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Dictatorship
of the Proletariat
Fraude
By
Venezuelan Economic Review
»
The Dictatorship of the Proletariat is a concept that belongs
to Marxism, and that is defined as the period that follows the
overthrowing of the dictatorship of the bourgeoisie (capitalism)
and which in turn concludes with the communist transformation
of society. During this transition towards communism the regime
proceeds to destroy the state’s bourgeois machinery, which
is made up by the Armed Forces, the police, parliament and the
judicial system, and takes control of the production mediums
in order to socialize them....
The
Dictatorship of the Proletariat is a concept that belongs to
Marxism, and that is defined as the period that follows the
overthrowing of the dictatorship of the bourgeoisie (capitalism)
and which in turn concludes with the communist transformation
of society. During this transition towards communism the regime
proceeds to destroy the state’s bourgeois machinery, which
is made up by the Armed Forces, the police, parliament and the
judicial system, and takes control of the production mediums
in order to socialize them. The term dictatorship of the proletarian
was used by autocratic regimes such as the Soviet Union to cover
up the fact that the nation was under the dictatorship of a
sole political party, which in turn became a dictatorship over
the proletariat by a new constituted dominant class bureaucracy.
Its consequent government, the dictatorship of the proletariat,
does not guarantee an equalitarian distribution of wealth, on
the contrary it guarantees that the dominant defeated class
will not be allowed to access a position of power again via
political or military maneuvers. Socialism was originally divided
in two branches: the Utopian socialism and the revolutionary
communism. The Utopian communism and the revolutionary communism
shared the criticism made against capitalism, but not the means
or the ends used to eradicate it. French revolutionary, Luis
Augusto Blanqui, was the first to explain the concept of the
dictatorship of the proletariat, adding that communism could
be implanted via an armed coup d’état that would
establish a revolutionary dictatorship and guide society towards
communism. In theory, communism defends the power of conquest
by the proletariat, i.e., the working class, the extinction
of private property and the means of production, and thus social
classes as economic categories will tend to disappear. This
eventually will lead to the extinction of the State as a dominating
tool of one class over another. The fact that the communist
revolution occurred in Russia, Europe’s most backwards
country at the time, is proof that communism, as a way of government,
caused the failure of the Soviet Union and the rest of nations
that made up Eastern Europe’s iron curtain. Karl Marx
and Friedrich Engels, drafted the Manifesto of the Communist
Party (a.k.a. the Communist Manifesto) in 1848, in which they
described the principles to be followed after the proletariat
assumes the power of the state: (1) Real estate asset expropriation;
(2) A strong progressive tax; (3) The abolition of inheritance
rights; (4) Confiscation of wealth and assets belonging to emigrants
and rebels; (5) Centralization of credits by the State; (6)
Nationalization of transportation; (7) Multiplication of national
factories and production means; (8) The creation of industrial
armies, mostly rural; (9) Articulation of agriculture and industrial
exploitation; (10) Public and free education.
According to Vladimir Lenin, the dictatorship of the proletariat
had to be an essential part of a socialist revolution, as it
was be used to prevent the resistance of the bourgeois hegemony;
in order to achieve this they must totally dominate the governmental
apparatus via the revolutionary process. Many communists, such
as Lenin, criticized the socialist bloc regimes, claiming that
the alleged collective property of production means in those
countries was nothing more than pure fiction, since they were
completely controlled by a bureaucratic minority, also know
as the soviet Nomenklature, which was its real owner. Hugo Chavez
has stated that Venezuela will be transformed into a socialist
republic, but what he has failed to mention is that together
with his entourage of stale communists, they remain stuck in
the dictatorship of the proletariat –having originally
failed in his attempt to assume power via a military uprising-
instead of escalating towards an Utopian socialism. Thus, Chavez’s
Socialism of the 21st Century project differs very little from
the principles developed by Marx and Engels, thus Venezuela
currently finds itself on the path to a communist regime as
rancid as the one imposed on the Cuban people by Fidel Castro,
considered the lonesome bastion of communism in America, which
was forced to accept the participation of foreign private capitals,
mostly in tourism, in order to maintain its fragile economy
alive before Hugo Chavez assumed power. A communist economy
cannot function correctly because without a market there are
no prices, and without prices, economic calculations become
impossible. Chavez has announced that it will nationalize the
telecommunications sector, the electricity companies and part
of the crude refining sector. Likewise he will promote a reform
that will incorporate the indefinite reelection so he can be
president for life, emulating his teacher and mentor, Fidel
Castro. Unfortunately these changes are “legally”
being orchestrated by a National Assembly, which despite not
only being completely discredited and lacking legitimacy, it
is the one that has been constitutionally constituted. But the
loyalty shown by Hugo Chavez’s followers will depend on
how radical these changes turn out to be and how much they benefit
the collective; which is why one must ask: Will the new Venezuela
oligarchy (a.k.a. the bolibourgeoisie of the revolution) be
willing to detach themselves of their recently acquired multimillion
fortunes to follow the anachronistic ideals of an autocratic
system that has failed in every nation where it has been implemented?
