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¿Cogestión es Revolución?Worker participation during the
first Chávez administration (1999-2006)
Federico Fuentes
A thesis submitted in partial fulfilment of the requirements of an Arts DegreeSchool of Social Sciences and International Studies, Faculty of Arts and Social Sciences,
University of New South Wales, November 2011Word count: 19,873
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Statement of Originality
I hereby declare that this submission is my own work and to theBest of my knowledge it contains no materials previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made in the thesis. Any contributionmade to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged in the thesis.
I also declare that the intellectual content of this thesis is the product of my own work, except that assistance from others in the project’s design and conception or in style, presentation and linguistic expression is acknowledge.
Signed:..................................................................................................
Approved as suitable for submission by
...............................................................................................................(Supervisor)
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Abstract
Attempts to analyse Venezuela’s experiments in cogestión (generally translated as ‘co-
management’) during the first Hugo Chávez administration (1999-2006) have tended to centre
on form rather than content. Almost all have concluded that the government ultimately
abandoned cogestión, and with its support for worker participation. However, rather than
focusing on pre-established models or comparisons with historical experiences, the
development of cogestión can be better understood as the product of a complex interaction
between competing visions within the government and workers' movement in the broader
context of attempting to create a uniquely Venezuelan model of socialism. At the heart of
these debates were the issues of ownership, production and distribution. The end result of all
this was that by early 2007, cogestión came to resemble something quite different to its initial
conception, that is: a mechanism for co-governance in the economic sphere and a necessary
means by which to ensure integral human development. While the term cogestión would
disappear from government discourse in the second Chávez administration, much of the initial
spirit of cogestión, and the lessons learned in implementing this government policy, would
come to be encapsulated in Chávez’s theory of the “socialist triangle”, based on social
ownership, social production and social needs.
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Contents
Introduction 5
Cogestión: co-management or co-governance? 15
Cogestión and the first Chávez administration 22
Cogestión and social ownership 29
Cogestión and social production 36
Cogestión and social needs 46
Cogestión and the ‘socialist triangle’ 52
Conclusion 58
Appendix 63
List of acronyms, key names and Spanish terms 63
Timeline of key events related to cogestión during first Chávez administration 66
Bibliography 70
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Introduction
During President Hugo Chávez’s first term in government (1999-2006)1 Venezuelan workers
came to see cogestión (generally translated as ‘co-management’) as synonymous with his call
to build “twenty-first century socialism.” The close affinity between these two concepts was
graphically symbolised on the 2005 May Day march. There, on a stage adorned with a banner
that read “Cogestión es revolución” (Cogestión is revolution), union leaders presented Chávez
with their proposed law on worker participation. Addressing the march, Chávez proclaimed
his support for cogestión, describing it as a means to create “new work relations” through
“workers participation … in the management and running of companies” (Despacho del
Presidente 2005b:324).
Several factors explain the close relationship between cogestión and twenty-first century
socialism. Although the term was included in the 1999 constitution and the first cogestión
experiment was initiated in March 2001, it was not until early 2005 – when Chávez first
began talking about socialism – that his government moved to introduce cogestión across a
variety of workplaces. Throughout 2005, the government’s increasing use of socialist
discourse was matched by moves to implement cogestión in state-owned companies, privately
run enterprises and fabricas recuperadas (recuperated factories).2
Workers’ discussions on cogestión also became increasingly intertwined with the broader
debate over socialism, with many viewing the two as intrinsically linked. As Michael
Lebowitz noted: “Given the constitution’s support for co-management and self-management
and protagonism in general, as well as Chávez’s stress upon the need for new productive
relations, it was natural that organized workers would take up the same themes” (Lebowitz
2006:203).
Yet, less than a year after the 2005 May Day march, the implementation of cogestión had
stalled. In early 2006, Chávez explicitly came out against cogestión in “strategic sectors” such
1 While technically Chávez served two terms during this time, his first (1999-2000) essentially involved the convening of a constituent assembly to rewrite the constitution. Once approved, Chávez was re-elected at the end of 2000, serving as president until 2006. For this reason, we have referred to all this period as his first administration.2 Recuperated factories is the name given to companies that were shut down by their owners and subsequently taken over, or recuperated, by workers.
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as the state oil company, Petróleos de Venezuela Sociedad Anonima (PDVSA, Venezuela
Petroleum Company), and by the start of his second term (2007-2012), the government
seemed to have moved away from promoting workplace democracy (Aló Presidente 2006:82).
How did it come to be that a policy viewed as integral to the project of twenty-first century
socialism was so quickly abandoned? If cogestión was revolution, did this mean that the
revolution had lost its way?
A new socialism for the twenty-first century
In order to answer these questions, it is necessary to return to the original spirit of Venezuelan
cogestión rather than simply focus on the end result. Attempts to mechanically impose
previous historical models onto the Venezuelan reality must be avoided.
While generally translated to mean co-management, cogestión had little to do with this
concept. In fact, cogestión was presented by state officials and union leaders as a radical
alternative to the failed experiments of co-management, which involved workers owning
shares and having representatives on company boards (Lanz Rodríguez 2005a:8; Gómez,
Tábata & Gámez 2005:45). Unlike co-management, which was viewed as a means to co-opt
workers into accepting pro-capitalist measures, cogestión was seen as a means for
transforming capitalist relations of production. Some prefer to use the term cogestión
revolucionaria (revolutionary co-management) in order to draw a sharp distinction between
the two (Lanz Rodríguez 2005a:9).
Moreover, while cogestión was seen as part of the broader socialist project, Venezuelans were
insistent that theirs was a “new socialism for the twenty-first century.” “We have to reinvent
socialism” proclaimed Chávez when first announcing his socialist beliefs, “but we cannot
resort to state capitalism, which would be the same perversion of the Soviet Union” (cited in
Lebowitz 2006:109). Instead, socialism needed to be reclaimed “as a thesis, a project and a
path, but a new type of socialism.”
None of this meant that Venezuela was exempt from the same dilemmas encountered in
previous attempts to build socialist societies. In fact, the same issues regarding ownership,
production and distribution that plagued these experiments have constantly reappeared in
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twenty-first century Venezuela. It is also clear that many in the government had studies these
lessons and drawn their own – in some cases conflicting – conclusions.
When it came to the Soviet model of state ownership, those within the Ministerio para la
Energia y Petróleo (MENPET, Ministry for Energy and Petroleum) argued that its downfall
should not be attributed to state-owned property (Valderrama & Mena 2005:39). In opposition
to this view, Víctor Álvarez, who was Minister for Basic Industry during the period of
cogestión, contended that “within the false belief that socialism is based on state property and
wage labour lay the seed of the debacle of ‘real’ or ‘state socialism’” (Álvarez 2009:193).
State ownership, argued Álvarez, was predestined to lead to the creation of “state monopoly
capitalism.” As an alternative, he proposed developing “new forms of social property based
fundamentally on direct worker and community control” (Álvarez 2009:183-4). Haiman El
Troudi, who was Chief of Staff to President Chávez in 2005, also argued that state ownership
inevitably led to state capitalism. Twenty-first century socialism therefore required the
construction of a system based upon “new productive relations involving the participation of
organised communities and small, medium and large entrepreneurs, both public and private”
(El Troudi 2006:6-7). Those within MENPET responded that eschewing state property
altogether amounted to a belief that socialism could be “built with bourgeois property forms”
(Valderrama & Mena 2005:40). Socialism required that social property be administered by
state to which society had delegated the responsibility of “social planning and administration”
(Aponte 2007a:129).
For some, the Yugoslav model of self-management offered useful lessons. Confronted with
the failures of Soviet state capitalism, the Yugoslav regime posed as an alternative, worker
self-management and the transformation of state property into “a superior form of property,
socialist property in the hands of the workers” (Álvarez 2009:187). This would allow for a
change in property relations and relations of production, eliminating the traditional division of
labour inherent within private and state-owned companies. Álvarez also acknowledged that
certain problems had arisen, as workers began to focus on maximising profits for themselves
rather than the needs of the communities. “In the struggle against state bureaucracy, the
workers had forgotten about the struggle against capitalism” (Álvarez 2009:188). Instead of
social property, what emerged was privately owned “group property.” For those in MENPET,
this was the inevitable result of “transferring what belongs to all of society to a part of it,
thereby stimulating collective egoism” (Aponte 2007:29). Only state-administered social
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property, within which “human labour enriches all of society and not a portion,” could ensure
a transformation in relations of production (Aponte 2007a:123, Aponte 2007:37).
Perhaps the biggest dilemma posed in the construction of twentieth century socialism was the
question of distribution. While the Soviet Union relied on a centralised planned economy
directed by the state, in Yugoslavia, ‘market socialism’ was proposed as an alternative to a
bureaucratically run command economy. Reflecting on these experiences, Elías Jaua, head of
the Ministerio de Economía Popular (MINEP, Ministry for the Popular Economy) between
2004-2006, contended that Venezuelan socialism would instead be based on “a new mixed
economy, where the market does not govern all areas of society, but rather serves as a
complement to strategic and democratic planning” (Jaua Milano 2005:26). El Troudi
disagreed, arguing that the problem with the dilemma of state planning versus market was that
it left out a key factor: the organised community. In the relationship between the state, market
and the community, it was essential to “always depend on the organisational force of the
community” (El Troudi 2006:5). Reflecting on the same issue, thinkers in MENPET proposed
the integration of companies into “socialist zones” to facilitate a process of planned
production and consumption (Aponte 2007a:141). Social property had to be combined with
central planning that extended beyond strategic sectors and to the entire economy. Otherwise,
the continued presence of the market and capitalist property forms would make impossible the
formation of socialist consciousness, opening the path towards capitalist restoration (Aponte
2007a:145).
In all this, the one experiment in twentieth-century socialism significantly not discussed was
Cuba. Undoubtedly, the close relationship between Venezuela and Cuba, and the widespread
admiration in Venezuela for this small island and its continued struggle for existence against
US hostility, made difficult any public or critical examination of the Cuban model.
Nevertheless, while stating his unwavering support for Cuban socialism, Chávez reiterated on
several occasions “the Bolivarian project is very different to the Cuban model” (Mastronardi
2011).
On this point indeed, all Venezuelan thinkers about socialism have concurred. Venezuelans
were attempting to construct their own, original model of socialism. Moreover, everyone was
aware that Venezuela’s attempt to create twenty-first century socialism could rely on the
wealth that came with being an oil-rich nation, even if, as we shall see, that wealth in itself
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created many other complications for the experiment. For the purposes of this dissertation
therefore, I have chosen to focus on the Venezuelan experience of cogestión and its attempt to
deal afresh with the issues of ownership, production and distribution in the construction of
socialism. Specifically, my focus is on how Venezuelans have understood the theory and
practice of cogestión, and how those understandings have changed in a continually shifting
economic and political situation.
In tracing the development of cogestión, it becomes evident that government policy was
shaped by competing visions that existed within the government over issues of ownership,
production and distribution. The views and activities of Venezuelan workers themselves also
had a significant impact on cogestión, because, in part at least, it became a means by which
they began to challenge the historically entrenched union bureaucracy and develop goals and
objectives beyond a narrow pursuit of improved wages and conditions.
And finally President Chávez himself was both a significant actor in this complex
development, and was also profoundly influenced by it. As we will see, it led him to not only
question his support for cogestión but to reconsider some of his ideas on socialism. By early
2007, Chávez had come to the conclusion that cogestión was only feasible if applied within
the context of what he described as the ‘socialist triangle’ of social ownership, social
production and the satisfaction of social needs.
Venezuela’s ‘magical state’
The debate and struggle over cogestión and socialism in Venezuela, must, like much else in
its recent history, be situated against the backdrop of the role of oil. The rise of oil production
in the 1920s fuelled a dramatic transformation in Venezuela’s economy. Over the next
decades, agricultural production slumped as capital poured into the oil sector. Reliance on
imports from abroad to satisfy the needs of the domestic market became an alternative to any
real attempt to diversify Venezuela’s economy.
The discovery of oil not only impacted Venezuela’s economy, but also profoundly shaped the
Venezuelan state and society as a whole. Fernando Coronil contends that oil wealth is the key
to understanding Venezuela’s “magical state” which, standing over and above Venezuelan
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society, “appeared as a single agent endowed with the magical power to remake the nation”
(Coronil 1997:4).
As oil’s contribution to state revenues jumped from a mere 1.44% in 1920, to 97.7% in 1940,
business elites became increasingly dependent on their connections within the state in order to
accumulate wealth (Godio 1986:2). This process facilitated both a fusion of power and wealth
within the state as well as the creation of a parasitic capitalist class, which sought to enrich
itself not by extracting surplus value but rather by appropriating it from the state (Coronil
1997:8; Lebowitz 2006:87). It also underpinned the emergence of a pervasive culture of
clientalism and corruption as Venezuelan society came to be dominated by a “social system
and political culture deeply implicated in legitimating and consolidating the vast set of formal
and informal mechanisms through which oil is produced and oil money is appropriated”
(Coronil 2008a:20). “Enchanted by its spectacular performances”, Venezuelans came to view
the state as a vehicle for lifting themselves out of poverty.
With the onset of the international oil crisis of the 1970s, this “magical state” entered into
crisis (Bilbao 2008:103). The nationalisation of oil in 1976 was unable to turn the situation
around given the state-owned oil company’s propensity to function as a “state within a state”
that acted in the interests of transnational oil corporations (Mommer 2003:28). While in 1981,
PDVSA was handing over 71% of its income to the government, by 2000, this figure had
plummeted to 39%. This in turn led to a steep decline in fiscal income, from US$1,500 per
person in 1975 to US$350 in 1999 (measured in 1998 dollars) (Bilbao 2008:103).
Venezuela’s sole attempt at industrialisation, the Corporación Venezolana de Guayana
(CVG, Venezuelan Corporation of Guayana) similarly entered into crisis. Located in the
southeastern state of Bolivar, this basic industry complex comprised of 16 state-owned
aluminum, steel, bauxite and mining companies was created as a result of the import
substitution policy promoted in the 1950s (Vitale 1984:6). Importantly, the CVG became
home to highly unionised “vanguard” elements of the Venezuelan labour movement (Ellner
1993:161-2). Like the oil industry, CVG also came to be dominated by clientalism and
corruption, and remained subordinate to the interests of foreign multinationals. Moreover,
during the 1990s neoliberal governments disinvested state funds in the complex to pave the
way for its privatisation, beginning with the sell-off of SIDOR in 1998.
