By Carlos Ball, editor of AIPE, a Spanish-language news organization based in Florida, and an adjunct scholar at the Cato
Institute.

The Venezuelan political elite was dealt a heavy blow in December when the country elected the anti-establishment Hugo Chávez as president with 56% of the vote.

Mr. Chávez's policies are still in formation, but what is clear is that without the election of an outsider the traditional power brokers who have done so much damage to the country would have continued unchecked. As example, consider the last two presidents, Carlos Andres Pérez and Rafael Caldera, who were like characters out of the 1958 novel "The Leopard" by Prince Lampedusa, which portrayed a decadent Sicilian aristocracy that made changes only in order to ensure that everything remained the same.

During Venezuela's 41-year democracy -- since the end of the military dictatorship in 1958 -- the country had two main political parties -- the social-democrats' Democratic Action (AD) and the Christian-Democrats (Copei). They not only alternated in power but also entered into a famous power-sharing agreement called "Pacto de Punto Fijo" -- named for the home of Mr. Caldera -- in order to crush any political competition.

If there were some policy differences between them initially, these became increasingly less noticeable as their nomenklatura extended its tentacles over every aspect of daily life. They controlled Congress, the judiciary, the civil service, labor unions, professional associations, the universities and even the armed forces. Theirs was a dynasty that seemed untouchable.

But Mr. Chávez is challenging all that. He ran on an anti-establishment platform backed by a coalition called Patriotic Pole. And when he was sworn in as president on Feb. 2 he took an untraditional oath: "I swear before God, before the Fatherland, before my people, and before this dying constitution, to fulfill the necessary democratic transformations in order for the Republic to have a new constitution, suited to the new times."

The AD and Copei congressmen who are now beating their breasts in defense of the existing constitution are the same ones who, through their political parties, colluded in order to suspend -- for 30 years -- specific constitutional clauses that protected private property and free enterprise. The reason was simple: It was the only way they could control the economy and make lucrative deals with mercantilists. Mr. Chavez's rise to power threatens years of "investments" made by these politicians and their associates in the business community.

The judicial system was destroyed by the AD-Copei establishment. During the old military dictatorships, judges had been appointed on the strength of their professional credentials. But in 1969 AD changed the law so that judges would be chosen by party affiliation, in proportion to the electoral results. The outcome was the near-disappearance of the rule of law. Today political contacts or deep pockets win in court. The poor, who cannot afford lawyers with the right contacts, often languish in jail for years without hope of trial.

Mr. Chávez's mother prayed he would become a priest, but he preferred the military and in 1992 headed an unsuccessful coup against President Carlos Andrés Pérez. Last year he campaigned against the corrupt establishment, which has bankrupted a rich and prosperous nation. Critics like to say he is a radical but the facts support his case: In the past quarter century, the public payroll increased to 1.3 million from 484,000. Salaries have been financed by inflating the local currency, the bolivar. Today it takes 578 bolivars to buy one U.S. dollar, compared to 4.30 bolivars in 1983; that is a 13,340% devaluation. Per capita income has backtracked to 1952 levels; 80% of Venezuelans now live in poverty.

The recent sharp drop in oil prices has revealed an economy with no clothes. Suddenly, with AD and Copei left without enough money to buy votes, a clean election brought in Mr. Chávez.

His popularity is boundless among the poor and a shrinking middle class that has seen its standard of living drop year after year. They are sick of hearing the same old political discourse and neither group has much to lose. Don't talk macroeconomics, or about the fact that the Venezuelan government owns Citgo, the largest gas retailer in the U.S., with the average dweller of a shantytown on Caracas' hillside. He doesn't have running water and must pay protection to the local gang because the police are busy serving as bodyguards to politicians and bureaucrats.

Even after former President Jaime Lusinchi was living in Miami, 36 agents of the political police remained assigned in Caracas as his full-time bodyguards. In one of his first acts as president, Mr. Chávez fired all of them, as well as the heads of all the country's corrupt customs offices. His first electoral promise was personal security for the common people.

Some political analysts have concluded that Mr. Chávez is a combination of a Marxist and an old-style Latin-American populist. He certainly has surrounded himself with old socialists. But despite the hero's welcome to Cuba that Castro gave him in 1994, it's hard to believe he would want to identify himself with a failed ideology. He undoubtedly is a nationalist and a patriot. His economics are obscure, to say the least, but what else is new with politicians from the Hudson Bay to Cape Horn?

Moreover, while he admits to only a rudimentary understanding of economics he has already learned the basics better than his predecessors. Labor unions controlled by AD are demanding government-mandated price controls and across-the-board salary increases for the private sector. Mr. Chávez has refused. Who, then, is practicing populism, the old establishment or the new president?

The proposed constitution also worries many Venezuelans. It is true that the new Colombian and Brazilian constitutions are much worse that the ones they replaced. And those close to Mr. Chávez seem determined to come up with a new document packed with political wishes. But by the same token, what Venezuela has now hardly passes for a democracy.

Mr. Chávez is already at odds with the Congress, which remains rife with AD and Copei dinosaurs, and he may view a new constitution as the only way to fight them. He is also streamlining government by reducing the number of cabinet ministries from 24 to 14.

Venezuela has a long way to go. Class-warfare rhetoric is in vogue, and some of the old mercantilists did finance the Chávez campaign, presumably not without motive. But the new president is intelligent and wants the best for his country. This is just the beginning of the story, and those who claim to know the end are lying.

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