Ken Livingstone: the interview
Ken Livingstone, former Mayor of London, in conversation with Calvin Tucker, co-editor of 21st Century Socialism.
Part 1: Venezuela, Cuba, China, and the changing global economy.
Tucker: You have recently been offered a new job by Hugo Chavez, the Venezuelan President. What exactly are you going to be doing in Caracas?
Livingstone: A job is overstating it; you know we had this deal that was done between London and Venezuela. President Chavez organized that we would get £14 million off the price of our oil bill for London's buses, and in exchange, Transport for London and the Greater London Authority would give lots of advice on how to run a modern city. And Caracas has huge problems. And the deal was cancelled by Boris Johnson [the new Conservative Mayor of London] on the grounds that it was obscene that one of the poorest societies was supporting one of the richest. What Boris didn't realize was that the Central Bank, the Treasury in Caracas, has $39 billion of reserves.
Venezuela's problem is not, given that they have the third largest oil reserves in the world, the lack of financial resources, it's actually the expertise. For example, to get a major programme to build decent housing. Because most of the people in Caracas live in the barrios, which are prone to collapsing down the sides of the hills in torrential rain. About ten years ago, 20,000 people were buried alive in a mudslide near Caracas. And with the cancellation of the London - Caracas deal, President Chavez asked me what I could do to globalise advice and strategy.
So I met with Chavez's candidates for the various local authorities in Caracas, and they haven't got the sort of strong modern government they need. You have five lower authorities, and Chavez's party will win the two which have about 80% of the population, which is poor. And most probably the three smaller ones in which the rich people live will elect rival candidates. If Chavez's candidates can win those two, plus the mayor of the overall greater Caracas region, they can work together for the sort of long term planning that we tried in London, on transport, housing, waste, recycling, all those things. I pulled together a team of people that can go over there and give advice.
It's all got to be done by Venezuelans, but there is no reason why they have to replicate the mistakes that we made in London over 150 years. What people forget is that if you look at the problems with Caracas or Lagos or Mumbai today, they are the problems that London had in the middle of the 19th Century. When peasants leave the land, they arrive in the cities, they die in their millions. There was a time when, in 1840, the average lifespan in Britain was around 42. In London, it was 35 years. Broadly, all the history of London is about how to create the modern social infrastructure that gives its citizens a decent quality of life.
So, it is not really a job in that sense. I’ll be orchestrating people to go over there. I mean, it won't require much of my time; it's a question of identifying those people who have the skills and expertise in these fields so that they can tap into them.
Tucker: You are a well known supporter of the Venezuelan revolution, as it’s called, and you're the honorary president of the Venezuela Information Centre.
Livingstone: That's right, yes.
Tucker: How would you characterize the Venezuelan revolution? Do you see this as a real revolution, if you like, a revolution in the traditional sense?
Livingstone: No, not a revolution in the traditional sense, because the poor people haven't fired any guns. And therefore it is not in that same sort of broad category as, say, Russia, China and Cuba. What you had before Chavez was the 200 richest families, the oligarchs, taking their share of the oil wealth that wasn't being taken by the international oil companies, living a life completely cut off from the mass of the population, and having most of their money abroad, so that they could get out if there was ever a real revolution.
Chavez won the election and has changed the tax regime, nationalized the oil companies. And when the middle class organized a strike, he took over and ran Pdvsa, the oil company, and has used that wealth to give people healthcare and good education, so you have now got 100% literacy. You see people who are 35 years old with braces on their teeth, because before Chavez no one except the rich saw a doctor or a dentist.
Now they are moving on to what is the next stage, in a sense. The vast majority of the population have left the villages and the jungles, and moved to the towns. But the oil industry only employs 80,000 people, and they have now got the same problem we had in 1980. The oil reserves and the wealth which that generates has raised the exchange rate, so that it squeezes out all the other forms of employment that could come, and in a sense when you actually look at their economy, they are one of the few governments in the world that desperately needs to spend more money in order to bring down the exchange rate. Most other countries have the problem that if they spend too much, the exchange rate goes down and the international speculators flee.
They want to re-balance the economy, so that with a better exchange rate they can make other industries viable, and other forms of employment viable. In a sense, what Chavez has done is really combine the sort of work of Britain's 1906 Liberal government with the 1945 Labour government. It's a huge package of social reform. It looks pretty revolutionary if you are one of the peasants who have been driven off the land and is living in squalor in the barrio.