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Meanwhile, the deepening economic crisis only accelerated the process of rural-urban
migration, as people flocked to the cities in pursuit of their share of the oil wealth. This,
combined with rising unemployment, led to the creation of a massive belt of barrios (poor
neighbourhoods) all along the hillsides of the capital, Caracas and other major cities. There,
informal sector workers crammed into makeshift housing attempting to eke out a living in
whatever way they could. Poverty levels rose steeply, as the average wage in real terms
decreased from US$5,200 in 1978 to US$2,000 in 1999 (Bilbao 2008:103). The share of
workers employed in the informal sector rose from 37.9% to 46% between 1984 and 2000. By
the end of the 1990s (when unemployment was running at 13.4%), informal workers for the
first time outnumbered their counterparts in the formal sector.
Simmering discontent exploded onto the streets in February 1989, when then President Carlos
Andres Perez (1989-1993) implemented an International Monetary Fund (IMF) package that
sent fuel prices skyrocketing overnight (Ciccariello-Maher 2007). For four days, a massive
uprising rocked Caracas, and extended out to several other cities and towns. Although a wave
of repression succeeded in quelling the uprising, Venezuelans continued to take to the streets
during the next decade. As disillusionment with the status quo grew, Venezuelan society
became engulfed by “a stream of demands and complaints levelled at local and national
authorities,” with over 7,000 protests taking place in the 1990s – a majority acquiring a
“confrontational” or “violent” form (Bruce 2008:25-9; López Maya 2002:13, 19).
This spontaneous and incoherent ferment from below had very little impact on government
policy. However, it was a critical factor in speeding up the plans of a group of dissenting
officials within the Armed Forces plotting a patriotic military coup. Although the February
1992 military rebellion failed, the coup succeeded in propelling its leader – Hugo Chávez –
into the collective imagination of Venezuela’s poor majority, “in constant search of a messiah
with a magical formula to relieve them of their misery” (McCaughan 2004:158).
Chávez’s growing popularity led to him being pardoned in 1994, after which he travelled the
country to listen to the demands of the people. Having decided to stand in the 1998
presidential elections as a political outsider and without the backing of any of the traditional
parties, Chávez won in a historic landslide. As promised, his first step in power was to
convene a popularly elected constituent assembly entrusted with the task of redesigning
Venezuela’s institutional framework and incorporating the previously marginalised majority
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into the management of public affairs. Throughout 1999, Venezuelans intensely debated and
then approved a new constitution that stated that “the participation of the people” in all
spheres was the key to “ensuring complete development, both individual and collective”
(Asamblea Nacional Constituyente 2003:23).
Quickly realising the threat that the process opened up by Chávez’s election represented to
their interests, the traditional elites sought to overthrow his government; first via a failed
military coup in April 2002, then a two-month management lock-out at PDVSA that began in
December 2002, and finally a recall referendum in August 2004 (Wilpert 2003; Medina,
López Maya & Lander 2007:147-204; Bilbao 2007:235-242). Each attempt was defeated by
the combined mobilisation of the people and the Armed Forces, which, following the failed
April 2002 coup (and subsequent purge of disloyal officers), was now in the hands of pro-
revolution forces (Harnecker 2003:11-18).
Empowered by these victories, the government set about trying to tackle Venezuela’s huge
social problems, while also seeking to convert the new, but still vague, ideas enshrined in the
constitution into reality. In the economic sphere, this required moving forward on two fronts:
dealing with immediate problems (such as unemployment and the reactivation of an economy
that had contracted by 26.7% in the first quarter of 2003 as a result of the lock-out at
PDVSA), while promoting initiatives toward a longer term structural transformation of the
economy (El Troudi 2010:45; Álvarez 2009:32). The promotion of cogestión was seen as an
essential element to simultaneously tackle both issues. However, attempts to implement
cogestión revealed a variety of views on this issue among government officials, union leaders
and workers more generally. The thesis which follows aims to describe and explain the
emergence of these differing views, and the ways in which the conflicts and interactions they
produced ended up changing the whole meaning of the cogestión idea, and the broader policy
and political context in which it was seen.
Thesis structure
Chapter 1 sets out to provide a brief survey of some of these competing Venezuelan views on
cogestión, as well as some of those put forward in ‘outsider’ academic studies that have
attempted to come to grips with Venezuelan debates. In most cases the views surveyed have
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little in common with the idea as it first appeared in the constitution and the first national
development plan.
Outlining the chaotic development of cogestión and the diversity of experiments in this area
carried out during the first Chávez administration is the focus of Chapter 2. The aim here is
not to describe and analyse each individual workplace where cogestión was introduced, but to
pinpoint key initiatives and turning points in the complex and uneven process of
implementation.
The subsequent three chapters focus on the more specific aspects of ownership, production
and distribution. Chapter 3 is concerned with cogestión experiences in recuperated factories
and the private sector, where the issue of collective versus social ownership appeared most
starkly. In Chapter 4, the focus shifts to the state sector, in particular the aluminium plant,
CVG Aluminio del Caroní S.A. (ALCASA, CVG Caroní Aluminum), where arguably the most
ambitious experiment in social production took place. Chapter 5 endeavours to grapple with
the innovative idea of the Empresas de Producción Social (EPSs, Social Production
Enterprises), Chávez’s attempt to ensure that production was geared towards satisfying social
needs.
Finally, in Chapter 5, I bring these threads together and analyse the basic foundations of
Chávez’s so-called socialist triangle. Premised on the idea that socialism requires
simultaneously moving forward on all three fronts – social ownership, social production and
social needs – it will by then have become apparent that this “socialist triangle” was heavily
shaped by his shifting views on cogestión. In many ways, the emergence of the “socialist
triangle” simultaneously involved returning to the original concept of cogestión, while placing
it in a much more radical setting. I will refer in this chapter to the writing of two key
intellectuals who played a part in influencing Chávez’s thinking as he was developing his
ideas on socialism: István Mészáros and Michael Lebowitz.
One final note: throughout this study, an emphasis is placed on Chávez’s ideas and words.
The absence of specific government documents or laws on cogestión means that a certain
focus on unofficial government statements is necessary. However, a more important reason
for focusing on Chávez’s words is given by Coronil, who argues that through his words “that
are also acts and guide actions” Venezuela’s head of (the magical) state “has brought the
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pueblo [people] to center stage” (Coronil 2008:4). Many of Chávez’s public pronouncements
are pedagogical in intent. They are intended to act as a guide to public discussion of policy
and its problems in a country where many of his supporters are poor people with limited
formal education who have long been excluded from public debate and discussion, let alone
from positions of power or responsibility. To that end, his statements are usually undogmatic
and open in tone, and designed both to express the President’s own uncertainties and to elicit
popular responses, suggestions and actions. In other words, Chávez’s reflections on cogestión
and socialism in Venezuela are no mere academic commentary on a political process, rather
they are a vital part of that process, and often influence it deeply.
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Cogestión: co-management or co-governance?
Among the numerous policy initiatives undertaken during the first Chávez administration
towards organised labour, none was more contentious than cogestión. Given its association
with twenty-first century socialism, this experiment in worker participation became a key
concern for unionists, government officials, and observers of the revolutionary process.
Unsurprisingly, attempts have been made to compare the policy of cogestión with previous
experiments in co-management. Others have endeavoured to squeeze the concept of cogestión
into pre-existing models. Almost all commentators agree that cogestión was dumped during
Chávez’s second administration.
There is little doubt that many of the same challenges and issues that emerged in previous
experiments with worker participation were revisited during the Venezuelan debate over
cogestión. The almost complete disappearance of cogestión from Chávez’s discourse, and his
attempt to remove the term from the constitution in 2007, add weight to the argument that
support for worker participation was subsequently dropped.
Nevertheless, such views contain two important shortcomings. Firstly, in the minds of
workers, the term cogestión had little to do with a desire to replicate any specific model
(Cerceau 2007a:15; Gómez, Tábata & Gámez 2005:47, 49). The same was true for the
government, and Chávez in particular, who continuously emphasised the uniqueness of
Venezuela’s socialist experiment. Referring to a pamphlet written by Michael Lebowitz on
the lessons of self-management in Yugoslavia,3 Chávez explained that while it provided a
useful reference point, Venezuela was “not going to copy any model, we are creating our own
model” (Aló Presidente 2005:19).
Second, it is insufficient to focus on the final forms, or “models” of cogestión that ultimately
emerged. Such views tend to imply the presence of a uniform and defined blueprint when in
fact government policy was shaped by the constant struggles of competing forces that held
widely differing opinions on cogestión.
3 See Lebowitz 2004
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For this reason, I propose to trace the non-lineal development of cogestión, focusing on how
the battle between competing visions regarding ownership, production and distribution were
ultimately resolved. This will allow for a better understanding of the actual course that
cogestión took, as well as provide an insight into some of the thinking behind Chávez’s
subsequent adoption of his socialist triangle.
Competing concepts of cogestión
Osvaldo Alonso argues that the focus of cogestión was on workers and owners jointly
administrating companies (Alonso 2007:9-10). Drawing parallels with the West German
experience of the 1950s, he argued cogestión differed from self-management in that “workers
administer as workers and not as owners.” Hector Lucena also refers to German co-
management when offering a definition of cogestión as the participation of workers in the
“decision making and running of a company” (Lucena 2006:26, 29). Maria Vera Colina
maintains that Venezuelan cogestión was not focused on “co-ownership” but rather the
“voluntary application” of “co-administration” between workers and company owners (Vera
Colina 2006:173-4).
Yet, as Rodolfo Cibank, the vice president of the Federación de Industriales, Pequeños,
Medianos y Artesanos de Venezuela (FEDEINDUSTRIA, Venezuelan Federation of Small,
Medium and Artisan Industries) noted, Venezuelan cogestión took on a “novel characteristic,”
with co-ownership “superimposed” onto a concept generally limited to worker participation in
management (Cibank 2005). The focus on ownership was also present in the discourse of
different government ministries. Asked to define cogestión, a vice-minister in the Ministerio
de Industria Ligera y Comercio (MILCO, Ministry of Light Industry and Commerce) stated:
“When we talk about cogestión … [we are referring to] the co-responsible participation of
workers in running the entire company, which is made concrete via the acquisition of shares;
shares that do not belong to individual workers, but rather a cooperative” (Fernández 2006).
A different view of cogestión was put forward by MINEP, another of the ministries assigned
responsibilities to oversee some of the companies under cogestión. Its course readings for
students preparing to take up jobs within these companies, stated that in places such as
Germany, cogestión had been implemented as a “reformist” measure, limiting worker
participation to owning shares and naming representatives to company boards (MINEP
16
2005:17). Only by linking cogestión to the demand for workers’ control could cogestión take
on a revolutionary character. Moreover, cogestión revolucionaria was only a stepping-stone
towards achieving the ultimate goal of autogestión (self-management), where workers owned
“the means of production, without state mediation” (MINEP 2005:18).
Such views were strongly opposed by others in the government. As head of MENPET, Rafael
Ramirez, together with his party colleagues from Esperanza Patriótica (Patriotic Hope) who
worked within the ministry, waged an intense public campaign against cogestión. Agreeing
with MINEP’s characterisation of cogestión as a reformist measure focused on workers
owning shares, those around MENPET drew the opposite conclusion: rather than culminating
in self-management, cogestión would inevitably provoke a regression towards capitalist
relations of production and the privatisation of strategic industries (Valderrama & Mena
2005:46-52).
While debates raged within the state over the issue of property, union leaders preferred to
view cogestión as a banner with which to advance their struggles for worker participation.
The Federación de Trabajadores de la Industria Eléctrica de Venezuela (FETRAELEC,
Federation of Venezuelan Electrical Workers) saw cogestión as superior to previous models
of co-management, because it represented “the governing of [publicly-owned] company in a
co-responsible manner” between the state, workers and communities (FETRAELEC 2005c:4;
Harnecker 2005:7). FETRAELEC leader Joaquin Osorio argued that Venezuelan cogestión
had nothing to with the social democratic models of “Germany, Sweden, Spain, Yugoslavia or
any other” country (Osorio 2005:7-8). Moreover, cogestión should have nothing to do with
workers owning shares, as this would transform workers into “owner-bosses and reproduce
capitalist egoism.”
The Frente Revolucionario de Trabajadores de Empresas Cogestiónadas y Ocupadas
(FRETECO, Co-mananged and Occupied Factories’ Worker Revolutionary Front) saw
cogestión as synonymous with workers’ control, and argued for the creation of workers
councils along the lines of those that existed in “revolutionary Russia” (FRETECO 2007:12-
17). Pablo Cormenzana agreed, stating that behind the confused notion of cogestión lay a
battle between workers and Chávez fighting for workers control, and “union bureaucrats and
Bolivarian reformists” who believed workers were incapable of running companies
(Cormenzana 2009:14, 75). In the end, according to William Sanabria and Yonie Moreno, this
17
“reformist bureaucracy” won out, imposing its model of cogestión based on co-ownership
between workers and bosses (Sanabria & Moreno 2009:23).
Iain Bruce’s survey of cogestión at ALCASA however, led him to conclude that there, “co-
management, albeit supported from below, had been essentially designed and nurtured from
above as a deliberate test bed for moves towards a socialism of the twenty–first century”
(Bruce 2008:137-8). Here, the Ministerio de Industrias Básicas y Minería (MIBAM, Ministry
of Basic Industry and Mining) headed by Víctor Álvarez, and the state-appointed company
president, Carlos Lanz, played a fundamental role in the introduction and implementation of
cogestión.
It is evident that various actors and observers of the process held differing views of cogestión.
While some focused on cogestión as a means for worker participation within companies,
others emphasised the question of co-ownership. Whereas some saw it as a transitional
measure towards self-management, others denounced it as “counter-revolutionary.” In some
cases, cogestión was seen as a battleground between “reformist bureaucrats” and
“revolutionary workers”; in others the positive role of state officials in promoting cogestión
was highlighted. Some drew parallels with experiences of co-management in Germany and
Russian soviets, but almost all agree that the Chávez government ultimately dropped its
support for cogestión (e.g. Bruce 2008:103; Navas & Osorio 2007:8).
