Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Please Support CounterPunch’s Annual Fund Drive
We don’t run corporate ads. We don’t shake our readers down for money every month or every quarter like some other sites out there. We only ask you once a year, but when we ask we mean it. So, please, help as much as you can. We provide our site for free to all, but the bandwidth we pay to do so doesn’t come cheap. All contributions are tax-deductible.
FacebookTwitterGoogle+RedditEmail

A Radical, Questionable Move: Venezuela Withdraws Its 100 Bolivar Notes

Caracas.

Venezuela’s government has made the radical decision to withdraw the heretofore largest bill from circulation. President Nicolás Maduro made this decision public on Sunday, December 11, indicating that the 100 bolivar note would cease to be valid in 72 hours, after which it could be delivered to the country’s Central Bank.

The alleged reason for this decision is to strike at mafias engaged in illegal money transactions on the border with Colombia. It is also claimed that an NGO, with ties to the U.S. Treasury, aimed to buy up all the circulating currency and thereby destabilize the government. These heterogenous claims – the first tinted with anti-Colombian sentiment – are most likely not the real or at least not the central reasons for this surprising move.

Most likely the main objective in the demonetization of the 100 bolivar bill is to dramatically reduce liquidity and hence stem inflation. That is why the step has not produced significant resistance in the banking sector. The economist Francisco Rodríguez, former executive of Bank of America, sees it as positive.

The problem of illegal money, as Prabhat Patnaik explains reflecting on a similar move by Indian prime minister Modi, is much more complicated than simple stockpiles of cash. Obviously, a radical step like this one, in India or in Venezuela, could constitute a momentary blow to those involved in illegal operations, but it will not affect the essence of their various rackets, which will recover in the short or medium term.

How should a leftist evaluate this recent step? Undoubtedly, it affects the common people in their daily transactions: paying bus fares, buying newspapers, or making purchases in small markets without access to credit-debit card lines. It also touches the informal merchants who represent an important part of the economy. In Venezuela, the informal economy always grows around Christmas, with booming sales of trinkets, holiday foods, and crafts.

In the last instance, one’s evaluation of the step will go hand in hand with how one judges Maduro’s decision to rigorously satisfy the needs of financial capital in the country by paying all key bills and debts on time. These policies have made the Venezuelan president the most recent, if most surprising, poster boy of the Financial Times. The current step, because it tends toward macroeconomic stabilization, is in line with this general attitude.

However, I believe that this overall line is a mistaken one. Global financial capital cannot easily be made into a conjunctural ally. It is rather an inseparable, unshakable secret sharer. The bloc that Maduro may have in mind, composed of global financial capital at one extreme, and public employees and the poor masses on the other, is an unrealistic and unstable one.

It is an unstable alliance precisely because, when push comes to shove, the financial sector, which is supremely agile and well organized, will leave the popular elements by the wayside when it opts for one of the many other possible political alliances that are open to it. Socialism, even as a long-term goal, must step out of the picture.

What is being constructed has the appearance of a chimera in which a belligerent and pro-socialist discourse combines with a silent sell out. The president and other leaders may not be aware of this; they may think that the satisfaction of the financial world’s imperatives is just a short term, necessary concession. But insofar as it leads to demobilization, apathy, and confusion in what were once the pro-socialist bases, it also hamstrings the popular force that could redirect the country on a progressive or socialist path.

Socialism needs socialists, just as anti-imperialism needs antiimperialists. The errors of statist and substitutionist practices, which tempt leaders as the paths of least resistance, are well-known lessons of history. It is not with a public, televised discourse that one constructs socialism but with an organic force diffused among millions of individuals. Here, this is called “popular power,” and it is precisely what is in danger of being lost.

More articles by:

Chris Gilbert is professor of political science in the Universidad Bolivariana de Venezuela.

October 18, 2018
Erik Molvar
The Ten Big Lies of Traditional Western Politics
Jeffrey St. Clair
Lockheed and Loaded: How the Maker of Junk Fighters Like the F-22 and F-35 Came to Have Full-Spectrum Dominance Over the Defense Industry
Lawrence Davidson
Israel’s “Psychological Obstacles to Peace”
Brian Platt – Brynn Roth
Black-Eyed Kids and Other Nightmares From the Suburbs
John W. Whitehead
You Want to Make America Great Again? Start by Making America Free Again
Zhivko Illeieff
Why Can’t the Democrats Reach the Millennials?
Steve Kelly
Quiet, Please! The Latest Threat to the Big Wild
Manuel García, Jr.
The Inner Dimensions of Socialist Revolution
Dave Lindorff
US ‘Outrage’ Over Slaying of US Residents Depends on the Nation Responsible
Adam Parsons
A Global People’s Bailout for the Coming Crash
Binoy Kampmark
The Tyranny of Fashion: Shredding Banksy
Dean Baker
How Big is Big? Trump, the NYT and Foreign Aid
Vern Loomis
The Boofing of America
October 17, 2018
Patrick Cockburn
When Saudi Arabia’s Credibility is Damaged, So is America’s
John Steppling
Before the Law
Frank Stricker
Wages Rising? 
James McEnteer
Larry Summers Trips Out
Muhammad Othman
What You Can Do About the Saudi Atrocities in Yemen
Binoy Kampmark
Agents of Chaos: Trump, the Federal Reserve and Andrew Jackson
David N. Smith
George Orwell’s Message in a Bottle
Karen J. Greenberg
Justice Derailed: From Gitmo to Kavanaugh
John Feffer
Why is the Radical Right Still Winning?
Dan Corjescu
Green Tsunami in Bavaria?
Rohullah Naderi
Why Afghan Girls Are Out of School?
George Ochenski
You Have to Give Respect to Get Any, Mr. Trump
Cesar Chelala
Is China Winning the War for Africa?
Mel Gurtov
Getting Away with Murder
W. T. Whitney
Colombian Lawyer Diego Martinez Needs Solidarity Now
Dean Baker
Nothing to Brag About: Scott Walker’s Economic Record in Wisconsin:
October 16, 2018
Gregory Elich
Diplomatic Deadlock: Can U.S.-North Korea Diplomacy Survive Maximum Pressure?
Rob Seimetz
Talking About Death While In Decadence
Kent Paterson
Fifty Years of Mexican October
Robert Fantina
Trump, Iran and Sanctions
Greg Macdougall
Indigenous Suicide in Canada
Kenneth Surin
On Reading the Diaries of Tony Benn, Britain’s Greatest Labour Politician
Andrew Bacevich
Unsolicited Advice for an Undeclared Presidential Candidate: a Letter to Elizabeth Warren
Thomas Knapp
Facebook Meddles in the 2018 Midterm Elections
Muhammad Othman
Khashoggi and Demetracopoulos
Gerry Brown
Lies, Damn Lies & Statistics: How the US Weaponizes Them to Accuse  China of Debt Trap Diplomacy
Christian Ingo Lenz Dunker – Peter Lehman
The Brazilian Presidential Elections and “The Rules of The Game”
Robert Fisk
What a Forgotten Shipwreck in the Irish Sea Can Tell Us About Brexit
Martin Billheimer
Here Cochise Everywhere
David Swanson
Humanitarian Bombs
Dean Baker
The Federal Reserve is Not a Church
October 15, 2018
Rob Urie
Climate Crisis is Upon Us
FacebookTwitterGoogle+RedditEmail