The Economy 2006-2007
The Gov’t
failed in its multiple attempts to control the inflation rate
for 2006; instead it increased to 17% (vs 14.4% in 2005), making
the Venezuelan economy the most inflationary throughout Latin
America. In comparison, with the rest of the countries in the
region, Colombia closed at 4.46%, Bolivia 4.74%, Peru 1.14%,
Honduras 4.9%, Mexico 4.09% and Ecuador 3.20%. December’s
inflation rate amounted to 1.8%. The cost of food products and
non-alcoholic beverages rose 26% during the last 12 months,
while transportation increased 15.4%, educational services 16.4%,
and health 13%, affecting primarily those less fortunate sectors
of the population, the one’s the Boliviarian regime claims
to want to protect. The accumulated inflation for food products
in Venezuela amounted to 26%, despite it being the only country
in the region which prices are currently regulated. Paraguay
and Argentina reported a food inflation of 10.6% and 10.5%,
respectively, while Peru’s food inflation amounted to
only 1.7% and Colombia 5.6%. According to Art. 319 of the Constitution
“unjustifiably failing to meet the goals and objectives
established in the annual policy accord will result in the removal
of the BCV’s directory and administrative sanctions will
be applied, in accordance to the law”; it remains to be
seen if the regime will honor the Constitution; but it seem
most unlikely. Internal economic activity increased 10.3% in
2006, according to the BCV. Gross Domestic Product (GDP) increase
was boosted by the non-petroleum sectors (+11.4% vs 11.1% in
2005), while petroleum activity fell 0.3% (vs +2.6% in 2005).
Financial and Insurances Institutions increased 37%, Construction
(+29.5%), Communications (+23.5%) and Commerce (+18.6%). The
Central Gov’t reached a deficit of Bs 1,931.7 BB in 2006
vs a surplus of Bs 3,940.5 BB in 2005. Balance of Payments closed
2006 with a surplus of $4,585 MM (vs $5,457 MM in 2005), due
to the increase in the current account’s surplus and the
lower deficit in the financial account, according to the BCV.
The current account reached a $27,374 MM surplus in 2006 (+7.2%
vs 2005). Exports increased 16.4%, while imports rose 32.3%,
therefore the commercial balance closed with a surplus of $33,224
MM (vs $31,780 MM in 2005). The financial account registered
a deficit of $19,690 MM, or a decline of $2,849 MM vs 2005.
The Petroleum GDP fell 0.3% due to the contraction of oil and
natural gas extraction, which fell 1.9% from Bs 6,250 BB to
Bs 6,130 BB. With a total GDP of Bs 7,530 BB, petroleum became
the second most important economic activity following manufacture,
which GDP totaled Bs 8,470 BB in 2006….Pdvsa and private
exports totaled $57.8 BB in 2006, covering 89.5% of the nation’s
total foreign sales. Oil exports in 2006 allowed a surplus in
the current account of 16.3% of GDP. Public spending expansion
increased the amount of money circulating in the street, generating
a 18.4% increase in private consumption in 2006, while public
consumption grew 7.6%, according to BCV….National manufacturing
production did not increase in the same level as the demand;
the manufacturing GDP rose 10%, which highlights that a large
part of the demand was satisfied by the high volume of imports
in 2006. According to the BCV, imports increased 26.8% in 2006
vs 2005, while exports decreased 4.3%. 2007 will not be an easy
year for the Venezuelan people, but especially for Hugo Chavez’s
regime, since it will be forced to define an efficient government
policy, something they have been unable to do in the past eight
years. According to World Bank Chief Economist for Latin America,
Guillermo Perry, Venezuela will increase more than 6% in 2007,
while the International Monetary Fund (IMF) estimates Venezuela
will register a growth of only 3.7% in 2007 (vs 17.9% in 2004;
9.3% in 2005 and 7.5% in 2006). Local analysts estimate this
increase at between 6%-7% for 2007, and a registered inflation
of no less than 20%. Petroleum prices will not decrease below
the $50/bbl marker, which will guarantee that the Government
may continue importing to satisfy demand, thanks to the excessive
foreign currency stemmed from oil revenues. Public spending
will continue rising and will close at no less than Bs 140,000
BB. According to risk rating firm, Standard and Poor`s, “the
Venezuelan Government must concentrate its efforts in controlling
public spending, as it is pressuring consumption prices upwards,
thus they suggest that the Gov’t focus their attention
on domestic problems such as crime, corruption and mostly inflation
and long-term investments.” Venezuela could see its credit
rating improved if the Government is able to cut its spending.
The regime needs for the price of oil to continue rising, so
they can excessively continue increasing public spending, which
is currently the one thing that is holding the Boliviarian ideal
together. If the scenario were to change the future of the Venezuelan
economy would be destined to plummet, highlighting the failure
of Hugo Chavez’s outdated revolution.
Venezuelan
Economic Review is
a Venezuelan publication with strategic and financial information.
Petroleumworld
not necessarily share these views.