The original concept of cogestión
What few take into consideration is the original concept of cogestión, in the constitution and
the government’s first national development plan, the Plan de Desarrollo Económico y Social
de la Nación 2001-2007 (Economic and Social Plan for the Nation 2001-2007) with its
emphasis on participation and “co-governance” between the state, workers and communities
(MPD 2001:13). In the constitution, cogestión appears in the section dedicated to political
rights, framed by Article 62, which states:
All citizens have the right to freely participate in public affairs, either directly or through their elected representatives.Peoples’ participation in forming, carrying out and controlling the management of public affairs is the necessary means by which to achieve the involvement that ensures their complete development, both individual and collective. It is the state’s obligation
18
and the duty of society to facilitate the generation of optimum conditions for putting this into practice (Asamblea Nacional Constituyente 2003:23).
As to what forms such participation could take, Article 70 listed cogestión as a vehicle for the
“participation and involvement of people … in social and economic affairs” (Asamblea
Nacional Constituyente 2003:25).
Cogestión is also mentioned in Article 184, Point 4, which enshrines “the participation of
workers and communities in the running (gestión) of publicly-owned companies, through self-
management and cogestiónarios methods” (Asamblea Nacional Constituyente 2003:62).
While the scope of this article was limited to companies in the hands of regional and
municipal governments, the constitution extended participation in such companies to include
communities as well.
Also of note is that Article 184 draws a distinction between cogestión in public companies
(Point 4) and forms of participation within “the social economy” (Point 3) (Asamblea
Nacional Constituyente 2003:62). Whereas the emphasis of cogestión in public companies is
on participation, the focus of the social economy is on promoting collective property such as
cooperatives “and other associative forms.” This separation is important, as it implies a
distinction between cogestión, as a form of participation, and collectively owned enterprises
within the social economy.
This differentiation is reinforced by the absence of the term cogestión in the section dedicated
to the “socioeconomic system.” Coinciding with Article 62’s focus on participation, Article
299 states that the goal of the “economic regime” is “ensuring integral human development”
(Asamblea Nacional Constituyente 2003:99-100). The constitution identifies three distinct
sectors within the overall economic regime: a state sector entrusted with control over
industries deemed to be “in the public interest and of a strategic nature” (Article 302); a
private sector (Article 299), and a social sector comprised of small businesses, cooperatives,
“and any other form of community association for purposes of work, savings, and
consumption, under an arrangement of collective ownership” (Article 308) (Asamblea
Nacional Constituyente 2003:99-102).
This vision of an economic regime comprised of three different sectors, each involving
different property forms (state, private and collective) is also present in the government’s
19
national development plan. Nowhere does the plan draw any direct correlation between
cogestión and collective ownership, nor is the application of cogestión limited to any
particular sectors.
What stands out in the national development plan is its emphasis on participation in the
political, economic and social sphere, as the only means by which to change society.
Discussing the new development model proposed by the government, the plan states:
…the motivation to achieve and the productive disposition of all social agents for change will be achieved by a society which demands co-responsible and democratic participation of all sectors, in all spheres and in each moment of the future. This shared and simultaneous action of all society will manifest itself in the deconcentration and decentralisation of decision making in order to expand the dynamic of change across the whole nation (MPD 2001:16, emphasis in original).
This idea of co-responsibility reappears in the section dealing with “participatory and
protagonist-based (protagónica) democracy” (MPD 2001:106). According to the plan, such a
democracy is only possible through the establishment of “a new relationship between the state
and society where what is public is assumed by the people and by the state in a co-responsible
manner. This forces a change in the way of governing, governing with the citizens”.
While no explicit definition of cogestión is offered anywhere, in pulling together the different
threads running through these key documents, it is possible to identify two important
elements. The first has to do with the significance given to the ‘co’ in cogestión, with its
emphasis on workers, communities and the state forming a co-responsible relationship as part
of changing the way in which society is governed. The other relates to the second half of the
word, ‘gestión’, which despite its literal translation as management, emphasises participation
as the necessary means to ensuring integral human development. In this sense, cogestión takes
on a vastly different meaning to that traditionally ascribed to co-management. Participation is
neither viewed as synonymous with ownership nor with workers having representatives on
company boards. Instead, the focus of cogestión is on co-governance and co-participation “of
all sectors, in all spheres”, as the necessary means for promoting “complete development,
both individual and collective.”
This focus was also at the heart of Chávez’s socialist triangle. However, this shift to the
“socialist triangle” is really only comprehensible in light of the many-sided divisions and
20
conflicts that had arisen as the result of the attempt to turn cogestión from a noble, if vague,
idea in the constitution, into a practical policy. It is to this attempt that I now turn.
21
Cogestión and the first Chávez administration
The choice of the word cogestión was largely related to its inclusion in the new constitution
(Cerceau 2007:4). The vision of cogestión presented in the constitution was one that focused
on co-participation and co-governance in the economic sphere as necessary means for
ensuring human development. This vision was also evident in the early experiments in
cogestión.
In March 2001, the Chávez government converted a re-opened sugar processing plant Central
Azucarero Pío Tamayo (Pío Tamayo Sugar Mill) into its first cogestión experiment. Referring
to this venture ten months later on Aló Presidente, Chávez congratulated all those involved in
“this example of cogestión” where workers and the state were “co-governing the plant
together” (Aló Presidente 2002:33). Chávez added that “cogestión or co-government” was
necessary component in the process of “beginning to de-concentrate” power and decision-
making. Reaffirming the centrality of participation within the idea of cogestión, in November
2002 Chávez referred to the sugar mill as the “model of cogestión” that the government
wanted to promote, where “workers are part of company board of directors, with new and
much higher levels of participation” (Venpres 2002).
Present within this “model” was the idea of workers owning shares. Ownership rights were
also extended to local sugar cane cutters. Organised into two separate cooperatives, each
owning 25.5% of the company’s shares, they controlled a majority stake in the operation
(Lucena 2006:15). However, this aspect of Chávez’s cogestión “model” was never
emphasised in his various interventions. Rather, Chávez proclaimed the company to be the
“property and pride” not of the workers, but “of the tocuyanos”, in reference to the name of
the local town, Tocuyo (Aló Presidente 2002:92).
This focus on co-participation between the state, workers and community could also be seen
in the initiatives promoted by electrical workers. In April 2001, FETRAELEC succeeded in
incorporating the term cogestión into the Declaración de Principios (Declaration of
Principles) that it jointly signed with management at the Compañía Anónima de
Administración y Fomento Eléctrico (CADAFE, Electricity Generation and Administration
Company) (Harnecker 2005:6). While concrete steps towards cogestión would not be taken
22
until 2003, workers in this sector had enshrined – at least on paper – “the revolutionary
principle of the right of workers to direct the company, at all levels, together with the state”
(FETRAELEC 2005:4).
When pro-revolution unions held a national gathering in September 2002 to discuss breaking
with the rightwing-controlled Confederación de Trabajadores de Venezuela (CTV,
Confederation of Venezuelan Workers) and “refounding” a new labour movement, they too
raised cogestión as a key demand (Encuentro Nacional de Trabajadores 2002). In response,
Chávez said the proposal to promote “cogestión, shared responsibility” was “marvellous”
(Despacho del Presidente 2005:442-445). While raising the idea of workers owning
companies, he stressed his belief that “workers will know how to assume their responsibilities
in order to successfully run these companies with shared responsibility, together with business
owners and with the government” (Despacho del Presidente 2005:445).
One month later, hundreds of pro-revolution union leaders presented a list of demands to
Chávez. Among them was a call to “establish and legitimise mechanisms of worker
participation” and to speed up “the establishment of cogestión in state companies and private
ones whose survival depends on [state aid]” (Varios 2002). One leader of the national
teachers union expounded the need to “continue concretising that project of the country
contained in the constitutional text” through the establishment of worker participation “in
running companies, in running the Venezuelan economy” (Varios 2002).
Birth of a new labour movement
In all these cases, the desire to move forward with cogestión as a means for promoting “co-
governance” was evident. However, it was the bosses’ lockout at the end of 2002 that really
opened up the possibility of turning this desire into reality. When PDVSA management
walked out of their jobs, workers stepped in. Organised into comités guia (guide committees),
workers took over direct control of oil production. Recalling these events, union leader
Marcela Maspero said:
Venezuelan workers carried out our first act of workers’ control when the oligarchic bureaucrats of this country dared to sabotage the oil industry in order to put an end to a legitimate government elected by the Venezuelan people. It was the oil workers that recuperated the Venezuelan industry (MINCI 2006:13).
23
Elsewhere, workers confronted business owners, who closed their companies, by occupying
them. During the 10-week general strike, pro-Chávez unionists called on the government to
issue a decree that would allow workers to take over these companies (Ellner 2006:118).
With control of the state oil company firmly in government hands, the aim was to transform
la nueva PDVSA (the new PDVSA) into the driving force of a program to develop and
diversify Venezuela’s economy. Moreover, the increased mobilisation of the labour
movement had led Chávez to state that it was time to “change this rancid capitalism for
cogestión obrera (workers’ cogestión)… ”, as he put it on his March 2 Aló Presidente
program (cited in Barrios 2005). “I want and demand that cogestión obrera be implemented,
that workers be incorporated onto company boards.”
The first steps in this direction occurred four days later, when Chávez appointed two union
leaders onto PDVSA’s board of directors. He argued that these workers had to “represent the
interests of workers and conciliate them with the interests of the company and the interests of
the country” as PDVSA, “now and forever must be property of the republic and must exist
solely to promote the interest of the republic and not the personal interests of anyone, of any
political party or specific social group” (Despacho del Presidente 2005:220, 225). Chávez also
argued that appointing workers to the company board was insufficient; it was necessary to
“progressively incorporate, as part of our strategic plan, concepts such as cogestión obrera in
the management of sectors within the oil industry… cogestión obrera for decision-making,
for controlling operations” (Despacho del Presidente 2005a:225).
One month later, similar steps were taken in CADAFE, breathing life into what was, until
then, cogestión on paper only. As with PDVSA, the appointment of two union leaders onto
the company board was accompanied by the promotion of worker discussions and
organisation from below. The focus was on establishing collegial structures right throughout
the company hierarchy that could integrate worker, community and management
representatives into a process of co-governance (Harnecker 2005:19).
Emboldened by their victorious struggle, Venezuelan unionists came together in April 2003 to
form an alternative to the CTV: the Unión Nacional de Trabajadores (UNETE, National
Union of Workers). Assuming the banner of cogestión as their own, the chant “Empresa
24
cerrada es empresa tomada” (a closed company is a company taken over) rang throughout the
congress (Ellner 2006:118). This slogan soon began to reverberate across the country as
UNETE leaders promoted workplace discussions on cogestión, focusing on the concrete
experiences of PDVSA and CADAFE (Lebowitz 2006:102-4).
Throughout the next two years, the constant focus on cogestión as an instrument for
worker/community participation and the creation of new relations of production was evident
in numerous documents, resolutions and speeches produced by workers (e.g. Comité Guía
2003; Comités Guía de la industria petrolera 2004; Comité de Refundación 2005;
FETRAELEC 2005a). A commission established by the Ministry of Labour, with the purpose
of interviewing workers from occupied factories in order to come up with a proposal for their
situation, concluded that the best action to take was nationalisation under workers’ control
(Cormenzana 2009:23). Nevertheless, 2005 would prove to be the year that cogestión really
took off, as the government began to expropriate some of these companies and place them
under cogestión.
2005: Year of cogestión
The first of these companies to be expropriated were Venezolana de Pulpa y Papel
(VENEPAL, Venezuelan Pulp and Paper) and Constructora Nacional de Válvulas (CNV,
National Valve Constructor) in January and April 2005, respectively. Renamed Industria
Venezolana Endógena de Papel (INVEPAL, Venezuelan Endogenous Paper Industry) and
Industria Venezolana Endógena de Válvulas (INVEVAL, Venezuelan Endogenous Valve
Industry), both were placed under cogestión
Throughout the rest of the year, a handful of other expropriated companies were also placed
under cogestión. All of these experiments involved worker-cooperatives owning shares in the
company. While this aspect had been present in the cogestión model introduced at the Central
Azucarero Pío Tamayo (though not in PDVSA and CADAFE), the difference now was that
the issue of ownership was increasingly emphasised in government discourse.
In August 2005, Chávez launched an initiative to promote cogestión in the private sector: the
Acuerdo Marco de Corresponsibilidad para la Transformacion Industrial “Fabrica Adentro”
(Framework Agreement of Co-responsibility for Industry Transformation “Inside the
25
Factory”). Through Fabrica Adentro, companies that were financially struggling were given
access to low-interest state loans in return for granting workers participation and shares in the
company. With over 1500 companies applying to be part of the program by the end of 2006,
and government expectation’s that some 100,000 jobs would be created through this process,
Fabrica Adentro arguably proved to be the vehicle by which cogestión was most widely
implemented (Azzellini 2009:23; Rangel 2006).
The focus on workers owning shares, however, was not present across all experiences of
cogestión in 2005. The experiment undertaken in ALCASA (employing 3,000 workers) was
not only the largest of its kind, but was viewed as a stepping-stone for expanding worker
participation across the CVG. It also developed into the most ambitious experiment in social
production, with workers directly electing managers and participating in drafting the
company’s overall budget.
It should be noted though that, by this time, cogestión was moving backwards or had been
completely dismantled in other state-owned companies. In PDVSA, union leaders became
entangled in cases of clientalism and corruption (Lebowitz 2006:106). In CADAFE, despite
the fact that management and workers had formally signed an agreement stating that the
decisions of the comités de gestión “would have a binding character on the function of the
company”, the company president was now arguing that workers’ participation, should
involve consultation, but should not be interpreted as meaning managers had to cede “their
competencies and hand them over to workers” (Cerceau 2007:16, emphasis in original; Perez
Vigil 2005). By the end of 2004, this clash of views and interests had led to threats of
industrial action, with union leaders denouncing that the company had been taken hostage “by
managerial authoritarianism” (EFE 2005; FETRAELEC 2005).
Throughout this period, Chávez also emphasised the issue of satisfying social needs.
Referring to notes he had drafted while reading Mészáros’ Beyond Capital, Chávez stated
during his July 17, 2005 Aló Presidente program that within this book he had found the key to
building socialism: “communal production” had to be accompanied by “communal
consumption” (Aló Presidente 2005a:18).
