Left Government Strategies toward Business Groups and the Outcomes: The Mexican and Venezuelan Cases
Left
Government Strategies toward Business Groups and the Outcomes: The Mexican and
Venezuelan Cases
by Steve
Ellner
published in Latin American
Perspectives, March 2023 (Vol. 50, no. 1): pp 130-150
ABSTRACT
The progressive governments of
Andrés Manuel López Obrador in Mexico and Hugo Chávez and Nicolás Maduro in
Venezuela followed a strategy of selective treatment to win over some
businesspeople and neutralize others in order to weaken the opposition of a hostile
business class. This approach had advantages and downsides. It succeeded in
gaining support from business representatives for government initiatives in
moments of difficulty and crisis and reducing the firepower of the commercial
media. It was also, however, conducive to corruption. Many non-hostile
businesspeople proved to be unreliable allies as they ended up withdrawing
their support for the government. The non-hostile capitalists were a far cry
from the progressive “national bourgeoisie” which Communists and other leftists
attempted to form alliances with in the twentieth century. Nevertheless,
pro-establishment actors attacked many of them including such leading
capitalists as Gustavo Cisneros in Venezuela and Ricardo Salinas in Mexico, who
in some cases were considered “traitors.” In Mexico, major businesspeople
before and after the left’s advent to power played a more overtly political
role than for the most part in Venezuela. Chávez attempted to define the
behavior of progressive businesspeople, which included limits on profits, and
also promoted the formation of politically progressive business organizations.
Key words: “national bourgeoisie,” Andrés Manuel López Obrador, Hugo
Chávez, FEDECAMARAS, Carlos Slim, Gustavo Cisneros
All governments that are committed
to revolutionary transformation but rule out a forceful seizure of state power,
or an accelerated radicalization quickly leading to socialism, are confronted
with a fundamental issue: given the predominance of the capitalist system, what
relations, if any, should the left in power pursue toward the capitalists. The
progressive governments that came to power in Latin America in the twenty-first
century, known as the “Pink Tide,”[1] faced this predicament,
though the strategy they followed toward capitalist groups was never openly
discussed or debated. This failure was especially striking because Pink Tide
governments recognized that socialism was not an immediate prospect and thus
the capitalists would be around for some time. Hugo Chávez cautioned that it
would take at least two decades to achieve while Bolivia’s vice-president
Alvaro García Linera predicted that what he called “Andean-Amazonian capitalism”
would last a century. The debate that took place within and outside of leftist
parties centered on economic policy, while skirting the crucial issue of how to
divide the business class by winning over or neutralizing some of its members and
isolating the most intransigent ones.
In Pink Tide countries, prominent businesspeople
occupied one of three groups, as defined by their political behavior. The hostile business sector (hereafter HBS)
was aggressively opposed to the leftists in power and sometimes formed part of
the disloyal opposition which questioned the government’s legitimacy. Businesspeople
in the friendly business sector (hereafter FBS) provided the government with
political support, endorsed some of its policies and in a few cases held
government posts and belonged to the governing party. A third category
represented a middle ground (MG) between these two poles.
This article will examine the
strategy toward businesspeople followed by the Pink Tide governments of Mexico
under Andrés Manuel López Obrador (hereafter AMLO) and Venezuela under Chávez
and Nicolás Maduro. Venezuela, as the most radical Pink Tide country and
Mexico, a moderate one, were chosen in order to explore contrasts and
similarities. In both cases intense polarization and the existence of a
powerful HBS, which included some of the nation’s leading capitalists, convinced
the leftists in power that preferential treatment toward a select group of businesspeople
was necessary and justifiable. The aim was to isolate and reduce the influence
of intransigent members of the HBS. The main approach of the AMLO government
was to increase the size of the MG by drawing some of the intransigents into
that category. In Venezuela, Chávez made greater efforts than AMLO to nurture
the FBS by formulating specific norms for “responsible” business practices, at
the same time that pro-Chavista business organizations were created (Ellner, 2020a:
167-169)
The examination of the relations between Pink Tide
governments and business groups sheds light on various issues and lessons and
raises questions which the article will explore. One issue is
whether the terms “progressive bourgeoisie” and “national bourgeoisie” – both
used by Communists and other leftists in the twentieth century – are fitting to
describe FBS and MG businesspeople in the age of globalization. A second is
whether to consider the tacit agreements with businesspeople in the FBS and MS
“strategic alliances” or “tactical alliances.” A third issue is the tendency of
the policy of preferential treatment toward businesspeople based on political
criteria to lead to corruption. A final question is what has the Pink Tide
experience shown with regard to the reliability and resilience of the alliances
with FBS and MG businesspeople in situations of crisis.
The first section of the article
will briefly explore the positions of the international Communist movement historically
and will show that its analysis of the national bourgeoisie in the South was
frequently modified in tandem with changes not only in Soviet foreign policy but
also the left’s political strategy. In the second section, the article will
explore the nature of the business sectors which AMLO and Chávez attempted to
win over or neutralize, as well as the differences in strategies employed by both
governments. The concluding section will discuss the larger implications of the
Pink Tide’s strategy toward business groups. Specifically, the resultant
alliances with FBS and MG business groups demonstrate the shortcomings of those
analyses of Pink Tide governments that classify them as populist in the
pejorative sense of the term. These writings define populism as the “politics
of antagonism” and stress the tendency of populist leaders to polarize, a
thesis which is at odds with the efforts of Pink Tide leaders to neutralize
sectors of a business class that was openly hostile to the government.
LEFTIST
DEBATE OVER THE “NATIONAL BOURGEOISIE” SINCE 1917
A brief discussion of the
longstanding debate over the role of the “national bourgeoisie”[2] provides an historical
context to understand the relations between Pink Tide leaders and national
business interests. At one extreme, some twentieth-century leftists supported
alliances with the national bourgeoisie that were designed to fulfill
far-reaching goals corresponding to a stage of national development based on
industrialization, democracy and land reform. At the other extreme, certain leftist
currents denied the existence of a progressive national bourgeoisie, or else
viewed it as highly unreliable, and in practice ruled out a strategy of
convergences and agreements with it. A majority of leftists stood between the
two positions, though in the age of globalization beginning in the 1980s most
ceased to view the local bourgeoisie as “progressive.”
