called “patriots” have exported billions of dollars to banks in Florida, thus starving the Venezuelan economy of much-needed investment. Combined with this economic sabotage they are also disrupting the food distribution chain, controlled by three or four big monopoly companies, in order to create artificial price hikes and scarcity of basic foodstuffs. They are draining away the precious life-blood of Venezuela in an attempt to cause the maximum dislocation, unemployment and pain. They calculate that this will dampen the enthusiasm of the masses for the revolution. They also wish to cause chaos and disorder, in order to create the conditions for a coup by the army tops to “restore order”.

9) The decisive element in the equation is the working class. The workers of Venezuela have already begun to fight back against the bosses’ offensive. They have taken the initiative, in some cases have occupied factories abandoned by the bosses, begun to introduce elements of workers’ control in some companies, set up democratic unions, forced the bosses to pay unpaid wages and benefits. These initiatives should be taken up and generalised. They show the way forward.

10) A particularly pernicious role is being played by the so-called “trade union leaders” of the CTV. These corrupt and degenerate labour lieutenants of Capital have long ago sold their soul to the bosses and the CIA. They have abdicated any right to be considered a legitimate part of the labour movement. They should be driven out of the movement.

11) The building of the UNT is an urgent task. We must strengthen and build the democratic unions and provide them with a fighting programme. Build a mass trade union federation! Work out a programme of demands based on the immediate needs of the workers: the fight against factory closures and unemployment, the high cost of living etc.

12) The UNT recently announced a campaign to organize 80 percent of the workforce into unions (which was publicly supported by president Chavez). This is a step in the right direction. By organizing the unorganised layers, the Revolution can cut the ground from under the feet of the old rotten right wing trade union bureaucracy. This initiative must be taken up energetically at all levels. At the same time, an appeal should be made to any workers who remain in unions affiliated to the CTV to fight to democratise those and join the UNT. In cases where this might not be possible new democratic unions should be set up, but always having the aim of organising the mass of the workers, and not only the most advanced layers.

13) To prevent sabotage, waste and corruption, the workers in industry must begin to exercise control over production. Corrupt officials must be dismissed. Managers who side with the counterrevolution and sabotage production, must be given an ultimatum: either desist from such activities and serve the people, or be dismissed with loss of pension and all other rights. Serious cases of sabotage should be met with arrest and imprisonment. Corrupt and counterrevolutionary directors should be replaced by people who are honest and devoted to the cause of the revolution. This can only be done effectively by introducing workers’ democratic control and management.

14) Can the workers run industry? Those sceptics who question the ability of the workers to run industry have had their answer. It was the workers who defeated the attempts of the bosses to sabotage the economy in the bosses’ lockout twelve moths ago. The workers of the PDVSA have demonstrated their ability to run even the biggest and most complex industries. They have done so with a high level of skill and competence.

15) In any case, the workers will not be alone. They will count on the help of the majority of honest engineers, scientists, technicians and managers, who are not saboteurs or counterrevolutionaries and who genuinely wish to see a prosperous and successful Venezuela. The people of Venezuela have enormous reserves of talent and creativity. They will attract to their side all that is best in Venezuelan society, including the cream of the intellectuals. The creative talents of the people under capitalism are crippled by a system that places the profits of a few above the interest of the majority. This is also true of those who occupy managerial positions at the lower level. In a socialist planned economy, their skills will be put to good use in applying the most modern technology and methods to boost productivity in the interests of all.

16) Workers’ control will immediately bring to light all the corruption, waste and nepotism, the excessive profits and perks of the bosses. Open the books! Compel all companies to reveal their real profits. Let the workers have all the information about the fat profits and perks, the swindles and theft. This would dramatically reduce waste and channel these resources into production for the development of Venezuela. However, workers’ control in and of itself cannot solve the fundamental problems of society. It is only a transitional step towards the nationalisation of the means of production and a planned economy.

17) The elements of workers’ control already exist. Some factories closed by the bosses have been occupied by the workers. During the sabotage of the oil industry, even Hugo Chavez expressed his support for the slogan “Factory closed, factory taken over by the workers”, though then the government did not really take any serious action to solve the problem of the workers who had occupied the factories. Isolated instances of workers’ control can only succeed partially and temporarily. What is needed is an overall plan of production that can integrate the different sectors of the economy and branches of production. But such overall planning and integration immediately comes up against the barrier of capitalist anarchy (the “market”). No real progress can be made unless these obstacles are overcome.