In an attempt to turn this idea into practice, Chávez called for the creation of Social
Production Enterprises (EPSs), which according to a September 2005 government decree, had
26
as their fundamental objective the generation of “goods and services that satisfy the basic and
essential needs of the community and its surroundings” (Gaceta Oficial 2005a:5). Moreover,
EPSs had to be motivated by “the values of solidarity, cooperation, complementarity,
reciprocity, equity and sustainability over... profit”. All the ministries involved with cogestión
experiments would go on to promote the creation of EPSs.
A cogestión model?
As Osvaldo Alonso notes, by the end of 2005 it was possible to differentiate between three
distinct cogestión models (Alonso 2007:26-27). Within the state sector, worker participation
had been introduced in PDVSA, CADAFE and ALCASA. The first two fell under the auspice
of MENPET and were rolled back, while ALCASA operated under the jurisdiction of the
newly-created MIBAM. The second group was made up of recuperated factories such as
INVEPAL and INVEVAL, which came under the jurisdiction of MINEP, entrusted with
overseeing the social economy. Finally, there were the private sector companies that
participated in the MILCO-administered Fabrica Adentro program.
Given the diversity of projects that came to fall under the cogestión umbrella, it is
unsurprising that a commonly agreed upon “model” or definition could not be found, even
among ministries within the same government. The lack of any defined legislation also
contributed to this situation. A further contributing factor was that government ministries
preferred to tailor cogestión projects according to their particular views rather than attempt to
work collectively to come up with a common vision of cogestión. In El Troudi and
Monedero’s words, the state resembled “an archipelago of unconnected islands” with little
articulation and synergy between ministries (El Troudi & Monedero 2006:169).
Within the labour movement a variety of perspectives could also be found. While many union
leaders talked of the need for workers’ control, there is little doubt that the government’s
promotion of cooperatives, and the many financial incentives offered by the state for such
enterprises, were attractive to many workers. Also important was the fact that the organized
labour movement outside of the state sector remained small and largely unorganised. The
prevalence of strong economistic tendencies within the working class that, compared to those
in the informal sector, was relatively privileged was another factor to be taken into
consideration. Finally, the lack of a strong, united national union federation that could
27
accompany and unify these struggles was a key factor in the reversal of fortunes in a number
of cogestión experiments (Navas & Osorio 2007:8; Gómez, Tábata & Gámez 2005:17). This
situation further deteriorated when the UNETE suffered a debilitating split in 2006 (Pollack
2006).
The overall weakness of the workers’ movement was revealed in its response to Chávez’s call
to take over some 1000 abandoned factories (Aló Presidente 2005a:36). Despite the UNETE’s
announcement that it had plans to occupy 800 factories over the next two years, the number of
recuperated factories never exceeded 40 (Azzellini 2009:11).
These factors, combined with the government’s necessity to prioritise immediate needs such
as reactivating the economy and creating jobs, meant that the model(s) of cogestión that came
to predominate were exactly those that seemed furthest away from its original conception. It
was not just in government discourse but in realities on the ground that the place initially
reserved for worker participation was overtaken by worker ownership and profit sharing. It
was also in this confused and highly dynamic context that Chávez began to rethink cogestión
as part of a much broader concept of socialism focused as much on distribution and
consumption as on production.
28
Cogestión and social ownership
Cogestión, as originally conceived, had as its primary focus the creation of a mechanism for
co-governance between the state, workers and communities in the economic sphere. This was
seen as essential to ensuring integral human development. The question of property rights,
while present, was generally a secondary aspect. While the issue of workers owning company
shares was present in similarly named experiences internationally, such considerations did not
weigh heavily in the initial debates in Venezuela.
The focus on co-governance and worker participation was also evident at the 2005 May Day
march. In his May Day speech, Chávez’s emphasis was clear: cogestión was not about
replacing one owner with “300 proprietors who believe they are now the owners of the
company… that would be perverse, we would be multiply the beast that is capitalism, that is
egoism, that is individualism, to another level” (Despacho del Presidente 2005a:321). Instead,
cogestión was about transforming relations of production via the incorporation of workers
into the administration of enterprises.
The prominence given to participation was equally visible in the UNETE’s draft law on
cogestión presented to Chávez at the march. Within the Ley de Participación de Trabajadores
y Trabajadoras en la Gestión de Empresas Publicas y Privadas (Law of Worker Participation
in the Management of Public and Private Companies), the question of workers owning
companies did not appear. Instead, the law focused on promoting worker participation in
public and private companies. This was to be accomplished via the “democratisation of
decision-making, participation in management at all hierarchical and organisational levels”
and providing workers with “access to all operational, legal and financial documentation”
(UNETE 2005).
Yet, as the government moved to experiment with cogestión on a wider scale in 2005, the
issue of ownership gained greater prominence, both in government discourse and in its
concrete implementation. This was so much the case that, when a Cuban advisor was invited
to Venezuela in 2005 as part of the discussion on cogestión, he concluded that “the central
problem in the debate has been the issue of property” (Borrego 2006:75).
29
How did a seemingly secondary issue – that of workers owning shares –come to be
“superimposed” on the original conception of cogestión and dominate the debate over its
implementation? (Cibank 2005) The seed of this confusion can be found in the government’s
original vision of its new economic model.
Building the social economy
Present in both the new constitution and the first national development plan was the idea of an
economic system based on three interrelated sectors: the public, private and social economy.
While the first two were viewed as part of the traditional economy, the social sector was
described as “one of the most novel aspects” of the new constitution (MPD 2001:13). Its role
was to incorporate unemployed and informal sector workers into the formal economy via the
promotion of collectively owned enterprises, cooperatives and small and medium sized
companies (MPD 2001:27).
Given these documents were produced half a decade before Chávez proclaimed the socialist
character of the Bolivarian revolution, it is perhaps not surprising that this sector was viewed
as “alternative and complementary” to the private and public sector, nor that its goal was the
“democratisation of the market and capital” (MPD 2001: 13, 27). At the time, moderate, pro-
capitalist elements had a strong influence over the government and the original constituent
assembly, a problem Chávez later acknowledged when proposing a number of radical changes
to the constitution (Chávez Frías 2007a:63)
As noted in Chapter 1, neither the constitution nor the national development plan established
a direct relationship between cogestión and the social economy with its emphasis on
collective ownership. Despite elements of both featuring in early cogestión experiments, a
distinction between the two concepts remained. Moreover, the first major experiments in
cogestión occurred, not in the social sector, but in state-owned companies: PDVSA and
CADAFE. Workers in these companies saw no contradiction between, on the one hand,
introducing cogestión and on the other, promoting the social economy.
Two months after Chávez appointed two unionists to the company board at PDVSA, workers
there presented management with a proposal to “create and control the conditions which
would allow for the protagonist-based (protagónica) participation of workers, communities
30
and the National Armed Forces in the process of the construction and consolidation of the
New PDVSA” (Comité Guía 2003). Their proposal also spoke of promoting and
strengthening small and medium-sized companies involved in activities with PDVSA. In
CADAFE, the new board of directors began approving resolutions to stimulate cooperatives
in service areas while simultaneously encouraging the establishment of comités de gestión
throughout the company’s internal structures to facilitate worker participation (Comité de
Refundación 2005:25-6). The question of workers owning PDVSA or CADAFE never
emerged as a serious proposal as workers viewed cogestión as a means by which to expand
workplace democracy. Nevertheless, a cogestión model involving cooperatives and collective
ownership increasingly came to be applied in the majority of cogestión experiments initiated
in 2005.
The main contributing factor to this was the change in the government’s orientation towards
the social economy. As the process began to radicalise in 2003, Chávez’s increasingly anti-
capitalist discourse was paralleled by a shift towards viewing the social economy less as a
complement and more as an alternative to the logic of capital (Lebowitz 2006:100).
Entrusted with the task of promoting the social economy, the newly established MINEP came
to oversee not just collectively-owned enterprises and cooperatives, but also most of the
recuperated factories. Although the decree to create MINEP differentiated between cogestión
within the state economy and collective ownership in the social economy, MINEP began to
fuse the two concepts (Gaceta Oficial 2004:17). This was particularly influenced by the fact
that within MINEP, cogestión was seen as a stepping stone towards the greater goal of
autogestión (self-management), where workers owned their own means of production
(MINEP 2005:17). The impact of this shift was clear in the cases of INVEPAL and
INVEVAL.
The recuperated factories model
This did not mean that the issue of worker participation disappeared. In fact, in the case of
INVEPAL, Chávez stressed the importance of “transferring power to the workers so that they
can transform reality” (Aló Presidente 2005:11). During the same Aló Presidente, Minister
Iglesias defined cogestión as “shared management of power” and as “taking into the
31
economic sphere that [theme] which runs right through our constitution from start to finish,
which is co-responsibility” (Aló Presidente 2005:17).
Ratifying the leading role he wanted workers to play within cogestión, Chávez proposed that
workers at INVEVAL and INVEPAL should elect their company presidents (Campos 2006;
Lugo, Vessuri & Canino 2008:16). This was despite MINEP being legally entitled to name
company presidents. This move also ensured that the worker-cooperatives held a majority on
the company boards.
Nevertheless, the shifting emphasis towards workers owning shares was clear. In both
INVEPAL and INVEVAL, the government took the initiative to hand over 49% of company
shares to the worker-cooperatives (Mendoza 2006). Workers were also promised 99%
ownership of the company further down the track if they demonstrated their capacity to fully
manage the enterprises (Azzellini 2009:18). The worker-cooperatives were also entitled to
share company profits among themselves, something Chávez described as an important
difference between capitalism and the new social economy his government was promoting
(Aló Presidente 2005:18).
The decision to place both companies under the auspices of MINEP was another indication
that Chávez saw these companies as part of the social economy. This was particularly true for
INVEVAL which seemed to be an obvious candidate for being placed under the auspices of
MENPET, given its long-standing relationship with PDVSA, (CNV was owned by a former
PDVSA president and exclusively sold its valves to the state oil company) (Janicke 2007).
Hotel Kamarata was another enterprise that was handed over to its workers, this time under
autogestión with the worker-cooperative given 100% ownership (MINCI 2005:4). In the case
of the textile company Hilanderías Tinaquillo (Tinaquillo Spinners), converted into Industria
Venezolana Endógena Textil (INVETEX, Venezuelan Endogenous Textile Industry), the state
took control of 51% ownership of the company, while the original owners held the rest of the
shares (Tejero Puntes 2006). The idea was that the workers would gradually obtain the state’s
shares (Cormenzana 2005).
With the launch of Fabrica Adentro in August 2005, cogestión’s association with collective
ownership deepened. Granting worker-cooperatives shares became a requirement for
32
receiving government loans. In order to encourage owners to give workers a greater stake in
the company, the interest rate on the loans decreased as more shares were given to workers.
Although many came to question the limited nature of worker participation within these
companies, the program seemed to have contributed to the reactivation of the economy and
job creation. By the end of 2006, 847 companies had already had their projects approved
(Azzellini 2009:23).
The emphasis on the issue of ownership and profit sharing also became more prominent in
Chávez’s discourse. When launching the Fabrica Adentro program, Chávez suggested that
the more shares worker-cooperatives owned, the more such a company could be said to be
“leaving capitalism” (MINCI 2005:36). Three months later, Chávez argued “capital is not bad
in and of itself. What is bad is capitalism, which is the degeneration of the use of capital,
when capital is concentrated in few hands and is utilised to exploit the rest” (Aló Presidente
2005b:23).
To be fair, this did not represent a fundamental shift in the government’s overall economic
policies. The idea of an economic system based on a public, private and social sector was
always present, as was the promotion of collective ownership and “democratisation of
capital” within the latter. One difference was the increased emphasis on the social economy as
an alternative to capitalism; another was that cogestión came to be seen as predominately
applicable to this sector comprised of collectively-owned enterprises.
The problems with collective ownership however, soon began to manifest themselves in
INVEPAL, where the cooperative model was forcing workers “to operate in the market and
become ‘owners’” (Mather 2006). Shortly after the cogestión experiment began, company
executives decided to hire a former VENEPAL board member as “General Manager”
(Trabajadores despedidos de INVEPAL 2006). Entrusted with the daily running of the
enterprise, the manager proceeded to convince company executives that rather than expanding
the cooperative, a more economically sound decision would be to hire lower paid seasonal
labourers for less than six months. This would not only increase profits, but also allow the
company to avoid having to incorporate seasonal workers into the cooperative. Under
Venezuelan law, cooperatives could not hire workers for more than six months without
incorporating them as members (Gaceta Oficial 2001:5). The result was that just before their
six months was up, some 120 workers were fired.
33
For this reason, Venezuelan trade unionists taking part in an international solidarity gathering
held in April 2005 came to reject the idea of workers owning shares in companies.
“Experience up until now teach us that it is only possible to develop the knowledge of the
running of companies by workers when these belong to the state” read the final declaration
approved at the meeting (cited in Lebowitz 2006:105). “The workers rejected any idea of
turning workers of the co-managed or managed factories into small proprietors”.
Workers from INVEVAL, INVEPAL and other recuperated factories also began to draw
similar conclusions, and in February 2006 took the initiative to form FRETECO, with the
principal objective of promoting “the expropriation and nationalisation of Venezuelan
industry and its placement under workers’ control” (FRETECO 2006:23). In practice, this
meant companies being 100% stated owned, complete workers’ control in the running of the
company and production to “satisfy the needs of society” (FRETECO 2007:12-16). The latter
was to be accomplished by ensuring that companies were “participating as one more link in
the planned economy and complying with the goals that society itself has imposed through
such planning.”
By early 2007, Chávez was also convinced that collective property was not the answer. While
it could be accommodated within twenty-first century socialism, in essence it remained
private property. The proof of this for Chávez was INVEPAL:
What happened there? Well, we established a property regime where some shares were owned by the state, others by the workers. What began to happen there? We ended up [with a situation involving], if we don’t correct this in time, the capitalist state allied with capitalist workers, a capitalist cooperative and the medicine ends up being worse than the illness… (Aló Presidente 2007a:70).
Instead, Chávez began to forcefully insist on the need to promote forms of social property.
This change in position soon became evident in the cases of INVEVAL, INVEPAL and Pío
Tamayo, all of which came to be placed under 100% state-ownership. The same occurred
with companies nationalised after 2006. The Fabrica Adentro program, which focused on
workers owning shares, was “dragging workers towards an entrepreneurial logic without
giving them real participation in decision-making,” and was soon replaced with Plan Fabrica
Socialista (Socialist Factory Plan) (Azzellini 2010:142). Launched in June 2007, the objective
34
of the plan was to create 200 state-owned socialist companies to produce a variety of essential
goods.