The Communist movement throughout
the twentieth century modified its position several times, demonstrating a
correlation between hostility toward the national bourgeoisie and swings to the
left in general. The two theses presented by Lenin and the Indian Communist
M.N. Roy at the Second Congress of the Third International (the Comintern) in
1920 manifested a nuanced contrast in positions on the issue. Lenin defended
alliances with the national bourgeoisie throughout the South, although he made
clear that Communists rejected the submissive stance toward that class advocated
by the Second International (1889-1916). Roy was more skeptical of the
reliability of the national bourgeoisie in certain nations, especially his
native India, and (unlike Lenin) viewed Mahatma Gandhi as belonging to the
religious right. The relationship between aversion to alliances with the national
bourgeoisie and what some pejoratively call “ultra-leftism” is demonstrated by
Roy’s insistence that the proletariat in India was numerically strong (unlike
Lenin’s assessment) and that “‘peasant and workers Soviets’” should be
organized “‘as soon as possible’” (Haithcox,
2019).
Subsequent changes in the position
of the international communist movement demonstrated the relationship between the
refusal by leftists to ally with the national bourgeoisie and their movement in
a leftist direction. This tendency
became evident at the Comintern's Sixth Congress in 1928 which claimed that while the Second Congress’s
call for alliances with the national bourgeoisie was correct for that period, the
nations of the South had for the most part entered a new period in which the “intermediate position of the national bourgeoisie between
the revolutionary and imperialist camps is no longer to be observed" as for the most part that class
had “passed over finally into the camp of
counterrevolution” (Comintern, 1928). The Sixth Congress signaled the beginning of the so- called
"third period" of international communism in which Communists
preached "class versus class," a strategy generally labelled sectarian and "ultra-leftist."
The succeeding Comintern congress held in 1935 reversed the
Sixth Congress’ claim that the national bourgeoisie had betrayed the
anti-imperialist cause. The new Communist position was that the national
bourgeoisie played an important role in the struggles for national liberation
which furthered the anti-fascist and anti-war efforts embodied in popular
fronts. This line of thinking continued throughout the World War II years when Latin
American Communists assumed an even more moderate position, broadened the base
of the anti-fascist front, and backed diverse non-leftist governments that supported
the Allied cause. A new reversal occurred with the outbreak of the Cold War
when Latin American Communists abandoned the broad-based strategy and, in some
cases, censured the party’s World War II leaders for their “rightist
deviations” (Ellner, 1981: 62-66). This position was again modified at the Twenty-First
Congress of the Communist Party of the Soviet Union in 1959 which signaled the
initiation of a strategy designed to establish close ties with governments that
represented the national bourgeoisie and formed part of the emerging bloc of
non-aligned nations. Nikita Khrushchev called these governments with “anti-imperialist”
tendencies "revolutionary democrats," and claimed they were embarking
on a “non-capitalist path” that was not plainly socialist, even while some were
not particularly progressive on the domestic front. In an indication of Moscow’s
commitment to the national bourgeoisie, by 1960 Soviet-guaranteed loans to
these non-socialist nations were reported to have overtaken those granted to
socialist bloc nations (Friedman, 2015: 30-38).
The period of
globalization beginning in the early 1980s represented a definitive change in much
of the left’s position on the national bourgeoisie. In recent decades a near
consensus has prevailed among leftist analysts that in the age of
globalization, the local bourgeoisie no longer has the potential – even if it
once had – to play an active role in the struggle for national liberation
(Desai, 2004: 182-184). Nevertheless, while Communists had minimized or
denied the progressive potential of the local bourgeoisie in periods in which
they moved further to the left (specifically in 1928 and at the outset of the
Cold War), that same position on the bourgeoisie since the 1980s did not imply
a shift in a leftist direction. More accurately, it signified a recognition on
the part of the left of the impact of global capitalism on local economies.
In spite of this near consensus on the left, some shades of difference
exist. Some analysts on the left postulate that the national bourgeoisie has
“exhausted its historical role” (Amin, 2006: 180) in favor of national
liberation, while others recognize a relationship of “antagonistic cooperation”
(Katz, 2015: 15) between local and global capital. At one extreme, Samir Amin
pointed to the failure of nationalist movements in power, such as Nasserism, to
retain its commitment to a politics of non-alignment and Third Worldism (as
shown, for instance, by Anwar el-Sadat’s conciliatory foreign policy and move
to the right). For Amin, these developments demonstrated that the national
bourgeoisie no long represents a force for change (Amin, 2006: 170-171; 2019: 90-94).
William I. Robinson is nearly as pessimistic regarding the potential of local
capitalists to defy hegemonic global capitalism since they “must increasingly
link to transnational capital” and “into the emergent globalized system
of production, finance, and services” (Robinson, 2017a: 177; 2016: 8; 2020; 26-27). In contrast, Claudio Katz
argues that the "increasing transnationalization" of the dominant
sectors of national capitalism of the South have "not destroyed their
local roots" as they "remain... in competition with the corporations
based outside the region," even though they now target exports instead of
the domestic market. Far from promoting thoroughgoing change, however, the
national bourgeoisie plays a key role in propping Pink Tide governments by pushing
them in an "increasingly conservative direction" (Katz, 2005). Only
small fringes on the left some associated with Maoism continue to uphold the
notion of a national progressive bourgeoisie (an example being the Movimiento
Obrero Independiente y Revolucionario - MOIR - in Colombia [Mosquera
Sánchez, 2009: 13-15: Robledo, 2009: 105-112]).
Given these theoretical revisions by analysts committed to
the leftist cause, one may have expected that progressive twenty-first century
governments have ceased to view the local bourgeoisie, or fractions of that
class, as potential allies. Indeed, there were few references by those on the
left to businesspeople as “anti-imperialist” or even progressive. Furthermore,
unlike twentieth-century leftists, Pink Tide strategists did not openly debate
the role of the national bourgeoisie in the struggle for far-reaching change. Nevertheless,
Pink Tide governments, even the radical ones such as that of Chávez and Evo
Morales, followed strategies toward business groups. In addition, in spite of
the absence of ideological debate regarding the national bourgeoisie, the
concessions that were made to that class split the government parties between
hard-line and soft-line currents.
