TO UNDERSTAND the developments in Venezuela, we have to look outside--to what U.S. policy has been. U.S. policy has been to impose, through its phony antiterrorist campaign, control over the world--and, in particular, line up subordinates to back U.S. war plans in the Middle East, in Colombia and elsewhere.

That's the context, and they've been able to line up governments like Uruguay, Costa Rica and Argentina, which are sucking up to the U.S. in the hopes of getting greater access to markets and maybe getting some loans.

This position of the U.S. and its effectiveness in lining up client regimes, however, came a cropper with President Chávez. Chávez developed and has expanded an independent foreign policy on all the major issues of concern to the U.S. He strengthened OPEC. He's broken the U.S. blockade of Iraq and Iran. He's developed commercial ties and other links with Libya. He's rejected Plan Colombia--the U.S. attempt to militarize the civil war in Colombia. He's rejected U.S. flights over Venezuelan airspace. He's critical of ALCA--the Latin American Free Trade Area--for being too much, too soon.

This isn't a complete break, because Chávez is a social liberal in domestic policy, and I'll come back to that. But he's more interested in Latin American regional treaties than a trade agreement that the U.S. will dominate.

Furthermore, he kicked U.S. military advisers out of the defense ministry and sidelined some of the intelligence people who were very close to--or members of--the Cuban exile community. And this is in addition to Chávez's close political ties with Castro and supplying Cuba with oil in exchange for medical services. I say "close ties" not because Chávez has carried out any radical social transformation, but in terms of personalities and symbolic meetings.

Because of all this put together--his regional and international policies and his identification with the poor--Chávez has polarized Venezuela like no political figure has. He's become a pole of attraction for all the disaffected poor.

In that sense, almost independently of his domestic policies, the country has divided between the pro-U.S. bourgeoisie and upper middle classes and the corrupt trade union bosses on one side, and the unemployed and underemployed, who number about 60 to 70 percent of the labor force, on the other.

It's this context, I think, that set the stage for the detonator, which took place in October 2001. I met with Chávez just after the event which precipitated the all-out offensive of the U.S. Speaking about the U.S. massacre in Afghanistan, Chávez said that you can't fight terror with terror--a direct reference to Bush's war.

The U.S. immediately withdrew its ambassador--recalled him for so-called consultations. It then sent a high-level delegation to Venezuela to meet with Chávez and tell him that he would pay a high price for the critical position that he took--and that future generations of Venezuelans would pay a high price. I was told this by one of the top Chávez advisers who was at the meeting. Chávez listened, said he wants friendly relations with the U.S., disagrees on this or that policy, wants U.S. investment, etc. They totally ignored him.

Right after that, you began to see the coming together of the U.S. clients--the business association, which has locked up most of their capital in U.S. Treasury bonds and real estate; and the trade union bureaucracy, which in 50 years has never organized any effective resistance to wage cuts and unemployment. These union leaders are comparable to the AFL-CIO in that they draw hundreds of thousands dollars in salaries and perks. They came together, along with the Catholic hierarchy and, of course, the mass media, which launched a murderous pro-coup campaign, inventing the most brazen lies.

The media accused Chávez of being a dictator. Here's a person who has won six elections in less than four years--presidential elections, constituent assembly, legislative, municipal, etc. And he's called an authoritarian or dictatorial personality! He doesn't steal elections like the Bush administration did in Florida. He wins by big, clean margins.

Meanwhile, the press had license to publish and broadcast open calls for the violent overthrow of the government. Secretary of State Colin Powell, when he was passing through Peru earlier this year, said that the U.S. would support a "transitional" government. So did James Wolfensohn of the World Bank. A "transitional" government with an elected president? That can only mean a coup.

THE KEY point to remember is Chávez's record on domestic policy. He's increased spending for housing, schools and health. He's increased income by a small margin--3 or 4 percent. He's increased taxes to some limited degree, so that the upper classes pay something, rather than nothing.

But for all of this, he has also deregulated the financial system. Spanish banks have become very involved in the deregulated system. He privatized Caracas' electrical system. U.S. oil companies haven't been hindered--they pay slightly more on the petroleum tax.

In other words, there's been no radical or even moderate redistribution of income. There has been no expropriation of any property--except unutilized farmland that's paid for in cash. That's about the most conservative land reform you'll see anywhere in Latin America--market prices for the land, paid in cash.

So why the big uproar by these domestic classes? They have access to the media, they can contest in elections--what's the big beef?

The big beef has nothing to do with domestic issues. The real issue is that the U.S. wants to overthrow him to put Venezuela in line with their other clients in Latin America and knock down the only government that offers an alternative foreign policy for the whole region. They don't want that alternative present.