The concrete realities of attempting to implement cogestión had contributed to a rethink by
Chávez of some of his ideas on building socialism. In place of collective property, Chávez
proposed that property should remain in the hands of the state and communities. Rather than
promoting a social economy parallel to the state and private economy, Chávez proposed to
reform the constitution so that the state’s focus was on building a “socialist economy” within
which social property was hegemonic (Chávez Frías 2007a:192-3). The focus though on
human development remained, with the goal of the new socialist economy being to guarantee
“the satisfaction of social and material needs of the people, the greatest sum of social and
political stability and the greatest sum of happiness possible”.
35
Cogestión and social production
Cogestión had initially been premised on the idea that participation in the workplace was an
essential ingredient for ensuring human development. However, serious problems began to
emerge in some of the companies under cogestión. These problems contributed to a shift in
the government’s position towards cogestión. Reflecting on the turmoil in INVEPAL, Jaua
explained that the problem there had been the result of “an incorrect selection of people” and
the “absence of political consciousness” among workers (cited in Moreno 2006).
However, some in the labour movement were drawing a different conclusion. The problem
was that participation had come to be mistakenly equated with the idea of democratising
capital while drifting away from its focus on human development. As an alternative, workers
within FRETECO were proposing nationalisation under workers’ control. Others pointed to
the example of ALCASA, arguably the most advanced experiment in cogestión.
The initiative to introduce cogestión in ALCASA once again came from Chávez. At the end
of 2004, he called upon CVG executive members to come up with proposals for developing
cogestión in the basic industry complex. To facilitate its implementation, Chávez created
MIBAM in January 2005 and appointed the Cuban trained economist Víctor Álvarez to head
up the new ministry. Álvarez in turn named Carlos Lanz, an ex-guerrilla and long-time
supporter of workers’ control, to the presidency of ALCASA, entrusting him with the task of
promoting cogestión there. The significance of this experiment can be understood when we
consider that aluminium is Venezuela’s second most important basic industry, and that
ALCASA was the nation’s second largest aluminium smelter (Bruce 2008:104). Moreover,
the success or failure of cogestión there would determine whether cogestión would be
extended to the rest of the CVG complex.
In ALCASA, the focus of cogestión was clearly on worker participation and direct workplace
democracy. “Co-management here” explained ALCASA worker Alcides Rivero “has a lot to
do with workers’ control, because it’s really the workers who are taking the decisions” (Bruce
2008:106). Lanz agreed, arguing that “cogestión revolucionaria” was different to the
traditional model of cogestión, with its focus on share ownership and worker representatives
on company boards; it was “a proposal for transition toward towards socialism, towards
36
another system of production” (Bruce 2008:106). In ALCASA, “workers are to assume
control of the plant in an integral manner. From the budget and administration, the technical
and productive problems to the labour organisation at the ground level” (Peña Rojas 2006:22)
To achieve this task, Lanz pinpointed six key elements as fundamental to the success of
cogestión: the election of all managers, regular report backs by all elected officials,
revocability of delegates and managers, rotation of posts, freedom of debate and discussion,
democratisation of knowledge and participation in the drafting of the company budget (Lanz
Rodríguez 2005). Taken as a whole, cogestión was not just about participation; it was about
fundamental change in the workplace and in the consciousness of the workers. For this
reason, Lanz saw cogestión “as a complex process, more political, ideological and cultural in
its nature and less technical and administrative” (Peña Rojas 2006:22).
As Bruce notes in his case study of ALCASA, changing the relations of production required
more than state ownership and centralised planning. In ALCASA, cogestión aimed “to restore
a third, vital component to its proper place in a socialist transition. This was the indispensable
question of overturning any monopoly of knowledge and giving all people, in this case all
members of the workforce, the power to discuss and decide” (Bruce 2008:110).
The ALCASA model
In January 2005, company managers, labour directors and trade union representatives at
ALCASA signed a commitment to implement cogestión: the Declaración de Macagua
(Macagua Declaration), which represented (Lanz Rodríguez 2009:27). The aim was to
introduce “worker participation in the management and administration of the company, in co-
responsibility with the state” (Lanz Rodríguez 2009:28).
An emphasis was also placed on the democratización del saber (democratisation of
knowledge) where “socialisation of the diverse technical-productive components of the
company would allow workers to make conscious decisions, participating in an integral
manner in the elaboration of proposals for restructuring production” (Lanz 2009:28). To assist
this educative process, the Centro de Formación Sociopolítica Negro Primero (“Negro
Primero” Socio-Political Education Centre) was established in July 2005 (Gerencia de
Asuntos Públicos 2005f).
37
The process of cogestión was developed in two phases. The first involved the election of
managers and establishment of mesas de trabajo (work committees) in each department of the
factory; the second developed a participatory budget within ALCASA.
Throughout March and April of 2005, the first phase was kicked off with workers voting to
elect managers in each department. In place of the traditional set-up where one person filled a
management post, three workers were elected in each department in order to make it more
difficult for corruption to arise (Gerencia de Asuntos Públicos 2005; Gerencia de Asuntos
Públicos 2005a). Parallel to this process of democratising management structures, efforts
towards creating organs of worker decision-making were also undertaken. A bottom-up
system for decision-making was established involving teams of five to ten workers electing
voceros (spokespeople) in each area of the company. These voceros came together to form
departmental-wide mesas de trabajo. In all, 231 voceros were elected to 19 separate mesas de
trabajo in ALCASA (Bruce 2008:112). Sitting alongside the voceros were the three elected
“worker-managers.” Their role was to implement the decisions made at the weekly meetings
of the mesas de trabajo (Bruce 2008:113).
The mesas de trabajo became a space where voceros would pass on workers’ concerns, and
where attempts were made to resolve problems by consensus (although when this was not
possible, a simply majority vote was taken). When no agreement could be reached, the issue
was referred back to an assembly of all the workers in the department. If an issue affected the
entire company, an assembly of the entire workforce had the final say.
While decisions pertaining to the internal structure of ALCASA fitted more neatly within the
traditional concept of workers’ control, the “co” element was present as the state, via
MIBAM, played a role in setting “the essential parameters within which ALCASA had to
work – financial, industrial, commercial and political” (Bruce 2008:113). According to then
secretary of the Sindicato de Trabajadores de CVG ALCASA (SINTRALCASA, CVG
ALCASA Workers’ Union), Trino Silva, workers also proposed that local community
representatives sit on the company board (Harnecker 2005a). In November 2005, two
members of nearby communities were elected as company executives (Azzellini 2011:390).
38
This internal restructuring shared many similarities, at least on paper, with what workers in
PDVSA and CADAFE were proposing (See Comité Guía 2003; Comité de Refundación
2005:17). However, unlike ALCASA, the election of managers was not seen as a priority in
either. Workers in CADAFE instead emphasised the need for appointed managers to be
accountable to the deliberations of the comités de gestión (Fuentes 2009:71). In fact, workers
within CADAFE elected only one manager. This exception occurred in one of CADAFE’s
regional affiliates, the Compañía Anónima de Electricidad de los Andes (CADELA, Los
Andes Electricity C.A). There, in 2004, the president of CADELA granted workers in the
state of Merida the opportunity to elect their own statewide manager from a workers’
assembly (Harnecker 2005:20).
Another difference between ALCASA and CADAFE was that workers in the latter played no
role in the budgetary process. The idea behind the participatory budget was that by
participating in the elaboration of an overall diagnosis of the company, workers would begin
to look beyond their immediate surroundings and help develop a company-wide plan for
recuperating ALCASA (Gerencia de Asuntos Públicos 2005c). Moreover, as Marivit Lopez
explained, this was also the difference between limiting participating to the productive
process and expanding it to the overall direction of the company (Bruce 2008:123).
The first preliminary steps involved meetings between company managers and voceros to
discuss ways in which costs could be immediately reduced, with all decisions being
distributed among workers (Gerencia de Asuntos Públicos 2005d; Gerencia de Asuntos
Públicos 2005e; Gerencia de Asuntos Públicos 2005g). Meanwhile, the mesas de trabajo set
about studying and discussing the budget for 2006. During this process, workers were for the
first time given access to the company’s accounting books, thus ensuring that “no more
commercial, administrative or technological secrets” remained, as Rivero put it (Bruce
2008:115).
By the end of the year, the company board could point to a number of important advances in
ALCASA. These included the payment of debts owed to workers, the election of new
managers and voceros, a successful campaign to reduce costs and increase production, plans
for a participatory budget, the creation of a worker’s education centre, introduction of new
technology, and an internal restructuring of the plant (CVG Alcasa 2005). Furthermore, in
April 2006, the third phase of the cogestión process began, with Lanz inviting workers to
39
debate the option of a workers’ council replacing the company board as the supreme organ for
running the company (a feature later incorporated into the collective contract for 2006-2008)
(Gerencia de Asuntos Públicos 2006a; Gerencia de Asuntos Públicos 2006d). The issue of
reducing the workday (with no loss in pay), as a means for allowing workers “free time for
rest, recreation, study and to share with their family,” was also raised (Gerencia de Asuntos
Públicos 2006b).
Barriers to participation
Nevertheless, the process of introducing cogestión in a variety of companies exposed a
number of important barriers that would need to be overcome for workplace democracy to
really take hold. One of these was the presence of company managers who feared losing the
power they currently held. This was particularly true in CADAFE where many key positions
continued to be held by managers appointed prior to Chávez’s election or aligned with
moderate chavista forces who “assumed an unfriendly attitude towards Chavista employees”
(Ellner 2006:120). In late 2004, FETRAELEC began publicly denouncing these sectors for
waging a systematic campaign against cogestión. The campaign involved the firing of
managers and workers who supported cogestión and the promotion of parallel unions so as to
undermine the position of the pro-cogestión FETRAELEC leadership (Harnecker 2005:16;
Navas & Osorio 2007:6). Within PDVSA, the comités guías also denounced the presence of a
similar campaign being waged by the new “techno-bureaucracy” that had entrenched itself
within management (Comités Guía de la industria petrolera 2004). In both CADAFE and
PDVSA, management counted on the support of MENPET, given the hostility that Minister
Ramirez held towards cogestión.
A further barrier was the old vertical-based structure of these companies, which remained
intact within existing laws and company statutes. Designed during the neoliberal era, this
legal framework radically inhibited worker participation and, in some cases, opened the door
to privatisation (FETRAELEC 2005b:6-7). For this reason, FETRAELEC proposed an
overhaul of the laws and regulations governing the electrical sector and the approval of a new
law on cogestión that could give this concept some kind of legal framework (FETRAELEC
2005:5-7).
40
Even in places where workers had elected managers, barriers persisted. Venezuela’s basic
industry sector had for a long time been home to a network of powerful clientalist networks,
comprised of foreign capital, local managers, trade unions and government officials
(Blankenburg 2008:20). It therefore came as little surprise that moves to open company books
were vehemently resisted. When the cogestión process in ALCASA threatened to put a halt to
some of these shady business dealings, the multinationals struck back. Following a decision
by workers to annul an unfavourable memorandum of understanding that the previous
management had signed with Glencore, the multinational company responded with a
campaign of boycott and sabotage. (Rodríguez 2005; Lanz Rodríguez 2009:37, 62). Trade
union leaders who saw cogestión as a threat to both the union’s power, and their personal
privileges, also opposed the process (Bruce 2008:125)
Resistance to cogestión did not only come from those that saw it as a threat to their profits or
power, but also from workers themselves. One year into the experiment, Lanz believed that
workers still remained divided on the issue; with a majority supporting cogestión, but mainly
“with the hope of getting some material benefit out of it” (Peña Rojas 2006:22).
The facts on the ground seemed to back up Lanz’s assessment. By early 2006, the mesas de
trabajo were meeting much less frequently, and in some departments had stopped meeting all
together (Peña Rojas 2006:26). Union elections in January 2006 ended with strong results for
the two main tickets which campaigned almost exclusively on the issues of wages and
conditions; supporters of cogestión failed to win more than 6% of the vote (Peña Rojas
2006:22, 30). In June 2006, workers at ALCASA voted to return to a system of single
managerial posts, and subsequently elected many of the same managers that had been
removed in the previous elections (Gerencia de Asuntos Públicos 2006c; Bruce 2008:126).
When Lanz left the company in May 2007, the cogestión process “suffered a severe setback”
with a majority of alcasianos “no longer advocat[ing] cogestión or workers councils”
(Azzellini 2011:391).
A similar resistance was also present among workers in CADAFE, according to union leaders
(Fuentes 2009:65). Concerns were raised that some workers had begun to view cogestión as a
vehicle for pursuing their own personal interests rather than for advancing worker
participation (Fuentes 2009:66, 71). The worst examples of this occurred in PDVSA, leading
to a situation which one UNETE leader from the oil sector described as a “disaster” for
41
cogestión (Riera 2008:53). There, union leaders had reverted to the “deeply rooted practice”
of political clientalism, using their positions of power to sell lucrative jobs in one of the
highest paying industries in the country (Ellner 2006:120). Undoubtedly this proved to be a
key factor in Chávez’s subsequent decision to declare “strategic sectors”, such as PDVSA, off
bounds for cogestión (Aló Presidente 2006)
For Edgar Caldera, a labour director at ALCASA, the explanation for all this was that the
mentality of clientalism and corruption remained strong even within the minds of the workers
(Bruce 2008:125). Former managers had taken advantage of this to subvert the democratic
process for their own ends. For this reason, some workers tended to agree with Jaua’s
assessment that the central problem was the lack of political consciousness among workers.
Arguing that a majority of alcasianos had been won over to supporting cogestión through
their participation in education courses, one worker stated “we still have to give courses to
more than 1000 workers… so that everyone will understand what co-management is and what
we want to accomplish with co-management” (Peña Rojas 2006:33). Providing workers with
the necessary information and tools with which to fully participate is undeniably a critical
ingredient to the success of any cogestión project. For this reason, the idea raised in ALCASA
(and later by Chávez), of reducing the workday in order to allow workers time for study was
crucial.
