Venezuela’s Colectivos

Venezuela’s current mess is a nice way to probe at existing high-low alliances, in addition to social and economic breakdown dynamics. Note I did not say political breakdown. Collapse in Venezuela has has emphatically not caused political change. The old Chavez crowd is still firmly in control. Drug and oil money prop up the regime of President Nicolas Maduro.

Hugo Chavez, president of Venezuela from 1999 to 2013, ruined the economy, but built a loyal following both high and low. He survived a coup attempt in 2002 and afterwards purged the military of questionably loyal officers. Chavez, being a military officer himself, knew how fragile loyalty could be, so he began a long process of taking care of the high and low, while simultaneously building a parallel security force. He looted every industry possible and handed out money to loyalists. Chavez was a socialist and strongman, rewarding the high elements who put him in power and reversed the coup attempt in 2002.

Despite large electoral victories, Chavez’s power was always insecure, not just at the ballot box, but also because of coups and other power blocs asserting control. South American history is littered with military coups when the elites say ‘ya basta’. For Chavez, the military and the oil industry were two critical blocs. If one wants to see how terribly misguided he directed the oil industry but secured his political power, look no further than Venezuelan oil production charts. Adjust that chart’s timescale to ‘max’. Look at oil production in the late 1990s. That is 3.5 million BPD when oil was below $20/barrel. Venezuela has always had a great oil industry, due to its reserves, location, and friendly government that realized the importance of oil. OPEC was formed partly by the determination of one Venezuelan official.

Chavez did not kill the golden goose but he cut back its rations. Look at that oil production chart again and focus on the 2000s. In the face of oil rising to as high as $140/barrel, Chavez created a situation where Venezuela’s oil production dropped. Despite huge reserves, the oil is in tougher to recover oil sands like in Canada. It requires investment, higher oil spot prices, and technical expertise. Despite incredibly high reserves, the Venezuela fields did not see the innovation, creativity, and investment that Canada witnessed. This was political, and the developmental economics are downstream from political decisions.

Chavez wrecked development by requiring oil workers to pledge a loyalty oath to him, and as such, Venezuela lost many technical workers. Similar to his handling of the military, Chavez realized the importance of the oil industry and how strikes or paralysis from that sector could doom him. The government takeover of foreign own assets did not help, either. It created an artificial cap on oil production. Revenues climbed due to oil skyrocketing in price, and this offset the doom Chavez had set into the industry. The revenues also bought off many in the low and funded the creation of colectivos for times of need.

While creating a negative situation for the oil industry (Mexico did this as well*), Chavez hardened support because what remained was loyal to him. This was replicated elsewhere as Chavez chased off the potential upper and middle class opposition to Miami, New York, and New Jersey. Chinese and Russian kleptocrats aren’t the only ones propping up urban housing markets. Venezuelans who could form and fund a power bloc opposite to Chavez’s crowd ran away to America as political refugees.

With this power bloc out of the picture, Chavez built community organizations of a purely political manner: colectivos, which were an organic outgrowth of moves Chavez made to route around existing civic institutions. These were originally just local organizations that were pro-Chavez. They originally were political campaign Bolivarian Circles and were state-sanctioned and funded political organizations capable of flying under the radar as legitimate political civic institutions to boost democratic reach in the nation. Colectivos often used motorcycles or dirt bikes provided by the Chavez regime. They just did nice things. That is all. Pay no attention to the accompanying violence in their neighborhoods or certain polling stations.

Chavez used far more tactics than street thugs or direct democracy actions to cement control. He founded the community councils in 2006 and subsequently formed a national militia in 2009. Chavez’s regime was able to direct billions to organizations loyal to him and firmly under his network’s control. The militia was a counterweight to any potential military coup. The community councils could be the eyes and ears on rising dissent within the nation. These organizations became a way for Chavez to use the federal budget, booming with oil revenue during the commodity 2000s boom, to direct money around normal political channels of questionable loyalty to his loyalists.

Pumped with federal money, these councils become a pipeline of talent for Chavez’s regime to develop and place loyalists around the country and within the government machinery. A proper takeover of a state requires enough personnel. Maduro has expanded on this, as 73% of the 2017 budget allocates spending for social services that includes these political councils. This is a significant increase just from 2016. For roughly a decade, these councils have developed political talent and networked across Venezuela for influence and control in Chavez’s hands. All of this money sloshes around, and the colectivos, militias, and councils all pledge loyalty not to Venezuela, but to the Chavez machine that Maduro now leads.

What are colectivos now in 2017? They are armed bands of thugs that shoot protesters, harass anyone, and restore order for the regime somewhat, but mostly their own local control. Their involvement in the drug trade has allowed them some autonomy, as they have an independent source of revenue. Their monopoly on private guns makes controlling the drug market or black market in goods easier. “Wait,” says the good progressive, “how are guns in private hands if the government confiscated them in 2012?” The Maduro crowd seized guns from everyone and now has turned around and armed the militia Chavez created. This militia can slide weapons to the colectivos and no one reports it. The regime then turns a blind eye towards all actions at the ground level by the militia and colectivos, so that they can enforce the government’s will.