BUSINESS
SECTOR ALLIANCES: THE MEXICAN AND VENEZUELAN EXPERIENCES
Major controversies including
corruption scandals surrounding Pink Tide alliances with the private sector point to the need for taking a close look at leftist
government strategies toward businesspeople. One example is President Lula da
Silva’s close relationship with the construction company Odebrecht, which
received numerous contracts for megaprojects both in Brazil and Venezuela.
Chávez also considered Odebrecht an “ally,” and expressed gratitude for the
company’s willingness to ship Venezuela needed material during the 2002-2003
opposition-led general strike (EFE News Service, 2008). Nevertheless, after
being sentenced to over 19 years in prison on charges of corruption, the
company’s owner Marcelo Odebrecht reached an agreement with the state in which
he confessed to supposed illicit dealings with Lula’s Workers’ Party (PT) and
government and accused Lula of receiving money in cash. In 2022, a significant
number of other former PT supporters among the elite and middle classes ended
up backing rightist presidential candidate Jair Bolsonaro against Lula who (in
the words of Forbes magazine) they “despised,” even though “many of them
made their way out of poverty during his mandate” (Fontevecchia, 2022).
A second example of controversy
arising from strategies toward the business sector is the role of two wealthy
businesspeople who have belonged to the Sandinista movement and government in
Nicaragua: banker and former Contra member Jaime Morales Carazo, who served as
vice-president in Daniel Ortega’s term of 2007-2012; and anti-Somoza commander
Bayardo Arce who managed Sandinista financial assets in the early 1990s and
went on to become a wealthy businessman and serve as a liaison between the
Sandinistas and the business sector, in the process helping to neutralize the
peak business organization, the Consejo
Superior de la Empresa Privada (COSEP). Some
analysts suggest that these “alliances may have gone too far, steering the
party off its ideological path for the sake of maintaining elite support and
holding on to power” (Cruz-Feliciano, 2020, 281).
A third example of a controversial relationship between the
left and the business sector is President Evo Morales’ reconciliation with the
main business organization Cámara de Industria y Comercio (CAINCO) of Santa Cruz
beginning in 2009. For some actors and analysts, with the “shift from
confrontation to accommodation and collaboration… the MAS government has
essentially given up on its transformation agenda” (Wolff, 2019: 115). For
others it was a master stroke in that it divided the enemy consisting of CAINCO
and the Comité Cívico de Santa Cruz, both of which for several years had been
united in defying the central government and promoting acts of violence. The
Comité Cívico denounced CAINCO’s turnaround and called its president a
“traitor” (Notimérica, 2009). In addition to appearing to be politically sound,
the pact promoted economic development but at the same time, as Morales'
critics on the left note, it set off deforestation with devastating
environmental effects (Farthing, 2020: 198-199). The alliance proved fragile.
At the first sign of instability following the controversial presidential
election of October 2019, CAINCO issued a public letter to Morales demanding his
resignation.
In Venezuela and Mexico, Pink Tide presidents aspired to
promote the rise of a new business class (the FBS) that would embrace goals of national
development and greater social equality. Their strategies built on the thesis that
the traditional bourgeoisie in the age of globalization was holding back
progress and was shrouded in corruption. In Venezuela, the critique came from
both sides of the political spectrum and dated back decades. In the words of
one leading business analyst, the traditional business class consisted of “rich
clowns” who were ill-suited to face the challenges of globalization and, in
contrast to their counterparts in Colombia, Chile and elsewhere, lacked the boldness
to enter politics and put forward viable plans for change. As a result of overreliance
on easy oil money and “lack of competitive zeal, creativity, money coming from
sweat and effort,” the Boultons, Mendoza Goiticoas and other traditional
families were unable to meet challenges such as the nation’s financial crisis
of 1993-1994 and ended up losing most of their fortune (Zapata, 1995: 10; see
also, Naím: 1993: 86-87). AMLO, for his part, characterized large Mexican
capitalists as the “mafia del poder” (mafia of power) and claimed that if true
capitalism were able to function without the monopolies, the purchasing power
of Mexicans would increase by 10 to 15 per cent (Expansión, 2011). The
strategies in both countries were predicated on the realization that regardless
of possible socialist goals, capitalism would be around for a long time, thus
the desirability of capitalist structural transformation.
A second strategy employed in Venezuela and Mexico was pragmatic.
Both Pink Tide governments provided a select group of businesspeople with certain
benefits in order to neutralize them and in the process isolate the more
intransigent members of the business class. Many businesspeople and groups in
the MG had previously been prominent members of the anti-government camp and as
a result of their switch were labeled traitors, corrupt and government
collaborators by opposition hard-liners. One of the main accomplishments of the
government’s pragmatic strategy in both nations was in toning down to varying
degrees the coverage of communication media outlets, which had previously been
aggressively anti-government and clearly identified with the opposition.
Venezuela business groups: HBS, MG and FBS
Years before Chávez reached power in 1998, the Chavista
movement established ties with members of the private sector through the
efforts of Luis Miquilena, a former leftist trade unionist turned businessman,
who was to become Chávez’s right-hand man. Miquilena obtained support for
Chávez’s presidential candidacy from various leading Venezuelan businesspeople including
multibillionaire Gustavo Cisneros. In contrast, the peak business organization
FEDECAMARAS opposed Chávez’s candidacy. Issues of corruption, the almost
inevitable consequence of privileging select business groups, manifested itself
shortly after Chávez’s election with accusations against Miquilena’s ally Tobías
Carrero, who had served as a conduit for large business contributions to the
Chavista movement.
With the Chavista government’s radicalization in 2001
along with resistance to it from Miquilena, Chávez personally intervened in
putting into practice a strategy designed to win over some businesspeople and
isolate others. Chávez unsuccessfully supported the government-friendly
businessman Alberto Cudemus against future coup leader Pedro Carmona in the
election for president of FEDECAMARAS in July 2001, and limited official
contact with that organization. At the time of the first general strike in
December 2001, which led into the coup of April 2002, Chávez through his
Defense Minister José Vicente Rangel met with a select group of businesspeople
in an attempt to (in the words of Carmona) “intimidate and commit them to
opposing the work stoppage” (Carmona, 2005: 38).