Yet in many ways this argument neatly dovetailed with those put forward by opponents of
cogestión. Oil minister Rafael Ramirez also concluded that the Venezuelan working class was
not ready for cogestión, given its tendency to behave “in a profoundly conservative manner
because it benefits from a set of privileges and fights to maintain them” (Cabieses Donoso
2008). For this reason, Borrego, like Ramirez, argued that in place of worker participation,
what was needed was a state that could “exercises its functions responding to the interests of
society as owner of all the means at its disposal and in search of greater efficiency, quality and
efficacy of social production” (Borrego 2006:78, emphasis in original).
Producing ‘new human beings’
Chávez was clearly concerned by the hold that these deeply entrenched vices had over the
workers movement. In his Aló Presidente of January 21, 2007, he criticised the economistic
outlook of the union movement, and railed against those “workers who work in a state
42
company and believe that it belongs to them” (Aló Presidente 2007:57). Complaining that
some workers only wanted to enrich themselves further so that they could live like the “rich
class”, Chávez said these attitudes were far removed from those of the “new human being”
that he believed were essential for creating socialism.
Earlier in the show, he had referred to this idea of the “new human being”. Quoting a passage
from a pamphlet by Lebowitz4, Chávez said: “No one articulated better in the twentieth
century the importance of developing new, socialist human beings that Che Guevara” (Aló
Presidente 2007:23). According to Chávez, Che had emphasised the need to simultaneously
develop the material base of socialism together with creating the “new man, the new woman.”
The way to do this, said Chávez (again reading out a passage from Lebowitz) was through
“the simultaneous changing of circumstances... and self-change (what Marx called
‘revolutionary practice’) [this] is how we build the new society and new human beings” (Aló
Presidente 2007:24).
Others drew the same conclusion. Asked about the problem of flagging participation at
ALCASA, one worker explained that this was due to voceros failing to properly inform
workers of what was occurring. This had led to increased “apathy in [sic] part of the
Spokemen and the people that are involved in the process of co-management” (Peña Rojas
2006:31-2). While understanding that “co-management is a long term process”, one in which
it was essential “to change the mentality of many workers,” cogestión could only advance
through the involvement of “workers directly with [sic] the process of co-management.”
The evidence seemed to support this notion. In CADELA, where cogestión was strongly
supported and promoted by both the elected manager and the local union, 80 to 90% of
workers were participating in the comités de gestión (Harnecker 2005:20). Through this
process, many of those who had initially opposed cogestión began demanding its expansion
into other areas as they started to see the positive outcomes of worker participation both for
themselves and the company (Fuentes 2009:65-6). High levels of participation were
accompanied by improvements in the company’s financial standing and a reduction in labour
conflicts and work injuries, among other gains (Harnecker 2005:28-30).
4 See Lebowitz 2006
43
Events in INVEPAL and Pío Tamayo revealed the negative side of reducing worker
participation. While it was true that workers had initially selected “incorrect people” to
represent them on the company board, they had not been alone in making this mistake. At the
state-owned Central Azucarera Ezequiel Zamora (Ezequiel Zamora Sugar Mill), where
managers had been appointed by the state, corruption scandals had engulfed the enterprise
(Últimas Noticias 2006). The difference in the case of INVEPAL was that the existence of
cogestión meant workers could recall their representatives, which they did in November 2005
(Rodríguez 2006).
Fearful of the “chaos” that had come with the decision to open up spaces for participation,
and conscious of the need to avoid a situation were INVEPAL went bust, MINEP gradually
reduced the power of the cooperative, beginning with the state reasserting its right to appoint
the company president (Vive Tv 2006). Yet reducing participation did not seemed to provide
a solution to the problem of corruption. Following the subsequent discovery of US$800,000
worth of unaccounted costs within INVEPAL’s budget, an official government report alleged
that no corruption had occurred. Instead, blame lay with “administrative disorder” caused as a
result of having handed over the company to the workers (Azzellini 2009:19). Workers
however, alleged corruption on the part of management (Ramírez &Trabajadores despedidos
de Invepal 2006).
In Pío Tamayo, where workers were protesting a lack of access to financial records and real
participation (leading to intense conflict between the union and the company’s worker-
president), the government also responded by appointing a new company president without
consulting workers (Lucena 2006:15; Aldana 2010). When the government moved to acquire
full ownership of the company, the main concern for workers and cane cutters was receiving
the payout for their shares as quickly as possible (Aldana 2010).
Here, the appointment of ‘efficient’ managers, while perhaps helping in some cases to
increase productivity, had not necessarily resolved the problems of corruption and backward
consciousness among workers. Where workers were denied the right to manage companies
and develop their capacities, others had used this ‘right’ to maintain their own privileges. This
had helped reinforce divisions between managers and workers, and with it the economistic
tendencies present within the workers movement. Only through the process of participating in
workplace decision-making, could workers both change their surroundings and develop their
44
own capacities. Cogestión did not require the selection of ‘ideal people’; rather the very
process of participation helped create ‘ideal people’.
Yet if democratic participation was necessary in production, it was also essential to ensure
that production was aimed at satisfying the needs of the communities. This issue of
consumption was perhaps foremost in Chávez’s concerns regarding the whole cogestión
project – a concern driven by the serious requirement to address the immediate needs of the
poor majority that made up the bulk of his support base. Mészáros idea of a system of
communal production and consumption had captured Chávez’s attention, so much so that he
progressively came to displace cogestión with the idea of the EPS. This proposal was an
attempt to deal with the third side of Chávez’s “socialist triangle”, the satisfaction of social
needs, which is the focus of the next chapter.
45
Cogestión and social needs
Increasingly concerned by the prevailing economistic tendencies within the organised
working class, Chávez began to shift his focus to the question of how to encourage workers to
consider the needs of those excluded from the formal economy and who populated the
impoverished communities surrounding their enterprises. The solution to this dilemma,
Chávez argued in his July 17 Aló Presidente program, was to be found in Mészáros’ idea of a
“communal system of production and consumption” (Aló Presidente 2005b:23) .
In Beyond Capital, Mészáros had argued that the construction of socialism was predicated on
“instituting a radically new type of exchange relations (Mészáros 1995:758). Whereas
capitalism was based on the exchange of commodities, socialism required re-establishing
exchange relations on the basis of activities, determined by communal needs and communal
purposes” (Karl Marx cited in Mészáros 1995:750, emphasis in original).
With this is mind, Chávez launched the idea of Social Production Enterprises (EPSs). From
the outset, two ideas shaped Chávez’s vision of what an EPS should look like. Firstly, that
production had to be geared towards social needs not profit; and secondly, that profits
generated by EPSs had to directly contribute to the wellbeing of surrounding communities.
During his November 27, 2005 Aló Presidente program, Chávez read out a definition of EPS.
This definition, he noted, was the result of “an intense debate during the preceding months”
among his cabinet members. Stressing that this was to be taken as a guide and not a dogma,
he said that EPSs:
… are those economic entities dedicated to the production of goods or services, in which labour has its own significance, is non-alienated, authentic; in which there exist no social discrimination in labour or of any type of labour, no privileges exist in labour associated with a hierarchical position. Those economic entities with substantive equality among their members, based on participatory and protagonist planning, and under a regime of state property, collective property or a combination of both (Aló Presidente 2005b:31).
Chávez added another important characteristic, stating that for any company to “be truly one
for social production”, it must distribute profits in a different manner. Chávez proposed that
46
EPSs should instead reinvest profits back into four funds: a self-sufficiency fund that could
ensure the economic viability of the enterprise, a labour fund to cover the needs of workers, a
fund for promoting social development programs, and a fund for the promotion of new EPSs
(Aló Presidente 2005b:34).
Various ministries were quick to take up Chávez’s call to build such enterprises, principally
MIBAM, MINEP, MILCO and MINEP (El Troudi & Monedero 2006:176). All of these
ministries were involved in some way with the different cogestión projects, and as with
cogestión, EPSs came to take on different characteristics depending on the ministry involved.
The EPS models
For MIBAM, the focus of an EPS was on creating a human-centred economy that could
satisfy both the material and spiritual needs of workers (MIBAM 2005). More specifically,
they were to be geared towards four essential sectors: food, clothing, housing and health.
Communities would collectively own companies with the aim of ensuring that these
enterprises responded to the needs of the community. A portion of the profits generated was
to go into a fund that would be utilised for the promotion of further such enterprises.
To kick-start the process of creating EPSs, MIBAM and CVG converted their Guayana
Regional Fund into a Social Production Fund. The regulations for accessing finances from the
fund were changed to enable the newly emerging EPSs to acquire loans, given that the old
rules only took into consideration traditional capitalist firms (MINCI 2006a:13). Further help
for nascent EPSs came in the form of providing secure markets for their products. This was
achieved by obliging state companies to contract EPSs for any goods or services required.
This was critical, said Minister Álvarez, given the unequal advantage held by “large
contractors that had already established themselves” (MINCI 2006a:14).
By the end of 2005, 260 EPSs had been formed in Guayana, producing uniforms, shoes,
wheelchairs, furniture and other goods and services. In many ways the charge was led by
ALCASA, with workers previously employed by private contractors being encouraged to
establish their own enterprises so that the company could directly contract them (Peña Rojas
2006:27). By 2006, a network of between 11 and 16 cooperatives had come to replace the
47
traditional private contractors responsible for supplying ALCASA’s 3,000 workers with
company uniforms (Bruce 2008:121).
Problems however soon emerged with the perseverance of the old “capitalist work culture”
leading to the reproduction of traditional worker-manager divisions within some EPSs (Peña
Rojas 2006:27). Another important obstacle was the attempts by company management and
union leaders to subvert agreements with the EPSs in order to pave the way for a return of the
old private contractors, and with them the kickbacks they previously received (Bruce
2008:120).
The focus on replacing previous private contractors with EPSs was also incorporated into
MENPET’s overall plans. A Register of Social Production Enterprises (REPS) was
established by PDVSA for this purpose (PDVSA 2006:4). In order to be registered,
companies had to designate a percentage of their profits towards a Social Fund and/or directly
provide goods or services to the community. The resources accrued in the Social Fund would
go towards communal council projects approved by the mobile cabinets established by the
government to sort through the countless applications for funding. Another requirement was
that these enterprises contribute to the creation of other EPSs. Mention was also made of the
need to incorporate cooperative labour and collective ownership as part of these enterprises,
with cooperatives “by their very nature” deemed to be EPSs (PDVSA 2006a:2). In November
2005, Minister Ramirez organised an exhibition of 160 EPSs that had dealings with PDVSA
in the areas of construction, maintenance, repairs, clothing and manufacturing, among others
(Aló Presidente 2005b:31).
What these changes meant in practice though are debatable, as many of the EPSs came to
resemble the same old firms that PDVSA traditionally dealt with, albeit that they now had to
contribute to a social fund via a tax on profits (Azzellini 2010:140). Ultimately, it was still
PDVSA management who determined what goods and services were to be produced, while
direct community or worker participation was largely absent from many of these projects.
Workers at INVEVAL argued that opposition to worker participation was the main reason
behind PDVSA’s continued refusal to commit to purchasing their valves (Janicke 2007).
Elsewhere, MILCO and MINEP were busy reconverting companies under cogestión into
EPSs. Having rebaptised those companies participating in Fabrica Adentro as EPSs, the focus
48
of the program, according to Minster Iglesias, was now not only on “democratising the
property of the company among its workers” but also ensuring companies “take up
commitments with the community that surrounds them” (Rangel 2006). A similar condition
was introduced by MINEP in the process of converting numerous cooperatives and recovered
factories into EPSs. Some noted that this conversion meant very little in practice beyond a
name change (Azzellini 2009:9, 18). For example, the original decree creating INVEVAL had
already included a requirement that the company reinvest no less than 20% of its profits into
local communities and promotion of the social economy (Gaceta Oficial 2005:10). This was
similarly the case with the Fabrica Adentro program (MINCI 2005:10). The biggest hurdle
though for some of the recuperated factories was not compliance with this obligation, but the
fact that they were hardly producing any profit at all. By the end of 2006, neither INVEVAL
nor INVETEX had restarted operations, and INVEPAL was just breaking even (Alfonso
2008; Tejero Puntes 2006).
Numerically at least, it seemed that EPSs had taken off everywhere except among the
recuperated factories that were still struggling to get up and running. In terms of reactivating
the country’s productive apparatus and job creation, the government could point to numerous
positive economic indicators, partially the result of this government policy: GDP growth was
10.3% in 2005 and again in 2006; the reactivation of already installed capacity, which was
running at 85.6% in the first quarter of 2005 but had risen to 92.1% by the last quarter of
2006; and a fall in unemployment of almost 4% during the same period (Álvarez 2009:248,
259; El Troudi 2010:58).
Beyond the magical state
Yet, as Álvarez notes, the reactivation experienced during this period in large part represented
a reactivation of the capitalist economy. To back up his claim, Álvarez points to figures from
the Banco Central de Venezuela (BCV, Central Bank of Venezuela) that showed the private
sector’s share of GDP had grown from 65.2% in 1998 to 70.4% in 2006, outpacing that of the
public sector whose share had fallen (Álvarez 2009:254-5). The much touted and promoted
social economy – the supposed embryo of the new socialist economic model – represented a
paltry 1.8% of GDP.
49
Even the positive examples of EPSs raised important questions about the overall project.
Many of these provided fertile training grounds for workers in collective organising and had
helped in raising consciousness about the necessity of producing for social needs. Yet, there
seemed to be serious doubts as to their capacity to provide the foundation of a new socialist
economy. Their success had been largely due to their ability to secure contracts with state-
owned companies and/or their access to favourable government funds, the latter readily
available due to booming oil prices. Under different circumstances, the survival of such
enterprises would certainly have been in doubt.
Overall, the tendency seemed to point towards a greater dependency on the state, rather than
towards a greater level of societal self-organisation within the social economy. With record
high oil prices, Venezuela’s state seemed more than ever to be “an incarnation of charismatic
powers that appear to be providential” (Coronil 2008a:19-20).
Conscious of this, Chávez confronted it in his November 17, 2005 Aló Presidente program
dedicated to EPSs. Referring to a request made by cooperative members from the Núcleo
Endógeno Fabricio Ojeda (Fabrica Ojeda Endogenous Unit) for more machinery, Chávez
retorted:
Be careful, be careful, you have badly accustomed yourselves to [the idea that] we have to give you everything. Because when I hear you, I am left worrying inside, as if we have to do everything… You should not get use to [the idea] that we have to give you everything, because there may come a day when we don’t have anymore to give (Aló Presidente 2005b:19).