18) The principal power of the counterrevolution consists in its ownership of the means of production. It continues to exercise control over key points in the economy, which it uses to place a noose around the neck of the Venezuelan people. The only way to prevent this economic sabotage and to eliminate the waste and corruption that are the inevitable consequences of capitalism is to destroy the economic stranglehold of the bourgeoisie. As long as the counterrevolutionaries continue to hold economic power, the Revolution will be fighting with one hand tied behind its back.

19) The land, banks, insurance companies and big industries must be nationalised. This can be done by introducing emergency legislation through the congress, backed up by an appeal to the workers to take over from below, to introduce workers’ control to prevent sabotage by the bosses and ensure a peaceful and orderly transition to a planned economy. The President of the Republic can explain this step to the people by going on television to expose the scandalous profits of the bosses, the waste, corruption and nepotism, the systematic sabotage of the economy.

20) By nationalising the key points of the economy under democratic workers’ control and management, it will be possible to introduce a genuine plan of production that will mobilise all the productive resources of Venezuela for the satisfaction of the people’s needs: a crash building programme of houses, schools and hospitals can begin straight away, using the country’s considerable oil revenue to finance an ambitious investment plan. Unemployment would be eliminated, and all citizens would have the right and obligation to work. Such a plan, which would guarantee an immediate improvement in the living standards of the immense majority, is only possible on the basis of nationalization. You cannot plan what you do not control, and you cannot control what you do not own.

21) Unless decisive steps are taken to control the economy, the people of Venezuela will be faced in the future with growing economic chaos, unemployment and poverty. Venezuela’s huge oil wealth will not be sufficient to prevent this. The bosses can use their economic power to sabotage and wreck the country’s prosperity. But even without that, the attempt to combine measures of nationalization with the market economy will produce distortions and particularly inflation that will cancel out the gains and provoke economic dislocation. The nationalization of the key points of the economy is therefore an absolutely necessary and urgent measure of self-defence taken by the majority to protect its most vital interests and the most fundamental right – the right to life.

22) The first step must be the nationalization of the banks. An important section of the Venezuelan banking system is under the control of two Spanish banking groups. Furthermore a large part of all the money that circulates in the financial system over a year is actually state-owned money, either directly or through state-owned companies particularly PDVSA. However the control over these financial resources is in private hands and is used to finance the counter-revolution and sabotage the economy. Without the nationalisation of the banks it will be impossible to plan the economy. Control of credit is one of the most fundamental levers of the modern economy. Without this, nothing can be accomplished. The state must know how much money there is, where it comes from and where it is going. Strict national accounting is the prior condition for a planned economy.

23) Nationalization of the banks would allow the state to exercise real and not fictitious control over the economy, to control the flow of capital and investment into those fields that reflect the interests of the majority and the objective requirements of the economy. The bank employees themselves can play a key role in the nationalization of the banks. They know all about the swindles and speculative movement of capital. They know how the counterrevolutionaries are using large sums of money for the purpose of sabotage and intrigues. An appeal must be made to the bank employees to control the movement of capital, ensure a smooth handover of the banks and prevent acts of sabotage.

24) The gains of the revolution are real and palpable. Important measures have been taken in the interest of the workers, the peasants and the poor, particularly the land reform and the health and education plans which have reached millions. But all these gains are under threat. They can be reversed and they will be reversed if the counterrevolution gets back in the saddle. In order to guarantee the gains of the revolution, it must be made irreversible. This means a fundamental change in society. This poses the question of power.

25) Every revolution in history is ultimately settled by answering the question: who holds the power? Who is master of the house? Until this question is answered, the revolution is not finished. By beginning the Bolivarian revolution, Hugo Chavez threw down a challenge to the old oligarchy. Their power was challenged but not completely overthrown. A colossal struggle began, which has still not been decided one way or the other. Upon the resolution of this struggle everything depends.

26) At bottom, the question of power can be reduced to one thing: Who controls the state power? That is the decisive question. The state in the last analysis consists of armed bodies of men – the army, the police etc. In a normal capitalist regime, the bourgeoisie controls the state and uses it to oppress the majority of society and guarantee its power and privileges. It controls not only the army and police but also the judges, the bureaucracy and every other branch of the executive power.

