The
academic laboratory of the Venezuelan coup has the highest academic
pedigree of all
by
Justin Podur
As we
watch a U.S.-backed coup unfold in a distant country, as in Venezuela
today, our eyes are drawn to the diplomatic, military, and economic
elements of the U.S. campaign. The picture of a scowling John Bolton
with a big yellow notepad with the message “5,000 troops to
Colombia” reveals the diplomatic and military elements. The New
York Times headline “U.S. Sanctions Are Aimed at Venezuela’s
Oil. Its Citizens May Suffer First” reveals the economic element.
But U.S.
foreign policy mobilizes every available resource for regime change
and for counterinsurgency. Among those resources, you will always
find academics. The pen may not always be mightier than the sword,
but behind every U.S.-backed war on a foreign people there will be a
body of scholarly work.
The
academic laboratory of the Venezuelan coup has the highest academic
pedigree of all — it’s housed at Harvard. Under the auspices of
the university’s Center for International Development, the
Venezuela project of the Harvard Growth Lab (there are growth
labs for other countries as well, including India and Sri Lanka) is
full of academic heavyweights, including Lawrence Summers (who once
famously argued that Africa was underpolluted). Among the leaders of
the growth lab is Ricardo Hausmann, now an adviser to Juan Guaido who
has “already drafted a plan to rebuild the nation, from economy
to energy.”
In an
interview with Bloomberg Surveillance, Hausmann was asked who
would be there to rebuild Venezuela after the coup — the IMF, the
World Bank? Hausmann replied (around minute 20), “we have been
in touch with all of them. … I have been working for three years on
a ‘morning after’ plan for Venezuela.” The hosts
interrupted him before he could get into detail, but the interview
concluded that bringing back the “wonderful Venezuela of old,”
for investors, would necessitate international financial support.
Never mind that the “wonderful Venezuela of old” was
maintained through a corrupt compact between two ruling parties
(called “Punto Fijo”) and the imprisonment and torture of
political opponents—amply documented but forgotten by those who
accuse Maduro of the same crimes.
The
Growth Lab website provides some other ideas of what
Hausmann’s plan likely includes: Chavez’s literacy, health care,
and food subsidy “Missions,” a growth lab paper argues, have not
reduced poverty (and, implicitly, should go). Another paper argues
that the underperformance of the Venezuelan oil industry was due to
the country’s lack of appeal to foreign investors (hence Venezuela
should implicitly be made more appealing to this all-important
group). A third paper argues that “weak property rights”
and the “flawed functioning of markets” are harming the
business environment — no doubt strengthening property rights and
getting those markets functioning again will be in the plan. If this
sounds like the same kind of neoliberal prescription that devastated
Latin American countries for generations and was imposed and
maintained through torture and dictatorship from Chile and Brazil to
Venezuela itself, that is because the motivation is to bring back the
“wonderful Venezuela of old.”
A Wall
Street Journal article by Bob Davis from 2005 credits Hausmann
with being part of the original Washington Consensus in 1989, “the
economic manifesto [that] identified government as a roadblock to
prosperity, and called for dismantling trade barriers, eliminating
budget deficits, selling off state-owned industries and opening Latin
nations to foreign investment.” Decades later, if the WSJ
article is to be believed, Hausmann looked at the data and found
“Deep reforms; lousy growth,” and concluded that there
“must be something wrong with the theories of growth.”
Hausmann’s
academic work is highly technical, macroeconomic modeling. The models
reveal the consequences of the assumptions used to construct them: at
times there is some data fit to them. Others are applied mathematics
exercises. A paper on 2005 “Growth Accelerations” looks for
periods when countries’ economies grew quickly. An earlier paper,
from 2002, presents a roundabout argument on the so-called “resource
curse,” in which oil-dependent economies (like Venezuela) suffer
poor developmental performance, arguing at that time that “more
interventionist policies to subsidize investment in the non-tradable
sector may also have a role to play.”
But
whether it was written by Hausmann or not, the economic plan of
Guaido’s post-coup government has no such heterodox ideas in it,
however. It is difficult to imagine Hausmann or Guaido going against
Bolton, who told Fox News that “It will make a big
difference to the United States economically if we could have
American oil companies invest in and produce the oil capabilities in
Venezuela.” The post-coup Venezuelan economy will not be all
about mathematically rigorous experiments in economic growth like
Hausmann’s academic work. It will be about the privatization of
Venezuela’s assets.
Hausmann
might have a long record of publishing models of economic growth, but
he has maintained a passion for regime change in Venezuela for more
than a decade — even at the expense of academic integrity. After
the Venezuelan opposition failed to oust Chavez in a coup in 2002 and
failed again to oust him using a strike of the Venezuelan oil company
in 2003, they resorted to constitutional means — a recall
referendum, in 2004. Voters overwhelmingly rejected the recall in the
referendum, which featured then new electoral machines that did an
electronic tally verified by printed ballots (still the system used
in Venezuela and praised by former U.S. president Jimmy Carter in
2012 as the “best in the world”) and was overseen by numerous
international observers including the Carter Center. But
Hausmann prepared a highly dubious statistical analysis to cast doubt
on the outcome. Hausmann’s dubious statistics were cited numerous
times. More may have been made of them had they not been thoroughly
discredited by the U.S.-based Center for Economic and Policy
Research (CEPR). Mark Weisbrot of CEPR summarized the episode in
a 2008 report:
“...