He also complained of a similar state of affairs within CADAFE, calling on the company to
stop asking the state for help and to instead force big companies and state institutions to pay
their bills or otherwise have their electricity cut off.
In recognition of these challenges, Borrego argued social ownership of the means of
production was the only way of ensuring that the results of labour were of “entirely social
benefit” (Borrego 2006:78). This view was shared by Minister Ramirez, who argued that
placing control of the country’s oil wealth in the hands of “the Venezuelan state, as the
collective representative of our country, as the representative of the collective interest” was
the key to building socialism (Ramirez 2005:9-10). In the absence of a revolutionary
proletariat, only the state could ensure that this oil wealth was directed to meeting peoples’
50
social needs as well as creating the necessary economic foundation upon which to build
socialism (Cabieses Donoso 2008).
As demonstrated above, Chávez became convinced of the need for social property. However,
Chávez came to see this as only one side of his socialist triangle. Equally important was
worker participation in production and community participation in distribution. In the absence
of the latter, the only alternatives were the market or state-imposed planning. Neither however
provided a path towards integral human development, as they were premised on a system of
consumption driven by either individual or state-imposed needs.
Analysing the rise of the EPSs, Lebowitz identified two types of EPSs: those which
predominately had relations with state companies and those that were linked to communities
(Lebowitz 2006:111). In the case of the former, worker participation in decision-making had
to be promoted across workplaces, thereby allowing workers in state firms and EPSs to base
their activities upon relations of solidarity and cooperation, rather than operating as
independent entities involved in the exchange of commodities. For those EPS based in the
community, “the direct articulation of community needs and productive activities” was only
possible to the extent that the communities themselves identified their own needs and
priorities. The emergence of communal councils5, argues Lebowitz, provided communities
with an instrument to begin to take on this task (Lebowitz 2006:112).
“In both cases, the premise is democratic decision making: the development of relations in
which the collective producer is both ‘the object and the subject of power’” explained
Lebowitz, borrowing a phrase penned by Chávez in the early nineties during his time in jail
(Lebowitz 2006:111). In such a scenario, people would be the subjects of power within
companies and their communities, and exchange could occur not on based of exchanging
commodities, but rather worker and community needs.
The reality of the EPS experience however, seemed to point in the opposite direction. For this
reason, Social Production Enterprises came to be replaced with Social Property Enterprises,
and then Socialist Production Enterprises (Álvarez & Rodríguez 2008:56). By mid-2007, the
promotion of further EPSs was put on hold in anticipation of the ultimately unsuccessful
5 Communal councils are geographically-based units of community organising, involving 200-400 families in urban areas and 20-50 families in rural areas
51
changes proposed to the constitution. Subsequently, the term EPS came to be used to refer to
a variety of projects but “without the existence of any official defined criteria” to describe
exactly what was meant by EPS (Azzellini 2010:141).
Cogestión and the ‘socialist triangle’
In attempting to build twenty-first century socialism, the Venezuelan government had to
confront many of the same dilemmas that previous socialist experiments encountered in the
spheres of ownership, production and distribution. The contradictory nature of the
government’s implementation of cogestión was largely the product of attempting to deal with
these issues. Moreover, all of this occurred within a context where divergent views on
cogestión and socialism existed within the government. Through this process, the practice of
cogestión came to resemble something quite different from its initial conception in the
constitution. Another consequence was the emergence of Chávez’s “socialist triangle”, which
in many ways represented a return to some of the same ideas that had motivated the
promotion of cogestión in the first place.
In January 2007, Chávez spoke of his idea of the “socialist triangle” for the first time.
Speaking on Aló Presidente, he said it was paramount that any future cogestión experiments
be “based on the [socialist] triangle… social property, social production and satisfaction of
needs” (Aló Presidente 2007a:82). Chávez also went on to develop some general guidelines of
what each side of the triangle could look like.
Social ownership
During the same Aló Presidente, Chávez defined social property as state ownership over the
strategic means of production. At the same time, Chávez made it very clear that this was not
the same as state capitalism: the key difference was that he was referring to “the social State,
not the bourgeois state, not the capitalist state” (Aló Presidente 2007a:49). A state, as Chávez
would later explain, built upon communal and worker councils (Chávez Frías 2007:73).
In August that year, Chávez would further refine his ideas on social property as part of a
proposal for 33 constitutional reforms aimed at bringing the constitution into line with his
52
socialist project.6 Addressing the National Assembly, Chávez returned to his idea of the
“basic economic triangle: property, production and distribution” and suggested that Article
112 of the constitution be modified to focus on the state promotion of social property (Chávez
Frías 2007a: 94, 192-3). A definition of social property was laid out in Chávez’s proposed
modification to Article 115:
Social property is that which belongs to the people as a whole and to future generations, and can take two forms: indirect social property, when it is exercised by the state in the name of the community, and direct social property, when the state assigns it, under different forms and within demarcated territorial areas, to one or various communities, to one or various communes, thereby constituting itself as communal property, or to one or various cities, thereby constituting itself as citizen’s property… (Chávez Frías 2007a:197, underline in original).
Chávez referred to PDVSA as an example of indirect social property, whereby the company
was “managed by the state, but belongs to all citizens”, adding again that the state he was
referring to was “the state we are building, the socialist state” (Chávez Frías 2007a:99). In
explaining the concept of direct social property, Chávez used the example of a corn flour
processing plant, the ownership of which could be transferred from the state to an organised
community with the purpose of attending to peoples’ needs. This conception, he said, differed
from collective property (also included in Article 115), whereby a group of people or a
cooperative, privately owned an enterprise and shared profits among them. Collective
property is the “private property of a group” said Chávez, “it is not social property, let’s not
fool ourselves” (Chávez Frías 2007a:100-1).
Here it is worth examining of the some of the ideas of Mészáros and Lebowitz, both of whom,
as has been demonstrated in this thesis, came to influence Chávez’s thinking on socialism.
Arguing in favour of social property, Lebowitz says that social ownership of the means of
production is a prerequisite for ensuring that they are “used in the interests of society and not
for private gain” (Lebowitz 2010:40). While everything around us is the collective result of
the social labour of past and present generations, under capitalism, it is capital which accrues
the wealth generated by society due to its ownership of the means of production. Given the
6 Our focus is on Chávez’s initial proposed reforms as they were penned by him personally and so therefore best reflect his views on what he believed needed to be amended in the constitution. After Chávez’s initial proposal was submitted for discussion in the National Assembly, a further 36 proposed reforms were added and some of Chávez’s initial ones were slightly amended. Ultimately, the overall proposal was defeated in a referendum held in December 2007.
53
“irreconcilable structural antagonism between capital and labour”, the latter had to be
excluded from ownership of the means of production “on the grounds of which… the key
decisions are made and the manifold partial functions of the social body are combined into a
whole” (Mészáros 2001:71; Mészáros 1995:739). To redress this situation, the fruits of social
labour must be placed under social control, thereby ensuring that people can participate in the
key decisions affecting their lives and those of future generations. This is only possible when
the means of production are socially owned, a prerequisite for social productivity being
directed towards “the free development of all rather than used to satisfy the private goals of
capitalists, groups of individuals, or state bureaucrats” (Lebowitz 2009:27-8).
Unlike state ownership, where state officials direct production, social ownership requires the
involvement of “all those affected by decisions about the use of means of production…
deciding upon that use” (Lebowitz 2010:41, emphasis in original). In the case of Chávez’s
example of the corn flour processing plant, direct social property could involve the
participation not just of the workers within the plant, but also of those working in factories
dependent on the corn flour produced there as well as local corn farmers and families living in
the local rural community affected by the operations of the plant. In the case of indirect social
property, that is property in the hands of the state, Chávez made clear he was referring to a
socialist state resting on communal and worker councils as organs of popular power. Thus the
people, and not simply state-appointed officials, would decide how the nation’s oil wealth
would be used.
Chávez’s emphasis on the need for social ownership was in large part motivated by the
dangers he came to see as inherent within collectively owned companies. These dangers –
which in some cases became reality – included workers focusing on making more profit in
order to enrich themselves, the fostering of competition between workers in different factories
and the reproduction of the traditional division of labour within companies between those that
work (do) and those that manage (think). To this list, Lebowitz added a further dilemma: the
fact that “not everyone has equal access to those means of production owned in common”
(Lebowitz 2010:41). For example, someone living in Venezuela’s industrial heartland,
Guayana, would obviously have more access to the means of production than a peasant
farmer living in a rural town in the isolated southern state of Amazonas. Given this, how can
the wealth produced by social labour, both past and present, be equally distributed?
54
Social production
For Lebowitz, the answer to this question lies in Karl Marx’s idea that “real wealth is the
development of human capacity” (cited in Lebowitz 2010:42, italics in original). Production
must be understood not simply as producing goods and services to satisfy basic needs but also
as an integral part of creating “new human beings”. In the Venezuelan constitution, such
integral human development is to be achieved through “the participation of the people in
forming, carrying out and controlling the management of public affairs” including in the
workplace. This was the focus of the second side of Chávez’s socialist triangle: social
production.
The necessity for worker participation is explained by the fact that labour “has as its result a
joint product – both the change in the object of labor and the change in the labourer herself”
(Lebowitz 2010:52). In this context, wealth distribution should be understood as ensuring that
production meets both the material and spiritual needs of individuals and of society as a
whole (Mészáros 2008:218) The abolition of the “despotism of the workshop” is therefore a
necessary prerequisite to ensure that “the consciously self-controlled life-activity of the social
individuals could be integrated into a both productively viable and humanly fulfilling whole”
(Mészáros 1995:751). This would require a restructuring of the labour process, so that the
traditional division of labour between workers and managers could be replaced by a system in
which humans ceased “to play the role necessarily assigned to them by capital” (Mészáros
1995:765).
To deal with this question of social production, Chávez proposed reforming Article 70 of the
constitution to replace cogestión with the terms “workers council” and “democratic workers
management in any company of direct or indirect social property” (Chávez Frías 2007a:185).
While Chávez also proposed removing reference to cogestión in Article 184, Point 4, he
simultaneously proposed expanding workers’ participation beyond services managed by state
governments and municipal councils (as was currently the case), to those under the
jurisdiction of the national government (Chávez Frías 2007a:221).
Another related reform was the proposed change to Article 90, which would have reduced the
workday for eight to six hours. The purpose of this reduction was to allow workers to dedicate
part of their workday to learning how to manage companies and ensure they had “sufficient
55
time for their own integral personal development” (Chávez Frías 2007a:189). This was
essential given that under capitalism, capital’s control over production and distribution is
“protected by [its] expropriation of the knowledge required for the societal reproductive
functions” (Mészáros 1995:800).
Social needs
To fully address social needs, participation is not just necessary in production, but also in
distribution and consumption. Any socialism focused on human development requires that
people “both as producers and as members of society” determine how the results of social
labour are used (Lebowitz 2009:28, emphasis added). Therefore, just as the full participation
of workers is a necessary precondition for abolishing the “despotism of the workplace”, the
“tyranny of the market” and the “command economy” (imposed under twentieth century
socialism) also had to be replaced with communal consumption, or, what Chávez referred to
as the satisfaction of social needs – the third side of his “socialist triangle” (Mészáros
1995:742).
To achieve this, Mészáros proposed shifting from a system of production based on the
exchange of commodities towards one based on the exchange of activities “in which the
individuals engage, in accordance with their needs as active human beings” (Mészáros
1995:759-60). Recalling Marx’s famous quote “from each according to their ability to each
according to their needs”, Mészáros argues that unless individuals are able to contribute in
accordance with their abilities, that is “on the basis of the full development of the creative
potentialities of the social individual”, distribution on the basis of social needs was impossible
(Mészáros 1995:759). Taking up this same theme, the Primer Plan Socialista de la Nacion
2007-2012 (First Socialist National Plan 2007-2012), which set out the policy framework for
the second Chávez administration, argued “the satisfaction of social needs is tied to the
system of production-distribution of goods and services, because only when workers in
Venezuela contribute to production of social wealth on the basis of this capacities, with the
development of their creative potential, does the probability increase of satisfying social
needs” (Republica Bolivariana de Venezuela 2007:29-30)
This would inevitably be a learning process, and not something that could be implemented
overnight. However, if the goal is integral human development, “the yardstick of socialist
56
achievements” must be whether the policies and measures implemented point in the direction
of consolidating a society based on “overall social control and self-management” in all
spheres (Mészáros 1995:739).
As long as production focused on self-interest, humans will continue to view each other as
competitors. For this reason, the focus on self-interest and “the individual right to consume
things without limit” must be replaced by a focus on human development (Lebowitz 2009:28-
9). Otherwise, self-interest would inevitably remain strong and begin to infect the other sides
of the triangle (Lebowitz 2010:81).
This is also a key reason as to why it is essential to move towards implementing all three sides
of the “socialist triangle” simultaneously. Social property, worker participation and
production for social needs have to be seen as intricately intertwined and indispensable
aspects of twenty-fist century socialism, one which had set as its goal integral human
development. The struggle to make this goal, enshrined in Venezuela’s constitution, a reality
led Chávez to conclude that only socialism could provide a path towards human development.
The pursuit of human development was also a motivating factor behind Chávez’s original
support for cogestión. Cogestión’s subsequent drift away from this initial focus not only led to
a government rethink of the policy but also played a role in shaping the idea of Chávez’s
“socialist triangle”.
57
Conclusion
Many have argued that early into Chávez’s second administration, the Venezuelan
government abandoned its support for cogestión and with that, worker participation. There is
much evidence to backup this assertion. While Chávez mentioned cogestión when first
presenting his idea of the socialist triangle, this concept soon disappeared from future
speeches. Chávez would even go as far as to propose the removal of this term from the
constitution. Within the workers movement, cogestión came to be seen as a dirty word
(Fuentes 2009:71). Moreover, during the first year of his second term, many of the different
initiatives in cogestión were either transformed, as was the case with the EPSs and Fabrica
Adentro, or were dismantled, as occurred in ALCASA. The evidence of a government retreat
on cogestión was so overwhelming, that after a visit to Venezuela in 2007, I had also arrived
at the same conclusion (Munckton 2007).
