Venezuela's Nationalization of the Banks

I'm going to begin my foray into blogging with a comment on the recent nationalization of Venezuela's third largest bank by the Chavez government. Obviously I'm very much in favor of it, as I'm in favor of most things that the Bolivarian Revolution has done. But we should pause and consider why this particular nationalization is a good idea.

I'm a socialist, not a communist, and I certainly don't think everything can or should be nationalized. I think that the basic mode of production in a socialist society ought to be cooperatives, in which the farmers or workers who produce the goods made by an enterprise should own and manage that enterprise. I'm generally in favor of decentralization and market socialism, rather than centralized state ownership. But banks are a type of enterprise that by their very nature are capital intensive and it wouldn't be practicable to have them all owned by small workers' cooperatives. A bank by its very nature needs to move large amounts of money around and a cooperative of Venezuelan farmers or fishermen is typically not going to have that kind of money.

There are other reasons, too. At least for the foreseeable future, even a socialist Venezuela needs to live and work in a capitalist world in which the possession of money, and credit, is critically important to the growth and development of an individual, a cooperative, or a social group. If Venezuela's government is going to exert more control over the development of the country, and encourage growth that favors the poorest people and reduces inequality, then control over the banks is essential.

Furthermore, the very heart of an anti-capitalist revolution is breaking the power of private capital- to end a system in which capital is owned by a small and discrete class of people who uses economic power to get others to work for them. Venezuela's government needs to control the banks in order to direct the flow of money and credit- away from the traditional elite classes, and towards workers and peasants. This is part of the reason why nationalization of the banks has always been one of the first goals sought by governments of the Left. Not just communist or full-fledged socialist ones, but even social democratic governments in places like France and India. If Venezuela is carrying out a full-fledged socialist revolution- providing an alternative to the morally bankrupt 'Washington Concensus' of liberal democratic individualist capitalism- then this is an even more necessary step.

As a Christian socialist, I have an additional reason to wish that banks and credit institutions be in public hands. I think there's something morally unhealthy about making large sums of money through interest or other property income sources. It's wrong at least at some level because it violates the natural connection between work and reward, two things that are intrinsically morally interdependent. A modern economy can't survive without interest, just as a modern society can't survive without an army. But precisely because interest and credit, like war, have the potential to be morally corrupting, it needs to be the state that's responsible for them, not private individuals. We can't do without interest and credit but at least we can try to ensure that we build a society without a particular class that makes their living solely through these morally questionable means.

Venezuela's 18-month period of 'Enabling Laws' is over as of Thursday, but this new law was a great way to finish it. We should hope that the National Assembly soon facilitates other important progressive changes that President Chavez wants to make, and paves the way for an accelerated social transformation.