The 1945 crisis and the PCB

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By FRANCISCO P. FARIAS*

The PCB had a practice marked by “signs of dissidence” in relation to the Vargas and Dutra governments, a different position from a “collaborationist” policy.

The 1945 coup, agitated by the National Democratic Union (UDN) and counting, in the end, with the complicity of General Dutra, governing candidate of the Social-Democratic Party (PSD), represented for Stanley Hilton (1987), to a large extent, a revenge against President Getúlio Vargas' indifference to Dutra's candidacy. If this was the manifest meaning of the 1945 crisis, the author's synthesis lacked an indication of its latent meaning. In a society divided into antagonistic groupings or social classes – such as Brazilian society, which began to spread the values ​​of the capitalist class order, the norms of the nation-people and profit, from the anti-slavery and meritocratic legal transformations of 1888-1891 - , the motivations of class members will not coincide with the objectives and interests sought by these classes or by their class fractions, in order to hide the domination relations in collective aspirations and exploitation of other people's work and, consequently, to preserve the privileges of the dominant and exploiting social minority, which concentrates political power and the means of production of collective life.

The UDN had the support of the opposition core, made up of the export/import sectors of merchant capital, so much so that the program of its presidential candidate recommended “financial sanitation”, opposed “fiscal barriers” and called for “collaboration of foreign capital ”, in addition to advocating a “cautious policy” of industrialization. Finally, the UDN preached a return to the principles of economic liberalism, a reference accepted not only by professionals from the middle classes, who experience a work situation inserted in the competition of the services market, but also by representatives of mercantile capital, in particular the Associação Comercial of São Paulo and the National Confederation of Commerce, as this reference met its profitability strategy, based on cost reduction measures, as it was unproductive capital. Thus, the less visible meaning of the 1945 political crisis was, ultimately, an attempt by merchant capital to regain political hegemony, lost with the 1930 Revolution.

1.

One of the main characteristics of the new State that emerged with the “1930 revolution” was political centralization, having as its instruments the interventorial system, through which the central government controlled the state governments; and the Public Service Administrative Department (DASP), which also held a legislative function. The impulse for the centralizing tendency in the State came from the group of lieutenants, committed to combating the regionalism of the agrarian oligarchies of the various states, but also from the industrial nucleus located in São Paulo. Their militaristic perspective predisposed them to a centralizing view of the political process, an example of which was their attempt to form a national party, the National Civic Union, as opposed to regional parties. In contrast, the dissident oligarchic sectors insisted on maintaining the prerogatives of state autonomy and limiting the powers of the federal state.

The process of centralization of the Brazilian State is also related to the growing articulation of fractions of the dominant classes, with regard to their regional segmentations. Particularly, starting from the political change of the 30s, the phase of commercial articulation, via expansion of the national market, between the industrial fraction of the pole-region and the agro-mercantile fraction of the periphery. To this greater economic interdependence between the bourgeoisies of the regions should correspond the centralizing political mechanisms. Thus, interstate taxes were abolished, and the Federal Council for Commerce and Export (CFCE) was created. The development of the internal market appears in Vargas' speech as a factor of nationality: “from the moment that the national market will see its unity assured, will see its absorption capacity increase, the political federation will find itself fortified. Economic expansion will lead to the desired balance between the different regions of the country” (D'alessio, 1979, p. 86).

The institutional discourse of the State transforms political centralization into an element of sovereignty of the state bureaucracy. Through political-institutional centralization, the State forms the people; before national integration by the state, there were regional populations. However, what institutions of state centralization essentially favor is the national integration of sectoral fractions (industrial, commercial) of capital. Industrial capital, when competing on an interregional level, redefines its segments in the national division of labor; basically, peripheral industrial capital, which is less competitive, is transferred to segments that preserve their regional market. In turn, commercial capital directs agricultural production to regional external markets, also going through the double process of competition and sectoral unification.