Following the FEDECAMARAS-led April 2002 coup and general strike
of 2002-2003, Chávez implemented exchange controls which excluded
businesspeople who openly supported the regime-change attempts. The system, in
which the state sold dollars for priority transactions at artificially low
rates, made sense at the time of its implementation in February 2003 as a check
on capital flight. In time, however, the system became unwieldy as the
disparity between official and unofficial exchange rates significantly widened.
Some analysts on the left, such as William Robinson (2017b), argue that the state’s
sale of cheap or “preferential” dollars “reflects an alliance between the
revolutionary bloc” and FBS businesspeople, who use unethical means to obtain
them. Various Venezuelan Chavista analysts such as economist Pasqualina Curcio (2019)
attempt to show that the lion’s share of the preferential dollars has filled
the pockets of non-FBS businesspeople, transactions which may have softened
their opposition to the government (Ellner, 2020a: 172). Many of these
financial operations were in association with foreign capital (Guillaudat, 2019),
and were made more profitable as a result of the manipulation of the unofficial
exchange rate, which, according to Curcio (2020a), was engineered from abroad by
currency exchange companies such as DolarToday, headquartered in Miami (Dachevsky
and Kornblihtt, 2017: 89-90).
Indeed, in addition to encouraging and favoring FBS
and MG businesspeople, the Chavista governments especially in moments of crisis
have attempted to mitigate the opposition of the business class as a whole and
FEDECAMARAS in particular. FEDECAMARAS’s two vice-presidents under Carmona, Carlos
Fernández (who played the lead role in the general strike of 2002-2003) and then
Albis Muñoz, succeeded him as president of the organization and maintained its relentlessly
hostile stand toward the government. However, all three candidates including
Cudemus who ran to succeed Muñoz as FEDECAMARAS president in 2005 pledged to
maintain a more harmonious relationship with the government. Subsequently, FEDECAMARAS
president Jorge Roig broke with the Venezuelan political opposition by boldly opposing
the four-month long street protests of early 2014 designed to achieve regime
change. Roig recognized that FEDECAMARAS had committed errors and claimed that
the differences with the government were not irreconcilable, at the same time
that he accepted President Maduro’s invitation to engage in dialogue in the
presidential palace, itself a novelty for the Chavista governments. In another
situation of crisis, Maduro passed the Anti-Blockade Law in October 2020 which
allowed the executive to enter secret arrangements with the private sector, a
law which drew heavy criticism from sectors on the left, both in and out of the
governing Partido Socialista Unido de Venezuela (PSUV). Maduro’s intention was
not only to stimulate much-needed private investments but also to distance moderate political and business leaders from
those of the radical opposition (Ron, 2020).
Chávez's strategy toward the FBS
reflected the more radical leftist nature of the Pink Tide phenomenon in
Venezuela in comparison to that of Mexico. By passing legislation and
implementing policies that privileged "responsible" capitalists, the
Chávez government was, in effect, promoting a new model of capitalism to
replace the old one based on super-exploitation and super-profits. Legislation designed to create
“socially conscious” businesspeople went beyond mere rhetoric and included the
obligation of banks to finance projects of national priority, the social
obligations of the recipients of public contracts, and checks on excessive profits.
Thus, for instance, the chapter titled “Social Responsibility Commitment” of
the Regulation of the Public Contracts Law of 2009 ordered government
monitoring of social programs which contractors were obliged to undertake prior
to completion of their contract and which were to cost between one and five
percent of the value of the project. FEDECAMARAS especially objected to the cap
on profits at 30 percent established by Maduro in January 2014, and attempted
to annul the measure in court.
Another indication of the more radical thrust of the
Pink Tide in Venezuela is that unlike in Mexico (as in the case of Alfonso Romo
[Gonzalez, 2019: 140]) no FBS businessperson belonged to the president’s inner
circle, and few held official positions in the governing party or the federal government.
The most politically prominent FBS businessman was Miguel Perez Abad who as a
member of the PSUV aspired to be governor of the state of Anzoátegui and then
held two ministerial positions in 2017-2018, after which he was appointed
president of the state Banco Bicentenario and in December 2020 was elected
deputy to the National Assembly on the Chavista ticket.
The vitriolic attacks on MG businesspeople by members of
the Venezuelan opposition reflected the intensity of the polarization in that
nation and the precarity of staking out a middle position. Much of the
opposition’s fire was directed at communication media personalities and owners
who were called “traitors,” a label that had much to do with the fact that
nearly all news outlets had unequivocally supported the regime change attempts
of 2002-2003. Subsequently, various major media firms toned down their attacks
on the government and maintained a more balanced coverage of the news. Representatives
of the opposition attributed these reversals (and those of others in the
private sector) to payoffs from the Chavista government and labelled businesspeople
with cordial government relations members of the “boliburguesía,” a term
tantamount to corrupt business operatives.
The about-faces of TV channel Venevisión owner Gustavo
Cisneros lent themselves to accusations of this sort. Shortly after Chávez’s
election in 1998, some FEDECAMARAS businesspeople denied that, given his
support for the president-elect, Cisneros could be considered a “serious”
businessman (Bottome, 1998). Following his allegedly active role in the April
2002 coup, these same businesspeople lauded Cisneros (Bottome, 2003?). This
view, however, changed again. Shortly before the presidential recall election
of August 2004, Cisneros met with Chávez in a meeting brokered by Jimmy Carter
after which Venevisión strove to maintain a fairly balanced coverage. Chavista
hard-liner Lina Ron warned against the Chávez-Cisneros meeting, while
soft-liner vice-president José Vicente Rangel encouraged it. Cisneros’ detractors
claimed that his alleged pact with Chávez was designed to eliminate competition
from the rival TV channel “Radio Caracas” (which the government forced out of
Venezuela) and to, along with his allies, create one big monopoly in the
nation.
Similar accusations of belonging to the “boliburguesía”
and of unethical dealings were lodged against other MG businesspeople,
including media magnate Raúl Gorrín and bankers Juan Carlos Escotet and Víctor Vargas.