Tucker: There is even a shade of Roosevelt's New Deal or the 'Great Society' in the USA, but the question I want to ask is this. On the one hand there is economic reforms which echo some of the social progress we have made in Britain, in Western Europe, or even to some extent in the United States. On the other hand, there is a political dimension to this process; if you like, an attempt to transfer political power from the old hierarchy and the ruling class, with the development of communal councils and so on. And it strikes me that if you look at the political aspect combined with the economic aspect, what is occuring in Venezuela could perhaps be accurately described as a revolutionary process. Would you share that view?
Livingstone: It is a complete transformation. I mean, because it is happening in such a short space of time, it's much more dramatic than, say, the 20th Century was for Britain. And in the sense that the American-backed coup in 2002 was an attempt to overthrow it, it really is much more potentially violent because America has sent killers down there to bump off Chavez, because the local generals were a bit nervous about doing it. It came down to the fact that Chavez refused to sign the paper saying 'I resign'.
What was interesting about Chavez is that he didn’t then go after everybody involved in the coup. The generals retired, they didn't go to prison. The TV Company that had urged people to overthrow the government carried on until its license expired. As you can imagine, if the BBC or ITV were urging people to overthrow the government here, they would all be inside for a very long time. So he took a very lenient view. And I know Amnesty International was critical, but a lot of the soldiers who had gunned down peasants should have been prosecuted. But he took the view of binding up the society rather than having a vast purge.
So it is certainly a very exciting time and there could be terrible violence if America tried again to overthrow the government, but I think that the problems they have in the Middle East means that America is a bit overstretched at the moment. Let me get you a coffee. Do you want milk or water with that? Sugar?
Tucker: Just milk would be great, thanks. So to finish off on Venezuela. One thing I found very interesting about Chavez’s rise to power is that it didn’t happen in the traditional revolutionary way - of course there is never the right sort of revolution, each one is different and has its own unique characteristics - but what you had in Venezuela was a collapse of the old party system, the old two party corrupt system, which as you know had come together in a power sharing pact called the Pact of Punto Fijo.
Livingstone: Was that in 1958?
Tucker: Yes, after the overthrow of the dictatorship. What I found interesting was the loss of ideological hegemony. I mean, the system just simply could not carry on in the old way. Nobody trusted the political parties. Chavez did not come in as a representative of one of the remnants of the 20th Century communist parties or Trotskyist parties or Maoist or social democratic parties. It was something completely different.
Livingstone: And in the beginning when he had just been elected, he came to London take part in one of Tony Blair's 'Third Way' debates. He arrived – here’s a soldier who tries a coup when he realizes that society is going nowhere. It fails, but the speech he makes is a bit like Nelson Mandela's, it reverberates. He gets elected and he is desperately looking... he is not anti-American, I mean the ideals of America he finds very attractive, and he is a practicing Catholic. He is not some Marxist trained guerrilla who has planned and plotted. He has moved leftwards empirically, because he has seen what doesn’t work. I see him as a sort of socialist. He is definitely not a Marxist revolutionary, but in the context of Latin America, Venezuela stands out like a great beacon.
In the same way that the old orthodoxies collapsed in Venezuela, they are collapsing over most of Latin America. It is only in Colombia, where Uribe is propped up by vast American wealth and also American fire power, that that old order is still hanging on. You've got trade unionists being hounded by death squads and so on.
And what Chavez has done, he's spent $8 billion buying Argentinean bonds to make sure that Argentina's government doesn’t collapse. Having had such progress by all sorts of left of centre governments, there is always the danger now as the world economy goes bad, that the backlash will bring back the right in some new form. So he is doing a lot with his money to try and prevent that happening.
Tucker: Some people would not describe Fidel Castro as a Marxist revolutionary either.
Livingstone: I think - and this is the great debate: was he just a sort of radical who got driven to Marxism and communism because of US pressure? I remember meeting a historian in Cuba in the 1980s who said Fidel Castro was a Marxist when he was a student. But having come to power, not as the head of a Marxist revolution, but just rebelling against the government of the day, it took him a decade to build a party structure which would sustain him.