27) However, there are exceptional periods in history, periods when the class struggle reaches deadlock, when things are not quite so clear-cut. Venezuela is now passing through such a complex situation. Is the Venezuelan state a bourgeois state? As long as the bourgeoisie remains the ruling class, as long as it continues to own and control the key points of the economy, as long as its economic power has not been broken, Venezuela remains a capitalist country, and the state therefore remains a bourgeois state. This means that the revolution has not been carried out to the end, has stopped half way, and therefore can still be reversed.

28) The state is still a bourgeois state, but it is a bourgeois state with peculiar features. The most peculiar feature is that the bourgeoisie has – at least temporarily – lost control over key parts of its own state. This seems like a contradictory assertion, but it is only the expression of a real contradiction that exists in society. Venezuelan society is split right down the middle. The extreme class polarisation affects everything – including the state, which is itself split. A section of the army has gone over to the side of the Bolivarian revolution. This includes the overwhelming majority of the ordinary soldiers, the non-commissioned officers, but also a significant number of the officers, like Chavez himself. This creates enormous difficulties for the Venezuelan bourgeoisie, which does not have the same grip on the army and the officer caste that exists, say, in Britain or the USA.

29) Many officers sincerely support the Revolution. The upper echelons will have been purged following the collapse of the coup of April 2002. In general, the prevailing mood is unfavourable to the counterrevolution. The external threat posed by US imperialism and Colombia will have galvanised the natural instincts of the army to fight and rallied them round the President. The counterrevolutionaries, at least for the moment, find themselves in a difficult position. But from the outside it is difficult to say what the real balance of forces in the army is. This will only be made clear by events.

30) In the last analysis, the correlation of forces inside the army is determined by the correlation of class forces in society. To the degree that the Revolution advances and strikes decisive blows against its enemies, both internal and external, to the degree that the masses are roused and active, the revolutionary wing of the armed forces will take courage and be strengthened. But vacillations and retreats will dishearten the revolutionary wing and encourage the counterrevolutionaries.

31) Chavez and his supporters are leaning on the support of the masses to strike blows against the oligarchy and imperialism. They did not originally have a socialist perspective, but only the notion of clearing out corruption and modernising Venezuela. They wanted a fairer, more just and equal society, but imagined that this was possible without breaking the bounds of capitalism. But this immediately brought them into conflict with the bourgeoisie and imperialism. The masses took to the streets and imparted an entirely different dynamic to the process. The mass movement has provided a stimulus to Chavez and in turn he has encouraged the movement in a revolutionary direction.

32) When Hugo Chavez founded the Bolivarian Movement, he sought to clean out the stinking Augean stables that were Venezuelan political life. This was a limited and very modest objective – but it met with the ferocious resistance of the ruling oligarchy and its servants. It earned him the undying hatred of the wealthy and powerful, and the loyalty and love of the masses. Hugo Chavez for the first time gave the poor and downtrodden a voice and some hope. That is the secret of the extraordinary devotion and loyalty they have shown him. He aroused them to life and they see themselves in him.

33) That explains the equally extraordinary hatred the ruling class shows towards Chavez. It is the hatred of the rich for the poor, of the exploiter for the exploited. Behind this hatred is fear – fear for the loss of their wealth, power and privileges. This is a gulf that cannot be bridged by fair words. It is the fundamental class division of society.

34) The Revolution stands for democracy. But a consistent struggle for democracy inevitably brings the Revolution into conflict with the vested interests of the landlords, the bankers and capitalists and imperialism. That is to say, if the revolutionary democracy is to achieve its aims, it must be prepared to go beyond the boundaries of capitalism. It must take action to destroy the economic power of the oligarchy. Failure to do this will inevitably end in defeat, the victory of the counterrevolution and the complete eradication of democracy in Venezuela.

35) Though they swear by democracy in every other sentence, the Venezuelan oligarchy and imperialism are the enemies of democracy. They want a “democracy” in which anyone can say what they like as long as the wealthy minority decides what happens. The only class that is sincerely interested in democracy is the working class and its natural allies, the poor peasants and the urban poor. True democracy will only be achieved when the power of the oligarchy is destroyed forever and power is in the hands of the working people. What is needed is not the hollow fiction of bourgeois formal democracy, where real power is in the hands of the bankers and capitalists, but a genuine democracy of the working people, based on the nationalisation of the land, banks and big industries and a democratic plan of production.