However, in the case of Escotet, Cudemus and others, tension between the Maduro
government and MG businesspeople intensified and led to a falling out. Gorrín,
for his part, served as an intermediary between the Maduro government and
Washington operatives in addition to attempting to further his own interests. Gorrín
in 2013 purchased the TV channel Globovisión, which up until then was an unrelenting
critic of the Chavista governments, and made changes to balance the channel’s
news coverages. Not surprisingly, Gorrín, who according to the New York
Times, “worked to broker U.S. investments in his country… while building
close ties to both Mr. Maduro and the opposition,” was considered untrustworthy
by hard-line Chavistas (Confessore,
Kurmanaev and Vogel,
2020: A-1; Ellner, 2020b).[3]
Escotet’s Banesco bank was the result of a merger with
Banco Unión, which had previously been associated with the hard-line opposition,
thus partly explaining the opposition’s resentment toward him. Escotet (like
Mexican MG businessman Ricardo Salinas) benefited from Chávez’s social programs
which were channeled through Banesco. While his relations with the government
had highs and lows, Escotet ended up breaking with Maduro and from Spain
supporting the opposition. Vargas, owner of the Banco Occidental de Descuento,
was called “Chávez’s favorite banker,” but his relations with Maduro were also inconsistent.
This volatility in relations with non-HBS businesspeople followed a pattern
dating back to the financial crisis of 2009 when the Chávez government arrested
two leading FBS businessmen, Ricardo Fernández Barrueco (considered the richest
Chavista businessman) and Arné Chacón (brother of a member of Chávez’s inner
circle).
In all these cases, leading businesspeople who
collaborated with the government and had fairly harmonious relations with it
could hardly be considered a national “progressive” bourgeoisie as envisioned
by the twentieth-century Communist movement. Nevertheless (as discussed below),
the government benefited from cases, such as that of the communications media, in
which business groups went from supporting regime change to the MG position.
The analysis of the “boliburguesía” by opposition members and
their accusations against it, in effect, pass over the distinction between the MG
and FBS. The former was hardly in the Chavista camp, as the opposition claims,
and its political and economic influence in the nation far outweighed that of
the FBS. In short, in spite of Maduro’s increasingly pro-business
policies, the thesis embraced by much of the opposition that the so-called “boliburguesia”
represents a “governing caste” fails to take into consideration the unstable
and stormy relations that leading members of the MG have had with both Chavista
governments (Ellner, 2020a: 174).[4]
Mexican business groups: HBS, MG and FBS
One major difference between the Mexican and Venezuelan cases
relates to the degree to which individual capitalists were publicly identified
with positions on partisan issues and openly supported political candidates.
Since the founding of FEDECAMARAS in 1944, Venezuelan businesspeople were
generally reluctant to assume heavily charged political positions, at least publicly,
a tradition which was momentarily broken in 2002-2003 with the two attempts at
regime change. In subsequent years, Lorenzo Mendoza, owner of the nation's largest
privately held company who was occasional mentioned as a possible presidential
candidate for the united opposition, always made clear that he lacked political
ambitions and interests.
In contrast, leading Mexican businesspeople played prominent
roles in attempting to block AMLO's presidential bid in 2006, 2012 and 2018. In
the latter election, businesspeople of powerful economic groups including Germán
Larrea (Mexico Group), Alberto Bailléres (Bal Group), José Antonio Fernández
Carbajal (FEMSA) and Andrés Conesa (Aeroméxico) issued statements to their
employees calling on them to avoid electing a "populist” president, an
obvious reference to AMLO.
Over the years, AMLO reciprocated by repeatedly denouncing the
unethical dealings of the nation's most powerful capitalists who he claimed
formed part of what he called the "mafia of power." In doing so, he
went beyond generalizations. In 2012, AMLO presented his book “The Mafia that
Took Possession of Mexico” (La mafia que se adueñó de México…y el 2012)
in which he claimed that the nefarious grouping consisted of 30 individuals, of
which 16 were businessmen, 11 politicians and 3 technocrats. Among the
businesspeople were Larrea, Bailléres, Carlos Slim, Emilio Azcárraga and Ricardo Salinas (who
allegedly headed the business mafia group), all of them among the
nation’s largest capitalists. Slim was by far Mexico’s wealthiest capitalist
while Salinas and Azcárraga owned Mexico’s two oligopolistic television
channels, TV Azteca and Televisa, respectively. AMLO blamed the “mafia of
power” businesspeople for helping rig the 2006 elections which allegedly
deprived him of the presidency.
AMLO, long known
for combining pragmatism with vehement denunciations of specific acts of
corruption, carried out a skillful strategy during the 2018 campaign of neutralizing
and reining in former adversaries including some “mafia of power”
businesspeople. Since the 2012 elections, AMLO counted on the active backing of
Alfonso Romo, who as one of Mexico’s wealthiest businessmen had previously supported
conservative presidential candidates. Belonging to the FBS, Romo served as an
intermediary between AMLO in 2018 and the private sector by arranging
well-publicized meetings with representatives of business groups including
those of Salinas, Azcárraga Slim, and
Carlos Hank González (top executive of one of Mexico’s largest banks, Banorte),
all of whom indicated their openness to his candidacy. At the same time, the
peak business organization the Consejo
Coordinador Empresarial maintained an officially neutral position,
unlike in the past (Vega, 2020: 613). Once AMLO was elected president, Romo
occupied the top position of Chief of the Office of the Presidency and created
the Business Advisor Council (Consejo Asesor Emprearial), integrated by
Salinas, Hank González and a representative of Televisa, among other leading
businesspeople.