Another feature of the State after 1930 was economic interventionism. New agencies to control economic activity were instituted and the State began to invest, through state-owned companies, directly in the productive apparatus. The meaning of this interventionist component was to accelerate the industrialization of the country, a projection resulting from the alliance of military and nationalist technicians within the state apparatus. The military branch was interested in completing the industrial park, with the formation of industries in the steel, oil and electric energy sectors, in order to enable the independence of the Armed Forces in armaments, fuels and transport. In turn, the civilian branch planned the country's currency economy, by substituting imports of these capital goods. However, in order to implement the interventionist policy, the state bureaucracy had to overcome resistance within the industrial bourgeoisie itself. The leaders of the industrialists – Federation of Industries of the State of São Paulo (FIESP) and National Confederation of Industries (CNI) – defended the participation of private capital, national and foreign, in the sectors of steel, oil and electric energy, contrary to the solutions adopted statists.

The economic independence of the country becomes bourgeois nationalism. Not all fractions of capital in peripheral nations are inclined to embrace the anti-imperialist policy. Large commercial capital, due to its insertion in the import and export market, tends to associate with the interests of foreign capital. It is contrary to a protectionist policy for the national market and generally defends the presence of international capital in all sectors of the country's economy. Big industrial capital, on the other hand, tends to have an ambiguous posture vis-à-vis imperialist capital. On the one hand, given its link with the bases of internal accumulation, this fraction opposes resistance to the participation of foreign capital in the industrial branches in which the presence of native capital is consolidated, such as the manufacturing industry. On the other hand, given its technological and monetary dependence on the capital of central countries, the industrial leadership is opposed to a global program of contestation of imperialist interests. Only middle capital would be receptive to an anti-imperialist government program.

It remains, then, for the State bureaucracy to assume a nationalist position, in a context of political balance between the segments of big capital. State-owned companies in basic industry, by contributing to the security of the State apparatus, making the production of weapons and the supply of fuel viable, preserve the independence of capital accumulation in the country. For the self-sustainability of the capitalist economy requires not only internalizing the production goods industry, but also reserving this sector for capital of national origin.

The national-developmentalist program induces a coalition between the bourgeois factions. On the one hand, the industrial bourgeoisie, although on the rise, does not have the strength to assume political hegemony in the very process of industrialization. In the first place, in countries undergoing industrial transition, there tends to be a functional relationship between, on the one hand, industrial interests and, on the other, agro-export interests. Part of the new industrial investments originates from the agrarian economy, which leads to the discourse of harmony between industrial activity and agro-export. Secondly, the industrial bourgeoisie, due to the low integration of its branches and regional sections, tends to have an immediate and restricted view of its interests. Pursuing short-term profitability goals, industrialists oppose the implementation of labor legislation, the effect of which would be to induce technical innovation and, consequently, increased productivity.

On the other hand, commercial capital benefits from the weight of the agrarian economy, although in decline, in the national formation. Primary products remain important in international and interregional exports. This postpones the tendency for commercial capital, given that industrial oligopolies normally generate their own distribution chain, to subordinate themselves to the industrial sector within the social formation. Thus, although commercial capital – represented by the most important segment, the exporters of primary goods – sees its economic interests restricted by the new economic policy, inaugurated with the national-developmentalist Revolution, this does not mean that it has a surrendered position vis-à-vis the interests of the industry. In short-term economic policy issues (inflation, credit, trade balance), trade capital shows strength to influence guidelines from a perspective orthodox, which generally indicates that economic growth is unfeasible without monetary and fiscal stability, a point of view favorable to their interests, since the rise in inflationary costs tends to fall more into the sphere of circulation.

The goals of national integration and economic independence, aimed at with the interventionist policy, do not necessarily call into question the structural values ​​of the bourgeois class, that is, the preservation of the State bourgeois (based on the structures of egalitarian law and meritocratic bureaucratism, necessary for the reproduction of capitalist production relations) and capital accumulation (expressed in income from wages and profits), although they demand the sacrifice of political and economic interests of the bourgeois fractions in the very process of consolidation of capitalism. The national-developmentalist policy, implemented by the bourgeois State, converges with the global (institutional) interests of the capital class.