However, this perspective fails to take into consideration that by the end of the first Chávez
administration, the various experiments in cogestión had come to resemble something quite
different from its original conception. In analyzing the new constitution, the government’s
first national development plan and the early experiments in cogestión, the focus on
promoting worker participation and co-governance in the economic sphere as a means of
ensuring integral human development becomes apparent. By 2006 however, the focus of
cogestión had shifted towards workers owning company shares, and a belief among some
within the government that workers were not ready to run companies.
This shift was the result of a number of factors. The first was that the lack of a coherent and
commonly agreed upon vision of cogestión had contributed to its chaotic development. The
form that varying cogestión models came to take was largely shaped by the competing visions
emanating from different ministries. This can be seen in the dissimilar approaches taken by
different ministries in implementing cogestión and promoting EPSs
Secondly, the government’s pressing need to tackle immediate concerns such as
unemployment and lifting the economy out of recession tended to militate against taking
‘risks’ that could put some of these companies in jeopardy. This was a factor in the
government’s support for Fabrica Adentro, despite its questionable success in promoting
58
worker participation, and its moves to reduce the power of cooperatives in places such as
INVEPAL and to oppose cogestión in “strategic sectors” such as PDVSA.
Thirdly, the absence of a strong, unified union movement that was only just beginning to
throw off the shackles of decades of entrenched right-wing bureaucratic leadership, combined
with the prevalent economistic tendencies among workers more generally, also hampered the
advance of this project.
Finally, there were the constant attempts by Chávez to deal with some of the very same
dilemmas that had presented themselves within twenty-century socialism; specifically, the
issues of ownership, production and distribution. Through this process, Chávez began first to
identify cogestión with co-governance and participation, then with the social economy and
collectively owned companies, and later proposed the creation of Social Production
Enterprises in an attempt to make the idea of “communal consumption” a reality.
The concrete experiences of implementing cogestión made Chávez rethink this issue and his
broader ideas regarding twenty-first century socialism. Not only had the various cogestión
experiments increasingly come to into conflict with Chávez’s evolving views on socialism but
they had also come to resemble something diametrically opposed to its original conception.
The end result of this complex and chaotic process was the development of his socialist
triangle based on social property, social production and social needs. Chávez had concluded
that unless cogestión experiments were firmly located within this framework the result would
inevitably be a regression towards capitalism.
Yet, in many ways, this represented not a rejection of the initial idea of cogestión, but of
‘actually existing’ cogestión. In place of social property, cogestión had come to be associated
with collective ownership. While co-participation came to be equated with co-ownership,
worker participation was increasingly pushed aside as problems with cogestión emerged.
Meanwhile, attempts to grapple with the third side of the triangle – satisfaction of social needs
– tended to amount to companies paying an additional tax. This was nothing like the original
idea of cogestión articulated in the constitution or Chávez’s speeches.
If cogestión represented the promotion of worker participation as a means to ensure integral
human development, then there is little doubt that cogestión in practice was vastly different.
59
That is, cogestión was no longer revolution. Yet, the disappearance of the term cogestión
cannot necessarily be equated with an abandonment of support for worker participation.
The development of Chávez’s socialist triangle instead, represented a simultaneous return to
the original ideas that had inspired the push for cogestión, only this time in a much more
radical setting. Regarding social ownership, Chávez’s insistence that the Central Azucarero
Pio Tamayo should be seen as the “property and pride” of the community found its
continuation in his idea of direct social property. Similarly, his comments that workers in
PDVSA had to ensure that the state oil company existed “solely to promote the interest of the
republic and not the personal interests of anyone” were echoed in his advocacy of indirect
social property. The initial focus on co-participation and integral human development shared
much in common with the idea of social production being geared towards the creation of
“new human beings.” Finally, the somewhat vague allusions and attempts to incorporate
communities in the constitution and in the Pio Tamayo sugar mill experiment respectively,
found a more concrete expression, first with the emergence of the communal councils and
later with the development of the third side of Chávez’s socialist triangle: producing to
satisfying social needs.
The key difference was that through this process, Chávez had shifted from a viewpoint that
advocated promoting the social economy as complementary to the capitalist economy, to an
anti-capitalist orientation. Nevertheless, the focus on participation “of all sectors, in all
spheres and in each moment of the future” and integral human development remained.
The impact of this would become apparent at an October 2007 meeting of representatives
from state-owned companies and government ministers convened to debate the idea of
“socialist companies.” There, Chávez argued that it was vital to more clearly define the
Venezuelan socialist model. This involved consideration of three fundamental categories:
social property, social production and distribution based on the satisfaction of social needs
(Cormenzana 2009:194).
After his initial presentation, representatives from various companies reported on how they
were converting their enterprises into socialist companies. However, it was the intervention
by workers from INVEVAL that caught Chávez’s attention (Cormenzana 2009:194).
Representatives from there explained how in January 2007, workers had decided to place
60
administration of the company under the control of a workers’ council, and that all workers
received the same salary. They explained that, faced with PDVSA’s refusal to buy their
products, the company was working with the community to find alternative markets for their
production. Chávez responded that workers at INVEVAL “had understood the objective of
this process” and declared the company an example to follow (Cormenzana 2009:195).
Agreeing with the workers’ proposal that INVEVAL should be 100% state-owned with the
workers’ council continuing to run the company, Chávez ordered that a decree be prepared to
legalise this arrangement.
Subsequently, the government also took the initiative to begin a process of introduction
control obrero (workers’ control) within CVG and the newly created Corporación Eléctrica
Nacional (CORPOELEC, National Electricity Corporation) (Fuentes 2009a; Fuentes 2010).
In many respects, these moves shared much in common with the cogestión experiments in
ALCASA and CADAFE, although now on a much bigger scale. For workers in the former
CADELA (now integrated into CORPOELEC), this move represented little more than a name
change, as their cogestión continued to function. However, nationally, it represented another
opportunity for workers in the electrical sector and in CVG to move forward with their goal of
achieving worker participation. The success or demise of control obrero is something that
continues to play itself out today. No doubt the biggest challenge will be find ways to convert
the ideas present in Chávez’s socialist triangle into reality. That is, twenty-first century
socialism still confronts the challenge of overcoming the very same dilemmas that bedevilled
the socialist experiments of last century.
Nevertheless, they can count on the lessons learned during the process of implementing
cogestión during the first Chávez administration. Importantly, the initial spirit with which
workers first took up the call for cogestión remains present. This was left clear to me in the
comments of Nestor Rojas, a unionist in the Merida region of CORPOELEC when he told
me:
What we want is worker participation in decision-making… The constitution defines this as cogestión, and that definition is nothing more than there should be co-administration between the state and workers. Maybe we have to change the word, but in the end we continue to run this company under cogestión (cogestiónando)… (Fuentes 2009:72)
61
It is also this vision that encapsulated the original spirit of cogestión, which today, despite the
name change, is present in process of implementing control obrero.
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Appendix
List of acronyms, key names and Spanish terms
ALCASA CVG Caroní Aluminium, part of CVG
BCV Central Bank of Venezuela
CADAFE Electricity Generation and Administration Company,
subsequently incorporated in CORPOELEC in 2007
CADELA Los Andes Electricity C.A, regional affiliate of CADAFE,
which covers the western states of Merida, Tachira, Trujillo and
Barinas, now incorporated into CORPOELEC
CNV National Valve Constructor, valve producing company
nationalised in 2005 and renamed INVEVAL
CORPOELEC National Electricity Corporation, created in 2007 as part of a
process of nationalising and consolidating the electrical sector
CVG Venezuelan Corporation of Guayana, state-owned basic
industry complex comprised on 16 steel, aluminium, bauxite
and mining companies
CTV Confederation of Venezuelan Workers, main trade union
federation prior to the emergence of UNETE
EPS Social Production Enterprise
FEDEINDUSTRIA Venezuelan Federation of Small, Medium and Artisan
Industries
FETRAELEC Federation of Venezuelan Electrical Workers
FRETECO Co-mananged and Occupied Factories’ Worker Revolutionary
Front
FSBT Socialist Bolivarian Workers’ Force
INVEPAL Venezuelan Endogenous Paper Industry, previously named
VENEPAL before it was nationalised in 2005
INVETEX Venezuelan Endogenous Textile Industry, previously named
Hilanderías Tinaquillo (Tinaquillo Spinners) before the
government bought a majority stake in the company
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INVEVAL Venezuelan Endogenous Valve Industry, previously named
CNV before it was nationalised in 2005
MENPET Ministry for Energy and Petroleum,
MIBAM Ministry of Basic Industry and Mining
MILCO Ministry of Light Industry and Commerce
MINEP Ministry for the Popular Economy
PDVSA Venezuela Petroleum Company, state-owned oil company
SIDOR Orinoco Steelworks, original part of CVG, privatised in 1998
and subsequently renationalised in 2008
SINTRALCASA CVG ALCASA Workers’ Union
UNETE National Union of Workers, largest nation-wide trade union
federation in Venezuela, established in 2003
VENEPAL Venezuelan Pulp and Paper, paper factory nationalised in 2005
and renamed INVEPAL
Álvarez, Víctor Minister for Basic Industry, 2005-2006
El Troudi, Haiman Chief of Staff to President Chávez, 2005
Iglesias, Maria Cristina Head of Ministry of Labour (MINTRASS), 2001-2005, Head of
MILCO 2005-2007
Jaua, Elias Head of MINEP, 2004-2006
Lanz, Carlos President of ALCASA, 2005-2007
Ramirez, Rafael Head of MENPET, 2002-present
Alcasiano(s) Refers to worker(s) at ALCASA
Aló Presidente President Chávez’s weekly television program
Autogestión Self-management
Barrios Poor neighbourhoods
Chavista Chávez supporter
Cogestión Generally translated as co-management
Cogestión revolucionaria Revolutionary co-management
64
Comités de gestión Management committees, set up by electrical workers as part of
the cogestión process in CADAFE and CADELA
Comités guia Guide committees, set up by PDVSA workers during the bosses
lock-out in December 2002-January 2003
Control obrero Workers’ control
Esperanza Patriótica Patriotic Hope, party which Rafael Ramirez belonged to
together with others within PDVSA (e.g. Toby Valderrama).
Behind the publication of the daily column Un Grano de Maiz
Fabrica Adentro “Inside the Factory” program involving privately owned
companies that signed up to the Framework Agreement of Co-
responsibility for Industry Transformation
Fabricas recuperadas Recuperated factories taken over by workers
Mesas de trabajo Work committees, set up at the departmental level as part
of the cogestión process in ALCASA
Vocero(s) Spokesperson(s)
65
Timeline of key events related to cogestión during first Chávez
administration (1999-2006)
1998
December Hugo Chávez elected President of Venezuela
1999
April Successful referendum held to convene constituent assembly to rewrite
Venezuelan constitution.
July Elections held for constituent assembly.
August constituent assembly convenes.
December New constitution approved by referendum.
2000
July Chávez re-elected within context of new constitution.
2001
March First national development plan approved by National Assembly
First cogestión experiment initiated at Central Azucarero Pío Tamayo
sugar mill.
April FETRAELEC and CADAFE board of directors sign Declaration of
Principles within which the figure of cogestión appears.
November Chávez enacts 49 law-decrees covering a range of areas including oil,
cooperatives and land reform.
66
2002
April Unsuccessful military coup launched against Chávez.
July Rafael Ramirez appointed to head up MENPET.
September Meeting of independent and pro-revolution unionists to discuss
‘refounding’ the labour movement.
October Live televised meeting between hundreds of union leaders and
President Chávez.
December Management lockout at state oil company PDVSA begins, numerous
other companies shut down as part of co-ordinated campaign to
sabotage Venezuela’s economy.
Pro-Chávez unionists call on the government to issue a decree that
would allow workers to take over these companies
2003
February Management lockout at PDVSA defeated; company now in firm
control of the Chávez government.
March Chávez appointed two union leaders to the board of directors at
PDVSA.
April Chávez appointed two union leaders to the board of directors at
CADAFE.
Pro-revolution trade union confederation Union Nacional de
Trabajadores (UNETE) is formed.
2004
August Chavez wins recall referendum
September MINEP created, entrusted with promoting the social economy. Elias
Jaua appointed to head up the new ministry.
November Conflict officially starts in CADAFE.
67
2005
January VENEPAL paper company nationalised, renamed INVEPAL and
handed over to workers to run under cogestión.
MIBAM created, Victor Alvarez appointed to head up the new
ministry.
Carlos Lanz appointed president of ALCASA.
February Agreement signed between state, managers and unions to initiate
cogestión process in state aluminium plant, ALCASA.
March Workers at ALCASA begin process of electing managers and voceros.
April CNV valve producing company nationalised, renamed INVEVAL and
handed over to workers to run under cogestión.
May Million strong May Day marched organised. UNETE leaders present
Chávez a draft law on cogestión.
Government buys out majority stake in Hilanderías Tinaquillo textile
factory, converts it into INVETEX and begins process of cogestión.
June Participatory budget process begins in ALCASA.
July Chávez calls for the creation of Social Production Enterprises (EPSs).
Reads out a list of over 1000 partial or completely closed down
factories, calling on workers to take them over.
“Negro Primero” Socio-Political Education Centre established in
ALCASA
August Launched Fabrica Adentro dedicated to introducing cogestión into the
private sector.
Process of autogestión (self-management with workers owning 100%
of the enterprise) begins at Hotel Kamarata.
October Latin America wide gathering of workers from occupied and
recuperated factories held in Caracas.
November Two members of nearby communities elected onto company board at
ALCASA.
Workers at INVEPAL vote to revoke mandate of their elected
representatives to the company board.
68
Exhibition involving 160 EPSs that have dealings with PDVSA hosted.
December CVG announced creation of 260 EPS to date.
2006
January Union elections at ALCASA see victory of opposition-aligned ticket
and ouster of pro-Chávez incumbents.
Chávez comes out against cogestión, at least in ‘strategic sectors’ such
as PDVSA.
February Workers from INVEVAL, INVEPAL and other recuperated factories
create FRETECO.
April Third phase of cogestión process begins in ALCASA as workers start
discussing issue of workers council and reduction of the workday in
context of new collective contract.
Minster of Light Industry, María Cristina Iglesias, appointed as new
president of INVEPAL.
June Workers at ALCASA vote to return to a system of single managerial
posts, and subsequently elect many of the same managers that had been
removed in previous elections.
September Figure of workers’ Council inserted into collective contract at
ALCASA.
December Chávez re-elected as president.
69
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