2. Some History¶
Core Argument¶
This chapter provides a historical materialist account of Venezuela’s political economy, arguing that the country’s trajectory has been determined by the interaction of imperialist domination, a parasitical oligarchy, and a corrupt state apparatus built on oil rents. The core narrative thrust is that Venezuela’s vast oil wealth, rather than enabling development, produced a uniquely backward and reactionary ruling class, a distorted economy, and a democracy that was little more than a mechanism for sharing spoils.
The chapter opens by establishing Venezuela’s objective material conditions: immense natural resources—the world’s largest proven oil and gold reserves, second largest gas reserves—combined with a small population and abundant arable land. Yet the country imported two-thirds of its food. This contradiction is explained by the nature of the Venezuelan oligarchy, described as a product of colonialism and imperialism, numbering about 100 families, who enriched themselves by filching state revenues. Unlike the European bourgeoisie, which made concessions to absorb workers’ militancy, this “gang of robbers” was unwilling to surrender any part of its power. The national bourgeoisie, tied to big landowners and dependent on imperialists, never led a bourgeois democratic revolution; it preferred to invest abroad and milk oil revenues rather than develop agriculture. Without land reform—which would mean challenging imperialist domination—there could be no food self-sufficiency.
The chapter traces the oil economy’s origins to General Juan Vicente Gómez’s 1908 dictatorship, which granted concessions at bargain rates to Royal Dutch Shell and US companies. By 1928 Venezuela was the world’s leading oil exporter. The profitability of oil, in accord with capitalist laws, sucked investment away from other industries, causing agriculture to decline and living standards to fall. The state bureaucracy grew to employ nearly half the working population, its main purpose being to funnel oil revenues into private pockets. By 1998 Venezuela ranked among the world’s ten most corrupt countries.
The chapter then narrates the rise and betrayal of reformism. Rómulo Betancourt’s Acción Democrática (AD) emerged during World War II as a mass party of the non-white poor, calling for universal suffrage, industrialisation, and agrarian reform. The 1945 coup, combining a military rebellion and a popular movement, brought AD to power. Its three-year government saw free elections, a tax hike on oil revenues to fifty per cent, and a proposed land reform targeting the two per cent of the population that owned seventy-five per cent of arable land. The landed oligarchy fought back, and a 1948 coup reversed these reforms. The subsequent Pérez Jiménez dictatorship (1953-1958) used a temporary oil price rise to buy support through public works, but cut spending on education and health when Middle Eastern oil caused a drop in state income.
The 1958 overthrow of Pérez Jiménez raised expectations, but the Punto Fijo Pact—a formal power-sharing agreement between AD, COPEI, and URD—ensured that the three main parties would share the spoils of the oil economy regardless of election results. Radical socialist parties and the Communist Party were excluded. For thirty-five years AD and COPEI played “ping-pong” with the presidency, with no substantial ideological differences between them. Betancourt, elected on a left-wing programme, rapidly reconciled with the dominant classes, convinced no leftist government could face down US imperialism. The Cuban revolution of January 1959 is presented as a stinging refutation of this analysis. The pact began falling apart with declining oil rents in the mid-1980s and was finished when Hugo Chávez was elected in 1998.