In summary, the role acquired by the State bureaucracy in the process of capitalist industrialization, becoming a social force capable of guiding the content of government policies (political centralization, economic interventionism), expresses a situation of absence of hegemony within the capitalist class (Poulantzas, 2019). In this case, state policy predominantly maintains independence from the interests of class fractions, guided by the global institutional interest of the owning class.

2.

Let us consider the core of mercantile capital in the country: coffee exporters. Overplanting, combined with exceptional harvests, leads to overproduction and stockpiling. The practical result is the drop in the value of exports, despite the constant volume sent abroad. The “1930 revolution” found a chaotic situation and panic in coffee circles.

The Sociedade Rural Brasileira (SRB) calls for broad measures: propaganda to encourage coffee consumption, credits, prohibition of planting new coffee plantations in Brazil and abroad, non-export of inferior type coffee, reduction of customs tariffs, reduction of taxes about coffee, purchase of stocks. But the decree of February 1931 implements only the last measure: the Federal Government buys the bags of coffee retained until June 1930. The aforementioned decree allows the Federal Government to collect the tax on the coffee tree and the right of 20% of exported coffee.

In 1931, the National Coffee Council (CNC) was established, concentrating important powers on it. In effect, the CNC would manage sales of coffee from stocks; he would direct the federal support program, arranging for the purchase of coffee; would employ the coffee rate; and would take control of transport regulations. In December 1931, there was an increase from 10 to 15 shillings on each sack exported. Another measure taken will be the burning of part of the stocks. After these measures, a wave of criticism against the CNC rose in the country, as coffee exporters feared that the Council would sell the stored product abroad, eliminating exporting firms. Over time, the importance of the CNC in guiding coffee policy increased significantly. In the beginning, it was an instrument of the coffee states. In a second phase, its main function was to maintain a constant link between São Paulo, the largest producer, and the federal government in the formulation of coffee policies. At the end of 1932, the Council was already suggesting guidelines to the federal government, with the purchase and destruction of stocks being financed mainly by new export taxes (Pelaez, 1973).

In February 1933, the CNC was extinguished and replaced by the National Coffee Department (DNC), which absorbed most of that body's responsibilities during the period of acute crisis in the coffee sector. Excess production in the 1933/34 harvest made new and more radical solutions urgently needed to deal with the coffee problem, so that, with the DNC, the coffee states definitively lost control of sector policies. Previously, it was the states that appointed the representatives of the Board of the CNC, but now, by the constitution of the DNC, the board will be exercised by three directors appointed by the Federal Government, being responsible for conducting themselves under the supervision of the Ministry of Finance. The centralization of coffee policies removed the solution to the coffee crisis from the interests of the commercial fraction.

Shortly before the coup d'état, in October 1937, a plan called the “aggressive policy” for coffee was prepared. Instead of prices, what matters is the “statistical equilibrium”, that is, the sale of a greater quantity of the product, regardless of the value. As what matters is the expansion of the market and the reduction of stocks, in November and December 1937 some decrees are intended to encourage exports and, in order to reduce government stocks, the addition of 1% of impurities in each imported bag. The result is immediate from the point of view of sales, as the average number of bags in previous years is surpassed in 1938 and 1939. The war slows down and stagnates the process, which in terms of prices reaches a minimum value.

The “aggressive policy” of coffee is opposed by the SRB and other associations in which exporters have a voice, demanding that the Government continue with price appreciation measures. A “Commission of Farmers” sends a Memorial to the President of the Republic, contrary to the policy of lowering prices and against the “sacrifice quota”, instituted in 1932 and consisting in collecting a percentage on exported coffee, which can be stored or burned . The DNC's response stresses the need for the “sacrifice quota”, its purposes and the reason for the price hike to benefit foreign competitors.

The Getúlio Vargas government thus innovated in terms of increasing the value of coffee, not only by destroying part of the stocks, but above all by implementing, from 1931 onwards, a policy of sacrifice, which implied the acceptance of lower profits by the coffee export sector. Merchant capital – represented by its most important segment, coffee exporters – had its economic interests restricted by the economic policy, inaugurated after the 1930 Revolution, as the costs of the program to support the sale of the product began to fall, largely in the export sector itself, a sign that this capital no longer held hegemony within the power bloc.