That's why this coup was planned, directed and financed by the Bush administration. It wasn't just the CIA. The assistant secretary of state for Western hemisphere affairs was involved--I'm talking about the Cuban terrorist exile Otto Reich. I'm talking about people like Elliot Abrams, who was in the Reagan administration and involved in justifying the killings in Central America, which amounted to 300,000 deaths. I'm talking about John Negroponte, the U.S. ambassador to the UN, who was involved with the death squads in Honduras.

I could give you a longer list. But you get an idea--you have thugs running U.S. policy in Latin America, who are capable not only of overthrowing a government, but engaging in the kind of violent repression that was launched in those 24 hours of the coup.

THE COUP failed for very elemental reasons. U.S. intelligence on the situation depended heavily on clients in the military, among the trade union bosses, the mass media moguls and the heads of the business association. And these people, who were on the U.S. payroll, told the U.S. what it wanted to hear--that public opinion polls showed Chávez's support dwindling. The generals that supported the coup said that the army was with the coup makers.

The second part of the story is that Washington is drunk with power after Afghanistan and bullying the rest of the world. As after the invasion of the Dominican Republic in 1965, they were drunk with power and thought Vietnam would be a patsy. They were wrong then, and they were wrong in thinking that their drive in Venezuela would knock down all obstacles.

They totally underestimated the commitment of the urban poor, which came down from the hills and represent something like 50 percent of the population in Caracas. The CIA took the anti-Chávez demonstrations coming out of the upper middle class neighborhoods as representing the whole country.

They also underestimated the race factor. They didn't realize that part of the opposition to Chávez is because he's Black--the first Black president in modern history in Venezuela. All of the leading lights of the bourgeoisie dislike him for his social origins and his race.

There's a fourth factor, which is the idea that Chávez was a clown--that he was incapable of defying U.S. authority. They thought that if they grabbed him and put him on an island and used some psychological pressure or other forms of interrogation, he would resign, and they could grab power.

And finally, they overplayed their hand in the first moment. They abolished the legislature, the courts and every representative institution. The first thing they did was break off the trade agreement and diplomatic relations with Cuba. The second thing they did was to say that they were going to break their agreements with OPEC. Those are hardly the banners under which any domestic opposition would mobilize. Those are exactly the top priorities for the U.S.

So as a result of that, some of the military officials did a flip. They first were against Chávez, but then were appalled by the total servility of this junta to the U.S. So they did a flip back to Chávez.

THERE'S SOME truth in that. Chávez is a nationalist in foreign policy and a social liberal in domestic policy. From year one, he has been in favor of class collaboration. The opposition isn't interested in any kind of class collaboration--they want it all.

Chávez has a history of trying--in practical terms, not rhetorical terms--to balance between the classes. He has a policy of balancing the budget. He has not engaged in any deficit financing--he's very orthodox on that. He has paid his debt faithfully, better than most countries in Latin America. So he's been trying to balance between a nationalist foreign policy and a liberal economic policy.

The problem is that this isn't acceptable to Washington, and as a result, the same military officials who did the back flip--who originally supported the coup, and then Chávez--are now back in their commanding positions. There's going to be an investigation of 30 or so military people, who openly identified with the coup, and they'll probably be put on pension and taken from command of the troops.

The bourgeois coup makers--who in any normal country would be in jail, facing treason charges--are back in their own offices, with the exception of Carmona and a few of his flunkies that were actually in the government. The head of the business association that prepared the ground for the coup is back; Ortega, the big trade union boss is back, calling now for a referendum and a rejection of Chávez. The day after the coup was defeated, he was talking again about organizing strikes--the peculiar kind of strikes where the bosses pay the workers their pay and bonuses to go on strike.

So his attempts to conciliate, which have a history in his social and economic program, have left in place the people that organized the coup and will be thinking about a future coup. And that's a real danger.

Condoleezza Rice has already said it. In a most cynical and despicable speech, she said, "I hope Chávez has learned the right lessons." Which in effect means we organize one coup, you better do what we want, or we'll come back with a second coup.

THAT'S POSSIBLE. On the other hand, while the right wing keeps banging at them, I think that they'll unite with Chávez against the right.

I think the main point in reaching out to the masses with a left-wing program is to first affirm Chávez's progressive foreign policy, and then develop an alternative social economic policy. I think those people who have simply outright rejected Chávez have been totally isolated--because from the point of view of the masses, they're seen as covert allies of the right.

The total polarization in Venezuela means that any meaningful left-wing politics has to take place in the context of this nationalist framework. That is, any socialist or Marxist program has to find a way of relating to the Chávez phenomenon. And I'm not talking about prostrating themselves or uncritically accepting him--especially his domestic program, which I think is open to a great many criticisms from the left, from the agrarian reform program to his views on financial markets to his views on foreign investment, privatization, etc.

There's a whole agenda here that's open to an alternative approach.

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