The statements of purposes of the draft constitutional reform proposed by Hugo Chávez in 2007 reads that "the nature of revolutions has to do with a substantive change of the relations of production," and although people rejected changes to the Constitution, the government has been implementing the reforms with the gradual establishment of a socialist production model.

Private companies find themselves increasingly besieged by Hugo Chávez Administration in its attempt at gaining control of means of production. The siege began with price and currency exchange controls, legal requirements and inspections and is ending with unfair competition and new threats of expropriation.

Last weekend, Chávez said that the State would have a majority control of Cada, a retailer network. He made the announcement during the opening of Bicentenario hypermarkets, former Éxito supermarkets, which had been expropriated some weeks earlier. Within this framework, the Venezuelan president said that the state would take new space. He also said that the seized properties will be handed over to the working class and the communities.

Chávez reminded mayors and state governors that they have the power to expropriate and instructed deputies to draft legal reforms.

Upon the amendment of the Law on the Institute for the Defense of People in the Access to Goods and Services (Indepabis), the Venezuelan government has a fast track instrument to expropriate any property or service. Therefore, the government has yet to amend the Law on Expropriations and the Code of Commerce, in addition to the Law for the Regulation of Profits, Law on Economic Activity, the Antitrust Law and the Law on Social Ownership. All these legal regulations are aimed to regulate private property.

Chasing the big fish
In the speech addressed in the opening of the hypermarket, Chávez said that any private companies that violate the laws would be expropriated. He established some differences between big and small enterprises.

"I would call the owners of small enterprises, if they are violating the law. But I will give them a chance. If they reoffend, their company could be intervened for a month and if there is no settlement (of the dispute), we would hand over (property) to the community. Big enterprises cannot be given any chance, they must be expropriated. I have no problem with that."

In his annual address to the National Assembly, Chávez had said that "there is small, efficient property. We are not enemies of such private property, but you have to link it with social ownership."

So far, the transition to socialism has been achieved by the expropriation of industries rather than the construction of a network of social production companies.

Translated by Gerardo Cárdenas