3.

The first initiatives that marked the liberal turn in economic policy after the Estado Novo (1937-45) were taken by the provisional President, José Linhares, and his Minister of Finance, José Pires do Rio, later deepened by the Dutra Government. In the exchange area, the Interministerial Ordinance of December 1945 suspended the requirement of a prior license for most imports. Decree-Law 9.025, of February 1946, liberalized the foreign exchange market and regulated the right of return on foreign capital (an annual maximum of 20% of registered capital in the country) and the remittance of income (maximum of 8% of registered capital ).

Dutra's contacts with the UDN explain that the beginning of his government was marked by the liberal horizon in terms of economic policy and that he included, in the ministry, members of that party. The Minister of Foreign Affairs, Raul Fernandes, was a leading UDN supporter, as well as Clemente Mariani, Minister of Education and Health, and Daniel de Carvalho, of the Republican Party, then an ally of the UDN, Minister of Agriculture. In fact, between 1945 and 1947, it is possible to speak of the ascendancy of liberalism. Regarding the economy, this trend was reflected in the liberalization of imports and, mainly, in the dismantling of the state machine built during the war to guarantee the system of direct control of imports. The “liberal-constitutionalist” sectors also prevailed in the debates of the Constituent Assembly, enthroning the principles of the laissez-faire, in particular the treatment of foreign capital movements, in contrast to the provisions of the 1937 Constitution. The principles of free trade and, above all, the guaranteed freedom of capital remittances abroad were not significantly restricted, despite opposition of the “directors” (Sola, 1998).

The frustration of not reaping the fruits of a victory that it "morally" considered its own and that seemed guaranteed in 1945 encouraged the UDN to participate in the new government. This “moral victory” was verbalized by a leader of that party, Juraci Magalhães: “in 1945 we were not lucky at the polls, but we won in ideas” (Benevides, 1981, p. 69). In 1946, when the work of the Constituent Assembly ended, the national leadership of the UDN admitted to collaborating with the government, which materialized with participation in the Ministry, with the party starting to discuss the meaning of membership and the possible advantages of the PSD-UDN agreement. -PR. At the 1946 Parliamentary Convention, the UDN had approved Otávio Mangabeira's motion in which "the party hoped that the government would conduct itself in such a way as to deserve less combat than competition in resolving the difficulties that hang over the country" (Same, same, P. 69-70). In 1947, the Executive Committee of the UDN unanimously approved the delegation of powers to the party's president, José Américo, to maintain understandings with the government and the other parties, including the "solemnization of the pact" and the appointment of UDN representatives. provided for in the outline of the agreement.

In formal terms, the inter-party agreement meant an understanding between the main PSD, UDN and PR leaders that the pillars of political stability would be respected: the new legal order, based on the newly drafted Constitution, and parliamentary support for the Executive's proposals aiming at “national pacification” and the elaboration of an economic and financial plan, with the fulfillment of the constitutional precepts of economic and social order. The immediate consequence of the agreement was that, during the Dutra government, at least in its first phase (1946-47), there was virtually no parliamentary opposition. By the end of 1949, the fragility of the pact was already evident, mainly due to the difficulty in finding a common candidate, a “national coalition”, for the 1950 election. Our hypothesis is that the agreement was weakened by the change of course of the Dutra government from June 1947.

In the final two years of the Dutra Government, more heterodox measures were adopted. Faced with the abrupt drop in foreign exchange reserves, Dutra was faced with the alternatives of currency devaluation or import controls, with the option of the latter being determined by short-term considerations, such as the inflationary impact of an eventual depreciation. Controls consisted of a system of import licenses in favor of essential imports for industrialization – fuel, equipment, machinery –, combined with a progressively overvalued exchange rate. Such measures benefited industrial entrepreneurs and discriminated against export/import sectors. In this context, the SALTE Plan can be seen as an additional symptom of the liberals' waning influence. In fact, the UDN had already turned to opposition to the government.