AMLO extended preferential
treatment to businesspeople members of the Consejo Asesor Empresarial, among
others. The special relationship went counter to his previous call for the
separation of political and economic power (Dresser, 2020). Thus Televisa and TV
Azteca (along with two other channels), in the words of Mexico Forbes
(2020a), “closed ranks” with the government in reaching an agreement (worth over
20 million dollars) to provide remote education to public school students, in
the process excluding smaller channels. AMLO also condoned tax debts for the TV
and radio media, a measure which mainly benefited Televisa and TV Azteca, which
held 282 and 182 concessions respectively. In 2019 shortly after assuming the presidency and at a
difficult moment due to President Trump’s threats of imposing tariffs on
Mexico, AMLO appeared publicly with Slim and Salinas where they announced their
intention to collaborate with the government on major infrastructure projects
(Beck, Bravo Regidor and Iber, 2020: 114). Subsequently, Mexico Forbes
(2020b) reported that Salinas and Slim were among those who “most stand out in
the contracts received from the government,” while the magazine Proceso
indicated that Slim was the government’s “principal contractor” (Tourliere,
2020). Slim’s contracts included megaprojects such as oil pipeline construction
and the “Mayan Train” in southern Mexico.
At first glance,
it appeared that AMLO had made his peace with private capital. The case of Salinas
was especially striking because he went from supposedly being at the helm of
the businessmen’s “mafia” to AMLO’s closest MG businessman. Nevertheless, the
members of the Consejo Asesor Empresarial were hardly in the FBS category as
differences and tension occasionally came to the fore between them and the
government. AMLO’s intention was to isolate the more intransigent HBS
businesspeople and thus he could hardly be accused of having “sold out.” Slim,
for instance, unsuccessfully attempted to convince AMLO in private against
suspending the construction of a new national airport outside Mexico City (in Texcoco)
for which the entrepreneur had contracts, after which relations between the two
temporarily soured.[5]
Salinas, for his part, used offensive language against, and resisted, the
efforts of Labor Secretary Luisa María Alcalde to suspend non-essential
commercial services in the face of the coronavirus epidemic (El Universal,
2020).
AMLO’s supporters
rejected the charge that the president was unjustifiably kowtowing to big
capital (Ackerman, 2020). They argued, for instance, that AMLO’s friendly
relations with Salinas and Azcárraga were designed to isolate such aggressive
government critics as journalist-media heads Enrique Krauze and Héctor Aguilar
Camín, who he claimed had received payoffs from previous governments to support
their neoliberal policies (Mendoza, 2020). AMLO followers also justified the
government’s use of Salina’s Banco Azteca to distribute social stipends on
grounds that most of the bank’s clientele belonged to the popular sectors and that
the system eliminated middlemen and in doing so curbed corrupt practices and
clientelism (Mex Albornoz, 2020).
AMLO’s special relationship with
Salinas was clearly on display in late 2022 when he reached an agreement with
the government in which he paid the back taxes that he allegedly owed. On
calling on Salinas to pay the taxes, AMLO showed discreteness and moderation,
indicating that the government needed to take into account Salinas’s claim that
he had been discriminated against by past governments. The agreement surprised
the nation because until then Salinas had adamantly refused to pay the taxes
and threatened to take the case to international tribunals. The announcement
was a victory for AMLO especially because it set a precedent for his
government’s efforts to collect back taxes from 20-30 large Mexican and
multinational corporations. Some journalists, however, were skeptical about the
agreement, claiming that “juicy government contracts” would more than
compensate for the payment (Ortuño, 2022), a claim that many of AMLO’s
supporters did not consider far-fetched.
AMLO’s strategy of “divide and
rule” appeared logical given the participation of businesspeople belonging to powerful
economic groups in the attempt to remove the president from office. Nevertheless,
the opposition and the HBS in particular stopped short of the insurgency
carried out by counterparts in Venezuela. In 2020, the Consejo Coordinador Empresarial (CCE) hardened its
opposition to the government due to its failure to devise a stimulus bill in
response to the COVID pandemic and to honor past contracts, such as those for
the construction of the Texcoco airport. The CCE made plans to step into a
vacuum created by the discredit of the nation’s traditional parties and to
support candidates without a previous political record, while also lending
support for a presidential recall in 2022. Some prominent CCE members floated
the idea of not paying taxes for the duration of the pandemic. Business leader
Gustavo de Hoyos who headed the business organization Confederación Patronal de
la República Mexicana was also determined to use the resources of the
private sector to unify the opposition around the objective of unseating AMLO.
A more strident and disloyal opposition was led by
businesspeople grouped in the Frente
Nacional Anti-AMLO (FRENAAA) led by Pedro Luis Martín Bringas, of the family
that owns the Soriana supermarket chain, and firebrand Gilberto Lozano, part
owner and former top executive of FEMSA, a major Mexican business group. For
various months in mid-2020, FRENAAA occupied Mexico City’s central plaza
demanding AMLO’s resignation and ominously predicted that he would no
longer be president by the end of the year. In short, the hostility and organized
efforts of influential actors in the private sector convinced the MORENA
leadership of the necessity of pursuing a selective approach toward businesspeople
even though that strategy ran counter to AMLO's previous harsh-sounding
rhetoric regarding the “mafia of power.”
As in Venezuela,
businesspeople who went from the HBS to the MG were strongly attacked for
having abandoned their previous positions. The harsh reaction of
pro-establishment figures against those who migrated to the MG evidenced the
high degree of political polarization that existed in the country. The fact
that the flagship companies of Slim and Salinas (Telmex and TV Azteca
respectively) originated not from their own entrepreneurial efforts but from privatization
carried out in the early 1990s contributed to the resentment. Salinas was
especially singled out for allying himself with whoever was in power and under
AMLO becoming the second or third richest man in the country, even increasing his
wealth during the COVID pandemic in 2020.
The
following are key issues related to the left’s relations with business groups in
both countries.
The Political and Economic Advantages of
the Government’s Business Strategies
In both countries the government succeeded in moderating to greater
or lesser degrees the coverage of a media that had previously been unrelenting in
their attacks on the Chavistas and AMLO before he reached power. In Venezuela
the change of ownership of several media outlets (Globovisión and the
historically conservative newspapers Ultimas Noticias and El
Universal) fed into the Chavista’s MG strategy and at least in the case of El
Universal may have been facilitated by the government (Ellner, 2020a: 171).
Indeed, the New York Times reported that Maduro claimed to have good
relations with Globovisión’s Gorrín (Confessore,
Kurmanaev and Vogel,
2020: A-1). In the case of Mexico,
AMLO, in a sharp departure from previous comments, stated “I have to be
thankful for, and recognize, that [TV Azteca] has never engaged in a dirty war”
(Linares and Rodríguez, 2019).