36) The immediate programme must be: a) the amalgamation of the banks and the nationalization of the banking system, b) the amalgamation of the insurance companies and the nationalization of the finance sector, c) the abolition of commercial secrecy: open the books! d) workers’ control and management of the PVDSA and all other big companies, and the nationalization of all other sectors of the petrochemical industry, gas and energy, e) the organization of the population into consumers’ associations and co-operatives to control prices and distribution of food and other products, which can be carried out through the nationalisation of the monopolies which control the food distribution chain, f) the nationalization of the land, the expropriation of the big estates and the formation of peasant co-operatives to run agriculture, g) the nationalization of all big transport companies and the creation of a unified transport system, h) a state monopoly of foreign trade.

37) US imperialism is playing a game of cat and mouse with Venezuela. Having been defeated in two direct assaults, it is resorting to siege methods. It is putting pressure on other governments in Latin America to help it isolate the Venezuelan revolution, which it regards as a dangerous focal point for the discontent of the masses throughout the continent. It is threatening to bring Venezuela to its knees with economic sanctions. At the same time it is actively preparing a campaign of terrorism and subversion.

38) Fearing to intervene itself, Washington is actively conspiring with the leading circles in Columbia, not just to isolate Venezuela, and to put pressure on its, but even to prepare direct intervention against the Venezuelan revolution. It is constantly intriguing in the Organization of American States (OAS) to interfere in Venezuela’s internal affairs. The role of the OAS is like that of a “friendly neighbour” who advises a man who is being attacked by a gang of bandits to stay still and not shout so loud, as this will only provoke the robbers and disturb the whole neighbourhood. With “friends” like these, the people of Venezuela have no need of enemies!

39) It is, of course, necessary to make use of diplomacy ‑ to take every possible measure to prevent the isolation of Venezuela, to develop friendly relations, trade etc., with Argentina, Brazil and, of course with Cuba. However, it would be extremely shortsighted to base oneself on this. Governments can change, and they can be brought under the pressure of imperialism. There is no guarantee that this will not happen in the case of Brazil or Argentina.

40) In the last analysis, the only real allies of the Venezuelan people are the oppressed workers and peasants of Latin America. They can always be depended on to defend the Venezuelan revolution, their governments cannot. Ultimately, the real defence of the Venezuelan Revolution consists not in diplomacy but in a consistent revolutionary and internationalist policy aimed at spreading the revolution throughout Latin America and beyond.

41) President Chavez has courageously stood up to the imperialists. He has said: “If there is an imperialist intervention we will fight them for 100 years.” Undoubtedly the masses would be prepared to make the greatest sacrifices for the revolution. They have been aroused to political life and have been given new hope and a sense of their own human dignity. Thus, the masses have tremendous reserves of revolutionary energy. This is something the imperialists and counterrevolutionaries are incapable of understanding. However, to rely exclusively on the willingness of the masses to make sacrifices is a mistake. The masses can sacrifice their “today” for the “tomorrow” only up to a certain point. This must always be kept in mind.

42) Ultimately, the economic question is decisive. In 2003 alone, Venezuelan GDP fell by 18 percent, despite the high price of oil. According to some calculations, living standards have fallen to the level of the 1950s. By these means the counterrevolution is trying to undermine support for the government, which it blames for the results of its own sabotage. So far, the plans of the counterrevolution have not succeeded. The masses remain fiercely loyal to the revolution and to President Hugo Chavez. But such a situation cannot last indefinitely.

43) For the time being, the Venezuelan economy has been helped by the rising price of oil. In 2003 the price of a barrel of Venezuelan oil ($25.65) was about 17 percent higher than a year earlier. President Chavez has attempted to alleviate the effects of the crisis by introducing price and exchange controls. Part of the income of the PDVSA has been diverted to social and housing programmes. Strict exchange controls have boosted the BCV’s internal revenues from $13 billion in January to $22 billion now. The devaluation of the official dollar rate from 1,600 to 1,920 bolivars has also helped. The growth rate is sharply up, although this is partly a reflection of a natural recovery after the steep fall brought about by the bosses’ lockout.

