How Chavez Does Business

Twenty-First-Century Socialism and Venezuela’s Soaring Stock Market

Chávez duking it out on the campaign trail. Click here to see an interactive graphic explaining how Venezuela's economy has fared under his rule. (Courtesy Reuters)

After almost 14 years in office, and with an impressive record of electoral victories behind him, Venezuelan President Hugo Chávez now faces the most challenging campaign of his political career. Venezuela's economy is weak, and, for the first time since 1998, Chávez, who has cancer, could suffer defeat when the country goes to the polls, on October 7.

The conventional wisdom is that Chávez's prospects will depend, as they have in the past, on his strong support from the country's poor. He has spent years developing social programs to dole out state funds to those in need, and the tactic has made him wildly popular. But that strategy alone might not work this time around. Chávez's electoral fortune today depends not so much on his connections to the poor but on his approach to Venezuela's private sector.

Chávez has long undercut private enterprise, which has resulted in a weak economy that is hurting his appeal to voters. (Click the image to the right to see how.) But he can also use economic troubles to demonize the private sector and rally ideological voters. This complicated relationship to the private sector explains why, this this time around, Chávez's candidacy is damaged but still afloat. 


This round of voting is especially significant, because more than at any point in

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