Chavez was building summer camps to indoctrinate kids, created a cult of personality, and engaged in a variety of other political moves that would normally induce progressives to namedrop Hitler. Yet, they sidestepped the namedrop because they viewed Chavez as an ideological ally.

Chavez did indeed create a cult. Chavez did effectively build organizations on the low that would be easy to buy off as well as pay off his high masters. Chavez was simply duplicating the Castro and Soviet method of cementing control.

Unfortunately for all in Venezuela, Chavez created smaller bands that now assert dominance and local sovereignty. Look at the quote at the end of The New York Times piece. The woman says that although they are thuggish, they are restoring order. People will follow the strong horse. Venezuela voted for this over and over and over and over and over again. Venezuelans face their reckoning. The face of it just might be masked men armed with AKs on motorbikes terrorizing those crossing the street.

*Note that Mexico had to shut down the Cantarell field which was a mega-field. Part of it was natural exhaustion and part of it was Mexican mismanagement and lack of reinvestment.

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9 Comments

  1. It’s hard to care too much about Venezuela when you realize the opposition is mainly composed of social democrats like the Democratic Action party or Harvard educated progressives like Leopoldo López.

    Or, when you read further into Venezuelan history, how Romulo Betancourt let Cuban-trained guerrillas establish themselves in the major university of Caracas in the name of “university autonomy”, or how, in the XIXth century, a bunch of secular anticlerical freemasons in the government destroyed the power of the Catholic Church in an extent (and earliness) unlike anything else in the rest of Latin America.

    Chávez was what Venezuela deserved. I feel sadder for Colombia, who is probably going to follow a similar path in the future now that FARC became a political party.

    Reply

    1. George P Thomas July 10, 2017 at 12:23 am

      The United States are not in any condition to lecture Cuba, Venezuela, or anyone else in the world. The world has deep concerns about the respect and the guarantees of the human rights in the USA., where there is a large number of cases of murder, brutality and police abuse, particularly against the African Americans; the right to live is violated as a result of deaths by firearms. Child labor is exploited and there are serious manifestations of racial discriminations. There are threats to impose further restrictions to health services that would left more than 23 million people without medical insurance. There is salary inequality between men and women. Immigrants and refugees are marginalized, particularly those from Islamic countries. There is the intention of erecting walls that degrade neighbors. International commitments to preserve the environment and fight climate change are abandoned.

      Also grounds for concern are the violations of human rights by the United States in other countries, such as the arbitrary detentions of dozens of prisoners in the territory illegally occupied by the US Naval Base in Guantánamo, Cuba, where even tortures have taken place, the extrajudicial executions and death of civilians caused by bombs and the use of drones; and the wars unleashed against different countries like Iraq, sustained in lies about the possessions of weapons of massive destruction, with disastrous consequences for peace, security and the stability of the Middle East region.

      Reply

      1. You are actually the one bringing “the US” in the discussion.
        The world doesn’t stop to the US. Get over it.

        Reply

  2. Venezuela, a coutry with biggest oil reserves in the world has problems with food shortages thanks to the glorious socialism. Due to issues such as blackouts they can’t even refine properly what they extracted which brings them down to level of african coutries with their ultra high social time preference.

    Reply

    1. George P Thomas July 10, 2017 at 12:24 am

      The American imperialists are trying hard to destroy the Cuban and Venezuelan revolutions domination because they are beacons of inspiration all over the world for oppressed people who are angered by injustice and seeking change. When economic intervention fails, Imperialist domination has often relied on military intervention, both overt and covert, or through military support to reactionary local allies, to dismantle entire societies. The USA programs of intervention in Cuba and Venezuela will go down in history as a systematic violation of the human rights of all Cuban and Venezuelan men and women and is qualified as an act of genocide pursuant to the 1948 Geneva Convention. Cubans and Venezuelans are already free, precisely because as was done in Cuba in 1959, from 1999 Venezuelans rid themselves of US imperialism and the dictatorship it imposed on them. Cubans and Venezuelans don’t need dreams that are alien to their culture or their history. Cubans and Venezuelans will continue to struggle to build sovereign, independent, socialist, democratic and sustainable nations. They will never go back to capitalism.

      Reply

  3. George P Thomas July 10, 2017 at 12:19 am

    THE BLAME FOR THE VENEZUELAN ECONOMIC CRISIS. (AMERICAN INTERVENTION)

    It was on April 19, 1961, that Cubans were victorious against the “Bay of Pigs” invasion

    Also significant is April 19, 1810, in Caracas, when the Spanish American Wars of Independence and the Bolivarian Revolution began.

    Spain, a superpower with an imperialist empire that began in 1492, was in ruins by April 19, 1810.

    Empires rise and fall.

    Like Spain, the USA, now tens of trillions of dollars in National Debt, is also a superpower coming to ruin.