In addition to achieving less
hostile media coverage, the governments’ MG strategy paid dividends in diverse ways.
MG and FBS businesspeople were especially helpful in moments of political
uncertainty and crisis. During the FEDECAMARAS-called general strike in
2002-2003, they provided transportation services that were essential for the government’s
survival. At the time of the four months of regime-change protests in Venezuela
in 2014, they responded energetically to Maduro’s call for dialogue as a means
to achieve stability. In Mexico, Carlos Slim denied that AMLO’s scheme to
raffle the presidential airplane was designed to divert attention from pressing
problems facing the nation at the same time that he (and Azcárraga) committed
himself to buying raffle tickets. MG businesspeople also posed a united front
with AMLO in the face of Trump’s tariff threats, and subsequently accompanied
the Mexican president in his trip to Washington for a White House meeting in
July 2020. Finally, MG businessman Alberto Vollmer (from one of Venezuela’s
traditional oligarchic families) injected life into the ailing Caracas Stock Exchange
by issuing stock in January 2020, its first public share offering in eleven
years. Coming at a politically precarious moment, Vollmer predicted that the
move represented a transition in socialist Venezuela comparable to the
reopening of the Shanghai Stock Exchange thirty years earlier that helped
revise China’s economy.
Strategic Versus Tactical Alliances
Many
social scientists have observed how capitalist groups adapt to a potentially
hostile environment such as under leftist rule (see, for instance,
Tinker-Salas, 2009: 192-193). In these cases,
business leaders make statements like "we are businesspeople not
politicians." This was basically the attitude assumed by MG businesspeople
in both countries. Nevertheless, the environment proved to be extremely
unstable, especially in Venezuela, due to the contradictions between the
inherent workings of the capitalist system with its drive to maximize profit
and a government committed to far-reaching transformation. One of the striking
characteristics of MG businesspeople in both countries was the large number of
them (as well as some in the FBS) who had previously been tied to conservative
political parties, thus placing in doubt their reliability as allies. Their
relations with the left in power contrasted with the strategic alliances with the
national bourgeoisie envisioned by Communists and other Third-World leftists in
the twentieth century that rested two postulates: a common denominator between
the left and this sector of the bourgeoisie in support of paramount goals; and
an alliance based on the struggle against common adversaries (imperialism and
fascism) and in favor of a new stage (national liberation).
Both Chávez and Maduro referred to government relations with
certain business groups as a “strategic
alliance” (a term also used in Mexico), an assertion that failed to prepare
followers for the economic difficulties and turbulence that lay ahead. Chávez’s
rational for calling for a strategic alliance was the prospect that Latin
American integration would be a win-win situation for the government and the
private sector, but the proposal failed to prosper. In effect, what was at play
were “tactical alliances,” as reflected by the phrase “productive
businesspeople” used by the Chavista governments (and “patriotic”
businesspeople used by the Sandinistas in Nicaragua), a far cry from the term
“anti-imperialist” or “progressive” bourgeoisie coined by the twentieth-century
left.
Corruption
The strategy of preferential
treatment for MG and FBS businesspeople is conducive to corruption. The reason
is simple. The decision to exclude those businesspeople who support regime
change and isolate them and their allies means making exceptions to the rule of
equality and transparency. Furthermore, those businesspeople who turn their
backs on peak business organizations, and (as in the case of Cisneros [Bottome,
2003?]) break family ties by drawing close to a leftist government, run the
risk of being vilified in pro-establishment circles, thus raising the stakes
and making preferential treatment more costly. The first major scandal in
Venezuela resulting from that strategy was the banking crisis of 2009 in which
Chávez acted forcefully against corrupt FBS businesspeople, although he stopped
short of nationalizing the banking system as advocated by some in his movement
(Guillaudat, 2019). The second case broke out in 2014 involving an estimated
20 billion dollars assigned under the system of preferential dollars. Maduro
committed himself to a full-fledged investigation into the fraud but failed to
take action.
The Venezuelan experience demonstrates that the left in power
upon implementing a business strategy of differentiation in its treatment of business
groups needs to prepare for the virtually inevitable side effects, namely
corrupt dealings even from within its ranks. The 2009 banking crisis with the
jailing of Arné Chacón (a participant in the November 1992 Chavista-promoted
coup attempt) was especially telling because it showed that even trusted, original
members of the movement – and not just "fifth columnists" as some
leftists call the “boliburguesía” (Colussi, 2008) – are susceptible to engaging
in unethical activity (as was allegedly the case with Bayardo Arce in
Nicaragua).[6]
Both Chávez and AMLO in their road to power highlighted the
fight against corruption and called it their number one priority. In doing so,
they disparaged existing anti-corruption mechanisms as completely ineffective.
The Chavistas rejected the separation of powers, including the autonomy of the
Central Bank, which they considered a feature of "liberal democracy"
and allegedly at odds with the participatory democracy they advocated. In its
place, they promoted the system of “social controllership” (contraloría
social) in which society in the form of, for example, community councils
monitor state activity. Along similar lines, AMLO (2018: 30-33) claimed that
the system of bidding for undertaking government projects was frequently rigged
and as a corrective favored the publication of the terms of contracts that were
signed. One international observer reported that more than three of every four
public contracts under AMLO were awarded “in a ‘no-bid process” (O’Neil, 2020),
and these included three major megaprojects: the construction of the Dos Bocas
refinery, the airport Santa Lucia and the Mayan Train (Vega, 2019: 615). The
lessons, especially in the Venezuelan case (where corruption became a major
problem), are clear: The left in power needs to rely on existing institutional
checks (at least for the time being) and/or develop new viable ones in order to
combat the corrupt dealings that should be anticipated as a result of the policy
of favoring some business groups at the expense of others.[7]
Divisions
within the Pink Tide
Well-defined, ideologically
based factions did not emerge within the governing parties in Mexico and
Venezuela, unlike, for instance, in the governing Socialist Party of Chile
under Salvador Allende. Nevertheless, a leftist tendency within MORENA and the
PSUV occasionally expressed reservations about the government’s strategy of
preferential treatment toward MG and FBS businesspeople. This critical outlook
manifested itself in different circumstances. Thus, for instance, in Venezuela
many rank-and-file Chavistas applauded Pasqualina Curcio (2020b) for her critical
observations regarding the Anti-Blockade Law, which was designed to cultivate
relations and open opportunities for U.S. business interests that favored
reversing Trump’s policy of sanctions against Venezuela (Confessore, Kurmanaev and Vogel, 2020; A-1).[8]
In Mexico, ever since AMLO's emergence as the leading
presidential candidate in 2018, many in MORENA’s rank and file adamantly objected
to the party’s strategy of attracting non-leftist party members (pejoratively
referred to as chapulines – “grasshoppers”) to its camp by privileging
them with positions on its slates. The same resentment manifested itself with
regard to Romo, Salinas and other FBS and MG businesspeople who were previously
identified with conservative parties and candidates. These MORENA members,
for instance, commended Labor Secretary Luisa María Alcalde for her firm stand
in opposition to Salinas’ failure to abide by anti-COVID-19 regulations that mandated
the closing of commercial establishments like his chain of department stores
Elektra (Mex Albornoz, 2020).