The 1945-47 conjuncture, characterized by liberalizing policies, faced a long-term scenario marked by the process of diversification of the productive apparatus, a process led by industrial activity. In 1947, for the first time in the country's history, the value of industrial production exceeded that of agriculture. In the industrial sector, the heavy industry segments had expansion rates above the sector average.

4.

The importance of the Brazilian Communist Party (PCB) as a political force came about in the first half of the 1930s through its influence on the demands program of the National Liberation Alliance (ANL). The political project outlined was to make capitalist development viable in Brazil – through industrialization on private and national bases and a broad agrarian reform against semi-feudal large estates – to prepare the passage to “socialism”. In tactical terms, therefore, the PCB was fighting for a “bourgeois-democratic revolution”; a revolution not in the political sense, since a bourgeois transformation of the type of legal-administrative structure of the Brazilian State had already taken place between 1888-1891, with the abolition of the slave right and the establishment of administrative rules based on the criterion of merit, but rather of an economic nature: the spread of salaried work throughout the social formation and the transformation of semi-servile relations in the countryside.

In consonance with this project for the immediate future, the party's position on most issues of economic policy differed from the points of view of the state bureaucracy. While state leaders tended, for example, to focus on the problems of inflation and the external deficit in relation to the performance of the country's trade balance, the Communists emphasized the lack of controls by the state, especially over profit remittances and the blockade of the internal market by the absence of an agrarian reform and by the co-option and repression of the trade union struggle. The practice of the PCB, in the post-1930s, was polarized by the themes of salary policy, the agrarian question and imperialism – whose guidelines would compose the ALN's program of opposition to the government.

The PCB's attempt to depose the government by arms in 1935 was largely due to the presence of a group of former lieutenants, under the leadership of Prestes, who had joined the Party. The militaristic vision of Prestes, already as the party's main leader, underestimated the support that the Communists had among the social majority for adopting this form of struggle. After the defeat of this insurrectionary attempt, the PCB reoriented its method of struggle towards the constitutionalist line, engaging in the 1945 redemocratization process. -Fascist, the policy of “National Union”. Support for the Vargas government in its intervention in the international conflict was matched by demands for the return of democracy and amnesty for political prisoners, including the party leader, Luiz Carlos Prestes. With the return of the legality of political parties in 1943, after the dictatorship of the Estado Novo (1945-1937), the PCB launched its own candidate for the election of President of the Republic, obtaining about 45% of the votes, and conquered a significant bench in the Assembly Constituent Assembly of 10. In the Constituent Assembly, the Communist group debated the issues that polarized the working class, but it was in a minority position; the parliamentary majority that drafted the Post-War Charter was strongly influenced by the propositions of economic liberalism, from which the Estado Novo had deviated (Giovanetti, 1946).

The Communists' electoral strength was due, in part, to their insertion in the workers' movement. Several are the indices of this insertion; first, in the 1945 elections, the majority of manual workers in the city of São Paulo voted for the PCB; second, of the 14 Communist deputies elected to the National Constituent Assembly, 09 would be identified with origin in the working class; third, the PCB had preponderant influence in the National Confederation of Industry Workers and in the National Confederation of Workers in Credit Companies; fourth, Communist militants controlled the largest union in Brazil – Sindicato dos Trabalhadores na Indústrias Metalúrgicas, Mecânica e de Material Elétrico de São Paulo; Fifth, the PCB's press and propaganda media, unlike their non-communist opponents in the big cities, were dedicated to the cause of the workers' movement (Chilcote, 1982).

Workers played their own role in the conjuncture of the 1945 re-democratization, especially with the national bank workers' strike as the high point of the labor movement. The bank workers had managed to trigger a strike to put pressure on the bosses and the State, and had the PCB assume a more combative position. The party appeared to thousands of workers “not as the party that told them to 'tighten their belts', but as the party that challenged economic exploitation, misery” (Frank Alem, 1981, p. 195). With that, a new pattern of relationship between the State and the trade union movement was gradually established, as the trade unions, most of them under the influence of the PCB, were placing themselves “in the direction of the economic struggles of the workers” (Same, same p. 231).