    History has proven that Capitalism can’t resolve the world’s problems.

    Imperialism, as the highest stage of capitalism, does not bring about a world of peace and mutual cooperation but rather one of intensified conflict, violence and war.

    The blame for the Venezuelan economic crisis rests on the United States empire and its imperialists, and the collaborating Venezuelan rightwing business owners aiming to sabotage the system.

    Venezuela is being attacked by the imperialists in the same manner that Cuba was… by invasion and embargo, (though not necessarily in the same order).

    An economic coup is now being waged upon Venezuela by the imperialists and by their allied collaborators in the private sector.

    We have been watching with grave concern, the economic crisis in Venezuela, and conditions such as :
    1. scarcity of goods,
    2. high inflation,
    3. broken currency exchange system,
    4. falling oil price,
    5. violence leaving dozens of citizens dead and hundreds injured.

    We, The Trinidad and Tobago Bolivarian Solidarity Group, believe that these conditions are the result of acts staged by big business (the opposition), in league with others whose objectives are destabilization of Venezuela.

    a) Basic commodity shortages are being caused by the business sector illegally stockpiling products in warehouses and diverting them from the Venezuelan marketplace for sale in Colombia, and by criminal speculators and smugglers who purchase subsidized food items and resell them at higher prices in the domestic market.

    b) Some speculators practice massive currency fraud by obtaining divisas (dollars)at the preferential exchange rate under pretext of importing priority goods and then selling those dollars on the parallel market or holding on to them in expectation of further devaluation of the bolivar…

    In attempting to weaken or overthrow the nationalist-populist government of The Bolivarian Republic of Venezuela, the imperialist empire has resorted to multiple forms of attack including:

    (1) corruption (buying off supporters),
    (2) funding and organizing opposition media, parties, business and trade union organizations,
    (3) organizing and backing disloyal military officials to violently overthrow the elected government,
    (4) supporting employers’ lockouts to paralyze strategic sectors of the economy (oil),
    (5) financing referendums and other ‘legal mechanisms’ to revoke democratic mandates,
    (6) promoting paramilitary groups to destabilize civil society, sow public insecurity and undermine agrarian reforms,
    (7) financing electoral parties and non-governmental organizations to compete in and delegitimize elections,
    (8) engaging diplomatic warfare and efforts to prejudice regional relations and
    (9) establishing military bases in neighboring countries, as a platform for future joint military invasions.

    When economic intervention fails, Imperialist domination has often relied on military intervention, both overt and covert, or through military support to reactionary local allies, to dismantle entire societies.

    Since WWII the USA has not won any war anywhere in the world, except in Panama and Grenada.

    Yet the USA has army, air-force, and naval bases in Columbia.

    These bases are not placed to patrol the Pacific Ocean to keep drug shipments from getting to the US.

    Instead many of them are grouped together on the Caribbean coast where there were already bases, and others are much closer to Venezuela.

    What missions ‘beyond Colombia’s borders’ are U.S. planners contemplating for this giant military presence in Columbia if not to stoke the flames of regional conflict?”

    What is worst is that the USA is now governed by a collection of morons, people-stupid-below-the-meaning-of-stupid, voted into power by people who are extremely gullible and inattentive.

    They are all believers of the Fake News, Propaganda and “False Flags” fed to them by the mainstream US media, which is controlled by big business.

    The imperialists are trying hard to destroy the Cuban and Venezuelan revolutions domination because they are beacons of inspiration all over the world for oppressed people who are angered by injustice and seeking change.

    The Trinidad and Tobago Bolivarian Solidarity Group stands in solidarity with the Chavistas and Fidelistas.

    We call upon the imperialists and their collaborators to cease their unrelenting attacks on the non-violent revolutionary people, to respect the democratic rule of the constitutionally elected government, and to not change the region from being a Zone of Peace.

    We urge the media to publicize the truth. Do not let the USA do to Venezuela what they did to Libya.

    “¡Viva Cuba!”
    “¡Viva Venezuela!”
    “¡Viva La Revolución!”
    “¡Hasta La Victoria Siempre!”
    “¡Patria O Muerte, Venceremos!”
    “¡Trabajadores Del Mundo, Únanse!”

    Reply

    1. Socialism, or how to blame other people for your own mistakes.

      Reply

  4. I’m genuinely curious where this is going. The colectivos will not fight very well for Maduro if they are fainting from hunger.

    Socialism is dying, and capitalism depends on concepts that no longer exist in Venezuela, like private property and rule of law.

    The simplest social system that allows people to grow food and eat it is feudalism. Food is very cheap now, so when Venezuela breaks up into dozens of little fiefdoms, the peasants will be growing a lot of coca leaf and opium poppy.

    Reply

  5. The Beyond the Wall podcast sometimes have guests from Venezuela. I remember an MD telling stories about his working life at the hospital, which was a lot more broken than what you hear about in the news. (It could have been in ep 14.)

    Reply

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