In Venezuela, the only problem with the Workers’ Paradise is that the workers don’t want it.
By Francisco Toro
In the wake of President Chávez’s attempt to nationalize the Venezuelan operations of U.S. bottle-maker Owens-Illinois, the firms’ Venezuelan workers spent most of the week protesting outside its factories in Valera and Valencia.
Amid the ferment of Venezuela’s self-described Socialist Revolution, you could be excused for assuming they were out waving the Red Flag, protesting the pitiless exploitation of the working class at the hands of the plant’s rapacious gringo capitalist paymasters. After all, government spokesmen spent all week trumpeting the takeover as a way of freeing O-I’s workers from the yolk capitalist exploitation and introduce them into the joys of Worker Power under socialist state-ownership of the plant.
The truth, in fact, was rather different, with hundreds of O-I employees mobilized to protest the State takeover of their plants, shouting “¡No a la Expropriación!”
Already protected by a hard-fought for collective bargaining agreement with the firm, O-I’s Venezuelan unions know full well that nationalization only imperils their working conditions. They know all about Mercal, the state-owned food retailing chain, where Collective Bargaining negotiations have been stalled for over three years and workers, in effect, have been forced to work without any contractual rights. They know all about VenIran, the Venezuelan-Iranian tractor manufacturer famous for firing workers summarily on suspicions of trying to organize an independent union. They know, in other words, that Collective Barganing agreements are enforceable if your employer is a private firm, but dead letter when it is a public one.
The dynamics here are easy to grasp. Under private ownership, any complaint the unions take to State Labor Inspectorates tend to be heard sympathetically. The socialist party appointed inspectors are, after all, mostly convinced of the horrors of capitalism and minded to be tough on private owners, demanding that Collective Barganing agreements and labor laws be adhered to absolutely to the letter.
When a firm passes into state ownership, however, that dynamic is reversed. A worker who protests an abuse by the “workers’ government” is seen as, at the very least, a walking contradiction and, more usually, as a dangerous, unreliable element: possibly a saboteur, certainly a counter-revolutionary. And so, the same complaint that will mobilize the state to your defense if you make it against a private employer can easily get you placed on a Black List of counterrevolutionary fifth-columns if you make it against a nationalized firm.
Is it any wonder, then, that Venezuelan workers have come to see nationalization as an imminent threat to their living and working conditions?
And so it is that, instead of a rapturous welcome from the hitherto oppressed proletarian masses, Chávez’s decision to nationalize O-I has been followed by a bizarre war of words between Owens-Illinois’ Venezuelan workers and the area’s pro-government Congressman, Saul Ortega, who was sent to patiently explain to the workers how outrageous their exploitation has been, while the workers themselves retort with a long list of fringe benefits in their contract – the workers’ cafeteria, the generous overtime pay, the training programs, etc. – and protest that all of these would be imperiled under state ownership.
Perhaps the biggest concern for the workers, though, has to do with the longer-term viability of the plant’s operations.
So long as it’s privately owned, O-I’s Venezuelan operations could expect to benefit from the investments, maintenance services, technology transfers and management expertise it needs to remain viable long into the future. But long experience in Venezuela – and the rest of the region – has shown that state-owned firms are badly run firms, and sooner or later, badly run firms end up shedding jobs. Undercapitalized, mismanaged, badly maintained firms that soon fall behind the technological curve and lose competitiveness: that’s long been the reality of State Owned Enterprise in Latin America.
Over time, as payrolls swell with political appointees and quality standards deteriorate, losses start to accumulate. Sooner or later – usually when the accumulation of such state-owned money-pits sets off a fiscal crisis – government’s are forced to sell them on again, typically at bargain basement prices, and often to investors whose only return path to profitability involves massive layoffs. It’s a cycles Venezuelans have suffered through before – and one Chávez, for reasons clear only to him, seems intent on re-editing.
Whether it was in the old Soviet block, in Fidel Castro’s Cuba or, increasingly, in Hugo Chávez’s Venezuela, supporters of Socialist economics have painted the State Controlled-Economy as the key to creating a Workers’ Paradise. But in Venezuela, a funny thing happened on the way to the Workers’ Utopia: the workers are wising up.