Reformism or Revolution by Alan Woods

Author:Alan Woods [Woods, Alan]
Language: eng
Format: epub
Tags: Philosophy: Political, Political Science : History and Theory - General, Political Science: Imperialism
Publisher: Wellred Books Ltd
Published: 2015-05-14T16:00:00+00:00

Keynesianism and socialism

In his interview, Weighty Alternatives for Latin America Discussion with Heinz Dieterich, 7/1/2006, with Junge Welt, which also appeared in Number 21 of the Marxistische Blätter Flugschriften, Dieterich explains his position on the banking system and monetary policy thus:

“Q: In 2005, Venezuela introduced a new national bank. What’s the plan there?

“Dieterich: The key idea involves the modernization of the role of the central bank, to get rid of an outdated monetarism that has blocked the economic and social development of Venezuela.

“There are basically two notions of what a central bank should do. One is the orthodox monetarist view, which restricts itself to the manipulation of liquidity in an effort to control inflation. That’s a role abandoned by larger nations years ago. The prototype of the newer interpretation of the role of the central bank is that of Alan Greenspan, who on the one hand acts as a guardian of the value of currency and on the other gives equal weight to unemployment, all the while keeping an eye on the business cycle.

“The central bank in Venezuela was occupied by people opposed to the Bolivarian project. They refused to accept that the democratically elected government had the right to restructure the institution according to the new requirements. They blocked attempts to use surpluses for capital investment, and they blocked every kind of productive assistance of the sort that Greenspan or the European Central Bank would provide…” [15]

Let us first note that there is not one word here about the nationalization of the banks, without which there can be no question of a socialist planned economy in Venezuela. Dieterich assumes that Venezuela will continue to operate on the basis of private ownership of the banks and financial system, and that this is perfectly consistent with his version of Socialism of the 21st Century, that is to say, an economic system that functions on the basis of market economics.

He then goes on to point out, quite correctly, that “the central bank in Venezuela was occupied by people opposed to the Bolivarian project” and that these people used their position to sabotage the government and block its economic policies. What conclusions are we invited to draw from this? Logically, if the banks are owned and controlled by the enemies of the revolution, the revolution has the right to defend itself by expropriating the banks. But professor Dieterich does not like such radical measures. Instead, he speaks only of “modernization of the role of the central bank”.

What does this modernization of the banking system consist of? It consists of abandoning “an outdated monetarism that has blocked the economic and social development of Venezuela.” That is to say, he advocates, not the abolition of capitalism, but only the replacement of one capitalist economic model in favour of another capitalist model. He says that there are “basically two notions of what a central bank should do”. What are these notions?

“One is the orthodox monetarist view, which restricts itself to the manipulation of liquidity in an effort to control inflation.

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