the political impact of economic and econometric research on
Venezuela can be very significant. For example, in 2004, economists
Ricardo Hausmann of Harvard’s Kennedy School (a former Minister of
Planning of Venezuela) and Roberto Rigobon of MIT published a paper
purporting to show econometric evidence of electronic fraud in the
2004 presidential recall referendum. The theory of the fraud was
implausible in the extreme, the statistical analysis was seriously
flawed, and the election was observed and certified by the Carter
Center and the Organization of American States. Nonetheless this
paper had a substantial impact. Together with faked exit polls by
Mark Penn’s polling firm of Penn, Schoen, and Berland — which
purported to show the recall succeeding by a 60-40 margin, the mirror
image of the vote count — it became one of the main pieces of
evidence that convinced the Venezuelan opposition that the elections
were fraudulent. On this basis they went on to boycott the 2005
congressional elections, and consequently are without representation
in the National Assembly.”
“The influence of
this Hausmann and Rigobon study would probably have been much
greater, but CEPR refuted it and then the Carter Center followed with
an independent panel of statisticians that also examined these
allegations and found them to be without evidence. Nonetheless, the
Wall Street Journal and other, mostly Latin American publications,
used the study to claim that the elections were stolen. Conspiracy
theories about Venezuelan elections continue to be widely held in
Venezuela, and are still promoted by prominent people in major media
sources such as Newsweek, even with regard to the recent
constitutional referendum of December 2, 2007.”
Hausmann’s
2004 statistical gambit is actually an established part of the
U.S.-coup playbook. The academic analysis of an election and the
finding of flaws, real or imagined, in an electoral process are the
beginning of an ongoing claim against the target’s democratic
legitimacy. The created flaw is then repeated and emphasized. Even if
it was spurious and debunked, as was Hausmann’s 2004 analysis, it
can continue to perform in media campaigns against the target. After
years of such repetition, the target can safely be called a
“dictator” in Western media, even if the “dictator” has more
electoral legitimacy than most Western politicians.
The
elected president of Haiti, Jean-Bertrand Aristide, was overthrown in
a U.S.-backed coup in 2004. Haiti’s Hausmann was an academic named
James Morrell. After Aristide won reelection in 2001 in a landslide,
he stood poised to make major legislative moves on behalf of the
country’s poor majority. Morrell published an article about how
Aristide had “snatched defeat from the jaws of victory,”
because of irregularities in the election of eight senators (out of
19, 18 of which were won by candidates from Aristide’s party): only
the votes of the top four candidates in the senatorial elections were
counted for these senate seats. These senators would have won
regardless of the methodology used, but these supposed irregularities
were enough to initiate the financial punishment of Aristide’s
government: the suspension of Inter-American Development Bank
(IADB) financing, to the tune of $150 million. All eight senators
were made to vacate their seats, but the IADB never provided the
loan. Morrell’s article played a key role as the intellectual
backing for the attack on the Aristide government’s legitimacy,
despite Aristide’s overwhelming victory in the 2001 election and
the contrived nature of the “irregularities” in the senate seats.
The coup
against Aristide unfolded over a period of years: economic warfare,
paramilitary violence, and the eventual kidnapping of Aristide from
the palace were the tactics of choice in that regime change. But the
academics preceded the coup, and followed it, providing
justifications and obfuscations of what was happening in the
post-coup, counterinsurgency violence.
Latin
American social violence has even longer-running academic
underpinnings. Today, Colombia’s president Iván Duque (the protégé
of the previous warlord-president Álvaro Uribe Vélez) leads the
call for regime change in Venezuela. Duque’s country was reshaped
by a multigenerational civil war during which the countryside was
depopulated, through paramilitary violence, of millions of peasants
(many of them Afro-Colombian or Indigenous). The academic theorist
behind this was the Canadian-born, U.S. “new dealer” Lauchlin
Currie, whose theory (summarized by academic James Brittain in a 2005
article), called “accelerated development,” was that “the
displacement of rural populations from the countryside and their
relocation to the urban industrial centres would generate
agricultural growth and technological improvements for Colombia’s
economy.” Currie implemented these ideas as the director of the
foreign mission of the World Bank from 1950, and as adviser to
successive Colombian presidents. Today Colombia continues to suffer
from Currie’s academic theories. Despite the peace deal of 2016, it
has the largest internally displaced population in the hemisphere.
John
Maynard Keynes wrote that “Practical men, who believe themselves
to be quite exempt from any intellectual influence, are usually the
slaves of some defunct economist. Madmen in authority, who hear
voices in the air, are distilling their frenzy from some academic
scribbler of a few years back.”
As Max
Blumenthal and Ben Norton show in their article about him, Guaido is
just such a practical man, a U.S.-foundation-funded street fighter
for the rich neighborhoods of Caracas. But he certainly has use of
the academic scribblers gathered at Harvard.
When it
comes to suppressing the people of Latin America in their hopes to
control their own fortunes and their own resources, the scribblers
have a key role to play, as much as their diplomatic and military
counterparts.
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