I see Fidel as a Marxist, and very much a Marxist coming of his time.
And I assume now that Raul Castro is running Cuba, there will be changes. When Lenin took power in Russia, the only economic transactions people made was that they brought the food they would eat that day, and a couple of times a year they would buy an item of clothing. I remember my grandmother saying 'you could leave your front door open', we are talking about pre-WW1 London. You could leave your front door open, everyone said, but that's because no one had anything to steal.
And as someone like Lenin could see, you could organise supply and demand around the very simple needs that people had. But nowadays, even people living on state benefits make dozens of economic transactions a week. It is a huge complexity, and there is no way a centrally planned economy is going to be able to manage the scale of economic activity we now have. The tragedy is, a lot of people on the left have moved from accepting, that as a means of distribution and exchange, the market can’t be bettered- to assuming that therefore the market can do everything else in society. And really it can’t. It's a very good mechanism for the distribution and exchange of goods. Full stop.
Fidel pre-dates the recognition of all this, and Raul has got to allow... the most dramatic economic growth in human history has been China, where they kept control of the commanding heights of the economy, but allowed a service and light industrial sector to grow up around it. But still the majority of the economy in China was in the hands of the Party. When I was discussing where should I open an office in China - Shanghai was clearly the parallel city, but we also had to be in Beijing because that is where the decisions finally get taken.
Whatever the big corporations are doing there, it requires the backing of the Party. And what the Chinese have done is, they have become totally predominant in a whole series of products. I think 82% of all ballpoint pens are made in one factory in China. The state has backed industries which are becoming incredibly successful because they have avoided the mistakes which the British Labour Party made in nationalisation, where the state didn't allow them to borrow money and didn’t allow them to sell, didn't allow them to compete in the private sector; they were just locked into slow decline. Whereas in China, they won’t bat an eyelid about paying their Managing Director £1 million a year, but they won’t let him own the company, and they will allow him to raise the money he needs to expand and have aggressive marketing campaigns.
So effectively, what the Chinese have created is nationalised industries which are dynamic, and they are cleaning up in virtually every area they move into.
And this is why, both in America and in Britain, the existing support of the governments has collapsed as dramatically as it has.
What the voting figures are like, they are like the collapse of support for governments during the last three recessions in the mid 70s, the early 80s and early 90s, and yet in each of those three, GDP went negative by about 3%. We've still got a positive GDP, and part of the problem is although we haven’t got the collapse of the economy as we did in the last three recessions, within the economy both in Britain and America there is a re-balancing in favour of exports and that is largely because of the growing competition from China and India.
And Britain and America can no longer rig the whole world’s financial system in their favour, so you are getting a real shift of economic power to the East and this isn't something that is temporary, it is going to be going on for 20 years. You go to Shanghai, and the students there arrive at school at seven and they leave at six, and these are the kids that the kids in the East End of London will be competing against for the rest of their lives, based upon having had about a third of the education that these kids are getting.
Tucker: There are clearly some significant similarities between the state-led development model that China is pursuing, and the state-led development model which was so successfully pursued by the post-WW2 economies in Britain and Europe, using Marshall Plan money. And I think that whilst there are also some similarities with Venezuela today, there are also significant political differences.
China’s economic growth is being achieved under the auspices of what most people consider to be an authoritarian system, whereas Venezuela is trying to move from liberal democracy to participatory democracy. Perhaps you see yourself more in the sort of Venezuelan mode in terms of how you ran London over the last eight years?
Livingstone: Chavez is trying to shift power, and if you were in Venezuela you would be in Chavez’s party and working with him. And if you were in China you would be in the Communist Party, but trying to move into a more devolved and decentralized direction. When the mayors of Beijing and Shanghai were probably at the best end of the Chinese Communist Party in terms of recognizing the sort of world that's coming, and the Communist Party has to change and adapt to it.
If you grow up in a society, you are going to take a position depending on the balance of forces you find. If you were growing up in Cuba in the 1950s you would throw your lot in with Fidel as the best hopes for the Cubans. Here, many of your readers will be horrified that you throw your lot in with the Labour Party because that is where the bulk of the working class, up until recently, tended to look and support, and it's linked to the unions. That was the best way of achieving progress.
Next week: in Part 2 of this interview, Ken Livingstone discusses New Labour and the pro-war 'left'.