44) These measures have partially succeeded in alleviating the conditions of the masses. They have served to buy time. But there will be a price to pay. On a capitalist basis, such measures tend to produce inflationary consequences. The bolivar is falling sharply on the black market. Inflation is rising at 27 percent annually – the highest rate in the region. In the long run, this is unsustainable. Sooner or later it will be reflected in new and severe economic crises, shortages and unemployment. Thus, the fundamental problem remains.

45) If the revolution does not advance, if it does not take over the commanding heights of the economy, the growth of unemployment and poverty can undermine the fighting spirit of the masses. For the time being, this does not seem to be the case. The economic recovery has provided a breathing space. The masses remain fiercely loyal to Chavez. The class balance of forces is still favourable to the revolution and unfavourable to the counterrevolution. But this can change. If the masses do not see a fundamental change , and above all decisive action against the counterrevolutionaries, frustration and disappointment can set in. The pendulum can swing back to the right.

46) Beginning with the less conscious, unorganised layers, a mood of apathy can set in among the masses. Seeing no real progress, the workers can become tired and disappointed. With every step backward, the reactionaries will take courage and pass onto the offensive. The vacillating elements can swing behind the counterrevolution. This mood can communicate itself to the state. Some of the “friends” of the revolution in the upper layers of the bureaucracy, the army and the police, can abandon the President and go over to the counterrevolution, alleging that the revolution has been taken over by “extremists” and is bringing nothing but chaos. The prostitute press will intensify its campaign of vilification and slanders. The stage will then be set for a counterrevolutionary coup under the banner of “Order”.

47) The masses have expended enormous energies in carrying the revolution to where it is today. It has come a long way, but the decisive point has not yet been passed, and there is still a real danger that the whole process may be thrown into reverse. There is a growing awareness of this at rank and file level. Frustration is already growing among the activists. This is a warning. This frustration could lead to moods of impatience and ultraleft adventures on the part of a layer of activists who have moved far ahead of the rest of the class. This could have negative consequences for the revolution.

48) The reaction has been defeated, but it has not disappeared. It is waiting for a more favourable situation to act. The idea that it is possible to placate the counterrevolution by displaying “moderation” is extremely foolish and utterly counterproductive. The counterrevolution and imperialism cannot be placated by sweet words. This fact is shown by the scandal over the Colombian paramilitaries. Not “moderation” but decisive action is necessary.

49) The revolution has attracted many friends. Most of them are genuine and honest. But some of these “friends” are not acting in the interests of the revolution. They are not revolutionaries at all, but reformists. And it is the historical destiny of reformism always to achieve results that are diametrically opposed to those that were intended. They are, of course, guided by the best of intentions. But the way to a very warm place is paved by such good intentions.

50) The reformists say that we must not do anything that will provoke the imperialists, we must be cautious, diplomatic etc., etc. But the argument about “provoking” the imperialists is false to the core. The imperialists do not need to be provoked. They have been hostile to the revolution from the very first day. They have lost no opportunity to attack it. They have already organised two attempted coups and are preparing a third under the banner of the referendum. It is not this or that speech, or this or that action that provokes them ‑ they regard the very existence of the revolution as a provocation. They will not be satisfied until it is destroyed.

51) The false “friends” of the revolution and the pseudo-Marxists argue that, since the Venezuelan revolution is democratic and popular, not socialist, it cannot take action against private property. This is pure sophistry. The American Revolution of the 18th century was a bourgeois democratic revolution, yet the revolutionaries of 1776 did not hesitate to confiscate the property of the supporters of the English Crown. After the American Civil War, the United States government did not hesitate to confiscate the property of the Southern slaveholders worth billions of dollars in modern currency. These examples from American history show clearly that the demands of the revolution supersede the so-called sacred rights of property.

52) Since when did the property rights of an exploiting and oppressive minority carry more weight than the needs of the overwhelming majority? Democracy means the rule of the majority. And we stand for consistent democracy. The Venezuelan revolution, following the excellent example of the American Revolution, will likewise not hesitate to take measures to eliminate the economic power of the counterrevolutionary minority.

Continue to Part Two

Mexico City,
May 20, 2004

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