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The Development of Venezuela's Popular Economy
Part 1: Experiences and Legislation
Venezuela has experienced five years of continual economic prosperity. Its grossdomestic product almost doubled between 2003 and 2008. Poverty significantlydeclined, and the shift of the GINI-Coefficient represented a large reduction ininequality
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. While those macro-economic indicators are recognized by most critics ofVenezuela's economic policies, the qualitative economic development of the countryis the subject of polemical discussions from different scientific, political, andideological points of views.Certainly, the Chavez government has broken with the neoliberal agenda of thepreceding decades. But has it developed instead a shift toward a participatory anddemocratic economy as the core of 21st Century Socialism? The new "Law for theDevelopment of a Popular Economy," which I will refer to as the Popular EconomyLaw in this article, could be counted as a step toward a participatory and democraticeconomy, because it promotes the democratization of the relationship betweencommunities and production and consumption. The concrete experiences of"Solidarity Exchange Groups" that were defined in this law and established in tencommunities across the country illustrate how the relationships of communities toproduction and consumption could be re-organized.Apart from the excessively growing consumption of import goods and the expansionof state control over strategic economic sectors that we observe currently inVenezuela, grassroots and community initiatives, as well as government legislation,have established a variety of innovative practices and approaches that aim for amore democratic and participatory economy in Venezuela. Unlike a scientificallydetermined project, the so-called "Bolivarian Revolution" has been characterized untiltoday as an open process in which alternative conceptions of production andreproduction can be developed.The Venezuelan government has oriented its economic policies around the principlesof desarrollo endógeno, or "endogenous development," as an alternative to theneoliberal development model known as the "Washington Consensus." Endogenousdevelopment had already been discussed by leftist and reform-oriented forces in the1970's and 1980's in Venezuela. The Movement to Socialism party (MAS), whichtoday has converted into a right wing social democratic party, and the RevolutionaryLeft Movement party (MIR), were the principal promoters of an idea of developmentthat basically proposes the integration of the community's cultural, economic andsocial potential into autonomous local networks of production and consumption.
 
 In the first years of the Chavez government, newly founded public institutions such asthe Women's Bank (Banmujer), the Institute for Rural Development (INDER), theInstitute for Cooperative Education (INCE), and others tried to put into practice theidea of endogenous development in Endogenous Development Networks (NUDES).The basic idea of the NUDES was that new cooperatives, founded with support fromthe government's program for the promotion of cooperatives, the Misión VuelvanCaras, should integrate themselves into local economic production networks. Forexample, a cooperative of village herdsmen should be connected with a newcooperative spinning mill and small clothing producers, and transportationcooperatives that collectively organize distribution.What was envisioned in the early years of the Venezuelan revolutionary processcouldn't be sustainably realized in the majority of cases. The participants and also theinstitutions lacked experience in collective organization, and traditional forms ofcollective social and economic practices had been lost in the course of decades ofexternal (exogenous) development models.However, the results should not be evaluated exclusively by the economicperformance of the cooperatives, considering that the government programs like theMisión Vuelvan Caras were addressed to sectors of society that have beenmarginalized from formal work, education, and cultural processes throughout history.Even though cooperatives and their integration into local networks failed in a lot ofcases in the years 2004 and 2005, the initiatives produced a variety of newexperiences and knowledge.
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 On June 3rd 2008, President Chavez passed a set of 26 new laws using presidentialdecree power the National Assembly had granted him for eighteen months. Theselaw-decrees were meant to strengthen the legal basis for the socialist transformationof the country. In the field of production and consumption, the "Law for theDevelopment of a Popular Economy," or Popular Economy Law, outlines theprinciples of a new solidarity-based economy based on community networks. Thislaw is basically an attempt to conclude the Venezuelan experience in the constructionof cooperatives and community-based economic development over the last decade.The Bolivarian Constitution of 1999 introduced new forms of social-productiveorganizations that were to emerge as community initiatives and receive the support ofthe state.
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But until last year there was no specific law that gave a detailed legaldefinition to these social-productive organizations. Hence, one of the motives of thelaw is the "regulation of activities of popular economy, [...] giving the Venezuelanstools and social practices for an economic development as an integrative system withthe capacity to strengthen social-productive projects by the communities."
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 The Popular Economy Law is written around a core of eight social-productiveorganization models (see table in the graphic). These models take into account theexperiences and critiques of cooperatives, self-managed factories, and communitycouncils in the previous years.
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The community based social-productive OrganizationsArticle 8 of the New Ley for Popular Economy
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Corporation of Direct Social and Communal Property 
: Productive Unity placed in adetermined territory defined by one o more communities, that benefits the collective,and owns the means of production.2.
Corporation of Indirect Social Property 
: Productive Unit that is conducted by thestate in name of the community. The state can progressively transfer the ownershipto one or more communities in benefit of the collective.3.
Corporation of Social Production 
: Unity of collective work destinated to producegoods and services to satisfy the material and social necessities by the social rc-inversion of the surplus, with substantive equality of the integrands.4.
Corporation of Social Distribution 
: Unity of collective work destinated hi thedistribution of goods and services to satisfy social and material necessities by thesocial rc-invcrsion of the surplus, with substantive equality of the integrands.5.
Self administrated Corporation 
: Unity of collective work, which administrated thecorporation directly and with its own resources to satisfy the necessity of its membersand the community.6.
Families Productive Unity 
: Is an organization of family members that developsocial-productive projects, to satisfy the necessity of its members and the community7.
Groups of Solidarian Interchange 
: Groups of organized Prosumidorcs to participatein the systems of alternative and solidarian interchange.8.
Groups of Community Trueques 
: Organized Prosumidorcs that utilize themodalities of the alternative system of solidarian interchange.The first model is called the Corporation of Direct Social and Communal Property andit targets the contradictory experiences faced by cooperatives. Many cooperativeshad become a new form of private property in which its members are following profitinterests that collide with community interests. To solve this contradiction,Corporations of Direct Social and Communal Property should be owned and run bythe communities in which they are based, thus guaranteeing a democratic decision-making process. Also, profits should be socially re-invested in the communities.
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