In the opposite camp, MORENA moderates
were open to business alliances and claimed that the party was split between “a
democratic left” and a “radical authoritarian minority” which viewed
“businesspeople as enemies of the people” (Sotelo, 2020).[9] In
spite of these differences, the more critical, left-leaning MORENA militants expressed
faith in AMLO’s political acumen and assumed that he acted wisely in pursuing a
policy of preferential treatment toward individual business groups (Mex
Albornoz, 2020).
CONCLUSION
Pink Tide government efforts to neutralize hostile business
groups through what could be called “tactical alliances” bore little
resemblance to Lenin’s strategy of promoting strategic alliances with the
national bourgeoisie based on common political goals. Twentieth-century
Communists envisioned a stage that would favor the interests of both the
national bourgeoisie and the working class. In contrast, the Pink Tide strategy
was short-term in that the governments sought to survive a politically
precarious situation engendered by a disloyal opposition. The FBS, as defined
by Chávez involving social responsibilities and a limit on profits, did
represent a “progressive” bourgeoisie. Nevertheless, the strategy towards
business groups pursued by the Mexican and Venezuelan governments, while helping
give rise to a robust MG sector, was not at all successful in creating a viable
FBS.
Certain institutional and non-institutional mechanisms are
essential for serving as checks on the corrupt practices that any government
policy of differential treatment toward business groups runs the risk of
encouraging. Most important, excessive concentration of power in the executive branch
of government (known as “hyper-presidentialism) deprived the nation of
necessary institutional checks. Furthermore, the Pink Tide movements in both
countries went overboard in denouncing the institutional deficiencies of the
past. Thus AMLO curtailed the practice of bidding for public contracts and the
Chavistas disparaged the system of balance of power which they viewed as a
vestige of the failed liberal democracy of previous decades. In both MORENA and
the PSUV a lack of political and ideological education for members meant that
the preferential treatment toward certain business groups was not debated, nor
understood as a necessary evil which required measures to guard against resulting
abuses. Finally, the use of the term “strategic alliance” was deceptive and contributed
to the failure to understand the downsides and limits of the government’s
differential treatment toward business groups.
The strategy of privileging MG businesspeople goes a long way
in countering the thesis that the salient characteristic of the AMLO and
Chavista governments has been its tendency to polarize whereby extremes on the
left and right eclipse centristists and moderates. As far back as AMLO's term
as Federal District mayor from 2000-2005, his detractors viewed him as a
populist in the pejorative sense of the term, which highlights polarization and
the politics of antagonism (Bruhn, 2008: 217-218). Other writers have analyzed the
governments of Chávez and Maduro through the same lens (Hawkins, 2011: 5). One
recent development that illustrates the misleading nature of this viewpoint is
the efforts of President Maduro to isolate the extreme opposition headed by
Juan Guaidó by allying with, and making concessions to, opposition moderates
who favored electoral participation in 2018 and 2020 (Ellner, 2020c). The strategy
of privileging MG businesspeople to weaken and isolate those in the private
sector who support regime change leads to the same conclusion regarding the oversimplification
of analyses that attribute polarization to the populism of Pink-Tide
governments.
This study has attempted to demonstrate what many Pink Tide supporters
and others across the political spectrum tend to ignore: the practice of
privileging MG and FBS business groups was the result of a strategy with
advantages but also downsides and potential dangers. Indeed, both the PSUV and
MORENA have failed to grapple with the very real possibility that the pragmatic
strategy of concessions to business interests, with the aim of neutralizing
sectors on the right, gets institutionalized and puts the government on a path
that reverses hard fought-for progressive gains.
[1] The common denominators of the Pink Tide governments
consisted of their rejection of policies of their neoliberal predecessors
and their independent foreign policy. The group was ideologically heterogeneous
in that it took in leftists such as Hugo Chavez and Evo Morales, on the one
hand, and on the other Lula Silva, whose government, like that of Andrés Manuel López Obrador, was center-leftist.
[2] The term is defined as local businesspeople who are
not inextricably tied, and completely subservient, to foreign capital.
[3] The investigative Chavista blog La Tabla
(2013) ran several stories placing in doubt Gorrín’s reliability (Majano,
2018).
[4] For an opposing view on the boliburguesía from a
pro-leftist political analyst, see Guillaudat, 2019.
[5] At this point, Salinas replaced Slim as AMLO’s
closest MG businessman (Córdaba, 2020: A-9).
[6] The left-leaning first government of Carlos Andrés
Pérez (1974-1979) attempted to promote an emerging dynamic bourgeoisie,
elements of which also turned out to be notoriously corrupt (Duno, 1975).
[7] Chávez’s selection of ministers, governors and
legislators – as opposed to social movement leaders – to fill the position of
vice-presidencies of the PSUV, which he was president of, deprived the party of
the opportunity to serve as a much-needed independent institutional check on
the state.
[8] The
sizeable number of favorable articles on Curcio in the leftist website
Aporrea.org attest to her popularity among critical Chavistas.
[9] In opposition to the moderates, MORENA’s secretary
general Citlalli Hernández was considered a “hard-liner among the hard-liners” (Infobae, 2020).
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