The electoral strength of the Communists is also explained by their policy of “National Union”. The PCB-Vargas coalition meant an alliance of the working class with the state bureaucracy's industrialization project, a project that did not entirely coincide with that of the industrial bourgeoisie. While government agents supported an industrial model centered on the participation of state-owned companies (steel, oil, electricity), on controlling the presence of foreign capital (remittance of profits, exploitation of natural resources, foreign debt) and on the regulation of labor relations (minimum wage, health care, vacations, retirement); industrial representatives were against the state monopoly in the production goods industry, the regulation of foreign investment in the productive sector and the implementation of labor laws. Thus, in the context of the 1930s/1940s, the Brazilian State did not represent the hegemony of the industrial bourgeoisie, but rather the global institutional interests (political centralization, economic interventionism) of the bourgeoisie; at the same time that this State demanded sacrifices of specific interests of the fractions (industrial, mercantile) of this class. The party, when it joined Vargas, treated the Brazilian bourgeoisie as an ally. A sign of the party's autonomy in this alliance was that it did not adopt, on important issues (inflation, external deficit, salary, agrarian question, imperialism), the economic vision of national-developmentalism, dominant in the state apparatus.

The PCB's position towards the first years of the Dutra government (1946-47) could not fail to be critical, despite the political line of the National Union party. Although he was careful to avoid a systematic attack on the Government of General Dutra, elected with the support of Getúlio Vargas, the concern with the liberal and conservative enclaves in the government was present in the Communist discourse. Thus, the Third Conference of the PCB, in July 1946, critically expressed its constitutionalist line: “accepting the decisions of the authorities and fighting for the peaceful solution of national problems does not mean standing idly by or conforming opportunistically, without protest, with arbitrariness and violence” (Carone, 1982, p. 67). In 1947, on the pretext that the PCB was linked to the interests of the USSR, the Dutra government approved the revocation of the party's political rights and intensified the repression of the union movement under its influence, such as the categories of dock workers and bank workers - as ways of realizing the pro-government liberal view on wage policy.

Finally, the PCB policy during the 1945-46 redemocratization process means that a part of the working class was not subordinated to the bloc in power, even if this policy seeks an alliance with its representatives, in favor of expanding political reforms and economical. Moving in the political field without opposing independence and alliance, the PCB had a practice marked by “signs of dissidence” in relation to the Vargas and Dutra governments, a different position from a “collaborationist” policy or a policy of support for the ruling class. .

*Francisco Pereira de Farias He is a professor at the Department of Social Sciences at the Federal University of Piauí.

References


BENEVIDES, MV The UDN and udenism: ambiguities of Brazilian liberalism. Rio de Janeiro: Peace and Land, 1981.

CARONE, E. The PCB (1943-1964). São Paulo: Difel, 1982.

CHILCOTE, R. Brazilian Communist Party. Rio de Janeiro: Grail, 1982.

D'ALESSIO, MB Problématique nationale et populisme dans le Brésil by Getúlio Vargas. 1979. Thèse de doctorat – Université de Paris I, Paris, 1979.

FRANK ALEM, S. Workers and “Redemocratization”. 1981. Dissertation (Master in History) – State University of Campinas (Unicamp), Institute of Philosophy and Human Sciences, Campinas, 1981.

GIOVANETTI NETO, I. The PCB in the 1946 Constituent Assembly. São Paulo: New Directions, 1986.

HILTON, S. The dictator and the ambassador: Getúlio Vargas, Adolf Berle Jr. and the fall of the Estado Novo. Rio de Janeiro: Record, 1987.

PELAEZ, CM “Economic analysis of the Brazilian coffee support program – 1906-1945: theory, policy and mediation”. in: CM Pelaez (org.). Essays on coffee and economic development. Rio de Janeiro: IBC, 1973.

POULANTZAS, N. Political power and social classes. Campinas: Ed. from Unicamp, 2019.

SOLA, L. Economic ideas, political decisions: development, stability and populism🇧🇷 São Paulo: Edusp, 1998.

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