State, Oil and Capital Accumulation in Venezuela

Abstract

The modern economic history of Venezuela is marked by the dominant role played by the state. A largely unstable state structure in the nineteenth century gave way — following the discovery of oil and its exploitation in the 1920s — to the state becoming the centre of the process of capitalist modernisation. This development was reinforced by the rise in oil prices in 1973–4, and by the nationalisation of the oil and iron ore industries in 1975–6. By the 1980s the state was directly responsible for nearly 70 per cent of capital accumulation in the economy and employed approximately a quarter of the working population, a situation often described in Venezuela by the term ‘state capitalism’.

The author is indebted to the members of the research project ‘Estructuras y Proceso del Sistema Politico Venezolano de 1958 en Adelante’ of CENDES, Caracas. Thanks are due in particular to Dr Heinz Rudolf Sonntag, Luis Gómez Calcagno, Margarita López Maya, Miriam Kornblith, Thaís Maingón and Ramón León. For his critical remarks on this paper I wish to thank Dr Georg Cremer and Maureen O’Hanlon for translating it into English. My thanks are also due to Carlos Fortin for his criticism and revision of the first version. Responsibility for the remaining flaws and weaknesses rests, of course, entirely with the author.