economy. This meant lifting price controls on the basic goods the population needed, freeing interest rates, reducing all sorts of subsidies—gas prices included—and increasing the cost of public utilities.
The result in Venezuela and elsewhere was not the growth that neoliberal economists and ideologues had promised, but instead the exact opposite: what is referred to in Latin America as the “lost decade,” in which the only things that really grew were unemployment and poverty. By the end of the 1980s, nearly half of all Latin Americans were living in poverty, with nearly 70 million falling into poverty in that decade alone. By 1989, the Venezuelan economy was shrinking, inflation was running at 85 percent, and the poor were bearing the brunt: more than 44 percent of families were living in poverty, and almost half of those in extreme poverty.
Against this backdrop, presidential candidate Carlos Andrés Pérez played the role of charismatic savior. Having presided over an oil boom during his first term as president in the early 1970s, Pérez was a reminder of the good old days, and he made big promises to match. His 1988 electoral campaign echoed popular frustrations with the emerging international financial system that was saddling poor countries with debts they couldn’t pay. Pérez denounced the IMF as a “bomb that only kills people,” accused the World Bank of “genocide,” and encouraged collective resistance among indebted nations worldwide. Once elected, however, Pérez did a sharp about-face: in exchange for billions of dollars in IMF loans, he signed on to a structural adjustment plan even more radical than those of his predecessors.
When rebellion is in the air, however, broken promises can be fatal, and the widespread perception that Pérez had betrayed his own campaign promises, in what many characterized as a “bait and switch,” had everything to do with the fury Venezuelans would unleash in the streets during the Caracazo. Pérez repaid that fury in kind. Unable to quell the rioting by other means, he declared a state of emergency and sent the army and police into the barrios surrounding the capital to subdue the rebellious poor. Young army recruits sprayed entire apartment blocks with automatic gunfire, killing many who lived and looked just like themselves, leaving bullet holes that are still visible today. In a single incident, the army opened fire on a crowd gathered on the Mesuca stairway in the poor slum of Petare in eastern Caracas, killing more than twenty. When all was said and done, hundreds if not thousands had been slaughtered—the numbers have never been agreed upon because bodies were simply dumped into the mass graves that are still being unearthed today.
Given the brutal failure of neoliberal reforms across the region as a whole, the Caracazo would soon be followed by a string of rebellions elsewhere on the continent and beyond. Only a year after the Caracazo, indigenous movements in Ecuador responded to neoliberal reform with the Inti Raymi uprising (1990), unleashing a chain reaction that would eventually see three sitting presidents unseated from power by street mobilizations. The Zapatista rebellion in southern Mexico (1994) exploded into history on the same day that the North American Free Trade Agreement (NAFTA) took effect, provoked by the Mexican government’s abolition of communal land rights to please the United States, and has since helped to inspire struggles worldwide while undermining the legitimacy of a corrupt political system. Struggles in Bolivia against attempts to privatize first water (2000), and then gas (2003), led to the removal of two presidents.
These grassroots rebellions did more than simply destroy, however. Through resistance to neoliberalism, new movements emerged, new alternatives were forged, and new leaders were thrown into power: Hugo Chávez in Venezuela, Evo Morales in Bolivia, and Rafael Correa in Ecuador all contributed to the broader leftward swing in the region, later dubbed the “Pink Tide.” Even more importantly, new forms of democracy also emerged that were local, participatory, direct, and communal—in short, unrecognizable from the perspective of the old, corrupt form of democracy in crisis throughout the region.
For example, when the state failed to provide drinking water to communities in Cochabamba, Bolivia, residents did not look for solutions through elections but took matters into their own hands. They came together to dig wells and manage the water supply themselves in a participatory and democratic way that built on both indigenous and leftist traditions. When water rights were later sold off to the transnational corporation Bechtel, these same neighborhood organizations barricaded the entire city to collectively resist the move, sparking a chain of events that has transformed the country as a whole.
These new experiments in democracy have since gone global, with the Spanish indignados, Tahrir Square protesters, and Occupy Wall Street all fighting against neoliberalism through practices of direct discussion, debate, and management of our own lives. Some would call this new form of self-government “direct democracy” or “radical democracy”; others might insist that it is the only democracy truly worthy of the name. What this developing form of self-government could look like is not yet clear, in part because it seeks to respond to an unavoidable challenge: how to harness the spontaneous energy of rebellion into new forms of political organizing, and how to ensure that these forms don’t betray their rebellious origins.
In Venezuela, the rejection of neoliberalism in the streets during the Caracazo led not only to Chávez’s election, but also to a long and continuing experiment in radical democracy that continues to this day in new institutions of local self-government, known as communes. At the time of the Caracazo, Chávez and others had been conspiring both within the army and alongside clandestine revolutionary groups, but the spontaneous rebellion by the people in the streets caught them off guard and forced them into action. On February 4, 1992, the Revolutionary Bolivarian Movement attempted to depose Pérez in a coup d’état that failed to seize power but made Chávez a national hero overnight.
It was only through the combined impact of the Caracazo and the failed coup that Chávez would later be elected president in December 1998, amid the collapse of the corrupt two-party system. The first task of his new government was to fulfill the most important promise of the electoral campaign: rewriting the Venezuelan Constitution. Within six months of Chávez’s inauguration in early 1999, a constituent assembly was elected, and before the year was out the Bolivarian Constitution had been approved in a national referendum. The new Constitution, written with the participation of social movements and grassroots Bolivarian Circles, promised to expand both social welfare and participatory democracy.
Social welfare came first, with the Bolivarian government attempting to tackle the poverty and social exclusion left by more than a decade of neoliberal reform. But even after being elected, the Chávez government lacked control over the purse strings of the national oil company, Petróleos de Venezuela, S.A. (PDVSA). As a result, the revolution would not truly get under way until the combative whirlwind that began with the brief coup against Chávez in April 2002. US-backed and -funded opposition forces briefly kidnapped the president and abolished the new Constitution before being forced out of power by mass mobilizations in the streets and the barracks alike. Defeated politically but not economically, opposition forces then shut down the entire Venezuelan oil industry in late 2002. They were again defeated, this time by oil workers who seized the installations after more than two catastrophic months.
With oil production now firmly in the hands of the state, the Bolivarian government sought to make good on its promises of social welfare, in particular through the establishment of a series of Bolivarian missions. Misión Barrio Adentro, for example, provided free health care in the poorest neighborhoods through Cuban-staffed medical clinics; a series of missions provided free education, from basic literacy training up to the university level; Misión Mercal provided subsidized food; Misión Vuelvan Caras (About-Face) sought to eradicate poverty by integrating the poorest of the poor—and these were followed by dozens more.
The effects of these policies on reversing the ravages of the neoliberal era have been undeniable: household poverty has been cut in half and extreme poverty cut by 63 percent. This doesn’t even account for the impact—more difficult to measure—of expanded access to subsidized food and free health care and education. Venezuela went from being one of Latin America’s most unequal countries to one of the most equal.3 As the Bolivarian process
